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Ofcom announces plans for a major reform of Openreach

by Mark Tyson on 26 July 2016, 11:31

Tags: British Telecom (LON:BT.A), Ofcom

Quick Link: HEXUS.net/qac4xk

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Ofcom has announced today new plans to "make digital communications work for everyone". Earlier in the year Ofcom said it was looking into a more independent Openreach; with a greater choice of broadband networks, including fibre connections to homes and offices; better quality of service across the whole industry; and better broadband and mobile coverage for people and businesses. Detailed plans, for some of the important network aforementioned aspects, have now been drawn up.

A key point to note is that BT won't have to sell off Openreach but it will have to make it into a legally separate company within BT Group, it will its own board with a majority of non-BT board members. This 'practical plan' should be able to be implemented within months rather than the years required to sell-off Openreach, Ofcom chief executive, Sharon White, told the BBC Today programme.

Openreach to become more independent

BT's influence on Openreach decisions has meant that, so far, BT has been able to push things in the interest of its own business, rather than anything of benefit to competitors. The following changes have therefore been proposed by Ofcom:

  • Openreach to become a distinct legally separate company within BT Group
  • Openreach to have its own Board with a majority of non-executive directors, not be affiliated to BT Group in any way
  • Executives accountable to the new Board
  • Greater consultation with customers such as Sky and TalkTalk
  • Openreach staff to be employees of the new company, rather than BT Group
  • Openreach to own assets that it already controls – the physical network
  • A separate strategy and control over budget allocation
  • Independent branding

The above implementation should mean that Openreach makes decisions "for the good of the wider telecoms industry and its customers," thinks Ofcom.

Fibre network boost

Openreach is to facilitate the easier deployment of fibre networks to customers of BT and rivals. A digital map of where all the fibre infrastructure is and its capabilities is being drawn up for sharing. Furthermore, from the end of this month, new rules come into force that will give telecoms providers further rights to access physical infrastructure.

Last but not least, Ofcom has drawn up some bullet points with steps to improve quality of service. Key changes include the introduction of automatic compensation when service levels are below par, easier provider switching, improved advanced service coverage checkers online, improving business lines, texts to opt out of nuisance calls, and support for "a legal right to decent broadband," of at least 10Mbit/s – with this minimum level to increase over time.

The above plans are said to represent "the biggest shake-up of telecoms in a decade," according to the Ofcom Chief Executive, Sharon White.



HEXUS Forums :: 18 Comments

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Still not enough, they need broken up. Also the national networks from Virgin and other providers should also be removed from their control.

Combine them into one new agency and make it into a independent governed unit that is controlled nationally on the basis of universal access that companies buy access from and then set the new agency to laying flipping fibre to every part of the UK already!!!

They would not be for profit as all charges would be ring fenced to them to apply to upgrading the network. Seriously annoys me already that we leave a large part of our GDP to a set of private organisations to mess around with.

We wouldn't do this to the roads network that also generates a large amount of our GDP, so why allow it to happen to our digital roads network?
Poorly written - Mark Had a few too many ?
A total breakup would mean BT would no longer be subsiding Openreach (as is the case at the moment). Some other source of funding for Openreach would need to be located, or Openreach would either drop further in quality of service, or have to put up wholesale prices for everybody just to maintain current service levels.

The chance of Openreach transitioning from a private company successfully to a public entity is pretty much zero under the current government (who are hell-bent on doing the exact opposite even in the face of evidence to the contrary, like the East Coast Main Line operation by DOR).
edzieba
like the East Coast Main Line operation by DOR).

Just thinking about that one still winds me up.
edzieba
A total breakup would mean BT would no longer be subsiding Openreach (as is the case at the moment). Some other source of funding for Openreach would need to be located, or Openreach would either drop further in quality of service, or have to put up wholesale prices for everybody just to maintain current service levels.

But isn't the point that if they were separate, all telcos would then pay for access which is what BT is doing now by subsidising? And surely if Openreach were separated from BT then line rental, such as it is, would go to the split off entity and not BT (barring the usual markup) since BT would not own the infrastructure? Isn't that essentially the subsidy you're talking about?

And lets not forget the billions in public subsidy Openreach has had and yet wholly failed to deliver value for (and which it has lied about - the figures they claim for the cost of installing fibre to a cabinet is something like four times the actual figure).