Ofcom to pursue legal separation of Openreach from BT

In a statement, the regulator said that: “We are disappointed that BT has not yet come forward with proposals that meet our competition concerns. Some progress has been made, but this has not been enough, and action is required now to deliver better outcomes for phone and broadband users.”

Ofcom has proposed that Openreach becomes a distinct company with its own board, with the majority of the non-executive directors and the chair not being affiliated with BT. “Openreach would be guaranteed greater independence to make decisions on strategic investments, with a duty to treat all of its customers equally,” added the statement. The regulator notes that if its monitoring suggests that “legal separation is not delivering sufficient benefits for the wider telecoms industry and its customers”, then “we will return to the question of structural separation – fully breaking up the companies”.

Ofcom is preparing to notify the European Commission of its intention to separate the two companies and states that during this process it remains “open to BT bridging the gap between its proposal and what is required to address our strong competition concerns.” The regulator is expecting to consult publicly on a submission to the Commission in early 2017 and following this, quickly submit a detailed plan to it, so a decision can be made.