Ofcom completes Universal Service Review

14 March 2006

Ofcom today completed its review of Universal Service Obligations (USO). These requirements ensure that everyone in the UK can benefit from basic telecommunications services at an affordable price.

Under sections 66 and 67 of the Communications Act 2003, Ofcom requires BT and Kingston Communications (in the Hull area) to offer a range of universal services. In June 2005 Ofcom published a public consultation on proposals designed to ensure that these requirements keep pace with changes in consumer demands and technology, and that the benefits of USO reach those who really need them.

Phone boxes

Phone boxes provide an essential service for those who do not have a landline at home or where using a mobile phone is not possible. However some phone boxes are expensive to run and very rarely used. BT and Kingston may seek to remove the last phone box from a particular location, but they must publish their plans for public consultation. During this consultation period local bodies can veto the proposal.

Ofcom believes that local communities must have the final say in decisions about keeping or removing phone boxes and intends to publish a guide for local authorities on the revised rules in this area. These rules set out that:

  • The local veto will be available to unitary, metropolitan, district and equivalent councils. Other local bodies must still be consulted. In June 2005 Ofcom proposed that in two-tier authority areas county councils should hold the right to veto. Ofcom has revised this original proposal following consultation responses.
  • The consultation period for proposals to remove a phone box will be extended from 42 days to 90 days.
  • The local veto will apply to the last phone box within a 400 metre area. A majority of responses to Ofcom's consultation supported changing the existing 100 metre definition.
  • BT and Kingston will have more freedom to use cashless phone boxes where boxes are subject to repeated vandalism or are needed primarily for emergency use.

Low-cost schemes

BT and Kingston must offer low-cost schemes to consumers on low incomes. A new low-user scheme will target people who receive Income Support, income-based Job Seekers Allowance and Pension Credit. These criteria have been broadened to reflect responses to Ofcom's consultation.

Services for customers with disabilities

BT and Kingston are required to offer a number of services for people with disabilities, including text relay for people who are deaf and hard-of-hearing. Text relay translates voice calls into text. To improve transparency and accountability in this area, a Stakeholder Advisory Panel will be established to monitor delivery and performance of these services. Other changes in relation to services for customers with disabilities will be subject to a separate public consultation later this year.

Telephone lines on request

BT and Kingston are obliged to install a new line at a standard price of £99.99, regardless of location. £99.99 is the new price introduced by BT from 1 March 2006. The standard price protects people who live in remote areas where the actual cost of installing a new line is more expensive.

BT and Kingston may only charge the customer more than £99.99 where their actual installation costs are more than £3,400. In those cases the customer may be charged the difference above the £3,400 threshold.

Funding Universal Service Obligations

Ofcom has not proposed changes to current funding arrangements. BT and Kingston will continue to fund USO. Ofcom will carry out a cost benefit analysis of the provision of USO in 2007, once the changes set out today have been introduced.

See the full USO statement.