Ofcom is pressing ahead with plans to force Openreach to become a legally separate company within the BT Group with the aim of providing faster and more reliable broadband across the UK.
Why is Ofcom proposing reforms to Openreach?
BT’s Openreach division develops and maintains the UK’s main telecoms network used by telephone and broadband providers such as Sky, TalkTalk, Vodafone and BT Consumer.
The current structure of BT was introduced by Ofcom in 2005, but the watchdog said it meant BT retained influence over significant Openreach decisions and has an incentive to make these decisions in the interests of its own retail businesses, rather than competitors.
Ofcom chief executive Sharon White has called her proposals 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.”
What are the specific complaints about Openreach?
More than nine out of 10 households now have superfast broadband, but there are constant complaints that Openreach is too often slow at making repairs and new connections.
Rival telecoms companies have long called for BT to replace its ageing network of copper wire.
MPs claimed in July that BT has “significantly under-invested” in Openreach and accused the company of making strategic decisions that put the group’s interests ahead of customers and its Openreach business.
What are Ofcom’s arguments for splitting off Openreach, rather than proposing it is sold off?
Ofcom said its plans would ensure the most independence from BT without the costs and disruption of a full break-up, with Openreach becoming a legally distinct company with its own board, including a majority of non-executive directors not affiliated to BT Group, its own branding and control over its budget allocation.
It believes legal separation can be introduced quickly rather than in the years that a sell-off would require.
But rivals still believe the plans do not go far enough.
What will the proposals mean for consumers?
Ofcom believes the move will make a significant difference to customers in the form of faster, more reliable broadband.
It has said a more independent Openreach would mean the division is better placed to invest in “fast fibre to the doorstep”.