Ofcom says that Openreach must open up its network of telegraph poles and underground tunnels to rivals, but stopped short of privatising the BT division.
Commenting on the Strategic Review of Digital Communications, published Thursday, the regulator said companies would be permitted to build their own, advanced fibre networks, connected directly to homes and offices.
“Openreach needs to change, taking its own decisions on budget, investment and strategy, in consultation with the wider industry. This would mean Openreach taking independent decisions on where to roll out broadband, how much money to spend on improving service quality and new high-speed broadband technology,” Ofcom said in a statement.
Responding BT said it was dedicated to improving service, but said Ofcom’s statement lacked clarity: “The focus now needs to be on a strengthened but proportionate form of the current model and we have put forward a positive proposal that we believe can form the basis for further discussions with both Ofcom and the wider industry.”
The move comes as a blow to rivals including Sky and TalkTalk that had campaigned hard for a complete separation.
Sky welcomed the move, but said more should be done: “BT must now be held to account for improving service and enabling delivery of fibre to Britain’s homes and businesses. Ofcom’s actions today are not the end of the debate but a staging post towards delivering the network and service that Britain needs,” the broadcast platform and broadband provider said in a statement.
Paolo Pescatore, Director, Multiplay and Media at CCS Insight said he wasn’t surprised at the outcome” “There were really only two viable options available and Ofcom, under the new leadership of Sharon White, has chosen to take a firm position by strengthening the current model. Openreach contributes significant profits to the company and being forced to open up its network will spur rivals and could drive greater competition.”
The regulator has been hard on the customer service aspects of the Openreach remit, which has come in for particular criticism.
Ofcom says it will now publish service quality performance data on all operators, and look to introduce automatic compensation for consumers and small businesses when things go wrong.
It also wants to make affordable broadband a ‘universal right’ for every UK home and business. 10 Mbps has been set as the new minimum standard.
