BT has been told to let rivals use its infrastructure to lay fibre cables that are faster than its own copper network, as part of a review of Britain’s broadband needs by regulator Ofcom.
In a once-in-a-decade review, the regulator stopped short of recommending that BT be forced to split off Openreach, the division that owns the broadband infrastructure. The verdict will be a blow to rivals including Sky and TalkTalk, which have said BT should lose control of the network.
But Ofcom left open the possibility of revisiting that nuclear option if BT does not toe the line on a string of issues. It also gave a series of recommendations, including automatic compensation for customers and businesses when the Openreach network experiences problems. The regulator wants to introduce league tables and make it easier for customers to switch provider.
In a bid to ensure that Openreach is not serving the needs of BT alone, Ofcom said the network should be run at “arm’s length”, signalling structural change at BT. The regulator also wants greater transparency on what Openreach is doing, amid complaints of poor service by BT and claims by rivals that being forced to use the network puts them at a disadvantage.
Ofcom said Openreach directors should be forced to consult customers – such as Sky and TalkTalk – on its investment plans and provide more information about how it allocates costs and assets.
The regulator also wants to introduce tougher minimum service requirements to make sure BT repairs faults more quickly, an area in which rivals say it is dragging its feet. There will also be a new government-backed universal obligation to provide fast broadband to every home and business in the UK, starting at 10 megabits per second.
Although Ofcom does not have powers to impose any changes on BT, it will seek a voluntary agreement with the telecoms regulator. If BT does not cooperate, Ofcom can refer the decision to the Competition and Markets Authority, a long process that both sides will likely seek to avoid.
Dan Howdle, telecoms expert at broadband and phone advice site Cable.co.uk, said Ofcom had not been tough enough. “Ofcom’s decision to open up Openreach’s poles and tunnelling to competitors and to give them more say in future strategic and budgetary decision-making goes halfway to alleviating competitor complaints, but stops short of addressing the prime concern.
“With Openreach currently in the midst of its BDUK superfast broadband rollout, aimed at reaching 95% of UK homes by next year – a rollout couched in £1.7bn of public money and a potentially vote-swinging degree of incumbent reputation – the decision should be seen as one of least disruption. It is, perhaps, a case of poor timing winning out over common sense.
“A recommendation to split would have absolutely been the right decision for the UK broadband industry, but, in the short term at least, perhaps not for the 2.5m UK homes that do not currently have access to superfast broadband.”
Ofcom chief executive Sharon White said: “People across the UK today need affordable, reliable phone and broadband services. Coverage and quality are improving, but not fast enough to meet the growing expectations of consumers and businesses.
“So today we’ve announced fundamental reform of the telecoms market – more competition, a new structure for Openreach, tougher performance targets, and a range of measures to boost service quality.
“Together, this means a better deal for telecoms users, which will improve the services and networks that underpin how we live and work.”