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MPs split on BT Openreach and broadband USO

At the second reading of the controversial Digital Economy Bill, MPs debated the future of BT and Openreach and the proposed universal service obligation for broadband

At the second reading of the Digital Economy Bill on 13 September, MPs were divided on matters such as the future relationship between BT and its infrastructure arm, Openreach, and the scope of the proposed universal service obligation (USO) for broadband.

Culture secretary Karen Bradley, who replaced John Whittingdale at the helm of the Department for Culture, Media and Sport (DCMS) in the post-Brexit reshuffle, reiterated the government’s commitment to get the right result in the future relationship between BT and Openreach.

“I have been clear that we will not stop or cease until we get the right result,” said Bradley. “If that means the structural separation of BT and Openreach, this government is prepared to consider that.

“Ofcom has made some recommendations. We are looking carefully at them, and Ofcom is consulting on them. We need to make sure we get it right and that we get this delivered, but nothing is off the table.

“The bill will ensure that Ofcom is held to account, but not at the expense of delay and intransigence.”

Bradley’s predecessor at DCMS, John Whittingdale, agreed that Ofcom had rightly put forward proposals to make a clearer separation between Openreach and the rest of the BT Group, but conceded there was concern that these proposals did not go far enough.

“It will be necessary for BT to make it absolutely clear that there is full separation and a level playing field,” he said.

However, former digital economy minister Ed Vaizey, who has also returned to the backbenches, said the idea of separating BT from Openreach “utterly confused” him.

“Why would one simply adopt the campaign of BT’s competitors?” said Vaizey. “Why would one wish to break up a highly successful British company post-Brexit, when we need all the champions we can get?

“In the words of the chief executive of Virgin Media, an able competitor to BT, ‘If you want better broadband, pick up a spade’. That is my message to TalkTalk, Vodafone and Sky, who all seek for their own reasons to break up a great British company.”

Universal broadband

Labour shadow digital economy minister Chi Onwurah said that, largely speaking, the Digital Economy Bill was a dud.

“The bill is an excellent example of that old ‘Yes Minister’ trick of putting the difficult part in the title so it can be ignored in the document itself,” said Onwurah.

But on broadband, the USO represented a long overdue step in the right direction, she said.

“The last Labour government left fully costed plans for universal broadband coverage by 2012. The Conservatives’ bungling procurement process and total lack of ambition left many behind, particularly in rural economies,” said Onwurah.

Whittingdale added: “Whether or not the USO is a legal necessity remains to be seen, but it is certainly sensible to put the provisions in the bill. BT is already saying it can deliver it without a legal requirement, but this should certainly spur it on in its efforts to demonstrate that that is possible.”

Read more about broadband

  • The Scottish government has issued prior information notice to kick off new procurement to deliver 100% superfast broadband access across the country.
  • In its newly released Building Gigabit Britain report, the Independent Networks Co-operative Association calls for the government to make a more ambitious commitment to fibre broadband.
  • TalkTalk’s business division claims Openreach is neglecting business broadband connectivity, and repeats its call for SME customers to take part in Ofcom’s consultation on the future of the BT Openreach relationship.

But Calum Kerr, Scottish National Party (SNP) MP for Berwickshire, Roxburgh and Selkirk, said the 10Mbps USO figure was fundamentally flawed.

“A truly effective USO needs to consider not just basic download speed, but upload, latency, data limits and, of course, cost,” he said. “Everyone should be entitled to a fair standard of broadband, and that is about a lot more than just download speed.

“Do we really think 10Mbps will be considered sufficient by 2020? Why does the government think the bar should be set so low? The SNP challenges the thinking that sees 10Mbps as adequate.”

Labour’s Chris Bryant and the Conservatives’ Scott Mann agreed, both proposing that the 10Mbps minimum should be raised to 15Mbps.

Commenting on the debate, Emma Hosgood, programme director at the Broadband World Forum, also said 10Mbps would not be enough to fully support the booming digital economy.

Hosgood also questioned how the investment in fibre-based broadband proposed by the Digital Economy Bill would be funded.

“Will it be the taxpayers’ or the service providers’ responsibility?” she said. “What about other companies, such as Skype, Facebook and Netflix, which potentially stand to benefit most from improved broadband speeds? These are issues that need resolving if the UK is to remain a world leader in the digital economy.”

The Digital Economy Bill will now move into the Public Bill Committee stage, which is expected to conclude towards the end of October. ................................................

Read more on Telecoms networks and broadband communications

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