Openreach is urging UK businesses to get a move on in preparing for the public switched telephone network (PSTN) switch-off in less than a year’s time – and targeted price hikes could be the key to forcing action.

More than half a million business lines still haven’t migrated, the connectivity provider warned, leaving them liable to significantly higher prices and eventual complete loss of service.

While many communication providers have already migrated much of their customer base, a number of smaller or specialist providers have been slower to act – and Openreach said businesses remaining with these providers could face risks tied to equipment failure.

Meanwhile, beyond phones, critical hardware such as fire alarms, burglar alarms, and payment terminals will need to be migrated.

Figures revealed by Openreach show that more than 12,000 lift lines and around 500 lines serving CCTV networks, for example, still need to be upgraded.

"There’s no time left to stall," said James Lilley, director of All-IP at Openreach. "We’ve spent the last year ensuring telecare customers can be migrated safely through our 'Prove Telecare' service, removing the final barrier to the switch-off."

Openreach price hikes look to encourage customers

To help push businesses into making the change, Openreach is planning a series of price hikes for legacy Wholesale Line Rental (WLR) products.

The cost will go up by 20% on April 1, by another 40% on July 1, and by another 40% on October 1 – effectively doubling the rental cost of legacy lines compared to 2025 rates.

"The PSTN analogue network is obsolete, becoming harder to maintain and significantly more expensive to run. We are passing those costs on to providers who continue to sell legacy products," said Lilley.

"If your business is still on this copper service, you will start to pay a premium for a service that will be switched off in 12 months. Most major communications providers moved their customers to digital long ago. If your provider hasn't contacted you, you need to ask why."

Making the switch

Openreach said businesses should start by reviewing their connectivity estate to identify any equipment still relying on the PSTN – and contact their service provider if they're not sure. They can also test equipment for free at Openreach’s test labs.

The connectivity provider said they should make the switch as soon as possible, and is offering a range of resources to help businesses through the transition, including support for edge cases and temporary solutions if needed.

The switch from the PSTN to digital services is expected to be complete by January 2027, but is causing concern. While copper phone lines can be powered from an exchange, internet-based digital phone equivalents cannot.

In the event of a power cut, therefore, access to phone services – including the emergency services – could be cut.

While service providers are dishing out battery backup (BBU) devices, free to vulnerable customers, these have a minimum battery life of just an hour.

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UK altnet providers have raised concerns about a rising tide of physical attacks on network infrastructure sites and has called for tougher sentencing rules for culprits. 

With attention often focused on the risk of cyber attacks, the group, led by fiber network provider Ogi and Vorboss, has written to Michelle Donelan, secretary of state for the Department of Science, Innovation and Technology (DSIT) warning that physical attacks can risk lives.

The severity of penalties should reflect the potential risks to life, as well as the critical role that full fiber plays, the group said. The joint letter by Ogi and Vorboss called for 'lengthy prison terms' and 'appropriate fines'.

"By asking for such severe consequences, we hope to deter individuals from engaging in activities that puts lives at risk and compromises the connectivity that we all increasingly rely on," the letter reads.

The group has called on DSIT and Ofcom to conduct a review of security practices at fiber infrastructure across the UK. It also asks for more direction from the government to make sure that police forces prioritize attacks on critical digital infrastructure.

In addition, the network operators would also like to see strict enforcement of essential security compliance protocols by the industry, specifically ensuring that all network builders adhere to Openreach ‘whereabouts’ compliance.

In their letter, the network operators suggested that Openreach may have a potential conflict of interest in that it competes with the network operators that use its ducts and poles. The group called for Ofcom to step in and improve compliance.

"Working with the UK and devolved governments now means we can make sure this infrastructure – feeding our homes, businesses and critical public services – is backed by laws that are fit for purpose; deterring those who aim to sabotage the connectivity we increasingly lean on for our working, social, and day-to-day lives," said Ogi CEO Ben Allwright.

"Now is the time for us to get around the table to make sure this vital infrastructure has the protection it needs."

UK altnet providers struggle with vandalism

The call comes following a series of attacks that have cut off homes, businesses, and public services, including hospitals.

Late last year, for example, Netomnia said vandals cut numerous cables, while in January Ogi reported extensive damage had been caused to its fiber to the premises (FTTP) network in South Wales.

Pine Media also suffered severed cables in Sheffield in the same month.

