The FT is reporting that BT will ask Ofcom for a complete overhaul of its universal service obligations (USO).

BT would like Ofcom to allow the introduction of a form of means testing for customers currently eligible for subsidised fixed line calls. In addition, BT would like the regulator to conduct a root and branch review of the costs of universal service, allow a revamp of the light user tariff to exclude second homes, and give the go ahead for the removal of thousands of unprofitable payphones - removing the veto rights currently held local councils. BT claims that 67% of the 70,000 payphones around the country are unprofitable - that means we pay for them on our phone bills.

Universal service is reported to cost BT �70 million per year - and remains regulated under terms set at privatisation. BT - rightly in my opinion - points out that the telecoms landscape has changed radically since 1984, particularly with the near ubiquitous uptake of mobile. PAYG models have provided a great way for people to go wireless - people prefer the convenience despite cell phones costing more (although the cost is decreasing). Despite this, Ofcom have suggested only minor changes to the current USO arrangements in their on-going Strategic Review of Telecoms.

The Ofcom Consumer Panel needs to roll its sleeves up and get in on this one. It is difficult to assess the benefit of USO to marginal consumers - and BT have an interest in suggesting that services aren’t being used. Certainly, it’s been a long time since I saw anyone using a payphone - vandalising - yes, but actually using it - no - but this is hardly a ’scientific’ measure of the value of payphones. As usual, there is a balance to strike between ensuring consumers get service when and where they need it whilst ensuring the majority of consumers aren’t funding a service that’s not used.