BT escapes Openreach bullet for now

Ofcom’s long awaited review of the UK broadband landscape offered both good and bad news for BT.

The regulator fell short of recommending the telco’s Openreach network infrastructure division be split into a separate company for now, but demanded that BT make it easier for rival internet providers to use its national network to deliver their own services to customers.

Ofcom wants the likes of Sky, TalkTalk and other broadband providers to have greater access to BT’s telegraph poles and underground tunnels. That way they can lay their own fibre optic wiring in the last mile to reach more consumers and businesses and offer faster broadband links to existing subscribers.

Improving bandwidth and availability is a flagship initiative for Ofcom which wants to bridge the ‘digital divide’ between the broadband haves and have nots, blamed for constricting economic growth in some areas of the UK.

The Strategic Review of Digital Communications also called for tougher rules on making sure broadband faults, repairs and installations are completed quickly, and that customers get transparent information on service quality and adequate compensation when things go wrong.

BT’s competitors are unlikely to be appeased. They remain frustrated that Openreach is still a BT which offers its own broadband services, fearing that BT has unfair competitive advantage in network ownership and that BT customers are given priority – arguments which have been raging on and off since the deregulation of the telecommunications back in the 1980s left BT with something of a monopoly.

The OfCom report would seem open to interpretation and as such is rather non-commital, meaning there is no change in the short term for the industry. The pressure from broadband providers is still on OfCom to create a more open and fair market. So, the review could ultimately be good news for telecommunications and network equipment suppliers; however, if those same national and regional broadband providers have the motivation to build last mile fibre infrastructure, they will need the investment to do it. But that’s a big if!

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