TalkTalk attacks BT football spending as Openreach row flares up
The escalating cost of football broadcasting rights threatens much-needed investment in Britain’s broadband infrastructure, the chief executive of TalkTalk has claimed in a renewed attack on BT. Baroness Harding said that Openreach, the BT division responsible for building and maintaining the broadband network, was “starved” of capital while the company committed massive sums to television rights auctions.

The attack was sparked by Ofcom’s decision not to intervene in the next Premier League rights auction despite concerns that its allegedly anti-competitive structure will cause costs to rise even higher than the current £5.1bn total over three years.

Lady Harding claims BT’s share of the burden has contributed to flat investment in the broadband network, resulting in slower speeds and repairs. She said: “Openreach is starved out of new investment capital, but when it comes to BT Sport, it seems there’s a blank cheque.

“If BT want to charge their retail customers ever more to fund a bidding war over football rights, that’s up to them. But customers deserve to know how much money is being transferred away from critical infrastructure to fund this expensive habit.” BT argues its push into sport has been funded by higher profits in its consumer businesses.

Ofcom last month published proposals for an overhaul of Openreach that would give it more independence as a subsidiary company, but allow BT to maintain control of major investments such as upgrades to full fibre-optic networks. BT is resisting some of the changes while TalkTalk, Sky and Vodafone want regulators to go further.

Lady Harding said that financial transfers between Openreach and BT should be made public so “shareholders, Openreach customers and consumers alike have a clear understanding of the cross-subsidies involved”.

TalkTalk is struggling to compete against larger and better-funded broadband rivals. It is also threatened by Ofcom plans to let BT increase Openreach’s pricing to encourage others to build their own broadband networks.

A BT spokesman said: “It is outrageous to claim that BT spends more on football rights than on Openreach when the opposite is so clearly the case.

“Openreach is one of the best funded local network businesses in the world. It has been investing more than £1bn a year on average over the past decade and that has risen to around £1.4bn. That is roughly three times the amount that our consumer business chooses to spend on football rights out of its own free cashflow.”