Ofcom Archives - United Networks

BT and Ofcom have reached agreement on a long-term regulatory settlement that will see Openreach become a distinct, legally separate company with its own Board within the BT Group. The agreement is based upon voluntary commitments submitted by BT that the regulator has said meet its competition concerns. Once the agreement is implemented around 32,000 employees will transfer to the new Openreach Limited following TUPE consultation, and once pension arrangements are in place. Openreach Limited will have its own branding, which will not feature the BT logo. The Openreach CEO will report to the Openreach Chairman with accountability to the BT Group Chief Executive with regards to certain legal and fiduciary duties that are consistent with BT's responsibilities as a listed company. Gavin Patterson, BT Chief Executive, said: "I believe this agreement will serve the long-term interests of millions of UK households, businesses and service providers that rely on our infrastructure. It will also end a period of uncertainty for our people and support further investment in the UK's digital infrastructure. "This has been a long and challenging review where we have been balancing a number of competing interests. We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future." The transfer of around 32,000 employees, under TUPE regulations, will be one of the largest such transfers in UK corporate history. It will take place once the agreement has been implemented and pension arrangements are in place for these employees. Under the agreement, Openreach will manage and operate its assets and trading but ownership of those assets and trading will remain with BT. The agreement builds on changes that BT has already made to the governance of Openreach in recent months. These include the [...]

Ofcom Confirm NO Openreach Split from BT, But Big Change is Coming

By Admin|News|

The telecoms regulator has today published its preliminary proposals as part of a major Strategic Review of the United Kingdom’s Digital Communications market, but the big news is they’ve decided NOT to completely split BT from its national broadband and phone network (Openreach). Openreach was setup a decade ago after Ofcom’s original review in 2005, which among other things forced BT to open part of their network to competition (“functional separation“) and introduced Local Loop Unbundling (i.e. allowing rival ISPs to install their own kit in BT’s telephone exchanges, giving them more control over ADSL broadband and phone). Since then the market has evolved and the new “fibre broadband” (FTTC) services don’t offer the same kind of control or price flexibility as the older LLU ADSL solutions. Meanwhile many of BT’s rivals feel as if the operator still has too much control over Openreach and aren’t investing enough in their infrastructure, which they claim has damaged competition and performance. By comparison BT say they’ve invested billions into the national infrastructure, are delivering a good level of service (i.e. meeting Ofcom’s targets) and claim that their rivals seek a free ride off the back of all their hard work. BT has also warned that splitting Openreach could damage their plans to invest in future “ultrafast” G.fast broadband upgrades and the 10Mbps USO (details). Furthermore there were also fears about the risk from a protracted legal battle, concerns over how BT’s huge pension deficit and group debt would be split and uncertainty over who would provide Openreach’s future investment. On the other hand BT’s rivals believe that an independent Openreach could have fostered investment into superior FTTH/P technology and made the market more open and fair for everybody. Ofcom’s job in all this was to navigate the maze of conflicting claims and [...]

Centre for Policy Studies Calls for Ofcom to Initiate BT Breakup

By Admin|News|

BT to be separated from control of their national UK broadband and phone (Openreach) network, which the group suggests could “provide a market with a level playing field between all players.” At present Ofcom’s on-going Strategic Review of Digital Communications is said to be “seriously” considering the option of breaking up BT, which if appropriate would require the regulator to refer the operator to the Competition and Markets Authority(CMA). Politicians seem to be divided on the topic, with many supporting such a split (here) and others, such as Ed Vaizey (Digital Economy Minister), suggesting that it has “lots of potential to backfire” and existing “regulations have proved very effective” (here). Meanwhile BT contends that it has continued to meet Ofcom’s existing regulatory targets and that any attempt to split their business might tie the process up in legal battles. Questions also remain over how BT’s debt / pension pile might be apportioned in the event of a split, as well as the impact on consumer prices from all of the related changes (better services cost more money) and what kind of market model might be adopted in its place. BT has also warned that their plans to roll-out ultrafast (G.fast) broadband could suffer, but that may be a moot point if FTTH/P ends up becoming the favoured course. Equally there’s a risk that separating Openreach might harm investment in alternative network operators, since Openreach would perhaps be seen as the bigger target for investment. It also remains unclear whether smaller ISPs on Openreach’s network would be winners or losers in such a market. In to this seemingly endless debate steps the CPS, which believes that separation of BT may be the best long-term fix for the United Kingdom’s telecoms market. Daniel Mahoney, CPS Economic Bulletin, said: “The UK’s broadband infrastructure [...]

BT and Ofcom agree deal to legally separate Openreach

Ofcom Confirm NO Openreach Split from BT, But Big Change is Coming

Centre for Policy Studies Calls for Ofcom to Initiate BT Breakup

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