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Ofcom rejects BT Openreach split to improve broadband services

MPs have warned that millions of households will be left with “dire” broadband speeds because broadcasting regulator Ofcom is refusing to break-up BT.

Critics of BT had called for a full split of its Openreach division in the hope of breaking up the monopoly and improving the infrastructure for better broadband speeds and reliability, but Ofcom rejected the move.

Former Conservative Party Chairman Grant Shapps is unhappy with the decision. Speaking to the Telegraph, he said: “You have to wonder how many times BT Openreach has to fail the public before the regulator acts.

“The idea of one more chance is being stretched to its limit while ordinary families and British businesses continue to suffer through poor or no super-fast broadband.”

121 MPs from all political parties called for BT to be broken up amid claims 5.7 million people were getting below the minimum expected download speeds stipulated by the regulator. Openreach owns and maintains the network cables.

Instead, BT will have to make Openreach a separate company with its own board and chairman, which Ofcom says will ensure the most independence from BT without the costs and time sink of a full break up.

Ofcom had been investigating BT for a year and found that millions of people had suffered, to use its own words, “woeful levels of service from Openreach”. Ofcom chief executive, Sharon White, said: “We’re pressing ahead with the biggest shake-up of telecoms in a decade.

“This will make sure the market is delivering the best possible services for people and businesses across the UK,” he added.

Broadband providers are unhappy with the investigation outcome. TalkTalk chief executive Dido Harding said in a statement: “Legal separation still means that a highly complex web of regulation, and BT has proven itself expert at gaming this system.

“There is nothing to suggest they will not continue to do so in the new system. Structural separation is cleaner, with less red tape. In taking one cautious step forward, I fear Ofcom may in practice have taken five steps back.”

BT argued it had spent £1billion alone on improving the infrastructure and its chief executive, Gavin Paterson, said it would invest another £6billion to bring the UK’s broadband up to scratch. “It is a sensible way forward. We accept that we can do better and we’ve put forward a proposal that does that,” he said.

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