Towards the end of 2016, Ofcom issued an order to BT that requires the company to separate from Openreach following the failure of the broadband company to address the “competition concerns” that Ofcom had previously raised.
Openreach – a subsidiary of BT that is responsible for maintaining UK broadband for everyone from BT, to Sky, Vodafone, and TalkTalk, has been frequently criticised for apparently working in BT’s favour. As a result, Ofcom decided in July that BT and Openreach should be made more independent – requesting proposals from BT about how the competition concerns would be addressed.
Unfortunately, Ofcom claims that BT did not respond to the request for potential solutions, which has driven the latest order for complete separation between companies.
Fair and Equal Broadband Connections
According to a spokesperson for Ofcom, the company is pressing forward with its attempts to improve telephone and broadband services across the UK, by pursuing greater investment in local networks and pushing improved service quality. Ofcom hopes that “Creating a more independent Openreach”, designed to work for the needs of all broadband and communication providers is an important part of this process.
Though Ofcom announced that some progress had been made on BT’s behalf to come forward with proposals regarding competition concerns, there simply hadn’t been enough feedback. They believed that immediate action was required to deliver better, more equal connections for all broadband and phone users.
Ofcom announced “Our current view is that an effective and robust form of legal separation” should improve services for everyone in the quickest amount of time.
The proposal was put forward to the European Commission, and included the request to make Openreach its own distinct company with its own board made up of members not affiliated with BT. Progress has already been made into this decision, with the announcement of the first Openreach chairman, Mike Mctighe.
A Long-Overdue Decision?
For many within the broadband and digital industries, the decision to separate Openreach from BT has been long awaited. According to the former director of wholesale for TalkTalk, Andy Hollingsworth, the decision will allow for greater “transparency for infrastructure investment”. After all, at this time, the UK is lagging behind the majority of Europe in regards to broadband speeds. With superfast broadband only being delivered to local cabinets – which can be miles away from the customer premise, we’re missing out on a lot of connectivity boosts.
According to Insight Principle Analyst for CCS – Kester Mann, the news of Ofcom’s decision to push for a break between BT and Openreach exhibits the ongoing concern that many have had over BT’s ability to satisfy competition concerns. To many, the old Openreach model was seriously flawed, and prevented the growth and development of broadband in the UK.
Now, the move towards a legal separation and greater independence should help to provide more benefits to other broadband providers in the long-term. Overall, it’s expected that broadband services will become more reliable and faster, regardless of who your service provider might be.
