Ofcom, the official regulator for the telecom market in the UK, will seek the legal separation of Openreach from BT. Openreach is the division of BT Group that develops and maintains the UK’s main telecoms network used by providers such as Sky, TalkTalk, Vodafone and BT’s retail business.
Ofcom said the decision follows after BT failed to offer voluntary proposals that address competition concerns. Ofcom believes BT has the incentive and ability to favour its own retail business when making strategic decisions about new network investments by Openreach. This concern arises because BT runs the national network, Openreach, as well as its own retail business.
The Ofcom proposal requires Openreach to become a distinct company with its own Board, consisting of a majority of directors who would not with BT. Ofcom is now preparing to notify the European Commission of its intention to implement these plans, requiring the legal separation of Openreach to make it more independent.
