BT and Openreach must be ‘distinct’ but breakup not necessary, says Ofcom

The recommendation follows complaints from competitors such as Sky and Vodafone, which say BT’s control of the network hampers their ability to serve customers

Michael Scaturro
Tuesday 26 July 2016 08:52
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BT has struggled to persuade MPs and regulators that its ownership of the Openreach network does not hamper competition
BT has struggled to persuade MPs and regulators that its ownership of the Openreach network does not hamper competition

BT should be permitted to retain ownership of the UK’s main broadband network, but it needs to give rivals better access to it, regulator Ofcom said.

Ofcom called on BT to set up a legally separate entity for the network unit within BT, with its own board, but stopped short of seeking a breakup, according to a statement on Tuesday.

The recommendation follows complaints from competitors such as Sky and Vodafone, which say BT’s control of the network hampers their ability to serve customers.

The regulator’s recommendation, the latest stage in a review of digital communications in the UK, builds on a decision in February.

At that time, Ofcom ordered BT to give competitors physical access to its telephone poles and underground tunnels and to let rivals take direct control of connections.

Gavin Patterson, BT's chief executive officer, has said that the network unit, called Openreach, is already one of the most heavily regulated businesses in the world and that the company has volunteered to accept tighter regulation to bring matters to a “clear and speedy conclusion.”

In May, the company proposed spending as much as £6 billion on network upgrades, on condition of receiving assurances from regulators that it will be able to make a profit from Openreach.

The same month, chief executive officers of BT rivals published a proposal for Openreach, calling for the creation of a separate company, financially and legally independent of BT.

© 2016 Bloomberg

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