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Grand review of Digital Comms by Ofcom launched
Thursday 16 July 2015 14:10:57 by Andrew Ferguson

Ofcom has launched its Digital Communications Review and a major part of the review is considering separating Openreach from BT not just functionally but making it a stand alone firm with its own investors and shareholders. Making Openreach its own entity rather than a body with various firewalls around it seems to be a popular option, but Ofcom is considering several options and will have to consider the impact on the UK overall, rather than just doing what BT and Openreach competitors want as it helps improve their business model.

  • "Retaining the current model, where Openreach operates as 'functionally separate' from BT, and using regular market reviews to address any concerns around competition;
  • Strengthening the current model by applying new rules to BT - such as controls on its wholesale charges with stronger incentives to improve quality of service, or tougher penalties if BT falls short;
  • Separating Openreach from BT could deliver competition or wider benefits for end users. It would remove BT's underlying incentive to discriminate against competitors. Separation could also offer ways to simplify existing regulation. However, the process would be challenging and it may not address some concerns relating to Openreach - such as service quality, or the timing and level of investment decisions;
  • Deregulating and promoting competition between networks. Virgin Media and a variety of smaller operators own networks, which allow them to provide phone and broadband services without using BT's network at all. This kind of 'end to end' competition, which sometimes involves running fibre lines directly to premises, can help incentivise Openreach to improve its infrastructure. However, it could also lead to duplication of networks and weak competition.
Options Ofcom is considering

A major consideration in what Ofcom will do is that any changes may introduce a period of uncertainty and if there was a magic investor looking to invest several billion in the nascent UK FTTH market, they will be now be waiting on the outcome of this review.

We see the regular complaints about how faults and problems where line access speeds drop and getting Openreach to investigate is difficult to impossible so there is something that does need fixing and Openreach is usually very adamant that it is working to improve how it works. The problems over the time it takes to get new lines installed or just a new broadband connection activated on an existing line will not be magically solved by any of the options especially as any structural changes will take years to implement. For the problems that exist now the only solution is for Openreach to work harder and at the same time communications providers to handle their Openreach interactions better, it is currently too easy for providers to simply blame BT or Openreach for any issues, when it can be the provider is at fault.

So fingers crossed Ofcom can act in the short term to ensure Openreach and the industry address the current complaints over timescales and customer service and address the long term infrastructure debate, which at one end has people calling no-one to rock the boat and at the other end a brand new nationalised and heavily resourced digital telco who is tasked with a national FTTH network build.

Comments

Posted by camieabz about 1 year ago
Which bit keeps all the cash?

It's 20 years overdue, I feel.
Posted by gerarda about 1 year ago
tend to agree- nearly 20 years ago I was trying to beg an extra 256K bandwidth off BT to allow a website to keep up with demand. They are still a brake on this country's progress.
Posted by jumpmum about 1 year ago
Interesting 185 page read!

camieabz:- It is more who keeps the debt and pensions obligations!
Geruda:- Nothing in the document will improve your broadband any faster. ( It could make improvements slower without more public money)
Posted by WWWombat about 1 year ago
Anyone going to respond to Ofcom?

@gerarda
I can't speak for you, but 20 years ago I was using state-of-the-art 28k dial-up, with no DSL or cable in sight.

Unless you were an ISP setting up a modem pool, there wouldn't have been much call for 256K *extra* bandwidth ... as there'd be few visitors. Less than 2% of the UK used the internet at this time.

Netscape navigator was only just garning support for WWW, so FTP, telnet and nntp were the tools for the internet.
Posted by TheEulerID about 1 year ago
I too was wondering about that 256kbps 20 years ago. The first ADSL trials didn't start until 1998 (when the standard was first approved), and the first commercial product was in 2000.

I've no idea where this web server was, but for home/office use there wasn't much more than ISDN back then short of very expensive leased lines.
Posted by gerarda about 1 year ago
That was because the additional demand I was talking came from the States. Being ahead of us in the game the customers had an expectation they could open an ecommerce session before leaving for work and for it to be still open when they came home. In a UK dial up environment that did not happen. If you want to be accurate I was referring to 1996 not 1995, and that was a year after the likes of Amazon and Ebay started trading.
Posted by Somerset about 1 year ago
@gararda If BT are a break on the progress of the UK then others have had 30 years to provide alternatives.
Posted by gerarda about 1 year ago
There is not enough space here to discuss BTs ability to ensure there have been no successful alternatives (VM excepted).
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