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August 24, 2015

Labour slams Openreach service, backs BT split

Shadow culture secretary Chris Bryant demands an end to "monopoly."

By Alexander Sword

Labour’s Chris Bryant has argued that Openreach should be split from BT unless there is ‘conclusive evidence’ in support of keeping the superfast fibre broadband unit under the telcom company’s control.

The shadow culture secretary argued that BT’s wholesale broadband division, which was spun off as a separate division in 2005 during Ofcom’s last review of the digital communications market, had delivered a "poor quality of service."

Writing in the Telegraph, Bryant slammed "the delays for repairs, the missed appointments, the months of waiting to switch providers."

He also criticised the Government’s superfast broadband roll-out scheme for granting a "monopoly" to BT.

"The Government designed the tender process for the superfast roll-out in such a way that it was virtually impossible for anyone other than BT to win," Bryant wrote. "The end result was that BT Openreach won 44 out of 44 contracts and its monopoly was reinforced."

The future of BT’s infrastructure division is again up in the air as Ofcom mulls a split as one of four options, the others being strengthening the current model by applying new rules to BT, retaining the current model and deregulating and promoting competition between networks.

The split is supported by TalkTalk and Sky, which have both argued that BT Openreach’s service is degraded by a conflict of interest.

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"It is crucial that we now seize this opportunity to structurally separate Openreach," TalkTalk CEO Dido Harding has commented.

"A fully independent Openreach focused exclusively on infrastructure would be incentivised to maximise coverage and improve quality of service for customers. It would end BT’s ability to erode competition, stimulating innovation, consumer choice and lower prices.

BT is staunchly defending its ownership of Openreach, commenting in a statement: "There has been huge progress this past ten years with an explosion in competition and broadband usage. Consumers are getting more for less and the UK has outpaced its European peers in terms of superfast broadband.

"Much of that progress is down to BT investing billions of pounds in fibre at the height of the recession. That investment wouldn’t have occurred had BT been split in two a decade ago and our ambitious plans for ultrafast broadband also depend on BT remaining intact."

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