An Openreach that works for everyone - ofcom reform openreach

[lettice]

Ofcom has today announced detailed plans to make digital communications work for everyone - including major reform of Openreach, the network division of BT.

• Openreach to become a distinct company. Openreach should be a legally separate company within BT Group, with its own ‘Articles of Association’. Openreach - and its directors - would be required to make decisions in the interests of all Openreach’s customers, and to promote the success of the company.
• Openreach to have its own Board. The new Board should have a majority of non-executive directors, including the Chair. These non-executives should not be affiliated to BT Group in any way, but would be both appointed and removed by BT in consultation with Ofcom.
• Executives accountable to the new Board. Openreach’s Chief Executive should be appointed by, and accountable to, the Openreach Board - not BT Group. The Chief Executive would then be responsible for other executive appointments. There should be no direct lines of reporting from Openreach executives to BT Group, unless agreed by exception with Ofcom.
• Greater consultation with customers. Openreach would be obliged to consult formally with customers such as Sky and TalkTalk on large-scale investments. There should be a ‘confidential’ phase during which customers can discuss ideas without this being disclosed to BT Group.
• Staff to work for Openreach. Ofcom’s principle for the new model is that people who work for Openreach should be employees of the new company, rather than BT Group. This would prevent any real or perceived conflict of interest, and allow Openreach to develop its own distinct organisational culture.
• Openreach to own assets that it already controls. Openreach should own its physical network. This would allow the Openreach Board to make decisions that depend on investing in, and looking after, Openreach’s assets. There may be costs in transferring assets or people to Openreach, which would need to be mitigated.
• A separate strategy and control over budget allocation. Openreach should develop its own strategy and annual operating plans, within an overall budget set by BT Group.
• Independent branding. Openreach should have its own brand, not affiliated with BT Group, to help embed the organisational culture of a distinct company.

Full ofcom report here;
Plans to make digital communications work for everyone | Ofcom

[lettice]

Ofcom chief executive Sharon White said there was a gap between what the regulator and BT are proposing and stressed she would use her powers to enforce the change if the company resists it.

She told the BBC Radio 4 Today programme: “I understand why some people look at selling off Openreach. It looks simple and clean on paper; actually there are big practical obstacles in terms of thousands of land contracts that need to be renegotiated, big pension changes, and I don’t think the country can afford to wait for reform.

“That’s why today we have announced the biggest shake-up to Openreach in its 10-year history to deliver better broadband to UK homes and businesses.

“Openreach will become a distinct company, legally separate from the rest of BT; it will have its own board, obliged by law to act in the interest of all customers, not just BT; and it will have to consult on big investments that matter to the UK, like fast fibre to the doorstep, not just what BT wants.”

Ms White insisted the move would make a “significant” difference to customers.

“It will mean that we have faster, more reliable broadband,” she said.

“It will mean that engineers turn up on time, get the job done first time.

“And I think also, crucially for the UK, it will mean more investment in fast fibre to the doorstep.”

The Government welcomed Ofcom’s recommendations, saying BT’s own proposals were inadequate.

A Department for Culture, Media and Sport spokesman said: “Nine out of 10 homes and businesses now have access to superfast broadband, but our goal is to make sure the UK builds the right infrastructure to maintain our position as a world-leading digital nation.

“We are clear that a more independent Openreach is needed to benefit consumers and the UK’s digital infrastructure. We are concerned that BT’s proposals do not go far enough and think it is right that full structural separation remains an option.

“Swift and clear action is needed to give certainty to consumers, industry and investors in the UK’s broadband infrastructure, and which delivers rapid improvements in the level of investment and service.”

https://www.pressandjournal.co.uk/pi...ny-says-ofcom/

Ofcom chief executive Sharon White also said

"If BT doesn't agree, we will use the rules and powers to enforce the change," she added. "We have the powers."

[speedyrite]

Early analysis by thinkbroadband here:
thinkbroadband :: Ofcom detonates tactical nuclear weapon underneath Openreach

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Statement from Sky on proposed Openreach reform here:
https://corporate.sky.com/media-cent...enreach_reform

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ISPreview coverage here:
http://www.ispreview.co.uk/index.php...ach-fibre.html

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On Sky's response;

Jeremy Darroch, Group Chief Executive, Sky said:

“Today’s proposal to create a legally separate Openreach is a step in the right direction, although falls short of the full change that would have guaranteed the world-class broadband network customers expect and the UK will need.
In particular, leaving Openreach’s budget in the hands of BT Group raises significant questions as to whether this will really lead to the fibre investment Britain requires.
At the end of the day, Ofcom’s changes will only work if they deliver better outcomes for customers.
It’s now important that the changes Ofcom have mandated today are implemented rapidly, fully and without dilution. We are encouraged by Ofcom’s stated commitment and willingness to use its powers to hold BT’s feet to the fire.”

One thing I think may help Sky, is that all that cash cow money of openreach will now not be poured into BT, and have to be used solely for investment in phone/broadband infrastructure.
So hopefully, bye bye BT sport and sky sports back without the extra burden of sport bidding competition and a lesser drain on all customers, I hope

[lettice]

Wonder in a few months then if will be seeing this;

[bubblegun]

On Sky's response;



One thing I think may help Sky, is that all that cash cow money of openreach will now not be poured into BT, and have to be used solely for investment in phone/broadband infrastructure.
So hopefully, bye bye BT sport and sky sports back without the extra burden of sport bidding competition and a lesser drain on all customers, I hope

My view would be that, that money was initially needed by BT group to create the BT Sports part of their group. However, that money was "seed" money and they now have a TV group doing Sports rights which is funded by their existing TV subscribers.

I also wrote this pish elsewhere...

Openreach being separate from "BT" is a small step in the right direction.

I've always felt uncomfortable when speaking to Openreach installers, that they get cheap BT TV deals (since they are part of BT) and say that Sky is crap to people they visit (lots of people told me they have said this). They need to be separate or be offered cheap deals from all the providers they work for (not just BT - or Sky or talktalk or EE or eveyone else) to reduce bias.

[FelixTCat]

bye bye BT sport and sky sports back without the extra burden of sport bidding competition and a lesser drain on all customers

Ah yes, the benefits of a monopoly.