The UK’s telecoms watchdog, Ofcom, this morning delivered its verdict on BT’s Openreach business. BT has escaped the immediate threat of being broken up but faces much stricter regulation under Ofcom’s proposals. Here the FT’s Daniel Thomas outlines five key findings.
1. Ringfencing Openreach
BT’s broadband network will require greater independence and improved governance under Ofcom’s proposals, although the regulator so far only laid out a number of options including a legally separate, wholly-owned subsidiary with its own board and accounts. Ofcom also retained the “nuclear option” of forcing the structural separation of Openreach, which will give it a stick to use in forthcoming negotiations with BT.
2. Encouraging fibre network building in the UK
Ofcom is clear that ultrafast fibre networks are necessary to meet future demand in the British broadband market – dismissing BT’s promises to invest further to improve its centuries-old copper network – and it wants BT to help rivals lay their own cables through the underground ducts and overhead poles. Openreach will be required to provide a new database showing the physical location and characteristics of its ducts and poles.
3. Improve broadband services
Ofcom wants BT to fix faults and install new lines quicker, as well as provide financial compensation for wholesale and retail customers when service levels are missed.
4. Improve mobile and broadband coverage
Ofcom will support the goverment’s aim to provide a universal right to fast affordable broadband of speeds above 10mgbs, as well as impose new obligations in future mobile licenses to cover rural areas.
5. Easier switching for consumers using bundles of TV and and telecoms
Consumers should found it easier to switch between providers in future given plans to provide greater information about alternatives. Ofcom is also considering the deregulation of traditional landline telephone given rival options from large technology groups such as WhatsApp ahead of BT’s plan to switch off its traditional voice network in 2025.
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