BT agree to separate Openreach from their core business but what does that really mean for consumers?

An Openreach engineer applies a label to a cable.

Openreach manage the wires and fibres which most consumers rely on to provide telephone and broadband services.

After much negotiation with the communications regulator, OFCOM, BT have agreed to legally separate their infrastructure division, Openreach, from the rest of BT but what does this really mean for consumers?

What does Openreach do?

Openreach manage the wires, fibres and telephone exchange equipment which connect consumers’ telephones and broadband routers to the rest of the telephone system and the Internet. They are responsible for repairing faults, installing new services (such as telephone and broadband lines) and upgrading the network so new technologies (such as faster broadband) can be introduced.

Why the split?

If you’ve ever had a fault on your telephone line or had a new line installed, you’ll know how long this can take and if you live in a rural location, you’ll probably know how poor broadband speeds can be. Although this is Openreach’s responsibility, OFCOM had concerns that, as Openreach couldn’t set it own budget as it was part of BT, it wasn’t getting enough money to manage and upgrade the infrastructure properly, choosing to spend the money on TV services instead (such as buying the rights to football games).

Another issue is that even though customers have a large choice of who bills them for their telephone and broadband services, most get their services via Openreach managed cables. As BT provide services as well as managed Openreach, many of the other telephone companies complained that BT was ordering Openreach to give priority to it’s customers, something that they were forbidden to do.

Will this really improve things for consumers?

The simple reason is that no-one really knows. It is hoped that as Openreach will be able to set it’s own charges for using the network, it’ll be able to have more money to improve services; previously, BT would charge the telephone companies for using the Openreach network but only gave some of that income back to Openreach. As a separate company, with a separate board, Openreach will have to pay more in administration costs, management salaries, etc. but it should now be able to set it’s own priorities.

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