Ofcom, the UK telecommunications regulator, is preparing to formally request BT to withdraw its network infrastructure, Openreach.
The watchdog has repeatedly expressed concern that BT is acting anti-competitive and has already decided in July that Openreach should be managed as a separate company . However, at that time the complete division of organizations was not recommended.
The problem arises from the fact that, although Openreach is part of BT, it is responsible for providing most of the telecommunications network infrastructure to competitors such as TalkTalk, Sky and Vodafone, as well as to the BT retail division.
«Ofcom continues its plans to improve telephony and broadband services for people across the country, seeking better service quality and encouraging greater investment in networks. Creating a more independent Openreach, which works in the interests of all vendors, not just BT, is an important part of achieving this, ”Ofcom said in a statement.
«We are disappointed that BT has not yet submitted proposals to meet our competition concerns. Some progress has been made, but this has not been enough and action is needed now to deliver better results for telephony and broadband users, ”he added.
Accordingly, Ofcom will send a formal notification to the European Commission to start the separation process, in accordance with the law.
«We remain open to several voluntary proposals from BT that address these remarkable concerns. However, we are now preparing a notification to the European Commission to request changes to increase the independence of Openreach, ”Ofcom continued.
A public consultation with the EC is expected at the beginning of 2017. If Ofcom receives the green light, the process of separating the companies will take place «as soon as possible».
In response to the ruling, a BT spokesman told IT Pro: “I took note of Ofcom’s announcement this morning, updating the next steps of the digital communications magazine.
«In July, we presented proposals that we believe are fair and sustainable and that meet Ofcom’s objectives without disproportionate costs. We are implementing these proposals and we have just appointed Mike McTighe as the first president of Openreach. We are in talks with Ofcom on two outstanding issues, the Openreach CEO reporting line and the form of legal incorporation.
«We will continue to work with Ofcom to come up with a voluntary agreement that is good for customers, shareholders, employees, retirees and investors in the digital future of the UK.»
Dan Howdle, Consumer Telecoms Expert at Cable.co.uk, said: “It is difficult to read whether BT’s heel resistance is the result of a tactic that deliberately delays and undermines the process or is the same. The process of separating Openreach is simply too vast and complex to be fully planned in such a short period of time.
«The fact that Ofcom had to talk about its ‘frustration’ suggested to me that there is more to this delay than bureaucracy and bureaucracy, that the desire to respect also plays a role.»