End result will hopefully benefit ISPs and consumers alike<\/b>
Following pressure from Ofcom which has been applied for quite some time now, BT has announced the separation of its Openreach networking arm.
Openreach will become a legally separate company with its own board, staff and management, along with distinct branding (minus the BT logo). However, it will still remain within the BT group (in other words, it\u2019s not being spun off completely).
Essentially, BT has voluntarily agreed to Ofcom\u2019s previous formal notification asking for such a split in order to ensure a level playing field for all ISPs when it comes to broadband infrastructure, and more specifically, to make sure BT can\u2019t lean towards its own interests when it comes to Openreach\u2019s decisions and policies.
The end result should hopefully benefit not just broadband providers, but ultimately consumers as well in terms of a more competitive pricing arena.
Around 32,000 staff members will transfer over to the new Openreach Limited company, with the process due to start this year according to Ofcom.
Ofcom noted that \u201cThe new Openreach will have the greatest degree of independence from BT Group possible without incurring the delays and disruption \u2013 to industry, consumers and investment plans \u2013 associated with structural separation or the sell-off of Openreach to new shareholders.\u201d
The CEO of Openreach Limited will report to the new firm\u2019s chairman, but will still be accountable to BT Group\u2019s chief executive regarding \u201ccertain legal and fiduciary duties\u201d, as BT puts it.
BT Group will set the overall budget for Openreach, although the company will have its own strategy and operating plans going forward.
Richard Neudegg, head of regulation at uSwitch.com, commented on the matter: \u201cThis is not the full structural separation many of BT’s retail rivals \u2013 including providers served by Openreach’s network \u2013 have campaigned hard for. What it does is offer a middle ground that gives Openreach independence, while still being owned by BT.\u201d
Neudegg further urged the industry to draw a line under the matter now, and to \u201cfocus on actually delivering the better service everyone wants to see\u201d.
He added: \u201cMost consumers won’t be bothered whether or not ‘a BT Group business’ is written on the side of Openreach vans, what matters is the UK’s digital infrastructure actually getting better in practice.\u201d
Andrew Ferguson, editor of Thinkbroadband.com, also chipped in, hoping that the move will result in a faster rollout of full fibre connectivity ( FTTP or fibre-to-the-premises , i.e. directly piped to the home or office in question, and not via a street cabinet).
Ferguson said: \u201cThe message is clear, 2017 is the time to start the hard work and push on with delivering full fibre. What many don\u2019t realise is the fibre-to-the-cabinet service that started to deploy in 2009 was always built with the fibre network ready to support fibre-to-the-premises at a future date.
\u201cSo rather than having fibre in just 5,500 exchanges, Openreach today has fibre ready to some 81,000 locations and just needs the workers, budget and ambition to start pushing this out from those points to millions of homes.\u201d<\/p>\n