Ofcom orders BT to legally separate from Openreach
Ofcom has ordered BT to separate from Openreach in a bid to help reduce 'competiton concerns'.
Openreach is a subsidiary or BT Group plc and maintains the UK's broadband network. This network is also used by BT's rivals Sky, TalkTalk and Vodafone and is often criticised for working in the favour of BT.
In July this year Ofcom attempted to make Openreach and BT act more independently, but chose to not separate the two businesses completely - a decision questioned by major rivals.
Ofcom requested that BT provide it with proposals looking to address its concerns of how much influence BT Group executives would have on Openreach as part of the decision made back in July - however it now claims that BT has failed to do so.
An Ofcom spokesperson has commented on the new decision to split BT and Openreach saying, "Ofcom is pressing ahead with its plans to improve broadband and telephone services for people across the country, pursuing better service quality and encouraging greater investment in networks. Creating a more independent Openreach – which works in the interest of all providers, not just BT – is an important part of achieving this."
The spoekesperson also said, "We are disappointed that BT has not yet come forward with proposals that meet our 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."
"Our current view is still that an effective and robust form of legal separation, with Openreach as a wholly-owned subsidiary of BT, is likely to achieve the greatest improvements for everyone in the shortest amount of time. Therefore, this is the approach with which we are minded to proceed."