BT must open its Openreach network to competitors, Ofcom has announced.
The regulator failed to rule out full structural seperation as a future option.
Ofcom's Strategic Review of Digital Communications found evidence that 'Openreach still has an incentive to make decisions in the interests of BT, rather than BT’s competitors'.
However the regulator said full structural seperation would cause 'significant disruption' to the market, instead announcing BT Openreach must make it easier for rivals to build their own fibre networks.
Ofcom explained Openreach should be kept ‘at arm’s length’ from the EE owner to reduce the country’s reliance on Openreach. The regulator said this will also boost investment from competitors in the market, giving consumers a greater choice of phone and broadband services.
Sharon White, Ofcom CEO, said: 'Today we’ve announced fundamental reform of the telecoms market - more competition, a new structure for Openreach, tougher performance targets, and a range of measures to boost service quality.'
BT CEO responds
The regulator’s decision was welcomed by BT CEO Gavin Patterson, who has repeatedly hit back at accusations that the brand is stifling competition. The telecoms giant most recently launched a public marketing campaign to defend its relationship with the broadband arm
Patterson encouraged other companies to make use of Openreach’s ducts and poles but warned that as of yet he has not seen any rivals willing to make the same investments BT has.
‘We are happy to let other companies use our ducts and poles if they are genuinely keen to invest very large sums as we have done’, he said. ‘Our ducts and poles have been open to competitors since 2009 but there has been little very interest to date. We will see if that now changes.
‘Ofcom have today explained why breaking up BT would not lead to better service or more investment and that structural separation would be a last resort. We welcome those comments. The focus now needs to be on a strengthened but proportionate form of the current model and we have put forward a positive proposal that we believe can form the basis for further discussions with both Ofcom and the wider industry.
‘Our proposal includes a new governance structure for Openreach as well a clear commitment on investment. Openreach is already one of the most heavily regulated businesses in the world but we have volunteered to accept tighter regulation to bring matters to a clear and speedy conclusion.’