Ofcom tells BT to open up cable network to rivals

Communications watchdog Ofcom has said BT must open up its cable network and allow competition to improve UK internet connections.

 

The regulator has so far stopped short of demanding a complete break-up of BT, but said this was still an option.

BT welcomed the report and said it was happy to let other companies use its network, if they were keen to invest.

Ofcom also said there was a digital divide in the UK between those with the latest technologies, and those without.

It has proposed that decent, affordable broadband should be a universal right.

Rivals had called for a split between BT and its Openreach operation, which runs its cables, fibre and network infrastructure.

Companies such as Sky, Vodafone and TalkTalk, who pay to use the network, say that BT underinvested in Openreach, leading to a poor service with interruptions and slow speeds.

Now BT will be told to allow easier access for rivals to lay their own fibre cables along Openreach's telegraph poles and in its underground cable ducts.

Tougher rules

Ofcom also says it intends to introduce tougher rules on BT's faults, repairs and installations.

It says Openreach should be governed at arm's length from BT, with greater independence in taking its own decisions on budget, investment and strategy. It adds that a complete split between Openreach and BT "remains an option".

The Chief Executive of Ofcom, Sharon White told the BBC: "Openreach does need major reform and the key thing is that it's independent so that it responds to all its customers, not just BT.

"If we cannot get the responsiveness to customers that we're seeking, then ... we reserve the right, formally, to separate [BT and Openreach]."

'Monopoly provider'

BT's shares were up more than 4% following the publication of the report.

A BT spokesman said: "Openreach is already one of the most heavily regulated businesses in the world but we have volunteered to accept tighter regulation.

"We are happy to let other companies use our ducts and poles if they are genuinely keen to invest very large sums as we have done."

But Ofcom's report says that the evidence "shows Openreach still has an incentive to make decisions in the interests of BT, rather than BT's competitors".

BBC technology reporter Jane Wakefield said: "That will be something rivals, from big players like Sky to small internet service providers that are attempting to bring broadband to areas not yet served by BT, will recognise all too well, and Ofcom's decision that the two should stay together for now will be seen as a blow."

A spokesperson for Vodafone said: "BT still remains a monopoly provider with a regulated business running at a 28% profit margin.

"We urge Ofcom to ensure BT reinvests the £4bn in excess profits Openreach has generated over the last decade in bringing fibre to millions of premises across the country, and not just make half-promises to spend an unsubstantiated amount on more old copper cable".