On 27 April 2017, following agreement by both Houses of Parliament on the text of the Bill, the Digital Economy Act received its Royal Assent and therefore became law. The bill had been before Parliament since July 2016 and was subject to a number of amendments before being rushed through owing to the general election on 8 June 2017. This isn’t the first time the UK has tried to implement such legislation. Back in 2010, and also just before a general election, a severely watered Digital Economy Act entered into force only for it to be eventually repealed in 2011.
The main provisions of the Act
While attention has mostly been on the legal right to faster broadband speeds, there are a number of other aspects to the Act which are important to the sector overall, particularly in relation to making it easier to deploy infrastructure.
The provisions most relevant to communications providers include:
- giving every household a legal right to request a fast broadband connection
- giving consumers and businesses better information about communication services, easier switching and automatic compensation
- cutting the costs for new infrastructure and simplify planning rules
- helping protect consumers from bill shock by requiring mobile network operators to offer a bill capping facility
- ensuring that the Crown guarantee of BT pensions has the necessary flexibility to allow BT and Openreach to be further separated
A universal service obligation for broadband
One of the biggest sticking points had been around what speed broadband households should have a legal right to. The government asked Ofcom for technical analysis and recommendations. Accordingly in December 2016, Ofcom presented the government the following three scenarios:
- Scenario 1 (Ofcom's preferred approach): standard broadband with a 10Mbps download speed
- Scenario 2: 10Mbps download/1Mbps upload, a contention ratio of 50:1 with a 100GB per month usage cap
- Scenario 3: superfast broadband: 30Mbps download/6Mbps upload, a guaranteed 10Mbps at all times with an unlimited usage cap
Alongside the headline speeds, Ofcom also considered the cost of implementation and ways to recover it. The cost estimates ranged from £1bn (scenario 1) to £2bn (scenario 3), and assumed a £10 - £20/year premium on the average consumer bill to pay for it.
From the outset, the government seemed committed for the speed to be at least 10Mbps and for it to rise over time. The House of Lords took a different view and pushed for the speed to be 30Mbps (scenario 3), however were eventually defeated at the wash-up stage in favour of 10Mbps. Crucially the date by the USO should be achieved has been left out of the Act.