Sharon White:
Splitting Openreach and BT looked like a simple solution, but it would have wasted time and money
Earlier this week, Ofcom outlined major reforms to deliver better broadband for people and businesses across Britain. On the whole, the UK has performed well to date. Nearly nine in 10 homes can get superfast broadband and speeds have increased dramatically from the dial-up days of a decade ago. But improvements cannot come quickly enough for people who still suffer from poor, dismal or nonexistent broadband. I share their anger and frustration. I hear firsthand about people’s problems with sluggish broadband or days lost sitting at home, waiting for an engineer who doesn’t turn up.
For many, the effects can be profound. To a small business, reliable broadband can mean the difference between survival and failure. For the elderly or vulnerable, broadband can be a lifeline preventing social isolation. So we must improve people’s connections.
We’re in the middle of a major review of the communications market to make sure this happens. I want everyone, whether they’re in a city high-rise or a rural hamlet, to enjoy the benefits of decent broadband. This means faster, more reliable broadband; engineers arriving quickly, on time, to install lines or fix faults; new, fibreoptic broadband cables to the doorsteps of homes and businesses, so Britain has the connections it needs to be a leading digital economy.
And when things go wrong, phone and broadband companies should provide automatic compensation. That means a cheque in the post or credit on your account – without having to ask. We are talking to companies about how this would work.
We also need a fundamental shakeup of Openreach, the BT company that runs the UK’s largest telecoms network. This reform, the biggest in Openreach’s history, would make it a distinct company, legally separate from BT. We believe Openreach should have its own board, obliged to serve all the UK’s telecoms companies equally.
Openreach should consult all of its customers on big decisions, not just BT. An Openreach working for the entire telecoms market, not its owner’s interests, can deliver improvements to broadband that homes and businesses need. This is a fundamental change and we will keep the pressure on Openreach to make sure it happens.
Some people think we should go further, splitting BT and Openreach completely. On paper, that looks like a simple solution to people’s broadband woes. But I’m convinced that our plan will give us the vast majority of the benefits but without risks and delay. Selling off Openreach would mean very significant disruption and costs, not just to BT but to the wider telecoms industry and consumers. It could mean too much time and money spent wrangling, which would be better used improving the country’s broadband.
If split, BT would have to spend time and potentially billions restructuring the UK’s biggest private pension plan, and renegotiating thousands of land contracts. Do we want it to do that, or to invest in its network, reforming Openreach quickly and efficiently, so that it works for everyone? And for those who argue that our powers would be greater once we leave the EU, I’m clear that we have the powers to act today. If Openreach fails to up its game, we will return to a plan to break up BT and Openreach, however difficult.
Our plan for better broadband goes wider. We’re making Openreach open up its network of telegraph poles and tunnels to allow rivals to build their own, advanced fibre networks, connected directly to homes and offices. This will reduce the country’s reliance on Openreach. We’ve already made it easier for people to change provider on Openreach’s network, and if broadband speeds fall below what people are promised, they can walk away from their contract.
Openreach is a lightning rod for people’s frustration with poor service and all companies need to do better. We already reveal the mostcomplained-about providers and plan to do more to show the best and worst, so customers can shop around with confidence.
Improving broadband for people and businesses is at the heart of our plans to make communications work for everyone. We’re working hard to make that happen.