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Monitoring of compliance with the new governance arrangements relating to Openreach

26 February 2019

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 annual monitoring report (PDF, 402.8 KB). This report sets out our findings since the previous report and also explains that we are expanding the scope of the OMU.

We set up our Openreach Monitoring Unit (OMU) to monitor whether BT and Openreach are acting in accordance with the Commitments. We continue to find that Openreach has operated in a way that is operationally and strategically independent from BT, as envisioned by the Commitments. Our monitoring of the Commitments is an extremely important part of Ofcom’s work and will continue to monitor and report on the Commitments moving forward.

Outside of the Commitments, in March this year, Ofcom published the Wholesale Telecoms Fixed Market Review (WFTMR). The WFTMR put in place new rules around the regulation of the fixed telecoms markets that underpin broadband, mobile and business connections, for the period from April 2021 to March 2026. These rules are designed to promote competition and investment in gigabit-capable networks – bringing faster, better broadband to people across the UK. The framework set out in the WFTMR aims to incentivise all network builders, including Openreach, to roll out new networks.

The Commitments and the WTFMR are two distinct frameworks which form part of Ofcom’s broader strategy to deliver better broadband to homes and businesses across the UK. Openreach has an important role to play in ensuring that competition operates effectively. Going forward therefore, in addition to our continued monitoring of Openreach and BT’s compliance with the Commitments, we will expand the scope of the Openreach Monitoring Unit to include issues relating to the WTMFR.

In order to support our monitoring, we encourage our stakeholders to contact us where they are concerned that there are issues that might act as obstacles to the development of competition in gigabit-capable networks in line with the WFTMR. We remain ready to use the tools at our disposal to support the policy set by the WFTMR, including through Ofcom’s enforcement function where appropriate.


Case leader

OMU@ofcom.org.uk

Case reference CW/01206/09/17