{"id":18942,"date":"2019-07-03T10:59:05","date_gmt":"2019-07-03T09:59:05","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=18942"},"modified":"2019-07-03T13:31:10","modified_gmt":"2019-07-03T12:31:10","slug":"bt-make-progress-on-legal-openreach-split-clarity-needed-on-fttp","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2019\/07\/bt-make-progress-on-legal-openreach-split-clarity-needed-on-fttp.html","title":{"rendered":"BT Make Progress on Legal Openreach Split, But FTTP Clarity Needed"},"content":{"rendered":"<p><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> has today deemed <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> to be making &#8220;<em>real progress<\/em>&#8221; in their on-going efforts to become a distinct &#8220;<em>legally separate<\/em>&#8221; company away from <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a>, although the UK telecoms regulator seeks more &#8220;<em>transparency<\/em>&#8221; around their efforts to increase independence and solid details on their future <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a> broadband plan beyond 2020.<!--more--><\/p>\n<p>The regulator&#8217;s <strong>Strategic Review of Digital Communications<\/strong> in 2016 (<strong><a href=\"http:\/\/www.ispreview.co.uk\/index.php\/2016\/02\/ofcom-confirm-no-openreach-split-bt-big-change-coming.html\">full summary<\/a><\/strong>) found that <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> still had an &#8220;<em>incentive to make decisions in the interests of <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a>, rather than <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a>\u2019s competitors, which can lead to competition problems<\/em>&#8221; and that the BT had failed to &#8220;<em>sufficiently<\/em>&#8221; consult rival ISPs, such as those that piggyback off their network, on future &#8220;<em>investment plans that affect them<\/em>.&#8221; They were also deemed to have under-invested in their network to the tune of &#8220;<em>hundreds of millions of pounds<\/em>.&#8221;<\/p>\n<p>In response BT and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> eventually reached a voluntary agreement (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2017\/03\/ofcom-bt-reach-voluntary-agreement-openreachs-uk-future.html\">here<\/a>), which aimed to boost competition by giving rivals easier access to the operator&#8217;s infrastructure and fostering an independent governance structure for <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a>, as well as tougher minimum service quality standards, separate branding, new consumer protection measures and better information sharing etc.<\/p>\n<p>On top of that Openreach recently raised their commitment to Gigabit speed capable &#8220;<em>full fibre<\/em>&#8221; technology (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/05\/openreach-aim-for-15-million-uk-fttp-broadband-premises-by-2025.html\">here<\/a>), not least by pledging to rollout <strong>Fibre-to-the-Premises<\/strong> (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a>) based &#8220;<em>ultrafast broadband<\/em>&#8221; services to cover 4 million homes and businesses by March 2021 (up from 3m). Furthermore they hold an ambition for 15 million by c.2025 (up from 10m).<\/p>\n<p><img decoding=\"async\" class=\"ngg-singlepic ngg-none\" src=\"https:\/\/www.ispreview.co.uk\/wp-content\/gallery\/2019-uk-internet-statistics\/openreach_2019_broadband_progress.png\" alt=\"openreach_2019_broadband_progress\" width=\"100%\" \/><\/p>\n<p><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> is required to monitor BT&#8217;s implementation progress on this agreement via their <strong>Openreach Monitoring Unit<\/strong> (OMU) and has today published their latest annual report. Overall the regulator found that &#8220;<em>real progress<\/em>&#8221; had been made but some issues remain.<\/p>\n<blockquote><p><span style=\"color: #339966;\"><strong>What Ofcom Found &#8211; In Brief<\/strong><\/span><\/p>\n<p><strong>Overall, real progress has been made implementing the new arrangements, but there is more to be done.<\/strong><\/p>\n<p>Continued focus is required by both BT and Openreach to strengthen Openreach\u2019s strategic independence and engagement with its customers.<\/p>\n<p><strong>Openreach\u2019s new Board, and financial and planning processes, are helping to increase independence.<\/strong><\/p>\n<p>Strategic independence has been bolstered by the creation of the Openreach Board, and by new strategy and financial planning processes that seek to balance Openreach independence with appropriate BT Group oversight. However, there is still more to do to improve transparency of how this balance is being struck, and to ensure that it is embedded and sustainable.<\/p>\n<p><strong>Openreach has increased the scale and pace of full-fibre broadband roll-out, though longer-term plans remain unclear.