This morning (Thursday 25th February) Ofcom published its first review of the broadband and telecoms market in a decade – the Strategic Review of Digital Communications.
Ofcom has called for BT to open up the network and for the quality of their services overall to be improved. Ofcom has decided that it is necessary for Openreach to overhaul its governance and strengthen its independence from BT. However, they stopped short of recommending a formal split between BT and Openreach, who own and manage the copper and fibre network.
The announcement has far-reaching implications for how people use the internet. The review sets out plans for businesses and customers to “receive the best possible phone and broadband services”- both in terms of coverage and speed. This includes making it easier to switch providers of bundled TV, telecoms and broadband services.
The decision that BT should not be forced to completely split from Openreach is a controversial one and has been met with disappointment by many in the telecoms industry. A significant number of BT Openreach competitors, including Vodafone, Sky and TalkTalk, have been calling for its breakup for some time. These companies have raised concerns that BT has under invested in Openreach and that it undermines competition in the market. They have argued that this has led to poor service for customers in terms of coverage, quality and speed of broadband in the UK.
Ofcom is confident that the reforms it has suggested will support investment from rival providers. Ofcom believes that by opening up Openreach’s network of telegraph poles and underground tunnels, and making it easier for competitors to access this network, this will “allow rivals to build their own, advanced fibre networks, connected directly to homes and offices.” Additionally, Ofcom intends to introduce tougher rules on BT’s faults, repairs and installations. This will include an “automatic compensation for consumers when things go wrong.”
BT and Openreach separation is still on the table though. Ofcom has reserved the right to take forward structural separation in the future if judged necessary. However, given that this is the first review of the broadband and telecoms market in a decade, rivals to BT are probably not feeling optimistic.