Ofcom wants Openreach legally distinct from BT to accelerate fibre roll-out

26 Jul 2016

Openreach to become a distinct legal entity within BT with its own board as part of measures by Ofcom to accelerate fibre rollout in the UK

The UK’s telecoms regulator Ofcom revealed a set of measures calculated to accelerate the rate of fibre broadband roll-out in the UK, including making Openreach a distinct company with its own board.

Ofcom is reforming the UK telecoms market in order to lead a step-change in the delivery of telecoms services for all users.

This includes creating a more independent Openreach, greater choice of broadband networks and better broadband and mobile coverage.

‘We’re pressing ahead with the biggest shake-up of telecoms in a decade’

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Under the proposed plans, Openreach is to become a legally separate company within BT, with its own board.

This is likely to be in response to claims in the industry that BT retains influence over significant Openreach decisions.

Under the Ofcom plan, Openreach will own its own assets and will have a separate strategy and control over budget allocation from BT. It will also have its own brand, not affiliated with BT.

All of these measures are designed to ensure that Openreach acts independently from BT.

New rules to accelerate broadband rollout

On Sunday (31 July) new rules will be introduced giving telecoms operators more rights to access physical infrastructure from incumbent provider BT’s wholesale arm, Openreach.

The measures are designed to reduce the cost of deploying broadband networks by sharing access to infrastructure across different sectors.

BT is understood to have started trials of a new, simpler process for sharing its network with five other telecoms companies.

A number of companies are rolling out ultrafast fibre in the UK. Virgin Media is investing £3bn to extend its network across the UK. CityFibre, Sky and TalkTalk are connecting fibre to premises in York, and KCom is doing so in the Hull area. Other providers, such as Hyperoptic and Gigaclear, are bringing ultrafast broadband to other local areas.

All phone and broadband providers in the UK are obliged to make access to services easier, including automatic compensation, easier switching and advanced coverage checkers.

Ofcom is also in favour of a legal right to decent broadband and said it believes all homes and offices should receive at least 10Mbps.

“We’re pressing ahead with the biggest shake-up of telecoms in a decade, to make sure the market is delivering the best possible services for people and business across the UK,” said Ofcom CEO Sharon White.

BT said it welcomed OfCom’s recognition that structural separation would be a disproportionate move.

“Our proposals provide Ofcom with every benefit they’re seeking but without any of the substantial and unavoidable costs associated with legal incorporation. We will continue to engage with them over the coming months,” BT said in a statement.

BT Tower London image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years