Following the news that BT has been ordered to legally separate from Openreach, Ofcom is now planning to make access to BT’s network much easier for rival providers.
Ofcom believes that improving this access can boost competition and help enhance the speed at which fibre broadband is rolled out across the country. Its plans will give other providers access to the ducts and telegraph poles that make up the network.
Ofcom put together its proposals this week with the intention of boosting investment in the provision of fibre broadband services, as there will be increased competition amongst the various providers. BT has long favoured copper-based wires, but fibre is considered to be the better option, as it provides a faster and more reliable alternative.
The regulator pointed to examples in Spain and Portugal, where recently increased competition has seen full-fibre broadband services reach a coverage level of 70 per cent. The UK, in comparison, has a coverage level of two per cent.
Ofcom also said that it will be a good thing for the UK to be less reliant on Openreach, as the BT subsidiary’s operation has favoured its parent company. The arrangement between the two companies resulted in a great deal of criticism in recent months, as some rivals were not given access to BT’s network.
Back in July, Ofcom was criticised because it chose not to split the two organisations, although this has now become a reality after concerns were raised about competition levels. The decision was made to make Openreach a separate company, even though it will remain part of the BT Group. This means that Openreach now has to treat all customers of the network equally. To date, BT’s rivals have been critical of the service provided by Openreach, and Ofcom is reported to still have a number of concerns about the future, including the possibility that the company may not be able to deal confidentially with some of its customers.
The competition policy director at Ofcom, Yih-Choung Teh, said that broadband’s future lies with fibre and that by creating competition between the various networks, it will be easier to make this happen. The regulator’s plans include exploration of how other providers can be given access to BT’s network and how this will improve the installation of faster fibre broadband in homes and businesses throughout the UK. Providers should be able to cut the costs of investing in their own networks as a result.
BT will also have to meet the cost of allowing other businesses access to its network. This will include the cost of repairs to the ducts. Rental charges can be capped, and rival companies will have to be notified when there are plans to carry out engineering work on the network. There may also be the option for rivals to carry out any engineering work without the help of Openreach.
Openreach will soon have to provide a “digital map” for BT’s rivals so that they can see exactly where the ducts and poles are. The plan is for this to be made public by Ofcom by summer 2017.