Reform, not removal from BT, for Openreach | Infrastructure | News | Rapid TV News
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In a move that will on balance dismay its rivals in UK Internet provision, UK telco regulator Ofcom has mandated changes, if not a wholesale shake-up, of the Openreach division of incumbent provider BT.

Openreach owns the pipes and telephone cables that connect nearly all businesses and homes in the UK to the national broadband and telephone network and with whom rival broadband and IPTV firms have to work with the provide their own services.

Rival ISPs such as TalkTalk, and in particular Sky, have called for Openreach to be broken up from the BT corporate entity. Only days ago, Sky CEO Jeremy Darroch said that if the UK were to improve its productivity and international competitiveness, and ensure that the country benefits from the latest communications technology, then it needed a better digital infrastructure, something not possible with the current provision arrangement.

He added: “BT’s broadband network faces little competition, BT sweats its copper assets for as long as possible, knowing it will not lose its captive customers, and continues to earn decent profits even if it does not invest in fibre. Sadly, it is often not economically viable for other providers to roll out separate ultrafast networks.”

Ofcom’s announcement forms the initial conclusions of its Strategic Review of Digital Communications in 2015 which the regulator says is designed to make the UK a world-leading digital economy over the next decade and beyond.

Essentially the regulator is mandating BT to now reform Openreach to better serve UK consumers and businesses and open up the network so competitors can connect fibre to homes and offices. Ofcom insists that Openreach must offer better quality of service for all customers, including automatic compensation.

As a result, says Ofcom, Openreach must open up its network of telegraph poles and underground tunnels to allow rivals to build their own, advanced fibre networks, connected directly to homes and offices. It adds that Openreach must make it much easier for competitors to access such network, and provide comprehensive data on the nature and location of its ducts and poles.

Commenting on the announcement, BT said in a statement: “We are keen to understand and address Ofcom’s concerns so we will review their paper in detail. A great deal of what they are proposing is already in place and we are open to discussions about how the current rules can be amended and updated. A voluntary, binding settlement is in everyone’s interests and we will work hard to ensure one is reached.”

Dan Howdle, telecoms expert at broadband and phone advice site, added: “Ofcom's decision ... goes halfway to alleviating competitor complaints, but stops short of addressing the prime concern. With Openreach currently in the midst of its BDUK superfast broadband rollout, aimed at reaching 95% of UK homes by next year the decision should be seen as one of least disruption. It is, perhaps, a case of poor timing winning out over common sense. A recommendation to split would have absolutely been the right decision for the UK broadband industry, but, in the short term at least, perhaps not for the 2.5 million UK homes that do not currently have access to superfast broadband."