Ofcom’s 2024 Report on Openreach’s Independence Finds Only Minor Breaches

The UK telecoms regulator has published their annual 2024 monitoring report into Openreach’s independence from BT, which found only a few minor breaches and noted that they’d seen “evidence of efforts by BT Group to renew and refresh its engagement with the framework” since the appointment of new Group CEO, Allison Kirkby.

Just to recap. The annual report process was established some years ago as part of Ofcom’s effort to monitor Openreach’s progress toward becoming a distinct “legally separate” company away from BT, which in turn stemmed from the original 2016 Strategic Review of Digital Communications (full summary).

The 2016 review concluded that Openreach previously had an “incentive to make decisions in the interests of BT, rather than BT’s competitors, which can lead to competition problems” and that BT had failed to “sufficiently” consult rival ISPs, such as those that piggyback off their network, on future “investment plans that affect them.” They were also deemed to have under-invested in their network.

In order to resolve that, BT and Ofcom reached a voluntary agreement in 2017 (here), which sought to boost competition by giving rivals easier access to the operator’s infrastructure and fostering an independent governance structure for Openreach, as well as tougher minimum service quality standards (see today’s news), separate branding, new consumer protection measures and better information sharing etc.

Since then much has changed and the operator is now rolling out FTTP broadband to an additional 1 million premises per quarter, while enabling rivals to harness their cable ducts and poles with much greater ease. As a result, Ofcom’s annual monitoring report is usually fairly uneventful, and that’s true this time around too.

Ofcom Report Statement

While there have been some reported breaches of compliance with the Commitments, we have not seen evidence to warrant opening any new formal investigations in this reporting period. In March of this year, we made a breach finding following our investigation into Openreach’s failure to meet three of the quality-of-service obligations in the leased lines access and wholesale local access markets during 2022/23 – this is covered in further detail later in this report. We will continue to meet with stakeholders regularly and are prepared to take enforcement action to hold BT and Openreach to account when necessary.

We continue to see evidence that the Commitments are working as intended and that they are well-established and well-embedded across BT and Openreach. We meet regularly with both BT and Openreach and understand how the Commitments are working in practice. We have welcomed the positive reports and evidence from BT and Openreach that the Commitments are rooted in the culture of both organisations.

We have this year seen evidence of efforts by BT Group to renew and refresh its engagement with the Commitments. This follows the appointment of a new CEO, Allison Kirkby, who served as a non-executive director of BT since 2019, including on the sub-committee charged with monitoring BT’s compliance with the Commitments.

Ofcom also noted that, during the last financial year, two minor breaches were reported to them by the CMO, both relating to inappropriate sharing of Openreach Customer Confidential Information (CCI) and these were categorised as “trivial breaches“.

However, the CAO did also report one “serious breach“, which related to the identification by BT’s Communications Regulation Compliance (CRC) assurance review of hydra cables. The report says these had been incorrectly ordered and installed in an Exchange in 2022, where the Openreach Cablelink product should have been used. But the “impact of the breach was minimal on CPs” (comms providers) and “we welcomed the measures taken by BT to deliver and refresh training for the Cablelink team“.

“Our assessment is that none of these incidents involved an intent to breach the Commitments nor were any CPs advantaged or disadvantaged, and in addition, our view is that each was thoroughly and robustly investigated by the BT and Openreach compliance functions. We therefore did not take any additional action,” said Ofcom

As usual, Ofcom concluded by stating that they “will continue to be vigilant to ensure there is no complacency and that BT and Openreach are operating not just to the letter of the Commitments, but in the spirit in which they are intended.”