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Update: can Ofcom’s reforms fix the Openreach network?

Fixing broadband

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.

We’ll be pushing for many of these measures through the recently announced Digital Economy Bill which making its way through Parliament over the next year. But I want to hear from you.

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?

Pat Collins says:
3 December 2016

I don’t agree with the split. The main problem is infrastructure which is currently the BT Network. BT have cut it’s staffing to the bone and they are having to contract out work. The only answer is to renationalise the Network! Everything this country that has been privatised has ended up providing a worse service rather than better services.

It is well known that privatisation is often aimed at profit for the managers and shareholders.

Renationalisation is not always the better option. Much depends on the question: Who are the managers and who will reap the rewards of good management.

Absolutely spot on answer!!

Absolutely spot on. It serves no useful purpose for organisations bleat on about choice and service. This in an infrastrucure issue. Yes they are rolling out fibre but the connetion the house is 40 year old copper.
This will cost a huge sum.As in normal in Britain nobody wants to pay. My company is sited in deepest rural Dorset, we have surerb fast broadband.It is a satelite system and cost a tidy sum. High quality superfast
broadband is expensive, I wonder if some of the people who seem to say we have a right to superfast broadband are prepared to pay for it.

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Andrew Dawson says:
6 December 2016

Privatisation has only served to widen ‘the gap’. Nationalised industries may have been inefficient but that was due to a number of very solvable issues. Privatisation was the old boy network making hay making an opportunity out of infrastructure that was created by minds more philanthropic. This was ‘sold’ to the british people but we have not benefited.

We are already paying for it. Corporate subsidies are going out in the billions to BT Openreach which is supposed to be going towards building infrustructure. No regulation means they don’t have any legal requirement to actually spend the funds where their designed to go so shareholders have been taking out money as dividends in record amounts rather than investing profits back into infrustructure (the current largest problem with the privitised market). Short term large payouts going to greedy individuals who don’t give a care about the rest of us..As the comment at the top says, the only way to fix is to renationalise so there are no shareholders who have that option. And the only way to ensure the renationalisation doesn’t go corrupt as well is to devolve power and turn the nationalised system into a co-operative, run by a board but all major decisions are voted on by the people. Every study on democracy has shown that when people are given decisions on policy, the vast majority of the time they will choose the policy that will benefit the many over the few…keep in mind this is based on voting on policies not people, people muddy the water with lies and manipulation.

In the last three months we have had six engineers come out to ‘fix’ the so-called fault in our supposed high-speed broadband. We work from home, when we were forced out of London from excessive rent, we have been unable to secure any consistentcy with our broadband. Perhaps it’s because most of our neighbours are retirees and don’t use it, but we’ve been paying for it just the same. We’ve been told the problem is Openreach so there’s nothing they can do, but they keep sending engineers, and have tried to charge us for their visits a few times after claiming the problem was from our side -but the problem has never been fixed. We met someone who works for an associated company last week and got chatting in the pub. Turns out they have been splicing signals between neighbours, whoever complains the most gets the greater signal, they simply haven’t invested any funds to deal with getting everyone online. Everytime there is a relatively heavy rain, our signal drops again -imagine that, whatever they’re doing only lasts until it rains…in England. Even if their shareholders weren’t taking out large dividends every year so that those corporate subsidies we pay for with our taxes went to pay for infrustructure, if this is their idea of how to build infrustructure in this wet country, how much money are they wasting on sending out engineers to throw out temporary solutions that litterally wash away every couple of days?

see above reply to Colin, we already are paying for it.

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Hi Lisa,
I agree completely with your response, although a bit more elaborate than my own opinion it means exactly the same, this company are getting subsidised by the gov and giving out record profits instead of improving the infrastructure,
No broadband in rural areas, no promised fibre optic in the cities, and very poor customer service which solves no problems and blames everything from fridges to having the router next to a window and the signal is going outside,
How much longer are they going to be allowed to be thatchers b*****s???

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You could not be more right! Admittedly, it was long ago and with fewer demands on the service, but I remember the GPO service and if I rang up today with a line problem an Engineer came out tomorrow and fixed it – and without the threat of a HUGE payment if the fault was within the premises. Now, we cannot expect a phone/broadband service rectified within less than 5 days!! BT “say” they are employing more people, but the truth is at they are employing more “contractors”. The contractors have limited access to BT systems (e.g. Kelly Engineering cannot touch underground connections even though they may have the knowledge). That is not “employing” more people! That is masking and exacerbating the problem at the same time. BT seem to think that if they send an “incompetent” engineer out (a contractor rather than openreach) that they are “seen to be” fulfilling some sort of duty. They are NOT! In fact, they at wasting customer and shareholder money by paying people to attend a job that they cannot resolve Who the heck is letting them get away with this? Where are Ofcom and what teeth do they actually have?

