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BT is facing further pressure to sell off its Openreach division in order to boost competition in the broadband market.

A cross-party report by MPs has already suggested that BT and its Openreach subsidiary be separated into two entirely independent companies, as this would end their "natural monopoly" over Britain's broadband infrastructure and lead to greater investment and innovation in the market.

Economic think tank the Centre for Policy Studies (CPS) has now put forward a similar argument, as it believes the UK's broadband infrastructure is falling behind other countries.

The organisation said the current system leads to a conflict of interest in two ways. Firstly, BT runs the UK's broadband infrastructure and service providers must use this technology. 

Secondly, the CPS argued BT uses its own infrastructure to offer internet services to customers, which puts retail broadband competitors at a "major disadvantage".

"Structural separation could provide a market with a level playing field between all players, where the infrastructure that service providers rely on would not be owned by one company," the group said.

"This would be good for competition and good for consumers."

The CPS said this approach has already worked very well in markets such as New Zealand and Singapore.

As a result, it has urged sector regulator Ofcom to refer the issue of structural separation of BT Openreach to the Competition and Markets Authority.

BT has responded by suggesting the CPS's report is "under-researched and paints a false picture of UK broadband".

A spokesperson said it compares the UK to other nations based only on average speeds, leaving out other key indicators such as prices, take-up and the availability of services, all of which "place the UK well against important international peers".

"There is simply no evidence that broadband investment would be higher or competition fiercer if Openreach became a smaller, weaker, standalone company," BT said.

"How could it, when the UK already has more than 500 firms competing in this market and Ofcom sets 96 per cent of Openreach prices to level the playing field for them all?"

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