The BT Broadband Divorce

In one of the most prolonged splits in business history, it has been confirmed that BT and Openreach will definitely be going their separate ways. Here, SBT provides you with all the information you need to know on how this split might affect you as a consumer

BT Openreach is required by law to allow UK broadband service providers to access its wholesale broadband infrastructure, which maintains broadband access for more than 30 million customers across the UK. While BT provides individual internet services to its customers, Openreach works on behalf of more than 500 service providers in the UK, such as Sky, TalkTalk, Gamma, Daisy and of course, BT in order to maintain the local access network that covers 30 million customers in the country. This means that BT has essentially been gaining from their competitors since Openreach was founded back in 2006. While some argue that the broadband to home services provided by BT Openreach are effectively operating, Ofcom has received many complaints from these service providers, including evidence of poor quality customer service and concerns relating to the future investment in UK broadband infrastructure, as well as a conflict of interest between BT and Openreach. After months of deliberation, it has finally been decided that BT and Openreach will go their separate ways.

The debate for this separation has centred around the argument of whether or not the firm that has been providing the majority of the UK’s broadband infrastructure should be a part of the same ‘parent group’ as the UK’s leading internet service provider, and rivals have previously argued that this is no good for both competition in other internet providers and the consumer, with an Ofcom representative saying: “We’ve been clear that we need a more independent Openreach. It needs to be genuinely fair and equal access to the country’s telecoms infrastructure to BT’s competitors. This is the best way to ensure consumers get the service they need, and the country gets the digital infrastructure it needs”, and many people agree.

The main issue with other UK service providers, such as TalkTalk and Sky, is that they don’t feel as if Openreach has been investing enough in the underlying infrastructure that the countries broadband network is delivered over. Openreach own and operate all of the cables that that the likes of Sky, TalkTalk and Vodafone have use of to deliver most of the broadband to their customers, and are claiming that BT have under invested and are trying to get every last drop out of the current network, which is impacting on the services provided to their customers. It has also been suggested that Openreach prioritise BT customers, with BT having access to better services. The separation of BT and Openreach should level the playing field, and without BT having such a hold over the Openreach board, Openreach should be allowed to invest properly in the infrastructure and services being open to all of the companies that use its services. Essentially, this should mean more reliable and quicker broadband to UK customers, even those in regions with traditionally poor service or slow connection speed.

It’s a possibility that the separation of BT and Openreach might mean quicker and more efficient customer service. Ofcom has received numerous complaints with regards to BT’s unsatisfying customer service, which has been one of the biggest arguments in favour of the split. Slow services from BT and Openreach pose huge threats to British businesses and research conducted by Beaming shows that two thirds of businesses across the UK have experienced internet connection failures in the last year that have prevented them from trading or accessing vital online services, costing them a total of £12.3 billion in lost productivity and extra overtime. Managing Director at Beaming, a specialist business ISP based in Hastings commented: “The internet is the greatest business resource ever invented, but our increasing reliance on connectivity creates new risks for those that need it the most. The pace of business is now such that any downtime means missed opportunities, lost productivity and a huge amount of stress as businesses race to get back on track. It is only when businesses experience a problem that they find their large, consumer orientated broadband provider expects them to self-cure problems online or queue for hours on the phone to gain assistance.”

It’s not just businesses though; millions of individuals across the country claim they have suffered shocking levels of service from Openreach, but will the changes to these companies deliver fast improvements to customers who have been let down for too long? Analyst at Ovum – an independent analyst and consultancy firm, specialising in global coverage of IT, and telecommunications industries – Matthew Howett thinks this will depend on how the separation is handled: “The improvements in quality and availability of service that Ofcom hopes legal separation will bring about will likely be delivered much sooner if BT can get on and deliver them today as a result of a voluntary agreement rather than a lengthy and uncertain process to run its course at the EU level. In many ways, this would be a better outcome than a forced legal separation, not least because the EU route is uncertain, untested and likely to take much longer to achieve.”

There are also talks of whether or not the separation of BT and Openreach will provide faster internet services, especially for people and smaller businesses in rural areas. Large and medium-sized businesses lose the fewest productive hours to internet downtime, although their greater dependence on internet technologies means they lose a greater proportion of their revenues than smaller companies. Slow and even non-existent broadband has been and is still an issue in the more remote areas of the UK, and small business owners such as farmers have been crying out for help. The Countryside and Landowners’ Alliance, however, has made the point that the split between the two related companies must ensure that the work Openreach has been conducting to close the ‘digital divide’ can continue: “Any formal break between BT and Openreach must not lose sight of the goal to deliver broadband to rural areas. Ofcom must make it clear that the conditions of the separation include guarantees for future investment to further support rural digital connectivity.”

As with various elements of life in the UK right now, nothing can be said for certain – apart from the fact that BT and Openreach will be soon to separate. But how Ofcom will go about this, we don’t know and only time will tell.