Ofcom has announced plans to legally separate BT Openreach.
This will see Openreach gain more independence from BT but falls short of a full structural separation which would see the two businesses split financially.
This has long been advocated by BT rivals who claim the tech giant’s ownership of Openreach allows it to act in its own interests. The UK telecoms giant has also grappled with MPs over its ownership of Openreach.
Ofcom has repeatedly stressed that it would prefer to enforce tougher regulation on BT Openreach rather than fully separate the two companies. CEO Sharon White said earlier this year that completely splitting BT Openreach would cause a significant disruption and cost to consumers, something which legal separation would avoid.
Under the new Ofcom proposals Openreach will have to consult with its rivals on large investments, as well as appoint non-BT executives to its new Board of directors.
Openreach will also have its own staff and branding, both of which must be unaffiliated with BT. As part of the new reforms, BT will also have to open up its broadband network to competitors, a demand made by Ofcom earlier this year.
BT CEO Gavin Patterson has pledged to implement these changes within six months.