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BT should let rivals use infrastructure to lay faster broadband cables, Ofcom says BT should let rivals use infrastructure to lay faster broadband cables, Ofcom says
(35 minutes later)
BT has been told to let rivals use its infrastructure to lay fibre cables that are faster than its own copper network, as part of a review of Britain’s broadband needs by regulator Ofcom. BT has been told to let rivals use its infrastructure to lay fibre cables that are faster than its own copper network, as part of a review of Britain’s broadband needs by the regulator Ofcom.
In a once-in-a-decade review, the regulator stopped short of recommending that BT be forced to split off Openreach, the division that owns the broadband infrastructure. The verdict will be a blow to rivals including Sky and TalkTalk, which have said BT should lose control of the network. In a once in a decade review, the regulator stopped short of recommending that BT be forced to split off Openreach, the division that owns the broadband infrastructure.
But Ofcom left open the possibility of revisiting that nuclear option if BT does not toe the line on a string of issues. It also gave a series of recommendations, including automatic compensation for customers and businesses when the Openreach network experiences problems. The regulator wants to introduce league tables and make it easier for customers to switch provider. The verdict drew criticism from TalkTalk and Sky, which said the regulator had not gone far enough.
In a bid to ensure that Openreach is not serving the needs of BT alone, Ofcom said the network should be run at “arm’s length”, signalling structural change at BT. The regulator also wants greater transparency on what Openreach is doing, amid complaints of poor service by BT and claims by rivals that being forced to use the network puts them at a disadvantage. TalkTalk’s boss, Dido Harding, said splitting Openreach from BT entirely would ensure “BT isn’t the one making the decisions on whether or not there is more money in Openreach or not and that’s exactly why I think they should be separate”.
Harding also said it was “deeply suspicious” that BT boss Gavin Patterson has pledged to spend more on Openreach in the run-up to the decision. “Independence would mean that Openreach makes the right decisions for their customers rather than the decisions that are right for BT Group,” she added.
A Sky spokesperson said: “We believe the simplest and most effective way to fix the current broken market structure is for Openreach to be completely independent. We are pleased to see that separation is still on the table.”
Lib Dem leader Tim Farron said Ofcom had “bottled it” and called on the government to force a full split.
Ofcom’s more moderate proposal would see the network run at “arm’s length”, it said, with separate people making decisions on its budget, investment and strategy. This would “remove the incentive and ability to discriminate against competing providers”.
But Ofcom left open the possibility of revisiting the nuclear option of full separation if BT did not comply on key issues. It said this might prove to be the “cleanest and most clear cut long-term solution”.
One source familiar with the situation said this was not a negotiating tactic to force BT’s hand, adding that full separation was “unequivocally not off the table”.
The BT chief executive, Gavin Patterson, said: “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.”
Ofcom also gave a series of recommendations to improve customers’ experience. These include automatic compensation for customers and businesses when the Openreach network experiences problems. The regulator wants to introduce league tables and make it easier for customers to switch provider.
The regulator also wants greater transparency on what Openreach is doing, amid complaints of poor service by BT and claims by rivals that being forced to use the network puts them at a disadvantage.
Ofcom said Openreach directors should be forced to consult customers – such as Sky and TalkTalk – on its investment plans and provide more information about how it allocates costs and assets.Ofcom said Openreach directors should be forced to consult customers – such as Sky and TalkTalk – on its investment plans and provide more information about how it allocates costs and assets.
It should also build a database of its telegraph poles and ducts, to allow rivals to plan where they might want to lay ultrafast fibre to compete with BT’s copper network.
Patterson cast doubt on whether rivals would take up the offer, despite complaining of the slow pace of fibre roll-out. “Our ducts and poles have been open to competitors since 2009 but there has been little very interest to date. We will see if that now changes,” he said.
The regulator also wants to introduce tougher minimum service requirements to make sure BT repairs faults more quickly, an area in which rivals say it is dragging its feet. There will also be a new government-backed universal obligation to provide fast broadband to every home and business in the UK, starting at 10 megabits per second.The regulator also wants to introduce tougher minimum service requirements to make sure BT repairs faults more quickly, an area in which rivals say it is dragging its feet. There will also be a new government-backed universal obligation to provide fast broadband to every home and business in the UK, starting at 10 megabits per second.
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Although Ofcom does not have powers to impose any changes on BT, it will seek a voluntary agreement with the telecoms regulator. If BT does not cooperate, Ofcom can refer the decision to the Competition and Markets Authority, a long process that both sides will likely seek to avoid. Although Ofcom does not have powers to impose any changes on BT immediately, it can take its plans to the European commission for approval. At that point it can impose its recommendations on the telecoms giant. “A voluntary, binding settlement is in everyone’s interests and we will work hard to ensure one is reached,” said Patterson.
Dan Howdle, telecoms expert at broadband and phone advice site Cable.co.uk, said Ofcom had not been tough enough. “Ofcom’s decision to open up Openreach’s poles and tunnelling to competitors and to give them more say in future strategic and budgetary decision-making 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 – a rollout couched in £1.7bn of public money and a potentially vote-swinging degree of incumbent reputation – the decision should be seen as one of least disruption. It is, perhaps, a case of poor timing winning out over common sense.
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“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 2.5m UK homes that do not currently have access to superfast broadband.” Ofcom’s chief executive, Sharon White, said: “People across the UK today need affordable, reliable phone and broadband services. Coverage and quality are improving, but not fast enough to meet the growing expectations of consumers and businesses.
Ofcom chief executive Sharon White said: “People across the UK today need affordable, reliable phone and broadband services. Coverage and quality are improving, but not fast enough to meet the growing expectations of consumers and businesses. “So today we’ve announced fundamental reform of the telecoms market – more competition, a new structure for Openreach, tougher performance targets, and a range of measures to boost service quality. Together, this means a better deal for telecoms users, which will improve the services and networks that underpin how we live and work.”
“So today we’ve announced fundamental reform of the telecoms market – more competition, a new structure for Openreach, tougher performance targets, and a range of measures to boost service quality.
“Together, this means a better deal for telecoms users, which will improve the services and networks that underpin how we live and work.”