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ShareUSC survives spending review but who are we kidding?

Earlier this week the much anticipated ‘spending review’ was unveiled and, as previously promised by Chancellor George Osbourne, the highly debated 2Mbps USC (Universal Service Commitment) remains unaffected. The 2Mbps USC was proposed by the previous Labour government initially to provide all UK households with a minimum 2Mbps Internet service by 2012. When the coalition government took power this deadline was extended to 2015 but there were fears that it may be compromised or even scrapped as part of the stringent spending cuts.

Darren Farnden, Head of Marketing

Darren Farnden, Head of Marketing

Whilst controversially only providing a minimum of 2Mbps, which many within the industry (including Entanet) have argued is far from fast enough to keep up with increasing demands and technological developments, at least it is a start for the ‘not spots’ of the UK. Therefore the industry was keen to see it protected. True to his word, Mr Osbourne appears to have done this. The USC will, as previously suspected, be funded by the remnants of the digital switchover fund and by the BBC license fee, and is forecasted to cost £530million over the next four years. It has also been confirmed that there will be no controversial broadband tax.

Whilst £530million may seem a lot there is ongoing concern that this forecast is wrong, with the previous Labour government expecting costs to reach £2-3billion.

However, while the UK focuses on a USC of 2Mbps in order to reach the status of ‘world leader in the provision of next generation broadband’, others in Europe have other plans. Last month the European Commission set a target of 30Mbps for all Europeans by 2020. –An increase from 2Mbps to 30Mbps in just 5 years is quite a jump, especially when you consider how long it has taken for us to get to the 2Mbps USC stage.

But is the UK ready for next generation access?
A recent survey commissioned by Cisco would suggest not. It found that whilst the UK is amongst the leaders in terms of penetration, with 75% of homes having broadband access, it also suggested that the UK is far from ready for next generation access, listing it outside those countries deemed as “prepared for the applications of tomorrow”.

In fact the report suggests that just 14 out of 72 countries researched are deemed as ‘prepared’. This seems low but is actually an improvement on the stats from 2008 which listed just 1 country as prepared. The UK was positioned in the next best category of “Comfortably enjoying today’s applications“. Still a far cry from ‘world leader in the provision of next generation broadband’ though.

Of potential concern to ISPs is the fact that the report also noted that broadband demands have significantly increased from “…a basic household requiring over 2Mbps and consuming about 20GB per month, to a smart and connected home commanding over 20Mbps and a consumption of 500GB per month”. As we have stated many times before, the increasing demand for bandwidth as new technologies emerge and user habits change is putting increasing pressure on ISPs’ networks and their ability to provide low cost broadband packages.

So while we welcome the confirmation that the USC remains intact and on schedule for 2015 we also have concerns that the budget required has been grossly under estimated and that the target of 2Mbps will be irrelevant within an even shorter period of time than first expected. We think the government should be aiming much higher if they plan to hit the additional European target of 30Mbps by 2020, just 5 years after the 2Mbps USC has been implemented. If the government truly believes Britain can become a ‘world leader in the provision of next generation broadband’ with a 2Mbps by 2015 USC they are fooling themselves.  Cisco’s report shows we have some serious catching up to do before we can make this a reality.

Have your say!

What do you think about the 2Mbps USC and the Cisco report that suggests the UK is not prepared for next generation access? Do you agree that we need to aim higher or do you think that 2Mbps will suffice? Share your thoughts by leaving us a comment below.

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One Response to “USC survives spending review but who are we kidding?”

  1. This technology is important and then also the capacity of broadband. And with more heavier and more Internet services as required, of course, faster speeds.
    I think the problem for most countries in the world today is that we have a so-called \economic crisis\ that certainly has an important role in how much money governments choose to spend on infrastructure, which include capacity for broadband. Finally … I do not think that 2Mbps is sufficient, even in four years.

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