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July 20, 2015

BT threatens court battle if Openreach is spun off

The company to halt its investment plans for faster broadband.

By CBR Staff Writer

BT chief executive Gavin Patterson has threatened to launch a a protracted legal fight and cease investment planned for Openreach, if it is prevented from owning the wholesale network services.

Openreach is the infrastructure division of the BT Group, which was opened for businesses in 2006 following an agreement between BT and Ofcom.

Openreach, which provides wholesale access to broadband and telephone lines, became a sperarate part of BT following Ofcom’s last strategic review in 2005.

However, during its 2015 strategic review, Ofcom proposed that separating Openreach from BT could deliver competition or wider benefits for end users.

In its review last week, Ofcom said, "It would remove BT’s underlying incentive to discriminate against competitors.

"Separation could also offer ways to simplify existing regulation. However, the process would be challenging and it may not address some concerns relating to Openreach – such as service quality, or the timing and level of investment decisions."

The Telegraph cited Patterson as saying: "This is a commercial enterprise and if there’s uncertainty we will defend the rights of our shareholders, undoubtedly.

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"It puts that investment very much at risk. At the end of it, and if we are meant to be looking at the next ten years, what do you want to look back on? Do you want to look back at 10 years of litigation and arguments?"

Patterson added that he made the decision to fight a legal battle to protect shareholders and the investment planned towards the digital economy that might be at risk.

BT is also threatened to halt the multibillion-pound upgrade to "ultrafast" broadband until a final decision is made regarding Openreach.

Patterson also accused its rivals Sky, TalkTalk and Vodafone of playing a foul game saying that they provide poor service while favouring price cuts instead of investing in the superfast broadband.

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