BT Ordered to Split from Openreach by Ofcom
Ofcom has recently announced that it is proceeding with a formal notification to require the legal separation of Openreach from BT. This move has been made after BT failed to offer voluntary proposals that address competition concerns. The regulator has said it is preparing a formal notification to the European Commission to start the separation process.
Openreach is a division of BT that develops and maintains the UK’s main telecommunications network, which is used by providers such as Sky, TalkTalk, Vodafone and others, including BT’s own retail businesses. The main role of Openreach is to provide the infrastructure for the final leg of the journey of your telephone line from the exchange to your business. This is mainly copper wiring and is used to deliver broadband services.
Ofcom is pressing for an improved broadband and telephone service network for people across the country promoting better service quality and encouraging greater investment in networks. Creating a more independent Openreach – which works in the best interest of all providers, not just BT – is an important part of achieving this.
This follows years of complaints from BT’s rivals regarding the service they receive from BT, citing problems such as overcharging for use of its infrastructure, and that response to demands were slow. Companies such as Sky and TalkTalk wanted a full break up of BT, with Openreach being turned in to a separate company. Ofcom has come some of the way by proceeding with the legal separation, but the fact is that officially it will still be "owned" by BT. So, it remains to be seen how much control BT will be able to exert over Openreach under the new structure.
Ofcom reached this decision via a public consultation, which has now been published. Around 94,000 people responded to this consultation via an online campaign. Some 90,000 responses, a huge majority, called for action to improve the UK’s telecoms infrastructure.