Universal Service Obligation

  • Start: 10 January 2005
  • Status: Closed
  • End: 21 March 2005

Universal Service ensures that basic fixed line services are available at an affordable price to all citizen and customers across the UK.

The scope of the Universal Service Obligations (‘USO’) is defined by the EC Universal Services Directive (‘USD’). The Secretary of State for Trade and Industry specifies the services which must be provided throughout the UK in the Universal Service Order (‘the Order’). The Order has been implemented by Ofcom through specific conditions on the Universal Service Providers (‘USPs’), BT and Kingston Communications. USO services include: special tariff schemes for low income customers; a connection to the fixed network, which includes functional internet access; reasonable geographic access to public call boxes; and the provision of a text relay service for customers with hearing impairment.

Ofcom has reviewed USO to:

  • ensure that the obligations continue to meet the needs of consumers as demands and technology change;
  • find the right balance between the needs of vulnerable customers and changing commercial conditions; and
  • make sure the benefits of measures reach those who need them by targeting and creating incentives.

This is the third document Ofcom has published during the review. In a consultation document on 10 January 2005 (‘the January consultation’), Ofcom examined the current operation of USO and made a series of proposals for change. In a statement and further consultation published on 30 June 2005 (‘the June statement’), we set out our conclusions and asked for comments on proposals for legal changes to implement those conclusions. We received 50 responses to that document. We intended to complete the review by the end of 2005 but have been delayed by the need to consider legal issues arising from a dispute raised by providers against BT’s increase of the connection charge to BT’s Text Direct service. This statement now sets out our conclusions.

As USPs, BT and Kingston have to ensure that customers can afford telephone service. This is achieved through special tariff schemes aimed at customers on low incomes. BT’s existing schemes – Light User Scheme (LUS) and InContact - use a proxy of low use in order to attract low income customers and around 60% of users are from low-income households. Ofcom consulted on BT proposals for an alternative scheme targeted more directly at those on low incomes. In the June statement Ofcom set out a revised targeted scheme proposed by BT modified to reflect concerns raised in responses to the consultation. The changes included a discount for early payment and an increased allowance of free calls included with the line rental.

Ofcom’s view was that the scheme represented a viable replacement for the existing schemes. To protect customers on the existing schemes, Ofcom indicated that the existing schemes will not be withdrawn until 600 000 customers are using the new scheme.

Since the June statement the eligibility criteria for the scheme have been broadened to address the concerns raised in responses. The scheme will be available for customers in receipt of Income Support, income-based Job Seekers Allowance and Pension Credit.

Disconnections policy is another indicator of affordability. BT has recently reviewed its credit management procedures and increased its marketing of schemes such as prepay to help customers with payment difficulties. This appears to be assisting customers and disconnection levels are beginning to fall.

Main documents

Supporting documents

Removing Callboxes
(PDF File, 148.2 KB)