FCS calls for mutualisation of BT Openreach

Federation of Communication Services wants Openreach to be sold off, but argues the new entity should have more representative governance to ensure the needs of the UK are properly met

FCS calls for mutualisation of BT Openreach

The Federation of Communication Services (FCS) has welcomed the recent report by MPs criticising BT’s performance in providing broadband services in the UK and has reiterated its call for the its Openreach subsidiary to be sold off.

In a message to its members, who provide voice and data communications solutions to both the public and private sector in the UK, the FCS noted: ‘For several years, FCS has called for full structural separation of Openreach from the rest of BT.

‘At first we appeared to be a lone voice in the wilderness, but gradually the call has gathered momentum: Ofcom noted in its Strategic Review of Digital Communications that an option to consider was structural separation of Openreach and on Saturday (23 January 2016) over 100 MPs, led by Grant Shapps, launched a report which states: “The time has come for BT to be forced to sell off Openreach to encourage more competition and a better service for every internet user and for the benefit of the UK economy.”’

The message goes on to say: ‘We are especially pleased to note the report's understanding of the broadband needs of business and public-sector users. Understandably, policy-makers focus on the needs of consumers, because consumers have the vote. But this has allowed the needs of employers to be cynically bypassed. The result has been a rush to sell bundled entertainment services to the public, rather than future-proof the ability of local businesses to compete.

‘In the 10 years since BT undertook to "functionally separate" its infrastructure division from its retail and wholesale divisions, FCS has consistently argued that the whole thing was a fudge. The proof of the pudding is as simple and fundamental as the question of who appoints the CEO of Openreach and who underwrites its pension commitments.’

However, the FCS believes that ‘simply floating Openreach off for sale to some other third-party investor will not guarantee service improvements’. Instead, the FCS believes Openreach should be mutualised.

‘The model would be closer to that used by Welsh Water: professional managers run the business, but governance rests with a board of stakeholders, including industry and consumer nominees. Only in this way can the correct, responsive decisions be made to serve the long-term needs of all users,’ the FCS argues.

The FCS is inviting members to comment and voice opinions on the report, its stance and how they would like the organisation to take the issue forwards.

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