Ofcom: BT must legally separate from Openreach

Posted on 30 November 2016

Ofcom: BT must legally separate from Openreach

On 29 November, it was announced that Telecoms regulator Ofcom has ordered BT to legally separate from its Openreach division, which runs the UK's broadband infrastructure. Mishcon de Reya Partner, Andrij Jurkiw, commented:

"Though Openreach will be transferred into a separate legal entity, it will still be owned by – and under the ultimate control of – BT group. So while Openreach may have its own board and executive directors it will still be reporting back in to BT group, bringing into question its true independence.  BT’s rivals - Sky, TalkTalk and Vodafone - will no doubt be disappointed that Ofcom has not ordered a complete separation of the Openreach business from the BT group.

"In the short term, Ofcom's announcement will make no difference for consumers. The process begun by Ofcom will take time to work through and only if it is successful will consumers potentially see prices go down. Ultimately, the aim is to achieve a better separation between Openreach and BT, so that BT's rivals have access to the UK's broadband infrastructure on more equal terms.

"Given the fact Ofcom have invoked a very infrequently used procedure, we're in unchartered territory with little indication of when we can expect a final outcome. Ofcom will put its proposed notification to the EU Commission in Brussels out to consultation early in the new year and the formal notification process will follow. Once the EU Commission issues its decision, there is every possibility it will be appealed by BT – particularly if the decision approves Ofcom's proposed plans for Openreach.  Consumers wanting more reliable and faster broadband should not hold their breath, as it may be some time before this is achieved."

Andrij featured on Sky News commenting on this story.