It's clear to me that Ofcom's recent decision to force BT to flip Openreach into a separate legal entity, albeit one wholly owned by BT, is one of damage-limitation in the strictest sense. Putting it bluntly, it appears to me that Ofcom neither wants the headache of a complete split (which would involve Ofcom monitoring such split for years to come (putting pressures on it from a governance and resource perspective) and the embarking on a long and doubtless sale process (with all the costs and complications that come with such a process)) nor to indirectly put the government on the hook to cover up some of the huge pension liabilities associated with Openreach (you might recall a certain little-known matter involving BHS in this regard).
Whilst true that that a new company, with a different board and perhaps a more stringent or restrictive constitution, might go someway to addressing the huge number of failings of Openreach to date, as it will still be a wholly owned subsidiary of BT, the cynic in me can't help but think that this may not prove as revolutionary as customers are hoping; group company boards talk, regardless of whether this is formally admitted or not. That being said, the public spotlight is firmly on BT and Openreach, and will be for some time following the split. Due to this it is hard to see how any new directors could allow (without some significant justifications) the failings to continue to quite the level to date, if just to ensure that they are not personally exposed in some fashion for failing to, for example, fulfil their directors' duties, or, perhaps more likely, exposed to reputational damage by being hung out to dry.
Whatever the case, what is clear is that the UK is in many ways far behind other, more technologically driven, economies than it cares to admit when it comes to broadband and, given the UK's increasing reliance on technology (from customer, business and sheer economic standpoints) the failings need to be resolved and addressed with a reasonable degree of urgency.
BT's Openreach division, which runs the UK's broadband infrastructure, should become a distinct company within the BT group, according to regulator Ofcom.Campaigners said the changes could not come soon enough for the millions of people who have suffered "woeful levels of service from Openreach". The media watchdog has resisted calls to split Openreach off entirely.Instead, Ofcom said its plans would ensure the most independence from BT without the costs of a full break up.More people will receive faster, more reliable broadband as a result of the changes, Ofcom boss Sharon White told the BBC. /**/ (function() { if (window.bbcdotcom && bbcdotcom.adverts && bbcdotcom.adverts.slotAsync) { bbcdotcom.adverts.slotAsync('mpu', [1,2,3]); } })(); /**/ The plans "can be introduced within months", rather than the years that a sell-off would involve, Ms White said.
http://www.bbc.co.uk/news/business-36891446
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