Monitoring of compliance with the new governance arrangements relating to Openreach

27 June 2023

Open

Programme into British Telecommunications Plc (“BT”) and Openreach Limited (“Openreach”)
Case opened 13 July 2017
Summary

On 10 March 2017, BT notified Ofcom of voluntary commitments to further reform Openreach. This means that Openreach will be a distinct company with its own staff, management, purpose and strategy. The commitments are designed to address the competition concerns identified by Ofcom in its Strategic Review of Digital Communications.

The focus of this programme is to monitor the implementation of the new model, BT and Openreach’s compliance with the governance arrangements and whether Openreach acts independently and treats its customers equally. Additionally we will assess whether the arrangements deliver positive outcomes for consumers and businesses.

Relevant legal provision(s)

Section 89C of the Communications Act 2003

We have today published the Openreach Monitoring Unit’s (OMU) annual monitoring report (PDF, 374.0 KB). This report sets out how through the work of the OMU, we ensure Openreach meets our expectations for how it deals with both its customers and its competitors.

As set out in our previous report, we expanded the scope of the OMU to include issues relating to the Wholesale Fixed Telecoms Market Review (WFTMR) framework. Therefore, as well as the OMU’s usual monitoring of whether Openreach continues to operate with greater strategic independence from BT, as required by the Commitments, the OMU has focussed on scrutinising Openreach’s activities and ensuring that they meet the regulatory requirements and expectations we imposed upon it in the WFTMR.

We have continued to see evidence that the Commitments are well-established and well-embedded across BT and Openreach. However, we have highlighted the challenge to both Openreach and BT to ensure that there is no complacency and that the Commitments remain operationally, culturally and sustainably embedded within both Openreach and BT, and the importance of compliant behaviour being driven by example from the very top – by key senior leaders.

We recognise we are in a key period for fibre investment, with alternative network operators and Openreach investing significantly on the basis of the rules we put in place in the WFTMR. It remains more important than ever to ensure that the OMU scrutinises these matters to ensure that Openreach is meeting both the letter and the spirit of its obligations.

Today’s report sets out how the OMU through its own-initiative monitoring, and concerns raised by industry, considers whether actions or decisions by Openreach risked distorting competition and harming the market. In this reporting period we have not found sufficient evidence to open any investigations in relation to these complaints, but we will not hesitate to prioritise enforcement action and hold BT and Openreach to account when necessary.

Over the next monitoring period, we would like to scale up our engagement and strengthen our dialogue with industry. We encourage stakeholders to bring any issues or concerns to our attention in real time so that these can be proactively addressed. Please contact the OMU via email: OMU@ofcom.org.uk


Contact

Enforcement team (enforcement@ofcom.org.uk)

Case reference CW/01206/09/17