The majority of the UK’s broadband and telephone lines are controlled and maintained by BT. While competition laws allowed other providers to offer telephone call packages and, in turn, line rental packages of their own, BT through their Openreach arm of the business offer all maintenance, make improvements and carry out the connections and change over from ADSL internet to Fibre broadband for anyone using the traditional telephone networks, no matter who their provider is.
Ofcom are concerned about the performance of BT Openreach on behalf of other providers across the country, such as their biggest rival Sky. Ofcom claims the service on behalf of these providers is often poor, with providers complaining their customers have to wait 10 days for connection which seems completely unreasonable.
Ten years ago during Ofcom’s last strategic review, Openreach was created to provide access to BT’s telephone and broadband network to competing providers. It was stated that this must be done on equal terms. The question is, have other providers been getting such service on the same terms as BT themselves, or do BT reserve priority for their own interests and customers?
Service providers pay BT a wholesale price for the use of the network, and then charge their customers accordingly. Opening up the market to other providers was of benefit to customers who can now receive deals as part of bundles with internet and TV packages, as well as reserving the right to shop around for their service to get the best deal when not in contract.
Because of complaints regarding the service on behalf of other providers, Ofcom are now opening a consultation into whether Openreach should be split into a separate company. BT chief Gavin Patterson told the BBC that he thought splitting the Openreach service off would be a “mistake”.
Other options on the table include allowing BT to continue running Openreach as before with stricter regulations to improve their service to other providers, as well as deregulating to allow other providers to use their own network rather than BT’s for their customers. Ofcom chief executive Sharon White said: “This review is about ensuring people get the best possible communications services, wherever they live and work. Our priorities are clear. We want to promote competition, investment and innovation, so that everyone benefits from even better coverage, choice, price and quality of service in years to come.”
BT has invested a huge amount of money into the fibre broadband market over the last few years, pushing the UK’s superfast broadband network ahead of European counterparts. BT has further plans to increase the speed of the network to ultrafast speeds with a continued commitment to growth. The question is, should they be forced to split in two, would this still be a viable option? BT feels it would not. This gives the regulator Ofcom some serious points to consider over the next 6 months.
BT say that: “Ofcom have overseen a regime that has balanced investment with competition and we hope they will once again put the needs of the UK and its consumers ahead of those who have tried to keep the UK in the digital dark ages.”
Ofcom’s position is to ensure consumers are getting the best services possible for the lowest possible prices. Keeping competition strong is the best way to do this. As well as looking at the future of BT Openreach, Ofcom will also be looking at pre bundle services. With BT trying to take over EE to offer a quad service like Virgin Media. Bundled services offer customers good value for money. However, reducing the number of service providers available will lead to less competition, allowing said providers to increase their costs. Ofcom say a statement regarding these reviews will be issued at the turn of the year, we look forward to seeing what’s decided and hope there will be a continued commitment to improving the speed and services available.