Plans from BT to diversify their Openreach network have been shot down by Ofcom.
In November of last year we reported that BT had been legally ordered to split from Openreach by the industry regulators, who believe an independently run Openreach would encourage more competitive prices for customers.
Responding to the ruling, BT recently appointed two new independent directors to the national telecoms network in an attempt to make the network run more independently. They brought in Sir Brendan Barber, former general secretary of the Trade Union Congress, and Edward Astle who was previously a board member of the National Grid. But it appears this wasn’t enough for Ofcom.
It is believed they take issue with the corporate governance of Openreach, and want it to have a completely separate board and management team without any connection to the wider BT group. BT rivals TalkTalk, Sky and Vodafone all rely on Openreach to provide broadband services to their customers.
As Ofcom are only calling for a legal separation, this would mean that the network division would still be under BT’s control. However the telecoms giant would lose a great deal of power over Openreach’s finances.
Last year BT said they would work with Ofcom to reach a settlement, but the regulatory board aren’t happy with the changes they’ve made so far.
A spokesperson for Ofcom said in a statement: “These changes fall short of our requirements for a legally separate Openreach that delivers for all of its customers.”
They added that they plan to “take our plans to the European Commission later this year,” which will force BT to make more drastic further changes.
A spokesperson for BT said that this current strategy was part of previous commitments the company had previously made, but stressed that they are still hopeful of reaching a voluntary settlement with Ofcom.