Last October, a hospital and financial institution in central London were taken offline after a vandal gained access to the network and cut through a cable.

"Change is needed to protect the country’s digital infrastructure. We’ve raised these concerns after a series of attacks on telecoms networks," said Vorboss CEO Tim Creswick.

"Resilience of digital connectivity should be a critical priority, and DSIT and Ofcom have the responsibility to affect these important changes. A review of current rules is desperately needed, from sentencing to policing to enforcing industry compliance."

Openreach is offering rewards of up to £20,000 for information relating to recent copper cable thefts in the Cambridgeshire villages of Swavesey and Witchford, where residents, businesses, and emergency services have been left without the use of phones and broadband.

The incidents took place on Witchford Road in Ely on the evening of 2 January, as well as on Fen Drayton Road in Swavesey during the night of 4-5 January, with the thieves reportedly dragging the cables from the underground network with the help of 4x4 vehicles.

Openreach head of Security Services Richard Ginnaw said that the thefts had “severely impacted the day-to-day lives of people across these areas of Cambridgeshire”, which is why the company has decided to offer the £20,000 reward.

“We are working closely with the police to catch those who are responsible and have deployed additional security enhancements across the area, but we also need your help. Please be vigilant, and if you saw anything suspicious on or around the time of the incidents, please report it,” said Ginnaw.

Those who would like to avoid speaking directly to police can anonymously contact the charity Crimestoppers by calling 0800 555 111 or using an online form, he added.

Commenting on Openreach’s plea, Crimestoppers South East regional manager Annabelle Goodenough said that the high reward offer “reflects the huge amount of damage caused to services and the local environment, and the importance they place on the issue”.

“This is not a victimless crime. With essential emergency services also being severely impacted by this, the potential devastating effect on human life cannot be underestimated,” said Goodenough, before urging “anyone with any information on those behind these thefts to speak to Crimestoppers completely anonymously”.

“We know that some people feel unable to speak directly to authorities, which is why our independent charity is here to help. You can tell us what you know while protecting your identity and staying 100% anonymous. Always. This promise has been kept since we began in 1988,” she added.

The recent thefts took place just miles away from the village of Cambourne, where in 2019 more than 2,200 people were knocked offline after thieves made away with 500 metres of Openreach’s copper cabling.

The UK government announced today that BT has offered to provide a universal high speed broadband of a minimum of 10 Mbps to homes and businesses from all parts of the UK by 2022.

As part of this initiative, BT offered to "voluntarily provide" the service across the country, mainly through Openreach. The proposal outlines that BT would fund the investment and recover its costs "through the charges for products providing access to its local access networks".

It's expecting to invest 450-600 million in the proposal, something the government is interested in as BT would proactively build the infrastructure instead of waiting for households and businesses to request it, which is what would normally happen under the Universal Service Obligation (USO).

Digital Minister Dan Hancock told The Telegraph that bills may rise as a result of the deal. He stated: "Nothing is going to be paid for by taxpayers here. We have already subsidised superfast broadband to the tune of 1.7bn."

"It's likely that it'll be paid for through every broadband bill" he added.

Culture secretary, Karen Bradley, said: "The government is taking action to ensure that people everywhere in the UK can get a decent broadband connection as soon as possible. We warmly welcome BT's offer and now will look at whether this or a regulatory approach works better for homes and businesses."

The government has to consider whether to take up BTs offer or revert back to its USO, which it has already committed to.

BT CEO Gavin Patterson said the company was pleased to make a voluntary offer to deliver the government's goal for universal broadband access.

He added: "This investment will reinforce the UK's status as the leading digital economy in the G20. We already expect 95% of homes and businesses to have access to superfast broadband speeds of 24Mbps or faster by the end of 2017. Our latest initiative aims to ensure that all UK premises can get faster broadband, even in the hardest to reach parts of the UK."

Quocirca analyst Clive Longbottom highlighted how the government has made numerous promises to raise internet speeds over the past 20 years.

"In 2013, the government promised superfast broadband to 95% of the population by December this year, with a universal 2Mb/s by the same date. This was abandoned in 2016. David Cameron promised a universal right to a minimum of 10Mb/s this seemed to die a very quick death, until being brought back up in the Digital Economy Act by Karen Brady this year," he told IT Pro.

Longbottom pointed out that, however good the intention, the 2022 deadline "pushes out the original commitment by 5 years hardly pushing the limits".

