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The Universal Service Conditions ensure that basic services are available across the UK at affordable prices

1.1 The Universal Service Conditions (‘USCs’) ensure that certain basic fixed line communications services are available at an affordable price to all citizens of the UK.

1.2 Currently BT and KCOM (formerly Kingston Communications) are designated as Universal Service Providers and consequently are required to provide a set of basic communications services in accordance with the terms specified by Ofcom in the USCs.

BT is required to provide fixed telephony services across the UK at uniform prices

1.3 Under the USCs BT is required to provide fixed telephony services in all areas of the UK excluding the Hull area in response to reasonable requests from end-users. BT must provide these services at a uniform price throughout the UK (again excluding the Hull area), unless Ofcom consents otherwise.

At a housing development in Ebbsfleet Kent, BT is planning to deliver services using next generation access network technology

1.4 Until now BT has connected homes to its network using conventional metallic cables. However at a large housing development at Ebbsfleet in Kent, BT intends to provide services using optical fibre cables. This technology is commonly known as Fibre to the Premises (‘FTTP’).

1.5 This is an example of Next Generation Access (‘NGA’) network technology which will support the delivery of broadband services with much greater bandwidth than conventional metallic cables. The optical fibre cables will also be used to deliver telephony services and may also be used to deliver TV services.

BT has asked for permission to discount its telephony services when it pilots FTTP technology at Ebbsfleet

1.6 BT plans to treat the first homes connected using this new method as a pilot (‘the Ebbsfleet FTTP Pilot’). BT argues that discounts are a standard part of any pilot and has asked Ofcom for permission (under the USCs) to offer pilot customers discounts on connection and line rental charges for telephony services which may include offering connection and rental without charge.

1.7 BT is seeking permission to offer these discounts to no more than 300 homes at the Ebbsfleet development for the period August 2008 to December 2009.

Ofcom is proposing to consent to BT Request

1.8 Ofcom wishes to encourage deployment of NGA networks and therefore proposes to consent to BT’s request in order to facilitate the Ebbsfleet FTTP Pilot. We think that allowing BT to discount telephony connection and line rental charges for the Ebbsfleet FTTP Pilot would not undermine the overall effectiveness of the USCs because the consent would be restricted to 300 homes for a limited period only. Also BT would not be permitted to charge above its standard rates for the Ebbsfleet FTTP Pilot and the requirement for uniform pricing would continue to apply elsewhere in the UK. We have assessed the impact of consenting to the request and our initial view is that it would have a minimal impact.

We have published a separate consultation that looks at the wider issues for regulatory policy associated with new-build fibre networks

1.9 The deployment of optical fibre networks for new-build developments (such as housing estates) raises a range of issues for regulatory policy. We have limited the scope of this document to BT’s request for the Ebbsfleet FTTP Pilot because we have already considered these wider issues in a separate consultation Next Generation: New Build [^(-1-)] which was published on 16 April 2008. We are currently considering stakeholders responses to that consultation and expect to publish a policy statement shortly.

Next Steps

1.10 In this consultation we are asking for stakeholders views about:

• our proposal to consent to BT’s request for non-uniform pricing under the USCs for the Ebbsfleet FTTP Pilot;
• the specific terms of the consent and the legal notifications for this consent; and
• our assessment of the impact of consenting to BT’s request.

1.11 The closing date for responses is 7 July 2008. Guidance on how to respond is set out in Annex 1. Following receipt and consideration of the responses we will publish a policy statement setting our decision. We hope to publish our policy statement in July 2008.

1.12 If we do not make any significant changes to our proposals as a result of the responses, we envisage that our policy statement would contain the final notification granting the consent requested by BT.

Footnotes:

1.-http://www.ofcom.org.uk/consult/condocs/newbuild/

The full document is available below

• Ebbsfleet Fibre to the Home Pilot - Proposal to allow non-uniform pricing of telephony services under Universal Service Condition 1 [pdf]
  Full Print Version

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