Broadband Providers Welcome Ofcom’s Openreach Recommendations

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NEWS ANALYSIS: What do the UK’s major broadband providers think about the initial findings of Ofcom’s once-in-a-decade review

Ofcom’s once-in-a-decade review of the UK communications market has proposed that Openreach make more of its infrastructure available to rivals so they can deploy rival fibre infrastructure and that the open access division of BT is given more autonomy.

However the review has fallen short of making Openreach a fully independent company – as many of its competitors wanted.

“Coverage and quality are improving, but not fast enough to meet the growing expectations of consumers and businesses,” said Ofcom CEO Sharon White. “So today we’ve announced fundamental reform of the telecoms market – more competition, a new structure for Openreach, tougher performance targets, and a range of measures to boost service quality.”

But how has the UK telecoms industry reacted to the news?

Gavin Patterson, BT CEO

BT CEO Gavin Patterson MWC 3“Ofcom have today explained why breaking up BT would not lead to better service or more investment and that structural separation would be a last resort. We welcome those comments. The focus now needs to be on a strengthened but proportionate form of the current model and we have put forward a positive proposal that we believe can form the basis for further discussions with both Ofcom and the wider industry.

“Our proposal includes a new governance structure for Openreach as well a clear commitment on investment. Openreach is already one of the most heavily regulated businesses in the world but we have volunteered to accept tighter regulation to bring matters to a clear and speedy conclusion.

“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. Our ducts and poles have been open to competitors since 2009 but there has been little very interest to date. We will see if that now changes.

“We are keen to understand and address Ofcom’s concerns so we will review their paper in detail. A great deal of what they are proposing is already in place and we are open to discussions about how the current rules can be amended and updated. A voluntary, binding settlement is in everyone’s interests and we will work hard to ensure one is reached”

Dido Harding, TalkTalk CEO

“Ofcom has done well in identifying many of the worst problems, including recognising, finally, that BT’s control of Openreach creates a fundamental conflict of interest which hurts customers.

“But having accepted all this, Ofcom has produced 100 pages of consultation with little concrete action behind it. The risk is that we end up with 10 more years of debate and delays, rather than facing into the problems and delivering improvements for frustrated customers now.”

Tom Mockridge, Virgin Media CEO

Virgin Media Broadband World Forum (3)“The best way to provide competition against BT and its inherited advantages is to support infrastructure investors like Virgin Media. We are challenging the incumbent with £3bn of investment in new network and providing choice.

“Ofcom has done the right thing by resisting separating Openreach, which would have sent a negative signal to infrastructure investors.”

Sky

“We welcome Ofcom’s recognition that the current Openreach model is not working and that fundamental change is required. BT must now be held to account for improving service and enabling delivery of fibre to Britain’s homes and businesses.

“Ofcom’s actions today are not the end of the debate but a staging post towards delivering the network and service that Britain needs. We believe the simplest and most effective way to fix the current broken market structure is for Openreach to be completely independent. We are pleased to see that separation is still on the table.

“We will work with Ofcom to deliver change at Openreach and we look forward to playing a positive role in helping make Britain a digital world leader.”

CityFibre

BT Cumbria Fell End fibre broadband“It is clear from Ofcom’s key strategic proposals that Openreach cannot and will not be allowed to remain solely responsible for delivering the fit-for-purpose infrastructure essential to fulfil the UK’s digital potential. Healthy competition and continued investment in fibre from multiple companies is vital.

“Ofcom’s strategy to encourage fibre investment, improve competition, and to ensure meaningful and usable access to BT’s physical infrastructure, creates a unique opportunity for alternative providers, such as CityFibre, to accelerate and extend new and existing roll-outs of next generation, ultrafast, fibre to the premises infrastructure projects nationwide.

“Ofcom also recognises that at a technological level, BT’s continued strategic reliance on and investment in copper-based infrastructure – often masquerading as fibre – is inadequate to meet the soaring demand driven by new services and increased usage habits that the market continues to observe.”

Eli Katz, Chair of Internet Telephony Services Providers Association (ITSPA)

“This once in a decade review has confirmed ITSPA members’ views that Openreach has not delivered the performance that the communications industry or the UK needs.  We believe that Ofcom’s proposals for further scrutiny and an increased focus on service quality will ensure a fairer marketplace for all Openreach customers whilst also supporting vital investment in faster broadband services.

“We also support the proposals to encourage the roll out of new ‘fibre to the premise’ networks by ensuring competitors have better access to BT’s mast and duct infrastructure.  This will improve competition, drive up performance and service levels as well as reduce costs for both individuals and businesses in the UK.

“ITSPA has long called for regulatory intervention to ensure that Openreach provides adequate quality of service and is pleased that steps will be taken to ensure that its performance will be more effectively scrutinised. In other areas of the review we support Ofcom’s continued commitment to improving the switching process for consumers and call for the regulator to reform the current number portability process. It is simply not fit for purpose in its current state and should be a priority in Ofcom’s work in the switching area.”

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