Telecoms regulator, Ofcom, has announced it is formally notifying the legal separation of Openreach from BT, after BT failed to offer voluntary proposals that address its competition concerns.
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Ofcom said it was disappointed BT had not yet come forward with proposals to meet their competition concerns. Although some progress has been made, it has not been enough, and action is now required to deliver better outcomes for phone and broadband users.
Openreach is the division of BT Group that develops and maintains the UK’s main telecoms network. BT’s rivals, including Sky and Talk Talk, who currently use the Openreach network, have already complained about BT overcharging for the use of broadband lines. They have called for a full break-up of BT, with Openreach being turned into a separate company.
Creating a more independent Openreach, Ofcom feel, would be in the interest of all providers, not just BT. This ties in with its plans to improve broadband and telephone services for people across the country, pursuing better service quality and encouraging greater investment in networks.
Plans to reform Openreach
In July, Ofcom set out its competition concerns regarding BT’s ability to favour its own retail business when making strategic decisions about new network investments by Openreach.
Around 94,000 people responded to the consultation via an online campaign. Some 90,000 called for action to improve the UK’s telecoms infrastructure; including the full, structural separation of BT. A few responses shared positive experiences of BT and urged no further action.
A significant number of the 4,000 non-standard responses raised concerns about slow broadband speeds, the availability of fibre broadband and the quality of service from major service providers.
These views underline the critical role digital communications play in people’s lives, and the importance of the steps Ofcom is taking to deliver better telecoms services for people and businesses.
Ofcom’s proposal requires Openreach to become a distinct company with its own Board. Openreach would be guaranteed greater independence to make decisions on strategic investments, with a duty to treat all of its customers equally.
The regulator is now preparing to notify the European Commission of its intention to implement these plans, requiring the legal separation of Openreach to make it more independent.
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