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BT's moves to open up the broadband market have been a success but more action is needed to foster even greater competition, the communications watchdog has said.

Ofcom praised BT in its latest report noting that since 2005 "real progress" has been made to open up the broadband market.

This has resulted in greater choice and better deals for consumers as well as more customers swapping providers, it said.

The report said: "BT has made very significant progress in implementing the undertakings and has committed considerable resources to meeting its obligations, including the creation of Openreach as an independent business unit in January 2006."

Ofcom did, however, introduce a new set of proposals to encourage more competition including the imposition of compulsory compensation for customers of BT Openreach in the event of poor service.

Under the new regulations Openreach would be compelled to pay compensation to customers proactively, rather than in cases where consumers have submitted a claim.

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