July 13, 2017
UK telecoms regulator Ofcom has announced ‘measures to ensure new Openreach delivers’, stressing it will take more than a light rebrand to keep it happy.
Earlier this week Openreach attempted to symbolise its virtual separation from parent BT by simply removing ‘BT’ from its branding. Today’s Ofcom announcement essentially said ‘if you think that’s all you need to do to get us to back off then you’ve got another think coming, son.’ It then detailed the many ways Ofcom will be keeping an eye on Openreach to determine whether it’s delivering as required.
Ofcom has chosen to focus on outcomes as the best way to make sure Ofcom is genuinely raising its game rather than just going through the motions. It will look at both wholesale and end-user outcomes according to the two tables below, but has decided not to publish specific targets. There will initially be six-month reviews so expect it to name-and-shame Openreach if any of those metrics go in the wrong direction.
“Ofcom will examine whether all UK consumers and businesses using Openreach’s network are receiving decent speeds, and the right service to meet their needs,” said the announcement. “We will measure, and report on, Openreach’s contribution to growing fibre broadband networks, including ‘full-fibre’ lines which are currently available to only around 2% of UK premises.
“We expect Openreach to be responsive to different models of investment proposed by its customers, including co-investment and risk sharing. We also want to see a step change in telecoms quality of service. So we will report on Openreach’s repair and installation times, and whether engineers are turning up on time.”
As ever in the Openreach saga, there are dissenters. The ITSPA (Internet Telephony Services Providers’ Association) has interpreted this announcement as too lenient and seems to think the scrutiny will be easy to side-step.
“Whilst ITSPA supported Ofcom’s original decision to pursue legal separation, as opposed to full structural separation, today’s news has caused major concern to our members,” said ITSPA Chair, Eli Katz. “Ofcom appear to have swept under the carpet industry’s serious concerns about the lack of public scrutiny into BT’s voluntary commitments. This now appears simply to be a ‘tick box’ exercise on Ofcom’s to-do list, without discussing the genuine threat this poses to businesses and consumers in the UK.
“Ofcom is willingly giving up its powers to hold BT to account on behalf of consumers in the UK in return for a set of promises from BT that are not fit for the purpose Ofcom itself specified. BT can unilaterally withdraw from it all on just 12 months’ notice. Today’s news may jeopardise the efficacy of the legal separation of Openreach from BT, with a knock-on effect of threatening Ofcom’s desire to see a competitive and flourishing market.”
Openreach wisely accepted the news graciously. “We support Ofcom’s statement and we’re getting on with the job of creating a more independent Openreach,” said an Openreach spokesperson. “We’ve already made a lot of progress. Our CEO now reports to the Openreach Chairman and is accountable to the Openreach Board which has a majority of independent members.
“We’re also working more closely with our CP customers and we’ve introduced a new confidential phase to our consultations with them. This week we unveiled our new, distinct brand which removes all references to BT Group.” Although not on the website, it should be noted.
The test will ultimately be in Ofcom’s 6-monthly reports, which are bound to be heavily scrutinised. If any of the metrics deteriorate Ofcom will need to be seen to take strident action if it wants to refute accusations of weakness. You can download the full statement and consultation here.