Ofcom, which is the communications regulator in the United Kingdom, reported on Tuesday that it was making a formal notification to require the legal separation of Openreach from BT. It says BT fell well short when the regulator asked for voluntary proposals to address competition concerns. The core of the Ofcom proposal is a requirement for Openreach to become a distinct company with its own board and a majority of members, including the chair, not affiliated with BT.
Openreach is the division of BT Group that develops and maintains the telecommunications network used by service providers including Sky, TalkTalk, Vodafone, and BT’s retail business.
“We are disappointed that BT has not yet come forward with proposals that meet our competition concerns,” Ofcom says in a statement. “Some progress has been made, but this has not been enough, and action is required now to deliver better outcomes for phone and broadband users.”
Ofcom has proposed reforms recently, and notes that “more independent Openreach would be well placed to invest in ‘full fiber’ broadband for everyone.” The regulator further reports it is preparing to notify the European Commission of the plans to require the legal separation of Openreach. However, it does add: “Throughout this process, we remain open to BT bridging the gap between its proposal and what is required to address our strong competition concerns.”
You can expect a lot of responses from both sides of the competitive argument to splash across the web over the next several days. Here’s just one calling for Openreach to expand its thinking around how to deploy ultra high-speed broadband:
“Despite Ofcom’s proposal, the infrastructure problems facing the U.K. market that prevent the rollout of a nationwide next-generation broadband network still remain,” Jaime Fink, co-founder at Mimosa Networks, comments. “The DSL (cable) foundations that underpin much of the U.K. broadband network simply do not offer the bandwidth and reliability to support today’s internet applications and meet the demands of tomorrow’s increasingly data rich services.”
He notes fiber deployment continues to present challenges in rural and dense urban areas, where the cost and immense bother of digging trenches is a big factor. That is an issue wherever it happens around the world, and was a large part of Google Fiber’s decision to press pause on fiber deployments in several areas of the United States as it looks into a “hybrid” strategy that includes fixed wireless technology.
“Openreach and other U.K. service providers must change their approach and look at new technologies that can profitably deliver a superfast sustainable broadband network. Lessons can be taken from the United States, where new broadband market entrants such as Google and Facebook are turning to fiber alternatives in the form of fixed wireless, in order to better connect their customers,” Fink notes.
“The technology can deliver fiber-like broadband connectivity in any environment, without the cost or disruption of its cabled alternatives. The technology will make it possible for service providers to extend their broadband services to areas that have traditionally been financially and logistically challenging, and meet the call from consumers, businesses, and government bodies to deliver superfast broadband across the country.”
Filed Under: Industry regulations