Ofcom reports on more independent Openreach
Ofcom yesterday published its first progress report on the legal separation of Openreach from its parent company BT
BT agreed in March last year to Ofcom’s requirements to make Openreach – which runs the UK’s main phone and broadband network – a distinct company. This means Openreach having its own staff, management and strategy, and a legal purpose to serve all of its customers equally.
Since then, the companies have been implementing these changes, which represent the biggest reform of Openreach in its history.
Ofcom’s Openreach Monitoring Unit has been assessing work by BT and Openreach to implement the new arrangements, measuring their performance against a set of agreed commitments.
This report (PDF, 349.2 KB) finds that, while progress towards legal separation has been broadly satisfactory, with many of the governance changes now implemented, some remaining steps have yet to be completed.
Findings from the report
- Progress broadly satisfactory. Openreach is now a separate legal entity from BT, with its own independent board. There has been progress in other areas, such as removing ‘BT’ from branding, putting in place compliance procedures, and carrying out staff training on the changes. BT and Openreach have both worked openly and constructively with Ofcom throughout the implementation phase.
- But legal separation not finalised. Due to complexities with BT’s pension scheme, the company has yet to transfer Openreach employees to the new Openreach Ltd. These pension challenges have been resolved, and BT has confirmed it will start the transfer process in the coming months, completing a consultation with staff by the end of this year.
- Positive signs on investment. Openreach has committed to invest in faster, better broadband networks, through a new ‘Fibre First’ strategy. The company has extended its planned roll-out of full-fibre broadband by 1 million premises, to 3 million by the end of 2020. However, we expect to see bolder commitments over time.
- Industry is cautiously optimistic. Many telecoms companies who rely on Openreach have stressed the importance of the new arrangements leading to tangible, positive change – such as greater transparency in Openreach’s decision making. However, some remain uncertain whether the new arrangements will allow Openreach to act with greater independence and treat all its customers equally in practice.
Ofcom has also been monitoring progress in Northern Ireland, where BT’s Northern Ireland Networks delivers the services provided by Openreach in the rest of the UK. Improved governance measures and additional staff training in Northern Ireland have been put in place.
Ofcom is closely monitoring the outstanding implementation steps, to ensure they are completed without further delay.
We will continue to monitor progress on implementation through regular reports. These will also assess, using a range of measures, how far Openreach’s behaviour and performance is delivering positive changes for the industry.
NOTES TO EDITORS
- The changes are designed to address Ofcom’s concerns that, in the past, BT had too much control of Openreach’s strategic decisions, and could favour its own retail business over other customers.
- The work carried out by the Openreach Monitoring Unit for this report has included consultation with industry, and meetings and interviews with senior staff from BT and Openreach.
Latest News from
KCOM fined £900,000 for emergency-call failure15/10/2019 11:15:00
Ofcom yesterday fined KCOM £900,000, after uncovering a serious weakness in the telecoms company’s emergency-call service.
Fairer prices for broadband customers14/10/2019 13:15:00
Ofcom recently (11 October 2019) set out a range of measures to help ensure out-of-contract broadband customers pay fairer prices, and providers offer better protection to vulnerable customers.
You'll never talk alone: Liverpool stakes claim as Britain's chattiest city10/10/2019 15:15:15
People in Liverpool spend more time chatting on the mobile than those in other major cities, new research reveals.
Ofcom's assessment of BBC Breakfast, BBC One, 17 July 201908/10/2019 15:15:15
Ofcom yesterday published its assessment of BBC Breakfast on BBC One on 17 July 2019.
Breaking the class ceiling – social make-up of the TV industry revealed19/09/2019 14:10:00
The UK’s television industry is strongly skewed towards people from privately-educated backgrounds, according to Ofcom research on the sector’s diversity.
Parcel companies admit breaking competition law through anti-competitive agreement19/09/2019 12:25:00
Royal Mail and a reseller of its business parcel delivery services – the SaleGroup, which trades as Despatch Bay – have admitted being part of an illegal anti-competitive agreement.
London calling: Ofcom to release new '(020) 4' phone numbers30/08/2019 13:15:00
London will gain 10 million more landline phone numbers later this year, as Ofcom introduces a new ‘(020) 4’ range to keep the capital connected.
UK becomes a nation of streamers... but traditional broadcast TV leads the way on UK content07/08/2019 13:20:00
Around half of all UK homes now subscribe to TV streaming services, according to a major Ofcom report revealing rapid shifts in the nation’s viewing habits.