25 Feb 2016

Ofcom to make Openreach more independent, falls short of ordering sell-off

Ofcom has today (25 February) announced that it will reform BTs governance of Openreach, the BT subsidiary that owns and managed the UKâ€™s fixed line physical infrastructure, such as the copper network. It will produce detailed proposals later this year, aimed at increasing Openreachâ€™s independence, allowing it to serve all its customers equally and increase the transparency of the split in costs between Openreach and BT.

The regulators decision has been prompted by its (perhaps unsurprising) finding that Openreach is incentivised to make decisions in the interest of its owner, BT.

Ofcoms new approach may lead to Openreach becoming a ring-fenced BT subsidiary with its own governance, but Ofcom reserves the right, if necessary to force BT to sell-off Openreach entirely.

As part of the changes, Ofcom will subject Openreach to tougher, minimum requirements for fault repair and the speed with which it installs new lines. Openreach will also be required to make its telegraph poles and ducts the small underground tunnels that carry telecoms lines, to competitors.

Ofcom will introduce quality of service performance tables to provide consumers and businesses with more transparency and to identify the best- and worst-performing operators. It also intends to introduce automatic compensation for users of fixed and mobile networks when things go wrong, eliminating the need for customers to seek redress for individual service interruptions.