The UK telecoms regulator Ofcom has reiterated concerns that BT continues to exert substantial influence over decisions affecting Openreach, the national broadband network.
After years of complaints from rival providers that BT — Openreach’s previous owner — had favoured its own retail operations in strategic choices, Ofcom intervened last year to change the company’s structure.
Rather than separating Openreach entirely from BT, Ofcom and BT agreed to keep Openreach within BT’s parent group while running it as an independent company intended to operate more fairly for competitors.
In a progress report published on Thursday, Ofcom acknowledged some improvements toward independence. A new board has been appointed and BT branding has been removed from thousands of Openreach vans.
Nevertheless, the regulator found that BT remains “significantly involved” in Openreach’s strategic decision-making.
“This is supported by emails exchanged between senior executives which demonstrate that BT was involved throughout the financial planning process,” Ofcom stated in the report.
The regulator also expressed concern that BT’s newly created Investment Board reviewed Openreach’s investment proposals before the final drafts were presented to the Openreach board for approval, indicating ongoing oversight by BT.
Last week, industry reports highlighted the forthcoming departure of BT CEO Gavin Patterson and reviewed his tenure during a period of substantial change for the company.
After the Openreach restructuring was announced, Patterson commented:
“I believe this agreement will serve the long-term interests of millions of UK households, businesses, and service providers that rely on our infrastructure. It will also end a period of uncertainty for our people and support further investment in the UK’s digital infrastructure.
This has been a long and challenging review where we have been balancing a number of competing interests. We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future.”
Many of BT’s competitors remain unconvinced that the changes have yet delivered concrete benefits for the wider industry.
“Some are uncertain as to whether the new arrangements allow Openreach to act with greater independence and treat all its customers equally in practice,” Ofcom wrote.
Ofcom plans to publish another update in November and expects additional progress in the months ahead. If the regulator concludes that sufficient independence has not been achieved, it may again consider a full separation of Openreach from BT.
Ofcom’s full Openreach progress report is available in PDF form from the regulator.
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