Longbottom underlined how the government's own figures show we are only at 93% broadband penetration so far. In order to meet the 99% promise, it will have to ensure 1.5 million homes have access to the new technology.

"Openreach reckons that it can introduce this mix of technologies at a cost of no more than 400 per home. If this is the case, why hasn't it been done before?" he said.

Ofcom states that around 1.4 million households cannot get speeds over 10Mbps. The figure is disputed by some MPs who claim there are a further 5.3 million who have not chosen to opt in for faster broadband services as well as some who may not be able to get 10Mbps speeds, according to the BBC.

Last week Openreach rival Hyperoptic raised 100 million to expand its network in the UK. Four European banks invested in the company: BNP Paribas, ING, RBS and Dutch investment bank NIBC. It is hoping to expand its full-fibre broadband and reach five million homes by 2025.

Ofcom will be cutting the price that BT can charge rivals for use of its Openreach fibre network in order to promote competition, it has been announced.

Specifically, Ofcom will be placing restrictions on the amount it is allowed to charge for its superfast broadband services, which have a maximum speed of 40Mb/s. The watchdog expects this to lead to cheaper prices for end-users, as well as promoting competition within the marketplace.

The company would also be compelled to complete repairs and line installations more quickly, something the company was fined by the regulator for earlier this month. If BT fails to deliver, Ofcom will have the ability to impose further fines.

Our plans are designed to encourage long-term investment in future ultrafast, full-fibre networks, while promoting competition and protecting consumers from high prices," said Ofcom's competition group director, Jonathan Oxley. "People need reliable phone and broadband services more than ever. We're making sure the market is delivering the best possible services for homes and business across the UK."

Ofcom will not, however, be capping the company's higher-speed services. This is partly because it believes that the caps on superfast broadband (as opposed to ultrafast networks like BT's new G.Fast infrastructure) would be enough to ensure competition, but also because it believes this will incentivise rival companies to build their own fibre infrastructure to keep up with BT.

The telecoms industry has reacted positively to the news, predicting a better overall quality of service for users. "This move is recognition that superfast broadband is increasingly becoming the new normal when it comes to the speed consumers expect from their internet provider," said uSwitch's head of regulation Richard Neudegg. "This should help to reduce fears of broadband blackouts, that research shows puts some consumers off moving to better services."

Mark Collins, director of strategy and policy for CityFibre, was similarly pleased: "Ofcom is finally delivering its promise to support full fibre investment and competition that will help close the UK's embarrassing fibre gap."

"This review is a major step forward. It provides the incentives for investing in full fibre networks that compete with BT. In addition to the measures announced today, we urge Ofcom to follow through on its proposals to improve access to BT's ducts and poles, and if Ofcom gets that right it will give us the tools and incentive to continue our investment in full-fibre infrastructure across the UK, and deliver it further and faster."

BT will legally separate from its network division Openreach, after agreeing to comply with regulator Ofcom's demand.

Openreach will be run by its own board, though the legally separate company will still reside within BT Group, and 32,000 employees will transfer over to the fibre installation body after union consultations.

BT expects the process of making Openreach more independent to take some months, as these employees' pension arrangements are transferred across.

The agreement means that Ofcom has dropped its threat of an official notification to the European Commission that was intended to force BT to adopt the changes, after it launched its proposals last November.

Ofcom was concerned that BT's control of Openreach, which is responsible for most of the UK's fibre networks, was anti-competitive by giving it the capacity to be biased against its rivals, including Sky, TalkTalk and Vodafone.

Mark Shurmer, MD of regulatory affairs for Openreach, said in a press conference call this morning that reaching this agreement was beneficial for all parties.

"A massive shadow has been removed from our business, our staff, our investors and our customers going forward," he said. "We have avoided long lasting damage to our pensions scheme, which is very important.

"This is a tough but just solution. We have worked hard to arrive at this solution in a way that addresses Ofcom's competition concerns but in a way that doesn't mean huge costs for us."

While BT will retain ownership of Openreach's assets, including its physical access network, an Openreach board formed mostly of independent members will control its operating plans and the future development of its assets and determine what technologies underpin future broadband rollouts.

Openreach is also free to explore investment with BT's rivals, like Sky and TalkTalk, and won't feature BT's branding.

