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BT is pushing ahead with plans for a new governance structure for Openreach by appointing additional members to its infrastructure arm’s newly-formed board, despite continued disputes with the UK telecoms regulator.
Openreach, which owns the fibres and wires that allow homes and businesses in Britain to get broadband connections, said this morning that Sir Brendan Barber, former general secretary of the Trades Union Congress, and Edward Astle, a former non-executive director at National Grid, had joined the newly-formed board yesterday as independent members to “oversee strategy, investment and service delivery at the UK’s leading digital infrastructure company”.
BT named Mike McTighe, former chairman of Volex, JJB Sports and Pace, chairman of the new independent board last November.
Openreach said this morning that it would appoint a fourth board member “imminently” and that he or she would have a “specific focus on customer service”.
BT competitors including Sky, TalkTalk and Vodafone rely on Openreach to provide broadband services to their customers.
They have long argued that the existing structure presents a conflict of interest and unfair advantage for BT, and have pushed for a full break-up of BT by spinning off Openreach into a fully-independent company.
Ofcom, the UK telecoms regulator, has stopped short of demanding a full spin-off, but first called for Openreach to be a “legally separate” company within BT last July, with an independent board and chairman, as well as control over its budget.
At the time, Gavin Patterson, BT chief executive, said Ofcom’s recommendations were a “sensible way forward” for Openreach and that BT would introduce “significant changes to meet their concerns”.
However, in November, the regulator said that after months of negotiations, it was “disappointed” with BT’s proposed changes and that it would launch a public consultation before seeking EU approval to force the structural separation of Openreach.
Ofcom maintained its position this morning following Openreach’s latest announcement.
An Ofcom spokesperson said:
These changes fall short of our requirements for a legally separate Openreach that delivers for all of its customers.
We intend to take our plans to the European Commission later this year.
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