Ofcom, the UK regulator, has reiterated that BT and its network arm, Openreach, operate independently despite rival telecom providers’ complaints. In its latest monitoring report, published on September 11, Ofcom emphasized that it has found no evidence of improper conduct between the two entities, even as industry players voice growing concerns.
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Industry Discontent Over Alleged BT Advantage Persists
For years, Ofcom has maintained that the legal separation between BT and Openreach functions as intended. However, many in the telecom sector disagree, alleging that the relationship still gives BT an unfair advantage. These grievances were again highlighted in the report, though Ofcom has chosen not to pursue formal investigations, citing insufficient evidence.
The regulator acknowledged receiving several concerns over the past year but stressed that none had warranted further action. Ofcom stated that it is “prepared to take enforcement action if necessary,” though it indicated this is unlikely in the near term.
“We have been meeting with BT’s rivals to listen to their concerns and have not found sufficient evidence to open any new formal investigations over the last year,” Ofcom said.
The report also highlighted BT’s recent efforts to reinforce Openreach’s independence, particularly following the appointment of Allison Kirkby as CEO. Kirkby, a former non-executive director on BT’s sub-committee overseeing compliance with independence commitments, has been credited with helping BT refocus on these commitments.
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Breaches in Openreach Independence: Ofcom Stays Cautious but Observant
Despite Ofcom’s assurances, the report revealed that BT and Openreach experienced breaches of their independence arrangements over the past year. While the companies described these incidents as “trivial,” they involved the inappropriate sharing of customer information and internal policy lapses. One more severe breach by BT is related to incorrect cable installation, though its impact was minimal.
Ofcom noted that these breaches were thoroughly investigated internally and found no evidence of intent to violate the rules or provide competitive advantages. As a result, the regulator decided not to take any additional action.
The report’s key area of interest was Openreach’s dealings with other telecom providers, many of whom raised concerns about its negotiation approach. Complaints included Openreach’s perceived reluctance to engage with customers before making major commercial decisions, such as increasing late cancellation fees or setting service level guarantees.
There were also grievances regarding Openreach’s decision-making around fiber-to-the-premises (FTTP) installations. Some industry players felt unfairly disadvantaged by Ofcom’s decision to restrict FTTP deployment for customers identified as telecare users, even when their telecare services were compatible with VoIP.
Despite these issues, Ofcom has primarily remained on the sidelines. “We understand that recent discussions between Openreach and industry have progressed this issue positively,” the regulator noted, opting not to intervene.
Concerns over Openreach’s energy charges for colocation spaces were also raised, but again, Ofcom remained impartial. It dismissed allegations of anti-competitive behavior related to fiber overbuild, where Openreach was accused of targeting areas already covered by rival networks.
“In all of the cases we have looked at, we have not seen any evidence of Openreach strategically targeting areas where competing networks have [been] built or plan to build,” Ofcom stated, adding that the build decisions appeared commercially rational. However, the regulator did acknowledge that overbuild remains a significant concern for the industry and pledged to continue monitoring the situation.
