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Ofcom announces “Openreach Monitoring Unit” to enforce agreement with BT over independence of infrastructure arm

PUBLISHED: 12:23 13 July 2017

Openreach is to operate as a legally separate business while remaining under the ownership of BT.
Picture: BT

Openreach is to operate as a legally separate business while remaining under the ownership of BT. Picture: BT

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The UK’s communications watchdog has revealed how it plans to hold Openreach to account as it splits from BT, warning that it could take further action if certain goals are missed.

Ofcom said it would set up a dedicated “Openreach Monitoring Unit”, which will assess whether the new company is delivering on its targets, and whether the rules are being observed by BT.

It added that if it emerged that the reformed Openreach was not working, or if BT failed to comply with its commitments, it would revisit the model and “consider new measures”.

In March, BT reached an agreement with Ofcom to legally separate its infrastructure arm Openreach following a drawn-out battle with the regulator.

The telecoms giant agreed that Openreach would become a distinct, legally separate company with its own staff, management and strategy, while remaining a subsidiary of BT.

In today’s statement, Ofcom said it expected the reformed Openreach to “engage with industry to deliver widespread fibre networks, offering fast, reliable broadband”.

“The new company should provide a good service to meet the needs of all the people and businesses who rely on its network, together with a step change in quality of service,” it said.

“We will measure how far Openreach is improving its network and helping to deliver better quality of service.”

BT will not escape scrutiny either. The regulator warned that the FTSE 100 firm will be closely monitored to see whether it is complying with its new commitments, and creating a “successful culture” to promote Openreach’s independence.

“Ofcom will closely monitor BT’s compliance with its new commitments, and how effectively Openreach serves the whole industry,” the regulator said in a statement.

“The unit will assess whether new governance rules are being observed, and whether Openreach is acting more independently of BT, making its own decisions, and treating all its customers equally.”

Ofcom chief executive Sharon White commended BT on the “positive progress” that it has made since March towards implementing its new reforms.

“Once they are complete, Ofcom will keep a careful eye on whether Openreach is working for telecoms users, ensuring BT and Openreach live by the letter and spirit of their commitments,” she continued.

“If we see problems emerging, we won’t hesitate to act.”

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