Ofcom has set out plans for the future of Openreach, the broadband infrastructure network division of BT. But are these reforms enough to make a difference?
In February 2016 Ofcom published the findings of its Strategic Review of Digital Communications. The regulator said Openreach needed to be reformed and make more of its own decisions on strategy and budget, as Ofcom found that while Openreach has an obligation to treat all its customers fairly it still has an incentive to act in the interest of BT.
So after six months of discussion what has Ofcom announced?
Ofcom’s plans for Openreach
Ofcom has announced in its plans that Openreach should:
- Become a distinct company within BT with its own ‘Articles of Association’ and its Directors should make decisions in the interests of all Openreach’s customers
- Have its own Board with a majority of non-executive directors, including the Chair, and should not be affiliated to BT Group in any way
- Ensure Openreach’s Chief Executive should be appointed by, and accountable to, the Openreach Board not BT Group
- Consult more widely with customers such as Sky and TalkTalk
- Employ staff directly rather than have staff employed by the BT Group
- Have a separate strategy and control over budget allocation
- Independent branding
Last week the Culture, Media and Sport Select Committee published a report which warned BT that unless the group reforms and addresses under-investment in the network then it should split from the Openreach network.
At the same time thousands of you were hit by outages across the BT network on Wednesday and Thursday last week with the company saying the issue affected 10 per cent of internet usage. BT Group apologised after fixing the fault on the network.
Ofcom has said that these plans for reform will help deliver ‘the best possible services for people and businesses across the UK’. But has the regulator gone far enough?
Taking action for better broadband
We know that many of you feel frustrated by your internet connection, which is why we want everybody to be able to access good quality broadband, be able to switch provider easily, and ensure automatic compensation is introduced if and when things go wrong with your broadband service.
It’s clear that Ofcom needs to move quickly on these plans and ensure Openreach is genuinely improving services for customers, many of whom have been let down for far too long.
Now is a perfect time for Ofcom to consider the greater role consumers can play in shaping Openreach’s future, as well as sharing their experiences and views on issues such as switching, compensation and a broadband Universal Service Obligation.
Update: 30 November 2016
Ofcom has ordered BT to legally separate from Openreach. Back in July, Ofcom announced plans to make Openreach a ‘distinct company’ within the BT group. However, the regulator has found that while some progress has been made by BT, BT’s voluntary plan to address concerns it laid out earlier did not go far enough. The regulator will now start the process to force separation.
Under Ofcom’s plans, the separation would see Openreach manage its own branding and budget, with its own board, chairperson and non-executives that are separate to BT’s.
Update: 10 March 2017
BT has reached a deal with the telecoms regulator, Ofcom, to legally split from Openreach.
Openreach controls the fibre connections, ducting and pipework for the UK’s broadband infrastructure and sells access to other broadband providers.
The telecoms regulator has been preparing for a series of reforms to improve the Openreach service. Reforms have included a forced legal split of BT and Openreach.
Ofcom believes that the plans to make Openreach a distinct company will improve the service for Openreach customers. Openreach will have its own board and make its own strategy decisions, but the BT board will continue to set the annual budget as the 100% shareholder and owner of the company.
Our Managing Director of Home Services, Alex Neill, said:
‘Millions of people have suffered woeful levels of service from Openreach, so these reforms must lead to significant improvements for customers who have been let down for too long.
‘Telecoms are now an essential part of our daily lives, so it’s vital that consumers now really do see better phone and broadband services.’
Do you think this will improve broadband in the UK? Will this lead to better and faster broadband?