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'Significant day' for broadband users as BT agrees to legally separate Openreach

Friday, March 10th 2017 by Phil Wilkinson-Jones

BT has agreed to make Openreach, which runs the UK’s national broadband infrastructure, a legally separate company.

At the request of Ofcom, Openreach will become a distinct company with its own staff and management, and a “legal purpose to serve all of its customers equally”.

It will also have to consult with providers that use its network, such as Sky, TalkTalk and Vodafone, on large-scale investments.

Ofcom said the changes address all its competition concerns and it will no longer need to impose changes through regulation.

Sharon White, Ofcom’s chief executive, said: “This is a significant day for phone and broadband users.

“The new Openreach will be built to serve all its customers equally, working truly independently and taking investment decisions on behalf of the whole industry – not just BT.

“We welcome BT’s decision to make these reforms, which means they can be implemented much more quickly.

“We will carefully monitor how the new Openreach performs, while continuing our work to improve the quality of service offered by all telecoms companies.”

The legal separation, which will begin this year, will see around 32,000 BT employees transferred to Openreach.

The new company will also have its own branding, which will not feature the BT logo, and its own board.

Gavin Patterson, the chief executive of BT, said: “I believe this agreement will serve the long-term interests of millions of UK households, businesses and service providers that rely on our infrastructure.

'A welcome step'

“It will also end a period of uncertainty for our people and support further investment in the UK’s digital infrastructure.

“We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future.”

A Sky spokesperson said: “This is a welcome step that we have long called for on behalf of our customers.

“A more independent Openreach is a step towards delivering better service to customers and the investment that the UK needs.

“It’s important that today’s agreement is now implemented by BT in good faith and without delay.”

The CLA, which represents rural landowners and businesses, welcomed the news.

Dr Charles Trotman, senior economics adviser for the CLA, said: “Openreach must now focus 100% on delivering the investment needed to connect rural communities.

“The CLA will continue to work with all parties to find new ways to get the best possible connections into rural areas and end once and for all the rural-urban digital divide.”

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