Ofcom has announced a number of measures it will take to ensure Openreach respects the terms agreed with the regulator after its separation from BT. Ofcom said it will closely monitor compliance and that it will consider new terms should the new Openreach not fulfill its obligations.
To measure results, Ofcom will examine if all consumers and business using the Openreach network are receiving decent speeds and if the right service is meeting their needs. The regulator will also measure Openreach’s contribution to growing fibre broadband networks, including ‘full-fibre’ lines, which are currently available to only around 2 percent of UK premises. Ofcom added that it expects Openreach to be responsive to different models of investment proposed by its customers, including co-investment and risk sharing. Regarding quality of service, the regulator will report on Openreach’s repair and installation times, and whether engineers are turning up on time.
To monitor compliance, Ofcom will be establishing a dedicated Openreach Monitoring Unit. The unit will assess whether rules are being observed, and whether Openreach is acting more independently of BT, making its own decisions, and treating all its customers equally.
Ofcom plans to publish its findings six months after the commitments come into effect, and then every year. This will include BT’s delivery on commitments in Northern Ireland, where Openreach does not operate. Openreach has also set up its own compliance committee, and is consulting publicly on a new process for engaging with telecoms companies on planned services and investments.
To complete the reform of Openreach, the government will still need to amend the Crown Guarantee, which underwrites the BT Pension Scheme. The fund will then have to transfer to Openreach. Once these steps are achieved and the new commitments come into effect, Ofcom will release BT from its past ‘undertakings’.
Ofcom proposed the separation of Openreach in July 2016, saying it was needed to ensure BT's wholesale customers receive the same of level of service as the company's own retail operations. By improving the level of wholesale service, a separate Openreach is also expected to boost broadband speeds and coverage in the UK. BT agreed in March to legally separate its wholesale networks arm Openreach. As a result of the voluntary efforts, Ofcom said it will not need to impose the regulatory changes on the company.
The proposals were met with disappointment by industry group ITSPA and fibre operator Cityfibre. ITSPA, which represents business service providers, said it supported the legal separation plan but is not pleased with the proposed enforcement. It said Ofcom is relying too much on BT's commitments, without enough public scrutiny, and in particular has allowed BT the right to withdraw from the commitments with 12-months notice.
Cityfibre suggested Ofcom's efforts were wasted, as "a leopard cannot change its spots". It called for the regulator instead to focus its resources and work on supporting the roll-out of full-fibre networks, "rather than spending even more time and effort policing the networks of the past".
