Ofcom has decided that BT hasn’t put enough effort into addressing its competition concerns, and has ordered the telecommunications giant to legally split from Openreach.
This means that Openreach will become its own company with its own board and a chair not affiliated with BT. However, BT will continue to own Openreach. It’s a big, fat compromise.
Ofcom decided against splitting BT and Openreach back in July, but told BT to address a number of concerns over its handling of Openreach. The firm’s response has been sluggish, despite the unveiling of Mike McTighe as Openreach’s first chairman on Monday.
“We are disappointed that BT has not yet come forward with proposals that meet our competition concerns,” said Ofcom. “Some progress has been made, but this has not been enough, and action is required now to deliver better outcomes for phone and broadband users.”
Rivals such as Sky and TalkTalk have been calling for BT and Openreach to be completely separated, so the legal split isn’t quite what they were hoping for. They’ll no doubt monitor the new situation extremely closely, to ensure that BT truly butts out of Openreach’s business.
Ofcom is prepping a formal notification to the European Commission to kick off the legal process. [BBC]