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Sky, Virgin, TalkTalk and others set out 10-point plan for creation of a more independent U.K. networks business.
A group of U.K. telecoms operators on Monday outlined their recommendations for the reform of BT’s network arm Openreach, including the suggestion that it be converted into a separate legal entity to create distance from its parent.
The group, spearheaded by major players Sky, TalkTalk and Vodafone, sent a 10-point plan to Ofcom chief executive Sharon White that it insists would, if implemented, "create a reformed Openreach capable of delivering better quality services and faster, more reliable speeds for all its customers."
The move comes in the wake of the U.K. regulator’s February announcement that it does not intend – for the time being at least – to require Openreach to be structurally separated from BT. However, it does deem it necessary to overhaul Openreach’s governance and strengthen its independence from BT in order to improve competition in the market.
Point number one in the 10-point plan, which is also backed by the Independent Networks Cooperative Association (INCA) and the Federation of Communication Services (FCS), stops just shy of a full separation of Openreach from its parent.
"Establishing Openreach as a separate legal entity is a necessary first step to true independence," the operators said. "This will allow it to agree a contract with a customer, employ staff, and own assets, just as any other U.K. company does."
The telcos proposed that the new legal entity should have an independent board, possibly appointed by Ofcom; no BT executives should feature. They also called for the creation of an independent body to oversee the transition of the new entity and to act in an adjudication capacity going forward.
The plan also calls for Openreach to own the network assets it manages, the copper, fibre, poles and ducts as well as systems and support functions; to have its own distinctive branding; and to be financially independent, with autonomy over its own budget.
The final four points in the plan cover the provision of services and information on an equal basis; consultation with customers on strategy, capex, and product design; the ability of BT to use alternate providers; and protection against overbuilding. With regard to the last, the plan calls for the regulator to require Openreach to demonstrate sufficient commercial rationale for duplicating infrastructure in areas where alternative operators have rolled out fibre-to-the-premises (FTTP), thereby giving altnets more certainty of achieving a return on their investment and stimulating network spend.
"These proposals can be implemented quickly and will deliver a much needed step-change in the performance of Openreach for millions of consumers and businesses across the U.K.," said Andrew Griffith, Sky’s COO and CFO, in a statement.
