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BT should increase infrastructure investment or face split

BT is ‘significantly under-investing’ in Openreach, its local access network subsidiary, the Culture, Media and Sport Committee says in its report Establishing world-class connectivity throughout the UK.

The report describes how the Government’s broadband programme, BDUK, is on track to deliver access to 95% of premises with superfast services by the end of 2017. However, it points out that the programme has not delivered coverage to whole areas. Households and businesses in the ‘final five percent’ with little or no access to broadband are left at a disadvantage as the programme seems to have tackled easier-to-reach premises first.

The report argues that under-investment in Openreach, which runs the UK’s broadband infrastructure, arises because BT appears to be deliberately investing in higher-risk, higherreturn assets and not investing in profitable lower risk infrastructure and services through Openreach.

The Committee demands that BT invest more in Openreach and infrastructure. Ofcom has suggested a complete separation of Openreach from BT Group and while the Committee has ruled this out for the moment, they do agree that Openreach should have much more autonomy over what it invests.

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