A Sky spokesperson said: "A more independent Openreach is a step towards delivering better service to customers and the investment that the UK needs. It's important that today's agreement is now implemented by BT in good faith and without delay."

TalkTalk CEO Dido Harding added: "We welcome the agreement to create a legally separate Openreach. The new company will be better placed to deliver the improved investment and service that consumers and businesses deserve.

"This deal will require robust Ofcom monitoring and enforcement to ensure it delivers the improvements the regulator expects. We hope this is the start of a new deal for Britain's broadband customers, who will be keen to see a clear timetable from Openreach setting out when their services will improve."

Openreach executives will be accountable to its board rather than to BT, and the body will be obliged to consult with Sky, TalkTalk and Vodafone on any large-scale investments.

This will include a confidential phase during which ideas discussed with rivals cannot be revealed to BT.

In future, there will be a 'confidential' phase during which customers can discuss ideas without this being disclosed to BT Group, as well as further protections for confidential customer information.

Ofcom CEO Sharon White said BT's decision to accept its proposals will mean they can be implemented much more quickly.

She added: "The new Openreach will be built to serve all its customers equally, working truly independently and taking investment decisions on behalf of the whole industry - not just BT.

"We will carefully monitor how the new Openreach performs, while continuing our work to improve the quality of service offered by all telecoms companies."

Saying the decision provides "welcome certainty" after a two-year saga over whether BT can retain control over Openreach or not, research firm CCS Insight added that it demonstrates the regulator's issues with weak competition among UK broadband providers.

Principal analyst for operators, Kester Mann, said: "The agreement reflects Ofcom's determination to improve BT's performance and clear concern that the UK broadband market has not been as competitive or operated as effectively as it would have liked. Its determination in negotiations with BT under the increasingly impressive stewardship of Sharon White should be applauded.

"BT's rivals, notably Sky and TalkTalk, will publically claim that the regulator should have gone further by enforcing a full structural separation. However, this option was always the most radical and controversial the regulator could have taken. In private they should be more than satisfied with the changes Ofcom has pushed through."

BT chairman Michael Rake admitted the company needs to improve its customer service, in an interview with ITV's Peston on Sunday.

Rake also spoke about BT's Openreach broadband service, saying: "Just to point out that Ofcom and the OECD (Organisation for Economic Co-operation and Development) and every independent survey showed this is one of the fastest roll-outs of broadband ever in an OECD country with some of the lowest speeds, most competition and highest access. But it isn't enough and we'll get there."

Ofcom, the UK's telecommunications regulator, is preparing to force BT to separate its Openreach division, which is responsible for deploying the vast majority of the UK's broadband infrastructure.

Although Openreach is part of BT, other providers such as TalkTalk, Sky and Vodafone also use the network.

Ofcom believes Openreach should run as a separate company, saying BT is hindering competition.

Last week, the British regulator said it will go to the European Commission to try and make BT legally separate from Openreach.

A spokesperson for Ofcom said at the time: "We are disappointed that BT has not yet come forward with proposals that meet our competition concerns. Some progress has been made, but this has not been enough, and action is required now to deliver better outcomes for phone and broadband users."

Speaking with Robert Peston, Rake said: "Everyone is frustrated because they want superfast broadband today. We understand that and we're committing to deliver it."

He added: "The point that I think is something that we have to work on is customer service, which has not in the industry as a whole been good enough nor is it with us, and we are doing a lot to improve that."

Ofcom, the UK telecoms regulator, is preparing to formally require BT to spin off its network infrastructure arm, Openreach.

The oversight body has repeatedly raised concerns BT is acting in an anti-competitive manner and had already ruled in July that Openreach should be run as a separate company. However, at that time it wasn't recommended that the organisations should be split up completely.

The issue arises from the fact that, although Openreach is part of BT, it's responsible for providing the majority of telecoms network infrastructure to competitors like TalkTalk, Sky and Vodafone, as well as BT's retail arm.

"Ofcom is pressing ahead with its plans to improve broadband and telephone services for people across the country, pursuing better service quality and encouraging greater investment in networks. Creating a more independent Openreach which works in the interest of all providers, not just BT is an important part of achieving this," said Ofcom in a statement.

"We are disappointed that BT has not yet come forward with proposals that meet our competition concerns. Some progress has been made, but this has not been enough, and action is required now to deliver better outcomes for phone and broadband users," it added.

