Ofcom to force legal separation of BT and Openreach

Ofcom is to push ahead with a legal separation of BT from its infrastructure arm Openreach, saying that BT had failed to voluntarily offer proposals that satisfactorily addressed its competition concerns.

It said a legal separation, whereby Openreach has its own independent board, would help the broadband body act more in the interests of the market and less in those of BT.

In a statement Ofcom said it was “disappointed” that BT had not yet come forward with proposals that meet its competition concerns.

“Some progress has been made, but this has not been enough, and action is required now to deliver better outcomes for phone and broadband users,” it said.

Ofcom wants Openreach to become a distinct company with its own board, with non-executives and a chairperson not affiliated with BT. It also wants Openreach to have control over its branding and budget allocation.

Openreach would also have a duty to treat all of its customers equally, the regulator said.

 

Response

BT said in a statement: “We put forward proposals in July that we believe are fair and sustainable, and that meet Ofcom’s objectives without disproportionate costs.

“We are implementing these proposals, and have just appointed Mike McTighe to be the first chairman of Openreach. We are in discussions with Ofcom on two outstanding issues, the reporting line of the Openreach chief executive and the form of legal incorporation.

“We will continue to work with Ofcom to reach a voluntary settlement that is good for customers, shareholders, employees, pensioners and investment in the UK’s digital future.”

 

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