British Infrastructure Group - BroadBAD report

Posted on 25/01/2016

For several years, FCS has called for full structural separation of Openreach from the rest of BT. At first we appeared to be a lone voice in the wilderness, but gradually the call has gathered momentum: Ofcom noted in its Strategic Review of Digital Communications that an option to consider was structural separation of Openreach and on Saturday over 100 MPs, led by Grant Shapps,  launched a report which states “The time has come for BT to be forced to sell off Openreach to encourage more competition and a better service for every internet user and for the benefit of the UK economy

You can read a copy of the report here.

We are especially pleased to note the report's understanding of the broadband needs of business and public-sector users. Understandably, policy-makers focus on the needs of consumers, because consumers have the vote. But this has allowed the needs of employers to be cynically bypassed. The result has been a rush to sell bundled entertainment services to the public, rather than future-proof the ability of local businesses to compete. 

In the 10 years since BT undertook to 'functionally separate' its infrastructure division from its retail and wholesale divisions, FCS has consistently argued that the whole thing was a fudge.  The proof of the pudding is as simple and fundamental as the question of who appoints the CEO of Openreach and who underwrites its pension commitments. 

We have fed our message to policy makers, including the Conservative Technology Forum and are therefore delighted to see this broad gamut of cross-party opinion supporting the case for full structural separation. 

But we feel the detail of the final solution needs to be considered further. Simply floating Openreach off for sale to some other third-party investor will not guarantee service improvements.  FCS believes Openreach should be mutualised. The model would be closer to that used by Welsh Water:  professional managers run the business, but governance rests with a board of stakeholders, including industry and consumer nominees. Only in this way can the correct, responsive decisions be made to serve the long-term needs of all users. 

Please let us have your comments and opinions on the report, our stance and how you would like us to take this forwards.

Cathy Gerosa

cgerosa@fcs.org.uk

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