Ofcom has announced plans for a major reform of Openreach, the network division of BT, which maintains the infrastructure for Sky, TalkTalk, Vodafone and BT itself.
The regulator says Openreach should become a distinct company with its own board. Employees should work directly for the new company rather than BT and it should retain its own operational structure. Openreach would also have its own brand not affiliated to BT. However, Ofcom has stopped short of a full separation.
Ofcom wants there to be a greater choice of broadband networks to business and the public including fibre connections to homes and offices.
The existing infrastructure has been in place since 2005, but there has been increasing concern at the influence of BT, and the perception that it makes decisions that favour its own retail business.
One critic has already voiced their disappointment: Jeremy Darroch, Group Chief Executive, Sky said. “Today’s proposal to create a legally separate Openreach is a step in the right direction, although falls short of the full change that would have guaranteed the world-class broadband network customers expect and the UK will need. In particular, leaving Openreach’s budget in the hands of BT Group raises significant questions as to whether this will really lead to the fibre investment Britain requires.
BT has put forward its own plans to change Openreach’s governance, but the regulator says these do not fully address Ofcom’s concerns.
The telco has already started trials of new, simpler processes for sharing its network, working with five other telecoms companies.
Responding to the announcement a Department for Culture, Media and Sport spokesman said: “We are clear that a more independent Openreach is needed to benefit consumers and the UK’s digital infrastructure. We are concerned that BT’s proposals do not go far enough and think it is right that full structural separation remains an option. Swift and clear action is needed to give certainty to consumers, industry and investors in the UK’s broadband infrastructure, and which delivers rapid improvements in the level of investment and service”.
Ofcom is seeking views on the plans with a closing date for responses of October 4.
