BT may lose its broadband division
BT may be broken up amid concerns that it is not fit to deliver the next generation of super-fast broadband, a Government report has revealed.
Ministers are considering whether BT should be forced to sell off its broadband division amid concerns over its performance, which has been described as “dire” by Tory MPS. It comes after Karen Bradley, the Culture Secretary, announced plans to give people a legal right to request access to minimum broadband speeds, despite opposition by BT.
The new review represents a significant blow for BT, which believed it had seen off the threat of being broken up last year.
A Whitehall official said: “There are concerns that the market is just not competitive. Given what we’ve seen with BT’S current performance, we want the delivery of the next generation of broadband to be quicker and more competitive.”
Tory MPS have repeatedly called for BT’S Openreach division, which owns and maintains broadband cables and has a monopoly over the network, to be sold off.
Ofcom, the regulator, has raised concerns that 1.1 million homes and businesses, mostly in rural areas, still do not have access to decent broadband speeds. Last year the regulator decided not to break up BT, instead concluding that the Openreach division should be a separate “legal entity” with an independent board. It will still, however, be owned by BT.
The Government has returned to the idea amid concerns that BT should not oversee the rollout of the next generation of optic-fibre broadband, known as full-fibre, which is 100 times faster than current connections. Most connections to homes and businesses are currently connected by slower, copper-based cables to local street cabinets. In future full-fibre cables will run directly to houses.
The Whitehall official said BT has been “dragging its heels” over establishing Openreach as a separate legal entity and could now face further action. In a call for evidence on the future of the telecoms industry, the Government said it wanted to consider whether “current arrangements” for BT were working.
Grant Shapps, a former vice-chairman of the Conservative Party and chairman of the British Infrastructure Group of MPS, said: “We are really concerned to see the relationship between BT and Openreach properly severed.
“It’s the lack of proper competition that has led to the sorry state of broadband in too many places. It’s a conflict of interest.
“We need to learn the lessons from the current rollout of broadband. The big concern is that we will never get to nationwide coverage of full-fibre broadband under BT.”
A spokesman for BT Openreach said: “Openreach is in a very different place to a year ago ... on 99 per cent of what we’ve been asked to do ... we are either on or ahead of schedule.”