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BT must open up network to competitors, says British watchdog

BT must open up network to competitors, says British watchdog

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British telecoms giant BT must open up its huge network of fiber and copper cables to competitors according to Ofcom, the regulatory body for the country's telecommunications industry. The advice is the result of a review into BT's management of its "Openreach" network, the 76 million miles of cables that connect British homes to telephone exchanges, regularly called "the last mile." Openreach will also be subject to more stringent guidelines that aim to see it repairing faults and installing new lines faster, and the network will have to compensate customers when their connections go down.

BT will open up its tunnels and telegraph poles

As a part of the body's new strategy, BT will have to open up its Openreach tunnels and telegraph poles, allowing competitors to lay their own wires and build their own network to "increase competitive pressure on the network." Ofcom introduced a new structure in 2005 that meant competitors such as Sky, EE, and TalkTalk became able pay BT to use its existing cables, allowing them to offer their own services using BT's network, but the body said today that BT is still acting in an anti-competitive manner. "Openreach is part of BT Group, but has obligations to treat all its customers equally," the findings read. "However, the evidence from Ofcom's review shows Openreach still has an incentive to make decisions in the interests of BT, rather than BT's competitors, which can lead to competition problems."

As a result, Ofcom says it's necessary for BT to separate further from BT, making its own decisions on budget, investment, and strategy to ensure it serves all of its customers equally, rather than prioritizing BT's plans. So too must the network have greater transparency, showing how costs are allocated between BT and its Openreach network. Ofcom hasn't detailed how exactly it will separate the two elements yet, but says that Openreach might become a subsidiary inside BT, given its own board members. The body also says it might still split the network into its own entity, entirely apart from BT, where it would presumably be free of its parent company's influence.

Ofcom reserves the right to completely split Openreach off from BT later on

Ofcom will also start ranking providers, acting as an independent watchdog for the "new universal right to fast, affordable broadband for every household and business in the UK." Combined with the other conclusions from the strategic review, the body says it will promote the installation of "ultrafast" broadband networks like those currently being laid down by Google Fiber, rather than copper-based connections BT had planned to put down.

For BT, Ofcom's findings are damaging, but they could still be worse — the Guardian says if BT loses Openreach entirely, as Ofcom is threatening, then it loses the £5 billion (about $6.96 billion) in revenue it provided last year. For its competitors, it's an opportunity to snatch up some of a sector traditionally dominated by the company that was once a British government department, but it might be even better for consumers, who stand to benefit from increased competition and faster connections.