Ofcom is concerned about BT’s continued Openreach influence

UK telecoms regulator Ofcom has raised its concerns that BT still has too much influence over decisions made by the Openreach national broadband network.

Following years of complaints from rivals that previous Openreach owner BT was prioritising their business in strategic decisions, Ofcom decided to step in last year.

Ofcom and BT reached the decision to keep Openreach under BT’s parent company, but have it run as an independent company in a bid to make its operations fairer to competitors.

In a progress report Ofcom published on Thursday, the regulator said progress had been made towards becoming more independent. A new board had been established and BT branding removed from thousands of Openreach vans.

However, Ofcom noted BT remained ‘significantly involved’ in Openreach’s strategy.

“This is supported by emails exchanged between senior executives which demonstrate that BT was involved throughout the financial planning process,” wrote Ofcom in their report.

“We are also concerned that BT’s newly established Investment Board reviewed Openreach’s investment proposals to be included in its strategic plans before the final draft plans were presented to the Openreach Board for approval.”

Last week, Telecoms reported on the impending exit of BT CEO Gavin Patterson and his career over that period which saw the business go through major changes.

Following the Openreach split, Patterson said:

“I believe this agreement will serve the long-term interests of millions of UK households, businesses, and service providers that rely on our infrastructure. It will also end a period of uncertainty for our people and support further investment in the UK’s digital infrastructure.

This has been a long and challenging review where we have been balancing a number of competing interests. We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future.”

A number of BT’s rivals are unconvinced the changes made to Openreach are yet to have a positive impact on the industry.

“Some are uncertain as to whether the new arrangements allow Openreach to act with greater independence and treat all its customers equally in practice,” wrote Ofcom in its report.

The regulator will be issuing another update in November and expects further progress in the months between. If sufficient progress is not made, it’s likely Ofcom will resurface the possibility of splitting Openreach from BT altogether.

Ofcom’s full Openreach progress report can be found here (PDF)

What are your thoughts about BT’s involvement with Openreach? Let us know in the comments.

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