a report published today, Tuesday 19 July 2016, the Culture, Media and
Sport Select Committee says BT is “significantly under-investing” in Openreach,
its infrastructure subsidiary. Based on a report commissioned from a panel of
independent experts, the Committee concluded the shortfall in investment could
potentially be hundreds of millions of pounds a year.
Committee, of which local MP Paul Farrelly is a senior member, says BT has exploited its position to make strategic decisions that
“favour the Group’s priorities and interests”—and is likely to have sacrificed
shareholder value and customer benefit as a result. Capital investment in
Openreach has been broadly flat since 2009 until this year, and quality of
service remains poor.
Committee is demanding that BT invest significantly more in Openreach, and
allows Openreach much more autonomy over what it invests, when and where. It
supports Ofcom’s plans for establishing greater separation between Openreach
and BT Group, but makes clear that if BT fails to “offer the reforms and
investment assurances necessary to satisfy our concerns”, Ofcom should move to
enforce full separation of Openreach.
the Committee’s judgment, Ofcom has not placed enough emphasis in the past on
improving Openreach’s quality of service: it says the prospect of stiffer
penalties should also encourage BT to voluntarily invest more in
convened a panel of expert advisers for the inquiry, including nationally
recognised specialists in finance, regulation, communications and
infrastructure provision, whose expert report is also published today with our
To read the report in full, click here.