BT seeking to ease burden of £80m-a-year public service remit

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The Independent Online

Ben Verwaayen, the chief executive of BT, has called for a review of the universal service obligation that legally binds the company to provide basic telecoms services to British homes.

Speaking about the universal service obligation at the 3GSM telecoms convention, which was held in Barcelona last week, Mr Verwaayen said: "The regulator should think about regulating on service rather than technology."

Telecoms analysts said that his comments provide a clear indication that Mr Verwaayen wants other communications companies - including, for example, Vodafone and Cable & Wireless - to contribute to fulfilling BT's commitments to universal service.

One said: "The universal service obligation was created in 1984 when BT was privatised. But the world has moved on since then and there are now several other powerful and wealthy telecoms groups in the UK that could arguably share the load."

BT's universal service obligations include providing special tariffs for poorer customers; a connection to the fixed-line network, which includes functional internet access; reasonable geographic access to public call boxes, and a range of services for customers with disabilities, including the text relay service.

Kingston Communications, which owns the fixed-line network in and around Hull, has similar obligations in its operating area. It is believed the universal service obligation costs BT about £80m per year.

One alternative would be to create a fund to which every big telecoms player would contribute. However, analysts believe that such a fund would be complex to set up and administer.

Ofcom, the telecoms watchdog, completed a review of BT's operations last year. It is due to carry out a cost-benefit analysis of BT's universal service obligation later this year.