Superfast broadband debate questions future of Openreach

A three-hour debate in the House of Commons has looked into the rollout of superfast broadband in the UK,  taking into consideration the BT group and its future relationship with Openreach.

The debate was introduced by Conservative MP for Boston and Skegness, Matt Warman. He started by saying that, whilst those in attendance could be forgiven for thinking that this debate was going to be just about the roll-out of superfast broadband across the UK, it would actually focus on “much more than that”.

“Broadband makes a profound difference today to businesses, to shopping, to entertainment, to education, to healthcare and to everything that goes with life in the 21st century. The £1.2 billion of public money invested so far could not have gone on a better cause, and we should remember that the coverage obligations imposed on a single 4G licence amount to a further £2 billion of public subsidy. But at its heart today’s debate is about making sure that we do not allow the digital divide to widen and deepen. A one-nation Government must deliver the same digital opportunities for all of us,” he said.

Warman pointed out that there is a “universal service obligation coming at 2 megabits a second, and there are moves to raise it to 5 megabits in the autumn”, but this “still falls below what Ofcom says is the typical need”.

As BT’s roll-out continues, many of the villages that I am sure will be mentioned later will find that their connections are improved. However, the communities that stand to benefit most are those that economically are the hardest to roll out to, so it is vital that whatever Government subsidy is available is pushed as far and as fast as possible,” he said.



BT’s role

The subject of BT’s role within the current roll-out, looking at its current and future relationship with Openreach, was later introduced by Warman.

The second issue is the role of BT within the current roll-out. I am sure many Members will say that BT is, in effect, a monopoly and that its Openreach division should be split off, and accuse the company of creaming off Government subsidies and spending them on sports rights while failing to provide a consistent service across the country.

In my constituency and across Lincolnshire, BT’s roll-out is ahead of schedule and under budget. Moreover, with take-up ahead of expectations, unexpectedly large revenues are being ploughed back into extending the network further than we had expected. None the less, rival networks will say that Openreach could raise more money and invest more widely as a separate company.”

Jesse Norman, the chair of the Culture, Media and Sport Committee, offered his opinion, suggesting an independent Openreach could be financially beneficial.

It is not just a question of whether the relationship of BT to Openreach is supporting competition. It is also a question of whether Openreach is itself being starved of capital because it is located within BT with its new, emerging consumer and retail orientation. If it at least had its own balance sheet it might be able to borrow at very low rates and therefore support capital roll-out with it,” he said.

To read the full debate, click here.

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