BT and Openreach told to be more transparent over split

BT and Openreach have made real progress on implementing the new arrangements governing their legal separation, but can do more to strengthen Openreach’s strategic independence, and more to improve transparency over how a balance is being struck between these new freedoms and oversight from BT.

That is according to the latest report on the two businesses’ new relationship produced by regulator Ofcom, which set up a dedicated Openreach Monitoring Unit in 2017 to hold both parties to account.

The Monitoring Unit’s second annual report painted a positive picture of the developing relationship, which was put in place in March 2017 following initial changes to the Openreach governance model made a year earlier in the wake of Ofcom’s Strategic Review of Digital Communications.

The legal separation of BT and Openreach was designed to address industry concerns that BT, as a provider of broadband services and owner of the UK’s largest broadband network, had the ability, incentive and propensity to favour itself when making investment and planning decisions, to the detriment of other network builders, and the disadvantage of end-users.

“In general, feedback from industry and Openreach’s customers has been positive, but not always,” said Ofcom. “There have been positive steps towards improved engagement and collaboration. But ... some providers still have concerns, for example about the potential for confidential information to be shared between the two organisations.

“We expect to see further improvements in how Openreach demonstrates it is treating all its customers fairly and equally.”

The regulator said the new board and financial and planning processes were working as intended to increase Openreach’s independence, and it was encouraged by early progress in implementing cultural change within the two businesses, welcoming the commitment from leadership but recommending more focus to embed this change at all levels of the firms.

The report also noted the increase in the pace and scale of full-fibre – also known as fibre-to-the-premises or FTTP – broadband roll-out, and asked for further clarity on how the more ambitious targets might be achieved. It urged Openreach to continue to work constructively with the industry to implement new arrangements governing other network providers’ access to its duct and pole infrastructure.