Consequently, Ofcom will be submitting an official notification to the European Commission to start the process of separation, as is required by law.

"We remain open to further voluntary proposals from BT that address these outstanding concerns. However, we are now preparing a notification to the European Commission to require the changes to increase Openreach's independence," Ofcom continued.

A public consultation with the EC is expected in early 2017. If Ofcom is given the go-ahead, the process of separating the companies will take place "as soon as possible".

In response to the ruling, a BT spokesman told IT Pro: "We note Ofcom's announcement this morning, updating on the next steps of the Digital Communications Review.

"We put forward proposals in July that we believe are fair and sustainable, and that meet Ofcom's objectives without disproportionate costs. We are implementing these proposals, and have just appointed Mike McTighe to be the first chairman of Openreach. We are in discussions with Ofcom on two outstanding issues, the reporting line of the Openreach CEO and the form of legal incorporation.

"We will continue to work with Ofcom to reach a voluntary settlement that is good for customers, shareholders, employees, pensioners and investment in the UK's digital future"

Dan Howdle, consumer telecoms expert at telecoms comparison provider Cable.co.uk said: "It's tough to read whether BT's heel-dragging is as a result of a tactic with the intention to deliberately delay and undermine the process, or whether, rather like Brexit, the process of separating Openreach is simply too vast and complex to be fully planned out in such a short period of time.

"That Ofcom has had to speak out of its 'frustration' suggests to me there is more to this delay than bureaucracy and red tape that unwillingness to comply is also playing some part."

Virgin Media, one of BT's biggest rivals, has joined the company in battling against a possible Openreach split.

Running in national broadsheet newspapers, a joint ad campaign will focus on the fact that the average download speed in Britain is faster than in many other EU countries.

It also adds that broadband speeds in the UK have "more than quadrupled" over the past five years, claiming that this is thanks to investments of over 15 billion by the two companies.

"BT and Virgin Media may be commercial rivals but we both have a proud track record of investing billions of pounds in the UK's digital infrastructure," BT CEO Gavin Patterson told The Telegraph.

"It's important post-Brexit that we don't talk the country down and that the right climate exists for further investment."

Together, BT and Virgin Media own and operate the entirety of Britain's broadband cable network. Aside from Virgin, all other internet service providers piggyback on BT's Openreach network to provide internet access to their customers.

Communications regulator Ofcom called for the division to be reformed, outlining proposals in July that would see Openreach become a "ring-fenced, 'wholly-owned subsidiary' of BT Group, with its own purpose and board members". By doing this, Ofcom hopes to remove any possibility that BT could bias against its rivals who rely on the network.

This legal separation, Ofcom claims, would give it more control over its investments and make the market more competitive "without incurring the costs and disruption... associated with separating the companies entirely."

Rival companies that currently depend on Openreach cables say that if Openreach and BT separate, they will be able to invest in upgrading the network, meaning better speeds and increased reliability.

IT Pro has approached both BT and Virgin Media for comment, but had received none at the time of publication. Ofcom's proposals are open to public consultation until 4 October.

Former business minister Anna Soubry has said BT needs to do more to bring superfast broadband to the nation, suggesting the company should split from its infrastructure arm, Openreach, to speed up delivery.

Soubry said Ofcom has not come down hard enough on BT, adding that the company has had too many second chances to get the rollout right. Last week, Ofcom said Openreach should remain to be part of BT, but it would need to change significantly to ensure customers' best interests were being considered.

"It's not good enough. It's outrageous in this day and age to not have access to super fast broadband and mobile phone signals - and that includes on our trains too," she said, speaking to the Radio 4's Today programme.

"Not only would I have put a very sharp toe under BT and looked at its performance and actually considered splitting it up, making sure it did a proper job - and I'm far from convinced that it's done a proper job."

When questioned about BT's claims 90 per cent of the nation has access to superfast broadband, Soubry said she doubted the figures were truthful, suggesting the company was being dishonest about its coverage and called for broadband to be considered the fourth utility under law, so rollout would be faster.

"It's strange that in my time as business minister, I seemed to meet every member of the 10 per cent," said Soubry.

However, BT responded to the claims and said it fails to understand how splitting Openreach would benefit anyone, especially those still waiting for superfast broadband to arrive.

A BT spokesperson said: "We fail to see how a smaller, independent Openreach would be able to invest the 1.4 billion each year that it does currently."

