Ofcom mulls splitting off Openreach from BT

Ofcom has announced that it's considering separating Openreach from BT, and the watchdog is seeking opinions on this potential move and others.

This is all part of Ofcom’s Strategic Review of Digital Communications, which was announced back in the spring, with the intention of examining competition and investment in the landline, mobile and broadband arenas.

Ofcom is mulling over whether separating Openreach from BT would mean wider benefits for consumers, putting paid to BT's incentive to discriminate against rival providers.

However, Ofcom noted: “The process would be challenging and it may not address some concerns relating to Openreach – such as service quality, or the timing and level of investment decisions.”

The alternatives are to retain the current state of affairs, and use market reviews at regular intervals to discuss issues that crop up in terms of competition.

Or Ofcom said that the current model could be strengthened with new regulations applied to BT, such as more stringent penalties if the company's service falls short, and controls on wholesale charges.

The final option is deregulating and promoting competition between networks, but that open playing field could lead to complications in terms of the "duplication of networks and weak competition", Ofcom notes.

Ofcom also intends to scrutinise bundles such as triple or quad play offerings – while these deals offer obvious outward benefits to the consumer, the watchdog wants to weigh up the risks they present in terms of shouldering aside competition.

The publication of this report, or discussion document as Ofcom calls it, marks the end of the first phase of this strategic review of digital communications.

The second phase will now run until October, with Ofcom wanting to receive responses and evidence to the points raised by then, with a view to producing a full statement on the action that will be taken, which will be published at the start of next year.

You can rest assured BT will have plenty to contribute to this discussion…