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Ofcom: Openreach to remain part of BT

Posted by Sam Frances on Friday, February 26th, 2016 at 16:24

Openreach will remain part of the BT Group, but with significant changes to how it is run, Ofcom has announced.

Openreach’s future has been a key issue in Ofcom’s Strategic Review of Digital Communications, with one option being to separate Openreach from BT entirely. However, yesterday Ofcom announced that it had opted for a less radical route.

Firstly, Openreach will be required open up its poles and ducts.

Openreach will be required to open up its telegraph poles and ‘ducts’ - the small, underground tunnels that carry telecoms lines. Using these, rival providers will be able to build their own fibre networks, connected directly to homes and offices.

Openreach must make it much easier for competitors to access this network, and provide comprehensive data on the nature and location of its ducts and poles. This new ‘digital map’ of the UK will allow competing operators to invest, plan and lay advanced networks, giving people more choice over how they receive their phone and broadband services.

— Ofcom statement

Secondly, Openreach’s governance will be reformed to give it more independence from its parent company.

Openreach’s governance lacks independence from BT Group. The wider company has retained control over Openreach’s decision-making and the budget that is spent on the network, and other telecoms companies have not been consulted sufficiently on investment plans that affect them.

For these reasons, Ofcom has decided it is necessary to overhaul Openreach’s governance and strengthen its independence from BT. In future, Openreach needs to take its own decisions on budget, investment and strategy - such as the deployment of new networks.

BT’s CEO Gavin Patterson said:

Ofcom have today explained why breaking up BT would not lead to better service or more investment and that structural separation would be a last resort. We welcome those comments. The focus now needs to be on a strengthened but proportionate form of the current model and we have put forward a positive proposal that we believe can form the basis for further discussions with both Ofcom and the wider industry.

For more information, see:

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