Sky, Vodafone Press Regulator to Separate BT Broadband Network

  • BT rivals write letter to U.K. watchdog chief outlining reform
  • Sky, Vodafone, Talk Talk CEOs want independent Openreach

Leaders of Sky Plc, Vodafone Group Plc’s U.K. unit and TalkTalk Telecom Group Plc called called on regulators to force rival BT Group Plc to set up a separate entity to manage the U.K.’s principal broadband network, which other companies use to reach customers.

The chief executive officers of BT’s rivals on Monday published what they called a “10-Point Plan” for the network, called Openreach. The plan calls for the creation of a separate company, financially and legally independent of BT, with its own identity and brand.

“If implemented in full, these reforms should deliver the step-change in effectiveness that customers need and remove barriers to a competitive market," they wrote in a letter to Sharon White, CEO of U.K. telecommunications regulator Ofcom. “The measures we have proposed are not controversial or drastic, but reflect arrangements which are commonplace for large listed companies.”

In a preliminary regulatory review of Openreach published in February, Ofcom stopped short of calling for a breakup of BT. It ordered the company to grant competitors better access to its broadband networks, by allowing physical access to its telephone poles and underground tunnels and letting rivals take direct control of connections. The regulator is still figuring out how to make Openreach more independent and will finalize its study sometime this summer.

BT CEO Gavin Patterson has said Openreach is already one of the most heavily regulated businesses in the world and that the company has volunteered to accept tighter regulation to bring matters to a "clear and speedy conclusion."

BT said on Monday it is already in talks with Ofcom to "further enhance” Openreach’s independence. The company this month proposed spending as much as 6 billion pounds ($8.6 billion) on network upgrades, on condition of receiving assurances from regulators that it will be able to make a profit from Openreach.

"Key suggestions made by other companies today seem incompatible with the legal responsibility that the board of any listed company has when it comes to stewarding shareholders’ money responsibly,” BT said in a statement.

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