Ofcom outlines proposals to ‘make digital communications work for everyone’

26 Jul 2016

UK telecoms regulator Ofcom has unveiled ‘detailed plans to make digital communications work for everyone’, including proposals for a major reform of Openreach, the network division of fixed line incumbent BT. Having said back in February that it believed Openreach should become more independent from BT, Ofcom has now detailed proposals on exactly how it envisages this happening. As per the proposed model, Ofcom has said that Openreach should become a ‘distinct company’, legally separate within the BT Group, with its own Articles of Association. In addition, it has called for Openreach to have its own board, with a chief executive appointed by, and accountable to, the Openreach Board, not to BT Group.

Further, Ofcom has called for Openreach to be obliged to consult formally with customers such as Sky and TalkTalk on large-scale investments, while it has also said that the infrastructure company should own its physical network. Finally, independent branding for Openreach is also on the cards, with Ofcom saying that this will help ‘embed the organisational culture of a distinct company’. However, should this setup fail to ensure that Openreach acts more independently from BT Group, Ofcom has said it could yet reconsider whether the two should be split into ‘entirely separate companies, under different ownership’. Views on the Openreach proposals are being sought, with a deadline for submissions of 4 October.

Alongside matters relating to Openreach’s governance, Ofcom has detailed its plans designed to boost investment in fibre networks and improve quality of service. Back in February the regulator committed to making it easier for alternative operators to invest in advanced, competing infrastructure by improving access to Openreach’s network of telegraph poles and ducts. In its latest announcement, Ofcom noted that new rules come into force from 31 July that will give telecoms providers further rights to access physical infrastructure, with these designed to reduce the cost of deploying broadband networks by sharing access to infrastructure across different sectors. In regards to quality of service, Ofcom said it has taken ‘significant steps’ in this area, which included: discussing proposals which will require operators to provide automatic compensation to customers when services fall short; publishing proposals to make switching between mobile providers swifter and easier, while it expects to publish plans to make it easier to switch landline, broadband and pay-TV services ‘shortly’.

Commenting on the raft of measures being proposed, Ofcom’s chief executive Sharon White said: ‘We’re pressing ahead with the biggest shake-up of telecoms in a decade, to make sure the market is delivering the best possible services for people and business across the UK.’

United Kingdom, BT Group (incl. Openreach), Ofcom, Openreach