Ofcom has released its first progress report on the legal separation of BT and Openreach, commenting progress is being made, but there still might be too much meddling going on.
The report, which you can see here, states there has been a satisfactory amount of work done, though there are still signs BT is fundamentally entwined in the organization. The problem here is simply down to the fact BT will not want to lose too much control. Current projects have focused on staff training and removing BT branding from Openreach, but these should be considered little more than window dressing and busy work; Ofcom needs to make sure BT cannot influence Openreach operations to its own benefit or the detriment of competitors.
The question still remains about balance. One of the concerns raised in the report is whether the new structure has struck the right balance between BT’s interests and those of Openreach. BT still has a major say in the Openreach strategy, and while this is still the case, few could deem this initiative a success. One example focuses on the investment plans.
“This is supported by emails exchanged between senior executives which demonstrate that BT was involved throughout the financial planning process,” the report states. “We are also concerned that BT’s newly established Investment Board reviewed Openreach’s investment proposals to be included in its strategic plans before the final draft plans were presented to the Openreach Board for approval. This is an issue that we will explore fully in the next monitoring period.”
Surely this should be considered contradictory to the purpose of having an independent board at Openreach. If BT is influencing the decision making process before the board is getting involved, the entire process of independence should be considered redundant.
There has of course been progress, it would be unfair to call this a disaster. However, in over a year the situation is fundamentally the same.