Skip to main content
Jump to navigation
bt openreach

TalkTalk and Sky have both insisted Openreach can only improve service levels if it is fully separated from BT.

Ofcom recently ordered BT to give more independence and investment powers to Openreach, with the broadband subsidiary being run as a distinct and legally separate company with its own board.

According to the regulator, this would provide Openreach with the greatest possible degree of independence without separating the companies entirely, and lead to decisions being taken for the good of its customers and the wider telecoms industry.

However, in its response to a consultation on the plans, TalkTalk has said it is "firmer than ever in its conviction that only full structural separation will give consumers and businesses the investment, value and quality of service they need".

The company argued that anything less would mean BT still has an incentive to use Openreach to "distort and weaken competition in the retail market".

TalkTalk went on to suggest that Ofcom is only advocating legal separation instead of structural separation because of "strong and sustained resistance from BT".

"This merely rearranges the deck-chairs such that Openreach will become a company 100 per cent owned by BT Group, rather than a division of BT," it said.

"Also, TalkTalk does not think that trying out legal separation for a few years is likely to provide the 'smoking gun' evidence that Ofcom seems to think it needs before it imposes structural separation."

The company acknowledged that legal separation could help to improve transparency, which means it is preferable to the "wholly unacceptable" situation that has persisted over the last decade.

Nevertheless, TalkTalk said it will not prevent BT and Openreach from providing a low quality of service, making investment decisions in its own interests, charging high prices to non-BT wholesale customers and standing in the way of retail and network competition and innovation.

Sky has raised similar points in its formal response to Ofcom's proposals, stating that BT's continued control of Openreach is holding back investment in fibre to the premises technology throughout the UK.

"The time for tinkering around the edges of this failing regulatory structure has long since passed," it insisted. 

"Ofcom must act boldly and urgently."

Andrew Griffith, Group Chief Operating Officer and Chief Financial Officer at Sky, commented: "We've reached a critical point in the long running debate on the future of the UK's broadband infrastructure.

"It's time to move from words to action. It is clear that a structurally separate Openreach is the best way forward to deliver the broadband that the UK so desperately needs for the future."

Mr Griffith stated there is no good reason why this cannot happen, as a fully independent Openreach would be a "sizeable" new FTSE 100 company capable of attracting new capital from investors, partnering meaningfully with wholesale customers and raising the quality of its service for consumers.

"Ofcom has a real opportunity to take the necessary steps to ensure that Britain really is fit for the future," he added.

Join the conversation

comments powered by Disqus

Stay up to date

  • Google+ Follow uSwitchTech
  • Subscribe to our RSS feed

Latest Comments

Search news