Universal Service - Telecommunications 23 October 2009 Presentation – Zahid Deen, Competition Group

1 Snapshot of current universal service Acts as ‘safety net’ to extend access to basic fixed line services  Meet reasonable requests for connection to a fixed location  A Social (Low cost) tariff  Reasonable access to Payphones  Access for end-users with a disability (includes provision of a Text Relay service) - Other requirements e.g. around directory information and billing - At affordable and uniform prices

2 Who sets the scope of the USO? Europe Directive 2002/22/EC Broad framework (Smorgasbord) Requirement for “transparent, non-discriminatory and competitively neutral” and “not more burdensome than necessary” Ofcom BIS BT & KCOM Statutory Instrument: Universal Service Order Describes, at a high level, the extent of USO in the UK s65-72 Communications Act 2003 Describes Ofcom’s powers and obligations in securing universal service consistent with the Order Sets Universal Service Conditions on designated Universal Service Provider(s) The UK designated Universal Service Providers

3 Ofcom will consult on a Framework for reviewing the USO Intend to issue first consultation document in 2010 Consultation likely to set out a high level frameworks for assessing financial and social costs and benefits of the USO – aim is more sustainable and better aligned USO Net Cost Assessment Set out where the burden of proof lies Outline framework for considering evidence under a net cost assessment (NCA) Assessment of Societal Value Identify those sources of value that are not captured in the NCA Set out, at a high level, the way in which such benefits could be captured in a value assessment Funding and Procurement Options Set out options available to us under the existing framework (e.g. Industry fund)

Blue Skies for future USO... 4 Universal broadband – a ‘commitment’ Government has proposed 2Mbps availability across the UK Mobile??? Government proposes revised obligations for spectrum awards in order to push coverage Other – such as new services for end-users with a disability (e.g. video relay) Different services may have different impacts and cost implications

…….Ultimately, a decision for Government Ofcom’s role is to implement the USO Government set the scope of USO – they determine if new services should be included Some of the discussion about what should be part of USO relates to what services are necessary for participating in society Government also influences how participation should occur - in public services (e.g. will broadband be essential in order to access some public services?) 5