14 July 2017
| James Pearce
UK regulator Ofcom has announced plans to create a new division that will be tasked with overseeing BT’s separation from infrastructure arm Openreach.
Ofcom ordered BT to carry out a legal separation from its UK wholesale division back in March following substantial lobbying from the incumbent’s rivals. The deal it struck with BT will see Openreach controlled by a separate board of directors, with distinct branding and funding, in an attempt to promote competition in the sector.
The regulator’s new Openreach Monitoring Unit will be tasked with making sure BT is delivering on its targets and following new rules set by Ofcom following its market review.
Ofcom said it would introduce a new framework once all of the commitments that BT has promised are introduced in full. It said BT and Openreach had taken “positive steps” but added four preconditions, mainly related to pensions, still needed to met before the new framework could be enacted.
While BT undergoes the separation, Ofcom’s new unit will measure its efforts using a number of criteria. Should the regulator find BT is dragging its heels or failing to meet targets, Ofcom warned it could look at introducing “new measures”.
Sharon White, Ofcom Chief Executive, said: “The new Openreach will be built to serve all its customers equally, acting independently and taking investment decisions on behalf of all its customers.
“BT has made positive progress towards implementing the reforms. Once they are complete, Ofcom will keep a careful eye on whether Openreach is working for telecoms users, ensuring BT and Openreach live by the letter and spirit of their commitments. If we see problems emerging, we won’t hesitate to act.”