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Implementing the government's 10Mbps Universal Service Obligation (USO) could prove extremely costly, a new report has warned.

Ministers have pledged to implement a new broadband USO that ensures everyone in Britain has a legal right to request minimum speeds of 10Mbps by 2020. The Digital Economy Act, which contained this commitment, received Royal Assent last week.

According to the Broadband Stakeholders Group (BSG), the cost of introducing the USO could be between £180 million and £930 million, depending on the cost threshold.

The organisation stressed it supports the goal of making good quality broadband universally available.

However, it said the report highlights the difficulty in designing a USO that meets this goal, whilst still providing value for money and limiting competitive distortion.

The BSG stressed that it also demonstrates that the level the cost threshold is set at will be vital to the USO's success, as well as the scale of the funding needed and the number of premises that the USO service would connect.

As a result, the organisation believes further information is required to gauge the economic benefit of each USO connection and to provide an accurate cost-benefit analysis.

Richard Hooper, Chair of the BSG, commented: "This reports rightly highlights the complexity of designing a broadband USO that is both cost-effective and built to achieve digital inclusion across the country. 

"Our report adds to the evidence base on the best way that a USO can positively contribute to the goal of universal good quality broadband and we look forward in engaging further in this debate with government."

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