Ofcom order BT and Openreach split

BT failed to address Ofcom's concerns over competition and investment

Regulatory board Ofcom have made a landmark decision requiring BT to legally separate itself from its Openreach division, the infrastructure used to deliver broadband to homes and businesses up and down the country.

The ruling came after BT failed to offer up any plans designed to address the concerns Ofcom raised back in July regarding the telecommunication giant making Openreach more available to their rivals and the need for further significant investment into the Openreach infrastructure.

Ofcom is currently in the process of putting together a formal notification to be sent to the European Commission so that the separation can begin.

In a statement issued on Tuesday, Ofcom stated “we are disappointed that BT has not yet come forward with proposals that meet our concerns. Some progress has been made, but this has not been enough, and action is required now to deliver better outcomes for broadband users”.

Openreach is now set to become a “distinct company” within BT meaning that it’ll possess its own appointed board who’ll have some control over financial based decisions independent of BT.

Mike McTighe, who spent eight years on Ofcom’s board, is set to become Openreach’s first official chairman. It was originally hoped that as an independent party his appointment would prevent the break-up of Oprenreach and BT.

“I remain hopeful this significant move by BT can help to underpin a sustainable, proportionate and fair regulatory settlement that is in the interests of the whole country” said BT’s chairman Sir Michael Rake.

Source: The Independent

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