Ofcom found that Openreach "still has an incentive to make decisions in the interests of BT, rather than BT’s competitors, which can lead to competition problems". As a result, the regulator will propose later this year an overhaul of Openreach’s governance and measures to strengthen its independence from BT. The new model might require Openreach to become a ring-fenced, wholly-owned subsidiary of BT Group, with its own purpose and board members, Ofcom said, adding that it also reserves the right to require BT to spin off Openreach as an entirely separate legal entity, with its own shareholders.
To increase the competitive pressure on Openreach, Ofcom wants to encourage "large-scale roll-out of new ultrafast broadband networks, based on cable and fibre lines", as an alternative to the copper network. To help bring this about, Openreach will be required to open up its telegraph poles and ducts to rival providers to build their own fibre networks, connected directly to homes and offices. Openreach must make it "much easier" for competitors to access this network, Ofcom said, including providing comprehensive data on the nature and location of its ducts and poles.
Ofcom also addressed the concerns of BT's rivals of poor service from Openreach. The wholesale operator will be subject to tougher, minimum requirements to repair faults and install new lines more quickly. These will set even higher standards than the measures introduced by Ofcom in 2014 and extend to other aspects of performance, such as how often faults occur.
For the broader market, Ofcom will introduce performance tables on quality of service, identifying the best and worst operators on a range of performance measures so that customers can shop around. In addition, Ofcom intends to introduce automatic compensation for consumers and businesses when things go wrong. Broadband, landline and mobile customers will no longer have to seek redress themselves, but will instead receive refunds automatically for any loss or reduction of service.
