Five questions answered on Ofcom’s broadband changes

Is it really going to change things that much?

Independent regulator and competition authority for the UK, Ofcom, has proposed new measures that they say will improve broadband deals for consumers. We answer five questions about the proposal.

What are the main proposals Ofcom is making?

In order to promote competition among providers and pass on savings to the customer, the regulatory body is proposing to cut the costs paid by broadband providers when switching customers, as well as shortening the minimum length of contracts.

It wants to cut the cost of switching to between £10 and £15, as well as reducing the minimum contract length to one month.

Currently, providers who use BT's superfast Openreach network must pay BT £50 if they want to switch a customer on to their service.

What has prompted these proposals?

In a recent report, Ofcom stated that upgrading from regular broadband connections to superfast – which is delivered through fibre-optic cables – was cheaper and is becoming increasingly popular. However, it said that switching from one user to another is expensive.

What has BT said about Ofcom’s proposals?

In a statement BT, which offers the BT superfast Openreach network, said it welcomed the plan: "We are pleased that Ofcom is maintaining pricing freedom for Openreach's fibre products.

"BT has already accepted a long payback period for its fibre deployment and its wholesale fibre prices - which are amongst the lowest in Europe - reflect this".

What do the experts say?

Marie-Louise Abretti broadband expert at uSwitch.com, speaking to the BBC said: "Targeting the market at wholesale level - offering monetary savings to broadband providers that are switching people - means it'll be up to ISPs [internet service providers] to make sure that cost savings are passed on to their customers.

"And with providers potentially saving up to £40 per customer, per switch, Ofcom must ensure this happens. We'd hope this move will see often hefty set-up fees scrapped, or at least reduced."

How many people in the UK currently use superfast broadband?

Only around 13 per cent of the UK has superfast broadband connection.

Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

Photo: Getty
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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.