Ofcom warns of further action if Openreach goals are missed post-BT split
The UK's communications watchdog has revealed how it plans to hold Openreach to account as it splits from BT, warning that it could take further action if certain goals are missed.
Ofcom said it would set up a dedicated "Openreach Monitoring Unit", which will assess whether the new company is delivering on its targets, and whether the rules are being observed by BT.
It added that if it emerged that the reformed Openreach was not working, or if BT failed to comply with its commitments, it would revisit the model and "consider new measures".
In March, BT reached an agreement with Ofcom to legally separate its infrastructure arm Openreach following a drawn-out battle with the regulator.
The telecoms giant agreed that Openreach would become a distinct, legally separate company with its own staff, management and strategy, while remaining a subsidiary of BT.
In today's statement, Ofcom said it expected the reformed Openreach to "engage with industry to deliver widespread fibre networks, offering fast, reliable broadband".
"The new company should provide a good service to meet the needs of all the people and businesses who rely on its network, together with a step change in quality of service," it said.
"We will measure how far Openreach is improving its network and helping to deliver better quality of service."
BT will not escape scrutiny either. The regulator warned that the FTSE 100 firm will be closely monitored to see whether it is complying with its new commitments, and creating a "successful culture" to promote Openreach's independence.
"Ofcom will closely monitor BT's compliance with its new commitments, and how effectively Openreach serves the whole industry," the regulator said in a statement.
"The unit will assess whether new governance rules are being observed, and whether Openreach is acting more independently of BT, making its own decisions, and treating all its customers equally."
Ofcom chief executive Sharon White commended BT on the "positive progress" that it has made since March towards implementing its new reforms.
"Once they are complete, Ofcom will keep a careful eye on whether Openreach is working for telecoms users, ensuring BT and Openreach live by the letter and spirit of their commitments," she continued.
"If we see problems emerging, we won't hesitate to act."
Alex Neill, managing director of home products and services at Which?, said it was important that Ofcom follows through with its promise to hold BT and Openreach to account.
"The separation of BT and Openreach must lead to a drastically improved service for broadband customers who have suffered from poor levels of service in recent years," he said.
"With Ofcom closely monitoring their performance we would expect to see prompt action if consumers don't appear to be benefiting from the changes."
A BT spokesman said the group welcomed Ofcom's announcement and reiterated that both BT and Openreach are already taking positive action towards implementing their new commitments.
He said: "As Ofcom mentions, there are still several preconditions that need to be met before Openreach becomes fully incorporated, but it's clear to see the company is already pushing ahead with its reforms and is focused on serving the long-term interests of millions of UK households, businesses and service providers that rely on its infrastructure."