Feb 1, 2017
BT adds to Openreach board amid dispute with Ofcom
BT is pushing ahead with plans to restructure Openreach by appointing two more members to a newly formed board of directors, despite a dispute with the UK telecoms regulator over the future of its infrastructure division. Ofcom, the UK telecoms regulator, said on Wednesday that BT's plans for the Openreach board did not go far enough in meeting its proposal to see a so-called "Legal separation" of the infrastructure arm from the wider BT telecoms group. Ofcom first called for Openreach to be a "Legally separate" company within BT last July, with an independent board and chairman, as well as control over its operations and budget. At the time, Gavin Patterson, BT chief executive, said Ofcom's recommendations were a "Sensible way forward" for Openreach and that BT would introduce "Significant changes to meet their concerns". Ofcom has stopped short of demanding a full break-up of BT by spinning off Openreach into a fully independent company - an outcome favoured by BT rivals including Sky, TalkTalk and Vodafone, which rely on Openreach to provide broadband services to their customers and have long argued that the existing structure presents a conflict of interest and unfair advantage for BT. Deutsche Telekom, the German telecoms operator that owns a 12 per cent stake in its British counterpart, has already attacked Ofcom's proposals as "Extreme", saying a legal separation would make the UK "Less investable" and would be "Completely at odds" with Ofcom's reputation as an evidence-based regulator.
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