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British Infrastructure Group slates incumbent telco’s G.fast plan; BT chief says report is misleading, ill-judged.
A cross-party group of U.K. ministers has called for BT to sell its infrastructure arm Openreach, much to chagrin of the telco’s CEO, Gavin Patterson.
"Unless BT and Openreach are formally separated to become two entirely independent companies little will change. They will continue to paper over gaping cracks," said a report published on Saturday by the British Infrastructure Group (BIG), led by Conservative MP Grant Shapps.
"We take any criticism seriously but we think this report and its recommendations are misleading and ill-judged," said BT chief executive Gavin Patterson, in a statement.
The report, titled Broadbad, is backed by 121 ministers, and gives short shrift to BT’s plan to upgrade the headline speed of its copper network using G.fast, rather than deploying fibre-to-the-home (FTTH).
"Rather than acknowledging the need to comprehensively rethink their broadband investment strategy, they are instead effectively postponing the decision and trying to strain every last bit of profit they can from the outdated and struggling copper network," the ministers said, describing G.fast as "a short-term fix that won’t address the long-term need."
The report also claimed that 5.7 million households cannot receive an "acceptable" broadband speed of at least 10 Mbps, and that 3.5 million of these households are in rural areas.
In addition, a number of BT’s rivals, including Sky, TalkTalk, and Vodafone, have complained of poor service from Openreach and argued that BT’s recently-approved acquisition of EE will give it added means and incentive to discriminate against them.
"This report considers that there is only one real option that would satisfactorily address the Openreach question; the structural separation of BT and Openreach," the report said.
A structural separation of BT and Openreach is one of the options being considered by Ofcom in its ongoing strategic review of the U.K.’s telecoms market.
A structural separation "would directly address the current reasons BT has to discriminate against competitors. As well as this it would also increase Openreach’s incentives to invest in the network and improve on their issues with performance and customer services," claimed the Broadbad report.
BT’s Patterson understandably leapt to Openreach’s defence.
"The idea that there would be more broadband investment if BT’s Openreach infrastructure division became independent is wrong-headed," he said. "As a smaller, weaker, standalone company, it would struggle to invest as much as it does currently."
Patterson argued that 90% of U.K. households have access to a fibre-based broadband service, and that will soon climb to 95%.
"We understand the impatience for progress to be even faster, but improving broadband is a major engineering project that involves contending with all manner of physical and geographic challenges," he said.