<\/strong><\/p>\n<p>Openreach continues to deploy ultrafast networks as part of its \u2018Fibre First\u2019 programme, and has increased its deployment rate during the past year. In May, Openreach\u2019s target for full-fibre connections was raised from 3 million to 4 million premises by March 2021. BT also announced an ambition for Openreach fibre to reach 15 million premises by the mid-2020s \u2013 but this is not a firm commitment. We will continue to monitor Openreach\u2019s fibre roll-out as an indicator of its contribution to the UK\u2019s broadband needs. We will seek further clarity on how the ambition of reaching 15 million premises will be achieved, backed by BT investment.<\/p>\n<p><strong>Openreach has a vital role to play in working constructively with industry to deploy fibre networks for UK consumers.<\/strong><\/p>\n<p>In particular, Openreach is required to give competing network providers access to BT\u2019s underground tunnels (known as \u2018ducts\u2019) and telegraph poles. New arrangements for access to these \u2018ducts and poles\u2019 came into effect on 1 April 2019. We expect to see Openreach working constructively with its competitors and we continue to closely monitor its behaviour and actions.<\/p>\n<p><strong>In general, feedback from industry and Openreach\u2019s customers has been positive, but not always.<\/strong><\/p>\n<p>Overall, there have been positive steps towards improved engagement and collaboration. But not all feedback has been positive \u2013 for example, some providers still have concerns about the potential for confidential information to be shared between Openreach and BT. We expect to see further improvements in how Openreach demonstrates it is treating all its customers fairly and equally.<\/p>\n<p><strong>We are encouraged by early progress in implementing cultural change, but more focus is needed to make this sustainable.<\/strong><\/p>\n<p>Organisational culture at both BT and Openreach is fundamental to the success of the new arrangements. We have been encouraged by the indications of personal commitment from leadership in both organisations. BT and Openreach have taken steps to progress cultural change and embed the Commitments in the daily activities of staff. This change will require continued and concerted effort, and it will remain a focus for our monitoring.<\/p><\/blockquote>\n<p>On the subject of Openreach&#8217;s extended &#8220;<em>full fibre<\/em>&#8221; network rollout, the operator has repeatedly said that their plans for 2025 and beyond remain &#8220;<em>subject to conditions being right.<\/em>&#8221; This reflects their efforts to reach a supportive agreement with Ofcom \/ Government on several key areas (e.g. easier wayleaves and an extension of the 5 year business rate relief on new fibre &#8211; Scotland has already gone to 10 years).<\/p>\n<p>Despite this we&#8217;ve yet to see a final agreement being reached in order to help to achieve their ambition for 2025 and beyond. Meanwhile rivals are starting to threaten their position within the market and Openreach wouldn&#8217;t be hiring so many extra engineers, or raising their long-term ambitions, if there wasn&#8217;t confidence in their future direction of travel.<\/p>\n<blockquote class=\"bq1\"><p><strong>An Openreach Spokesperson told ISPreview.co.uk:<\/strong><\/p>\n<p>&#8220;Ofcom\u2019s report shows that we\u2019re making real progress, but there\u2019s always more to do.<\/p>\n<p>We\u2019re hugely ambitious and we\u2019re determined to build on last year\u2019s best-ever service performance. We\u2019ll continue to invest heavily in our network and people as we build a new, future-proof digital platform which will be a catalyst for productivity and prosperity throughout the UK.&#8221;<\/p><\/blockquote>\n<blockquote><p><span style=\"color: #339966;\"><strong>Ofcom&#8217;s 2019 Openreach Progress Report (PDF)<\/strong><\/span><br \/>\n<a href=\"https:\/\/www.ofcom.org.uk\/__data\/assets\/pdf_file\/0022\/155218\/openreach-annual-monitoring-report.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.ofcom.org.uk\/..\/openreach-implementation-report-2019.pdf<\/a><\/p><\/blockquote>\n<p><strong>UPDATE 1:30pm<\/strong><\/p>\n<p>Added a comment from Openreach above.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ofcom has today deemed Openreach to be making &#8220;real progress&#8221; in their on-going efforts to become a distinct &#8220;legally separate&#8221; company away from BT, although the UK telecoms regulator seeks more &#8220;transparency&#8221; around their efforts to increase independence and solid details on their future FTTP broadband plan beyond 2020.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[474,36,69,38],"class_list":["post-18942","post","type-post","status-publish","format-standard","hentry","category-uk_isp_news","tag-bt","tag-ofcom-regulation","tag-bt-openreach","tag-politics"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - 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