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Sky: Ofcom can 'lead the way' by splitting Openreach and BT

Monday, February 22nd 2016 by Phil Wilkinson-Jones

Ofcom has “an opportunity to lead the way” by recommending that BT splits from Openreach, the CEO of Sky has said.

The telecoms regulator will announce the results of its Review of Digital Communications – an overarching look at the UK’s fixed and wireless broadband networks – on Thursday.

The review has centred on whether Openreach, which owns and operates the UK’s biggest broadband network, should be separated from its parent company BT.

Writing in The Times this morning, Sky CEO Jeremy Darroch said the technology BT chooses to invest in is at the “heart of the debate”.

“If the UK is to improve its productivity and international competitiveness, and ensure our businesses, homes, schools and hospitals benefit from the latest technology, then we need better digital infrastructure including an ultrafast broadband network with speeds of 1Gbps or more, through fibre laid direct to homes and businesses,” he said.

Mr Darroch said much of the rest of the world is already rolling out fibre to the premises (FTTP), but in the UK there is a catch.

“There’s one national infrastructure broadband network and currently only BT determines how fast it will be.

“BT has shown little willingness to invest in fibre to the premises. Instead, it plans incremental upgrades to decades-old copper cables as the final connection to homes and businesses, falling far short of the potential of a true fibre network.”

He said it was “naïve” to think anything would change under the existing structure and aiming for anything less than 1Gbps was “unambitious”.

'Status quo'

Mr Darroch also said the process of separation was not complicated, especially as Openreach is already “functionally separate” from BT.

“It is clear the status quo is not an option. BT invests virtually the same amount today in the network as 10 years ago.

“This has seen the annual level of faults grow to 10% of all customers, and customers waiting more than two weeks for their broadband to be connected. Unacceptable for a modern society.

“With so many agreeing change is needed, Ofcom this week has the opportunity to lead the way. The industry, with much of the nation, will be ready and eager to support it.”

In October, the man leading BT’s superfast broadband rollout said Ofcom would be wrong to change the existing set-up.

Bill Murphy, managing director of next generation access at the telecoms giant, said the UK had enjoyed a competitive communications marketplace since Openreach was created a decade ago.

“Why do we have low prices and such high choices? Because this is a very vibrant market,” he told Cable.co.uk.

“One of the reasons we’ve had such a dynamic marketplace is because Openreach was created and the structure of Openreach within the BT Group has succeeded.

“It works with 500 different communications companies on an equivalent basis, it’s highly regulated and supervised and as a result consumers benefit.”

Last month, BT chief executive Gavin Patterson said the UK is better off with Openreach remaining part of BT.

Writing in the Telegraph, he said: "It is at the heart of how we ensure UK infrastructure receives the vital investment it needs and how we sustain the competitive marketplace that...we all benefit from."

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