Faster Broadband for All Is Now Closer to Reality in the U.K.

  • Parliament advances universal internet coverage option
  • Homes would have right to basic broadband if implemented

Residents of rural U.K. are one step closer to gaining access to faster internet services capable of streaming high-definition TV shows and movies.

The British Parliament on Thursday passed a law giving the government authority to introduce a universal service obligation that would require broadband download speeds of 10 megabits a second for the remaining 5 percent of the population that don’t have access to that level of service -- about 1.4 million homes.

To subscribe to online video services that have become increasingly popular around the world, you need fast a broadband connection. Netflix Inc. recommends a minimum connection speed of at least 5 megabits a second to watch basic HD video, while Amazon recommends at least 3.5 megabits. Almost 250,000 U.K. premises can’t get speeds higher than 2 megabits, and more than 600,000 can’t get 5, according to a report last year from Ofcom, the U.K. communications regulator.

The vote follows months of discussions between Prime Minister Theresa May’s Conservative government and BT Group Plc, the former British phone monopoly, about offering basic broadband in rural areas. Implementation of the law will be the responsibility of a future government, with British voters heading to the polls on June 8 for a general election called earlier this month. The broadband provision was part of the Digital Economy Bill, among several rushed through Parliament before shutting down in advance of the election.

Broadband access in the U.K. is an issue of vital importance to politicians, particularly those with rural constituencies in places like the Scottish Highlands and the Welsh Isle of Anglesey, as well as to investors and regulators.

BT has proposed to take the lead on implementing a universal service obligation to connect those in the hardest-to-reach places. Still, more discussions are needed to establish the final design of any program, including funding, technology options and cost limits for premises.

BT is offering to help with the rural rollout on the condition that it gets a big enough return. Telecommunications companies have been reluctant to spend vast sums to reach a limited number of households in remote areas, since it would take many years to recoup the investments.

The law specifies that once 75 percent of the U.K. has signed up for service of 30 megabits a second or more, a review would be triggered to consider increasing the speed level for the universal service obligation to 30 megabits.

While most people living in the U.K. can connect to the internet at speeds of 30 megabits a second or faster, and enjoy the ability to stream video on 4K Ultra high-definition TVs, many in rural parts of the country struggle to stay connected to the modern world with slow internet or spotty satellite services. And only 2 percent have access to fiber connections with speeds higher than 250 megabits, a speed needed to accommodate technologies such as some virtual reality and connected devices.

BT’s Openreach network division, used by some of its rivals, has come under pressure to spend more money sooner on laying fiber all the way to homes and businesses to prepare for future demand. The company has so far focused on upgrading connections to street cabinets to reach more buildings faster -- and at a lower cost.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE