Regulators say at least £1.1bn needs to be spent on Britain's telecoms infrastructure to provide a "decent" level of broadband to the more than 1.4m homes in the UK that are currently forced to go without it.
Ofcom today set out a series of proposals to the government on how it can deliver on its promise of download speeds of a minimum of 10 megabits per second – what government calls a universal service obligation (USO).
Although the number of homes still missing out on decent broadband has fallen by a million over the last year, Ofcom felt the urgent action needed to be taken. "[T]oo many people and businesses are still struggling for a good service. We think that is unacceptable," said the regulator's group director Steve Unger.
Specialists were brought in by Ofcom to estimate the cost of distributing sufficient levels of broadband to those 1.4m homes currently without it.
The regulator said it would cost at least £1.1bn to deliver on the government's minimum standard.
The price to you of universal service obligation (USO)
Over a period of seven years, broadband costs would need to rise by £11 per annum – less than a pound a month – to delivery USO to the 1.4m homes without it.
This would increase to £20 per annum to ensure the top level of broadband considered by Ofcom in its report.
There are 3.5m homes without superfast broadband – defined as download speeds of 30 megabits per second – and Ofcom estimated the cost of rolling this higher level out instead would be less than double, at £2.0bn.
Broadband expert Ewan Taylor-Gibson of uSwitch was clear on the level of investment required. "Ofcom has laid out three possible universal service offerings – the superfast option costing £0.9bn more than a standard 10 megabits per second service would be the sensible option if we want to safeguard our digital future," he said.
State of the union
Taylor-Gibson also pointed out while England was forging a path in broadband, the rest of the union was in danger of being left behind.
You only have to look at Ofcom's broadband coverage map to see the stark divide between England and the rest of the UK - most of the 1.4m UK homes and offices that can't get speeds of 10 megabits per second are in Scotland, Wales and Northern Ireland.
Ofcom's report concluded the only way of delivering on broadband speed promises was to build on the current BT infrastructure – with the exception of Hull, which has its own established network in place. The devil, as is often the case, was in the detail; in particular when it came to delivery.
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"No one is committing to exactly how this is going to happen," said Dan Howdle, telecoms expert at Cable. He added:
If you’re living in a hillside cottage in the Highlands and the promise is you’ll have 10 megabits per second by 2020, should a letter not have already dropped through your door carrying an explanation of exactly when and how this is going to happen?
The report also revealed eight per cent of Britain's smaller businesses, or 200,000, are being blighted by poor broadband and unable to receive USO levels of service