BT's rivals call for new Openreach status

BT’s rivals in the UK are gearing up for the next stage in a battle over the future of its last-mile operation, Openreach.

They are telling Sharon White, head of UK telecoms regulator Ofcom, that Openreach should become a legally separate company with its own board and the ability to form contracts. At the moment it is a division of BT and all contracts are in BT’s name.

The Federation of Communications Services (FCS), which represents business providers, along with three of BT’s biggest rivals, Sky, TalkTalk and Vodafone, have given White a 10-point plan which they say will “ensure Openreach is fit to equip the nation for the challenges of tomorrow”.

Chris Pateman, CEO of the FCS, said: “We are throwing down a challenge, underpinned by sound research and experience. A challenge to Ofcom, Openreach and the industry to work together to shape the future for the good of all market players and all customers.”

The move comes weeks after Ofcom decided not to insist immediately that Openreach become a totally separate company, though it is still looking at different options. “Frankly, FCS was disappointed Ofcom’s review of digital communications stopped short of recommending the complete structural separation of Openreach from the BT Group,” said Pateman.

The letter to White is timed just before the UK government announces – expected later this week – a universal service obligation that will set the minimum broadband speed in rural areas at 10Mbps.

The FCS letter to White says: “The national network has to be able to deliver the world class connectivity that Britain needs, enabling a dynamic market where all industry players can invest and compete on a level playing field. We also agree with the UK Government when it stated that ‘the current relationship between BT and Openreach will not deliver the country’s needs for more competition, better innovation and better service’, and note that it urged Ofcom to take ‘whatever action is needed’ to achieve this.”

The FCS and its allies hold that legally constituting Openreach as a company could be the first stage in a complete separation.

The UK government’s new broadband policy is expected to be revealed in the annual Queen’s speech, due to be delivered to parliament on 18 May.