Until recently I would have stuck up for BT/Openreach to the hilt. Never again! As far as BT are concerned, their imperative is to the Shareholder, which ultimately means – sod the customer, spend as little money as possible, rake the money in from direct customers and other providers (Talk-Talk, Sky etc) and generally sod the end user altogether! As shown above, that is wildly false economy. What they are forgetting is that MANY of their shareholders are their damned customers who are seriously annoyed at their antics. FGS how many of us bought the shares when the GPO was privatised? Millions! And many of us still hold shares and would gladly forego dividends for SERVICE!

So, who are they servicing? Obviously not the customer. Obviously not their shareholders (if their shareholders are within the UK and subject to the whims of their provision) – they do not ask if you are a shareholder when you contact.

I fully agree that this, and every other utility needs to be re-privatised. That should never have happened and no “monopolies and mergers” commission involved. They should just have been reorganised to be profitable. If the Telecoms/Gas/Electricity companies are profitable now then they could have been under state control with much less confusion, and outright lying to the end user who STILL has little comeback.

Have you read the BT small print? “We can do what we want when we want and thou canst not argue with this”? And Ofcom allow that? WTF is the purpose of Ofcom?

Yes, we are prepared to pay for it! I am a least. The question is, how the hell do you get it when the infrastructure provider has provided not enough infrastructure in your area? Don’t say go to “sky” or “talk-talk”, because at the end of the day BT/OpenReach provides the infrastructure for these sharks to feed on and if the infrastructure isn’t there, your “Sharks” would have no more success where I am that BT do. You are lucky enough that BT provide good access for your service provider to provide the service. This is not true throughout the rest of the country. Get a grip!

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I believe a key objective for OFCOM is to force Openreach to share fibre capacity with it’s competitors. We live in Exeter where fibre was installed throughout the city (not by BT) about fifteen years ago. Unfortunately we’re in a residential development that missed out at the time because our road had not been adopted. BT finally put fibre into our area about a year ago, but are the sole providers. They will not lease/sell fibre capacity to competitors (like Virgin), so we must use BT copper landline or BT fibre services. Virgin are “locked out” by BT. Virgin tell us they would need a substatial number of subscriber comitments to justify the cost of installing their own fibre.

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Ofcom are the cause of the.problems with BT, they have to provide circuits for use by other suppliers but none of the other suppliers will allow BT to use their circuits. This applies to copper or fibre, in other words BT is having to subsidise all the other providers that use it’s circuits, causing a huge lack of progress by BT as whenever they install new plant they are only able to use a percentage of the installation as they have to reserve the rest for their competition to use. This was initially brought in when the telephones were free to be provided by ather companies but it is now strangling BT’s investment in the future.

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As far as I am aware openreach is supported by the main body of BT income, I think if they were separated the cost of maintaining the network would rise dramatically, openreach income must be able to finance the maintenance of the network, imagine the cost Engineer, Van, Tools, Equipment, etc backup staff, are all the other companys willing to support openreach, also what happens to existing pensioners who`s pension depends on BT profits.

I’m a BT customer – when I returned to them last September (2015), as soon as I moved I had no service because a faulty cable had been used to set up my connection by Open Reach and it took 7 whole days to sort it out – just a joke. I am currently considering leaving them – just looking for a suitable deal – phone and wi-fi.

J Wilson says:
3 December 2016

Like others I also believe that creating yet another Corporation with its own Board will simply add to the costs of any access to any Network no mater who provides it. Why doesn’t Ofcom simply order BT to install Fibre Optic cables across the country and set a cap on their charges for access to it, which should be ‘unlimited’ for everyone.

I say ‘unlimited’ because I was being charged extra for ‘unlimited broadband’ down a copper cable with speeds frequently below the alleged 2MB minimum that Gordon Brown set them as a ‘target’. But when I complained about this (to the Post Office whom I was actually paying for my package) one of their staff told me that they can’t actually measure my use of the Internet. So why doesn’t Ofcom look into any and all false claims by BT and others that they can measure usage, or indeed why anyone’s use needs to be monitored at all, if it’s so fast?

Years ago there was a TV show which showed that people living in England were being ripped off by BT & Virgin for their Internet and land line charges, compared to France where the basic speed in Paris was 20MB/s and it was only costing them £20 a month and that price included free phone calls and Internet TV channels. Whereas here that also costs extra to the likes of SKY TV etc.

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Hi Duncan, there’s nothing that’s preventing you from sharing these links. I think it’s the pasting of these links that’s stopping the hyperlink from appearing, I just added a space between the hyphens and the URL in the above post and it’s allowed your URL to appear as a link. Let me know if you’re having any other problems.

Maurice says:
4 December 2016

When Openreach was created BT used this as their profit base. The old rich BT became poorer and Openreach became the profit centre. It depends how much pressure is applied to Openreach as to whether it will spend enough money to significantly improve speeds. I personally dislike Openreach as they have used me to obtain money thro’ charges that in my opinion were not justified. I jumped when the opportunity arose and now have rural broadband FTTP. BT – hang your head in shame.

