Thanks for the leg-up, Sky

Added by Chris Pateman | Tuesday 30th June 2015

Gosh, where does 10 years go?  It’s a decade, now, since BT and Ofcom signed the Undertakings.  They agreed to avoid a full-blown competition review at that time by splitting up the monopolistic BT structure, and spinning out a ‘functionally separated’ infrastructure supplier (which is now called Openreach) which would treat both BT Retail/Wholesale and all other resellers on an ‘equivalence of inputs’ basis. 

Well, to a very large extent, equivalence has worked.  It is a matter of record that BT’s resale operations receive every bit as poor a service from Openreach as Sky, TalkTalk and the FCS comms providers who deliver the crucial business-to-business comms services.

The statistics in Sky’s statement make scarily make fascinating reading.  All those consumers let down when they want to be watching Corrie on catch-up or streaming video or on-line gaming content.  But, to be honest, disappointed consumers are hardly a disaster for UK plc.  Compare that with FCS members, who routinely find 30% of the jobs they are provisioning fail to deliver on time because Openreach engineers do not arrive, or arrive ill equipped, or connect the landline but not the broadband, or go to the wrong address, or are subject to ‘Matters Beyond our Reasonable Control’.  Businesses which have been poised to start up a telesales operation find themselves laying staff off until the comms can be delivered.  Companies which have purchased new telephone numbers and included them on their literature discover the incoming calls won’t be able to get through for at least another week.  It’s a nightmare for comms providers, who are completely reliant upon Openreach to deliver.

Sky’s frustration is echoed right across the industry.  In any other market, frustrated customers would simply change supplier.  In comms, this is not an option (well, except in a few geographic areas).  That’s why we believe Openreach should not only be fully, structurally, separated from the BT group, but re-launched on a completely different ownership basis as an industry mutual. 

Just selling it off to some other private interest so it can carry on being an unaccountable monopoly under new private ownership will not deliver what the industry and the country needs.  Openreach should still be run by professional managers and employ professional engineers.  But it should be viewed as a national infrastructure utility asset, and governed by industry stakeholders in the same way as Welsh Water or Railtrack.

Lastly, with all these headlines flying around, It’s important to remember two things. 

  • Firstly, 10 years ago, ‘functional separation’ had never been tried before.  So it was hard for anybody in the reseller industry to argue at that time that it wouldn’t work. 
  • Secondly, both BT and Ofcom signed the Undertakings.  They are, essentially, a contract between the regulator and the regulated.  Ofcom are not a neutral party in this instance.  They are co-signatories.

Which is why Sky’s suggestion of an impartial review by the CMA is absolutely the correct route to take.  FCS would go further.  We have already recommended the CMA investigation itself should report to the House of Lords Select Committee on Communications to ensure impartial Parliamentary scrutiny at the highest level. 

Maybe TalkTalk would like to help us with that bit?

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