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MPs’ broadband report renews row over Openreach future

MPs have again called for BT and Openreach to be split up, but have been heavily criticised for including misleading statistics in their evidence

A report produced by the British Infrastructure Group (BIG), a cross-party parliamentary body dedicated to improving infrastructure across the UK, has again called for the forced separation of BT and Openreach, but has been criticised for including misleading headline statistics.

BIG, which is chaired by MP Grant Shapps, released its Broadbad report on 23 January 2016. The report included a collection of statistics that purported to show the dire state of the UK’s broadband infrastructure.

In a preamble to the wider report, Shapps wrote: “With the UK economy now so reliant on its internet infrastructure, this BIG report contends that our future is being held back by systemic underinvestment stemming from the ‘natural monopoly’ of BT and Openreach.

“The report concludes that the current situation is stifling competition, hurting our constituents and – in the process – limiting Britain’s economic potential.”

More than 100 MPs put their signatures to the report and called for Ofcom to take radical action to stop a “monopoly company clinging to outdated copper technology with no proper long-term plan”.

“Given all the delays and missed deadlines, we believe that only a formal separation of BT from Openreach, combined with fresh competition and a concerted ambition to deliver, will create the broadband service that our constituents and businesses so rightly demand,” said the group.

Statistical soup

Among the claims made in the report were that BT has taken £1.7bn of taxpayers’ money, when in fact £1.7bn is the total amount of funding backing the Broadband Delivery UK (BDUK) scheme. This amount of money has not yet been spent and – following the award of some second-phase contracts to other suppliers – will not all go to BT.

The Broadbad report also referenced an “Ofcom-required” minimum speed of 10Mbps, which is not yet the case. However, the government is currently consulting on what would be a legally binding universal service obligation (USO).

MPs also said that there were 5.7 million homes that could not receive a broadband speed of 10Mbps, but this was based on data collected nine months ago.

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While BT CEO Gavin Patterson conceded in an interview given to the BBC that there remained more to do, BT’s official line was similar to its previous, widely reported views on the progress of the national broadband roll-out.

“We take any criticism seriously, but we think this report and its recommendations are misleading and ill-judged,” said a BT spokesperson.

“Independent data from Ofcom, the European Union [EU] and others repeatedly place the UK number one for broadband and superfast broadband when compared with other large EU countries.

Some 90% of UK premises can already access a fibreoptic broadband connection. That will soon climb to 95% and above.

“We understand the impatience for progress to be even faster, but improving broadband is a major engineering project that involves contending with all manner of physical and geographic challenges.

“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.”

CWU seeks Ofcom meeting

The Communications Workers Union (CWU) also responded to the report, branding it “badly researched, ill-judged” and containing “no concept of the physical and geographical challenges in providing a super/ultrafast broadband infrastructure”.

A CWU spokesperson reiterated Patterson’s view that a break-up of BT and Openreach would lead to legal challenges and diminishes incentive to invest for some time while the court case dragged on through appeal after appeal. This would also, the spokesperson said, create “needless uncertainty” over the future of its members’ jobs. 

“There is absolutely no evidence in this report to support its conclusions or proposed course of action and that this would result in the faster delivery of broadband to all parts of the UK. Nor is there a shred of evidence to support the claim that additional investment would be forthcoming if the proposals are accepted.

“The CWU will be seeking an urgent meeting with Ofcom to discuss this report and other speculation to ensure that the concerns of CWU members are fully understood before their review is finalised.”

It is widely expected that Ofcom will rule on the fate of Openreach in the next month.

Shapps hits back

Following publication of the report, Shapps said that BT staffers had tried to get their hands on a copy of the research documents, and had left multiple voicemail messages for him in the attempt.

However, on one of these messages, the staffer forgot to hang up at the end of the call and was subsequently heard mocking the contents of the report with a colleague, said Shapps.

He told the BBC: “They are pretty contemptuous and dismissive of the entire issue. They simply appeared not to care about it.”

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