Only an integrated BT can connect the UK

Telecoms & Financial Services February 25 2016

Responding to the latest report from communications industry regulator Ofcom, the CWU has re-affirmed that only an integrated BT will be able to deliver the UK’s broadband infrastructure and has warned that Ofcom’s announcements today could put at risk future broadband investment for the country.

Although Ofcom appears to be ruling out full functional separation of Openreach from BT, the union still has concerns over the proposals, which could have the same associated risk as structural separation.

Andy Kerr, CWU deputy general secretary, explains: “If Openreach was to become a separate subsidiary of BT, it would substantially limit the investment it would be able to make in the UK’s broadband infrastructure it currently affords as part of BT Group.

“The changes involved would be extremely complex, time-consuming and expensive, which would divert money and effort away from Openreach’s ability to modernise the network and make it available for every customer, as well as do nothing to improve its customer service.

“In addition,” Andy continues, “Ofcom’s proposals to open up BT’s ducts and poles to competitors bring into question the reciprocity that needs to be afforded from BT’s competitors. And, on top of this, it will allow competitors to cherry pick the most profitable part and calls into question how this will extend investment in high speed or ultrafast broadband and increase coverage.”

Despite expressing concerns on the above aspects of the regulator’s report, the CWU has welcomed some other recommendations, such as Ofcom’s call for a universal service obligation of 10MB broadband for every place in the UK and its commitment to improve mobile coverage in the UK.

The union also backs the need for a “step-change” in the quality of customer service, but points out that this is “an industry-wide issue” and not something that only applies to BT.

But Andy is critical of some aspects of the regulator’s approach to date, saying: “Ofcom has in the past focussed on driving down prices which has impacted on revenues and the ability to meet rising customer expectations in relation to service availability, quality and resilience.

“Ofcom can’t relentlessly pursue a regulatory model based almost solely on pricing, and then pursue BT for its failures in quality of service.”

To properly address this issue, “a major programme of investment and a properly resourced workforce to build and maintain network infrastructure to a high standard is needed,” he insists.

Ofcom’s report: Making Digital Communications Work For Everyone can be viewed by clicking here