A report backed by 121-cross party MPs says Ofcom should force BT to sell off its Openreach service in order to open up competition and improve the quality of the UK’s internet service.
Openreach is a BT subsidiary which maintains the fibres, wires, ducting and cables that connect nearly all homes and businesses in the UK to the internet. But the nature and quality of the service has been heavily scrutinised, with millions of consumers across the UK still receiving what the report calls “dire” internet service.
MPs are calling for Ofcom to end BT’s “natural monopoly” over the UK’s broadband network.
The report, led by Tory MP Grant Shapps, titled ‘Broadband’, said that despite £1.7bn of taxpayers’ cash pumped into subsidising the construction of UK high-speed broadband, there are still 5.7 million people in the country who don’t have access to internet at the Ofcom required speed of 10 Megabits per second.
“But the problem is even worse for business with 42% of small and medium size enterprises reporting problems with their internet connection, at an estimated £11bn of cost to the British economy,”
“We believe that Britain should be leading the world in digital innovation,” the MPs said in the report.
“Yet instead we have a monopoly company clinging to outdated copper technology with no proper long-term plan for the future.”
‘Little will change’ unless Openreach and BT are formally separated.
It concluded: “Unless BT and Openreach are formally separated to become two entirely independent companies little will change.
“They will continue to paper over gaping cracks.
“Whilst rural SMEs (small and medium-sized enterprises) and consumers are left with dire speeds, or even no service at all, Openreach makes vast profits and finds little reason to invest in the network, install new lines or even fix faults in a properly timely manner.”
MPs expressed support on social media:
I am one of the MPs calling for BT Openreach to do much better on Broadband access. Improvement is needed.
— Alan Duncan (@AlanDuncanMP) January 23, 2016
Pleased to be part of MPs coalition calling for end of BT’s monopoly on the absurdly slow rollout of fibre broadband https://t.co/Zx2piTrRV0
— David Warburton MP (@DJWarburton) January 24, 2016
BT comments on the report:
BT said: “The idea that there would be more broadband investment if BT’s Openreach infrastructure division became independent is wrong-headed.
“As a smaller, weaker, standalone company, it would struggle to invest as much as it does currently.”
Openreach generated revenue of £5bn in fiscal 2015 and accounted for 34% of BT operating profit.