Ofcom telecom rules protect BT from an expected split

Ofcom released its initial recommendations to improve telecoms quality and broadband and voice coverage in the UK – indicating no split to BT Group.

Openreach, a division of BT, must open up its network of telecom poles and underground tunnels to allow rivals to build their own fiber networks, connect directly to homes and offices, said Ofcom.

Ofcom says Openreach needs to take its own decisions on budget, investment and strategy, in consultation with the industry. Ofcom did not suggest a split between BT and Openreach to become two independent companies. A split was the main recommendations of the rivals of BT Group.

UK broadband industry feels that the initial recommendations of Ofcom will be a big blow for BT rivals such as Sky, TalkTalk and others.

Ofcom felt that it is necessary to overhaul Openreach’s governance and strengthen its independence from BT. Openreach needs to take its own decisions on budget, investment and strategy – such as the deployment of new networks.

Openreach management should be required to serve all wholesale customers equally, and consult them on its investment plans. Ofcom did not share its action plan to ensure that Openreach is following the Ofcom guidelines and penalties on Openreach if it does not follow.
UK broadband coverage and speed
The new model, which will be announced later in the year, might require Openreach to become a wholly-owned subsidiary of BT Group. Ofcom reserves the right to require BT to spin off Openreach as an entirely separate legal entity, with its own shareholders.

Ofcom will introduce tougher rules on faults, repairs and installations; transparent information on service quality; and automatic compensation for consumers for poor services.

Ofcom will work with the UK Government to deliver a new right to affordable broadband for all household and business in the UK. Ofcom intends to place new obligations in future spectrum licenses to improve rural mobile coverage.

Under Ofcom rules, 98 percent of homes and offices must receive an indoor 4G mobile signal by next year.

Sharon White, Ofcom Chief Executive, said: “People across the UK today need affordable, reliable phone and broadband services. Coverage and quality are improving, but not fast enough to meet the growing expectations of consumers and businesses.

Baburajan K