BT fights to keep Openreach, with support from Virgin Media
(Image Credit: iStockPhoto/scisettialfio)
You would be forgiven to think this is a poor April Fools wind-up, but two of the biggest rivals in telecoms have indeed partnered to fight Ofcom's regulatory pressure to split Openreach from BT once and for all. The two sent a joint letter to the regulator which argues that opening-up the UK broadband market will be a bad decision for consumers.
Vodafone even went as far as to create a dossier on BT’s margins
Of course there is a lot of self-interest here, but one of the biggest arguments is that there will be less investment into the network from BT once Openreach becomes its own sole entity. In the report they also highlight that "allowing multiple operators to tamper with the physical network will cause service faults for customers” which is hard to dispute.
Virgin Media has also been a vocal opponent of further regulation in the superfast broadband market. It recently announced a £3 billion expansion to its cable network and said it would not welcome any intervention that might impede the rollout.
A spokesperson for the company confirmed they are indeed supporting the BT-led lobbying and that "a stable and proportionate regulatory environment is a pre-requisite for ensuring continued investment" in telecoms infrastructure.
Openreach is currently a subsidiary of BT that was forced to be formed by Ofcom to give rival telephone and internet service providers (ISPs) equal access to BT's wide-reaching network of copper and fibre cables.
The regulator is looking to split Openreach from BT in the hope that it will foster competition and reduce the monopoly held by both BT and Virgin Media. In fact one of the ISPs who use BT's network, Vodafone, even went as far as to create a dossier on BT’s margins designed to demonstrate its unfair advantage in the market.
A "major communications review" is due to be launched by Ofcom, the first in ten years. The review's intention is to ensure the market remains fair, promotes innovation, and offers customers the best value in a time where it is being disrupted through several potential industry-shaking decisions such as BT's intention to acquire the UK's biggest mobile operator, EE.
Do you think Openreach should be split from BT? Let us know in the comments.
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