A new move to make BT legally separate its Openreach network arm will fall short of delivering the benefits customers need, a Highland MP has warned.
Drew Hendry said a decision by telecoms watchdog Ofcom to trigger proceedings with the European Commission to force a legal separation would result in “little real change.”
Ofcom yesterday said it was “disappointed” with BT’s proposals since the regulator outlined plans in July to make Openreach a “distinct company” within the BT group to appease competition concerns.
But it has stopped short of forcing a full break-up and sale of Openreach, which develops and maintains the UK’s main telecoms network used by telephone and broadband providers such as Sky, TalkTalk, Vodafone and BT Consumer. The watchdog said it remains “open” to further proposals from BT for a voluntary separation of the division.
Mr Hendry, SNP MP for Inverness, Nairn, Badenoch and Strathspey, said: “Whilst it is good that there is recognition that things have to change, the proposals announced today do not go far enough.
“Allowing BT to retain ownership of Openreach effectively means little real change, and is unlikely to gain the benefits that consumers and businesses need.
“We will continue to argue that Ofcom should have the power to properly separate BT and Openreach if required. Businesses must be able to access the best technology and for it to be deployed as quickly as possible.
“It is widely regarded that the current situation with BT and Openreach is not working as it should.”
Ofcom said a more independent Openreach, which “works in the interest of all providers, not just BT” was vital to improving broadband and telephone services across the UK.
The regulator’s action was described as a “move in the right direction,” by Trudy Morris, chief executive of Caithness Chamber of Commerce.
She said:“Phone and broadband connectivity is a key issue for businesses in the north Highlands and we welcome this move by Ofcom to address competition concerns which have been holding back investment in the UK’s digital infrastructure.
“A more independent Openreach, with a remit to provide equality of service to all providers and to consult more closely with customers and with greater control over its own strategy, would be a move in the right direction for investment in the digital future of the north Highlands.”
Stewart Nicol, chief executive of Inverness Chamber of Commerce said businesses and consumers in the city and across the Highlands needed the best possible digital connections to drive the area’s economy and enable companies to compete in the global marketplace.
He added: “Despite the substantial investment in the region’s digital infrastructure and the undoubted progress made in recent years, levels of dissatisfaction with broadband capability remain high in too many of the region’s business communities.
“For all businesses in the Highlands, the priority is delivery of the level of digital connectivity they’ve long been promised. The litmus test for any change to the ownership structure of the UK’s broadband backbone is whether it delivers the connectivity that businesses require in order to reach their potential.”
Rival firms have welcomed Ofcom’s action, but are also worried the plans do not go far enough.
On Monday night, BT appointed the first independent chairman of its Openreach arm – hiring Mike McTighe, who was on the board of Ofcom between 2007 and 2015.
The company said: “We are in discussions with Ofcom on two outstanding issues, the reporting line of the Openreach chief executive and the form of legal incorporation.
“We will continue to work with Ofcom to reach a voluntary settlement.”
