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Wait to see if Ofcom’s caution on Openreach will bring results

26 Jul 2016

Institute of Directors building at 116 Pall MallResponding to Ofcom’s decision this morning not to push for full separation of BT and Openreach, Dan Lewis, Senior Infrastructure Policy Adviser at the Institute of Directors, said:

“Ofcom have clearly identified that BT’s current control over Openreach is excessive, but we will have to wait to see whether the changes announced today will be enough to create a truly competitive broadband market. An independent board for Openreach and legal separation from BT are steps in the right direction, but money will still flow between the two companies, leaving room for rivals to make accusations of conflicts of interest. Ofcom says that full separation would be disruptive, but overseeing this complex new structure will not be hassle-free either.

“This should be BT’s last chance to show that Openreach can deliver truly world-class broadband under its ownership. British business can't wait forever for ultrafast connectivity. Complaints of poor speeds in rural areas are common, but even in cities the UK is lagging behind. London comes 26 in a ranking of European Capitals, behind Bratislava, Tallinn and Sofia. It’s an embarrassment that countries with generally lower living standards are leaving us behind. If the UK fails to catch up, BT should face much more extensive action from the regulator.

“There is no reason that the company which lays the fibre optic cables has to be owned by the previous national telecoms monopoly. We know that full separation has worked well in New Zealand. Ofcom have chosen to be cautious today, but in a post-Brexit world where we must work harder to be competitive, they may need to be bolder in future. In the coming years, households and businesses will need faster speeds to meet the demands of emerging like technologies virtual and enhanced reality, the internet of things and driverless cars.”

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