BT, Openreach and Broadband

Every week, I receive many letters and emails from my constituents telling me about the broadband coverage in their area. Time and again, I learn of slow, unreliable services across north Shropshire. Broadband is no longer a luxury, but an essential utility, as central to our lives as water, electricity and roads. Its role will only increase in the future, as more smart technologies rely upon it, calling for serious consideration of how our network is structured and run.

For the last decade, the approach has been to regulate the dominant provider – Openreach – as a fully-owned subsidiary of BT and spend increasing public money on rural and poorly-served areas. This arrangement has been slow and ineffective. Instead, we need a bold new strategy which separates Openreach from its parent company and gives it the freedom to co-ordinate and develop the broadband network.  

The Chief Executive of Ofcom, Sharon White, undertook a consultation on the future of Britain’s broadband services, and concluded this was the “cleanest and most clear-cut long-term solution.” I welcome her findings, but she has suggested only a partial separation. As we saw in the protracted unbundling of the retail and logistical arms of British Gas, however, these glass walls or compromise solutions create a host of unnecessary problems and costs, and delay future investment. We must go further and push for full separation if we are to release the full potential of Britain’s future broadband network.

BT has a number of understandable reservations over this idea: it naturally seeks a competitive advantage over its rivals by maintaining its full retinue of services, and wishes to protect its current copper-wire assets. These private interests, however, must be weighed against public concerns.

Fibre-optic technology needs to be implemented urgently, and with it the extension of a fast, universal service. As that coverage develops, the market will become less competitive than might be supposed. The crucial factor will then be how well the network is co-ordinated, making the case for a separate Openreach all the more clear.

BT is a fantastic company with a long and world-leading history. It provides hundreds of jobs in north Shropshire and thousands nationwide. It also provides a raft of mobile and entertainment services which are becoming ever more popular and prominent. We must learn from history, however, and the lesson from utilities including British Gas and others across Europe is that structural separation will come. Like them, broadband will become a standalone utility, and a lengthy process will delay much-needed development. Far better would be to act decisively and implement a robust framework to equip Britain with a fast, competitive network, available and accessible to all.  The will also give BT the freedom to concentrate on its expanding range of retail products.