Ofcom Seeks Comments on Separating Openreach from BT

By Ian Walker

LONDON--The U.K. telecom regulator said Thursday it is seeking comments on whether separating Openreach from BT Group PLC (BT.A.LN) would deliver competition, or wider benefits for end users, after concerns on the performance of the infrastructure division.

The Office of Communications, or Ofcom, made the comments as it announced the completion of the first phase of its digital communications review, where a major focus has been on whether competition is delivering benefits to consumers and businesses.

"BT's network has evolved in recent years, with fiber lines running closer to premises. This may require different models of competition than those that worked best for the traditional copper telecom network," Ofcom said.

It believes U.K. consumers would get better services at lower prices if there is a sufficient number of effective competitors. The review is considering the implications for the U.K. of international trends towards consolidation.

Ofcom is therefore seeking views and evidence on future regulatory approaches by Oct. 8.

Matters under consideration also include whether new rules should be applied to BT, such as controls on its wholesale charges with stronger incentives to improve quality of service, or tougher penalties if BT falls short.

It will also examine converging media services, offered over different platforms, or as a 'bundle' by the same operator. For example, telecoms services are increasingly sold to consumers in the form of bundles, sometimes with broadcasting content; this can offer consumer benefits, but may also present risks to competition.

Write to Ian Walker at [e-mail]; @IanWalk40289749

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