BT (LSE:BT) has presented UK regulator Ofcom with a proposal for a new governance model for Openreach, which CEO Gavin Patterson said would “significantly increase” the independence of the fixed-line infrastructure business. Speaking at the Media & Telecoms 2016 & Beyond conference in London today, Patterson said the model would see Openreach have its own board of directors, which would include one BT non-executive director.
BT (LSE:BT) has presented UK regulator Ofcom with a proposal for a new governance model for Openreach, which CEO Gavin Patterson (pictured) said would “significantly increase” the independence of the fixed-line infrastructure business.
Speaking at the Media & Telecoms 2016 & Beyond conference in London today, Patterson (pictured) said the model would see Openreach have its own board of directors, which would include one BT non-executive director.
He said the new model would address concerns about the relationship between BT and Openreach and enable the UK telecoms sector as a whole to move forward in terms of broadband deployment.
Last month, Ofcom decided that BT must open up its poles and ducts for use by rival providers, enabling them to build their own competing fibre networks. Crucially, the regulator did not call for a structural separation of Openreach as some had predicted.
The regulator said at the time that the measure would promote large-scale rollout of new ultrafast broadband networks, emphasising cable and fibre over copper. Much of BT’s fixed-line network comprises fibre to the cabinet (FTTC), with copper lines then connecting to the premise.
Ofcom, which launched a sector review in March 2015, said it had found that Openreach, functionally separated since 2005, “still has an incentive to make decisions in the interests of BT, rather than BT’s competitors, which can lead to competition problems”.
Rivals, most notably Sky, TalkTalk and Vodafone, have accused BT of using profits from Openreach to finance other areas of the business, most notably its premium TV content.
Their calls for a level playing field increased in volume when the Communications and Markets Authority (CMA) gave the go-ahead to BT’s £12.5bn acquisition of leading mobile operator EE, with no conditions.
Entertainment an option
Asked about BT’s content ambitions at the conference, Patterson said he would not rule out “doing something in entertainment”, but stressed that the company’s focus remains on sport for the time being.
Meanwhile, at the same conference, Frank Sixt, group finance director and deputy managing director at CK Hutchison, owner of mobile operator Three in the UK, said that while his company does not plan to become a converged player, it is open to partnerships or wholesale agreements with third parties in this respect.
Separately, CK Hutchison said today that it had a “fruitful” exchange with European Union competition regulators at a hearing to further discuss its plan to merge its UK mobile operator with rival O2.