Alison Storey says:
4 December 2016

What will happen next! Nothing!!!!!!!!

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Gordon says:
4 December 2016

I don’t believe the split will lead to faster broadband in the countryside. I think that competing companies will cherry pick for areas with higher population density leaving those “out in the sticks” in the slow lane. At present I have the option of 1.5mb/s broadband on my fixed line or an expensive 13mb/s using a 4G mobile signal.

As good broadband is now a total necessity for businesses and homeowners as we are all referred to a website whenever we try to access any local authority or central government services, which means that you are at a distinct disadvantage if you can’t get decent broadband. The government should make it compulsory that all the providers contribute to the installation of fibre across the country at a reasonable price. At the same time ensure that the installation is carried out by a vigorously monitored company who might see this as an opportunity to rip the tax-payer off by carrying out this work at an exorbitant price.

Frances Weekes says:
4 December 2016

I worry when the government insist that we do something for financial reasons or in the name of choice or competition that the consumer, over the long run, looses out. Markets add cost!

Anyone who thinks that a split will lead to better service will be disappointed, its only the likes of Sky’s Murdoch and virgin who will gain, their interest is only to do damage to BT and make more money for themselves. Customers will sadly see no benefit

Mark Jones says:
5 December 2016

BT’s customer service is rubbish- I don’t believe there will be a better service as BT has an inherent disregard to their customers !

fred says:
5 December 2016

about time something was done ,seems to me bt is into everything ,about time they got it right,not sure that this is the answer but its a move in the right direction

Allison Hardie says:
5 December 2016

I’ve been with talktalk for about 10 years they advertise speeds of up to 17 meg but mine barely reaches 5.
If I bought a car that advertised it did upto 120 mph but it only did 50 I would have a claim against that car company so why are broadband providers aloud to continue misleading customers?

Allison read the small print.Speeds up to 17 meg.If you live 5 miles from your exchange and have copper connection to your home then high speed is always goint to vary. If you must have a contant 17 meg then spend out for satelite or move to an area with Virgins fibre network.

Sorry but this is about the issue of private companies and what they do – all their technical support is in India so they pay the Indian staff 10% of what they pay here and UK staff are on the dole and we pay for that – BT pocket the profit. I recently had problems with my BT Hub 2 which were not really resolved – I have been sent a free Hub3 but I had to protest to get that and I strongly suspect that the problems I experienced were of BT’s making to get you to buy their new product. The only resolution to all of this nonsense is to re-nationalise these companies (modern version to be run to break even, invest and not for profit) so they employ British people and serve British people not just the God profit!! Same thing with the electricity Companies, Nat West Bank (which we pretty well own anyway and which owes us £45 billion – any profits they had were got through dodgy dealings in the past), the Water Companies and the Railways.

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BT are not providing fibre optic cable services in our area. People in many rural areas, pay
the same but are being ignored.

Marvin kane

broadband providers have been ripping people off for years promising high speeds and not delivering in many cases it is about time they were held responsible. john McTernan disgruntled virgin media customer

BT are not providing fiber optic cable services in our area though they have fiber optic to the central box 25 houses on the street all have a copper cable connection, as you move further from the main box(green) significant lose of speed and BT does not have funding to replace 1000 M of cabling but charge all customer on street full price for high speed connection. For ten years they have been promising replacement. We are stuck between a rock and hard place as all other providers need infrastructure to provide any better connection speed. This is Reading UK we are talking of not some rural village.
Should be funded from the Bonuses of the top brass!!!!

When the Housing Association that I rent from used this tactic it simply added an extra layer of impenetrable red tape. This ruse simply makes it harder to track down the department that is responsible and make them accountable, when was the last time you could actually ring direct and speak to a human who would actually record and process any form of inquiry let alone a complaint.
Oh and you can bet your sweet bibby it will all be on premium rate and a carousel designed to infuriate and test the patience of a saint…..neat that isn’t it!

John Roe says:
8 December 2016

we booked and paid for broadband for our Worcester offices, paying over a year ago – no install as yet. One of the many frustrating features of this is that Openreach will not speak to the ‘end user’, do not publish complaint lines or email accounts and are, effectively, unaccountable. Separation from BT needs to be accompanied by a massive cultural change in this organisation (even their own workforce are scathing about them) – and accountability to the public. Sad that the UK’s broadband efficiency is being compromised over arguments as to who will fund their stupidly generous pension scheme.

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The absence of a relationship between Openreach and line renters [subscribers] will not change, John. Openreach has no contract or agreement with subscribers as it is a contractor to the telecom service providers that access Openreach’s infrastructure. It is essential that subscribers contact their provider in the event of a problem otherwise they will not be aware of any inadequacies of Openreach in order to tackle them; people suffering loss of service should be able to get compensation form their service provider [subject to their T&C’s] and they in turn should claim back from Openreach as appropriate.