"Independent data clearly shows that 91% of UK premises have access to superfast speeds today and this will rise to 95% by the end of 2017. Numerous independent reports, including those from Ofcom and the EU, consistently rank the UK number one amongst our main European peers for superfast broadband coverage and take-up."

Main image credit: Department for Business, Innovation and Skills

Openreach should be run as a separate company from BT, industry regulator Ofcom recommended today.

BT's fibre rollout division would not be fully separated from BT under the watchdog's proposed model, but would be run as a distinct company with its own board and employees.

It would also own the physical network it operates, allowing the board to make decisions around investing in the UK's broadband network and other Openreach assets.

Ofcom stopped just shy of recommending full separation between BT and Openreach, but said: "This model would provide Openreach with the greatest degree of independence from BT Group that is possible without incurring the costs and disruption - to industry and consumers - associated with separating the companies entirely."

Part of BT Group, Openreach comprises the UK's main broadband network whose lines are used by BT rivals like Sky and TalkTalk, and Ofcom has expressed concerns that BT's ownership of the network can lead to competition problems.

The latest proposals, which would come under the Communications (Access to Infrastructure) Regulations 2016, seek to make Openreach more independent from its owner.

Ofcom did not rule out separation if the proposed model does not work, however, saying: "If it cannot achieve this, Ofcom will reconsider whether BT and Openreach should be split into two entirely separate companies, under different ownership."

Research house CCS Insight's director of media, Paolo Pescatore, told IT Pro: "Fundamentally, BT will always be under pressure to perform and, ultimately, the threat of functional separation will remain. Therefore, we suspect the topic of separation will likely return in the future should this proposed new model not work."

Ofcom's recommendations build on its 10-year review of the digital communications market in February, when it ruled out separation but demanded BT open up more access to its ducts and poles to competitors, which BT has since started to do.

The regulator also recommended letting Openreach take its own decisions on budgets, investment and strategy, something today's proposals are designed to effect.

BT has responded by giving its rivals more access to the fibre network. Yesterday, it made a series of concessions ahead of Ofcom's proposals, including appointing an independent chairman, a majority of independent directors, and giving Openreach more autonomy over investment.

A spokeswoman for the telco today said: ""We welcome Ofcom's recognition that structural separation would be a disproportionate move. Our proposals provide Ofcom with every benefit they're seeking but without any of the substantial and unavoidable costs associated with legal incorporation. We will continue to engage with them over the coming months."

The proposals are subject to a public consultation, and people can have their say on the plans until 4 October.

Rivals' reactions

However, the measures outlined by Ofcom do not go far enough for BT's competitors.

"BT has gone the extra mile to appease Ofcom but rivals will still not be happy," said CCS Insight's Pescatore. "We firmly believe that it is now time for all parties to work together to ensure an efficient and speedy outcome in the interests of consumers. And more importantly regulatory certainty."

Sky's group CEO, Jeremy Darroch, said the proposal of a legally separate Openreach "falls short of the full change that would have guaranteed the world-class broadband network customers expect and the UK will need".

He added: "In particular, leaving Openreach's budget in the hands of BT Group raises significant questions as to whether this will really lead to the fibre investment Britain requires.

"At the end of the day, Ofcom's changes will only work if they deliver better outcomes for customers. It's now important that the changes Ofcom have mandated today are implemented rapidly, fully and without dilution. We are encouraged by Ofcom's stated commitment and willingness to use its powers to hold BT's feet to the fire."

Dido Harding, CEO of TalkTalk Group, said a legally separate Openreach "is a step in the right direction".

But she added: "The intention ten years ago was to create a functionally separate division that served all customers equally, but that is far from what happened. The lack of clear rules and responsibilities meant that BT was (according to Ofcom) able to make 4 billion in excess returns in a decade, and I fear we're repeating the mistakes of the past.

"Legal separation still means that a highly complex web of regulation, and BT has proven itself expert at gaming this system. There is nothing to suggest they will not continue to do so in the new system. Structural separation is cleaner, with less red tape - and removes BT's ability to exploit loopholes in the regulation. In taking one cautious step forward, I fear Ofcom may in practice have taken five steps back."

However, Dan Howdle, editor-in-chief of broadband comparison site Cable.co.uk, told IT Pro separation is inevitable.

"In terms of full amputation of Openreach from BT, the leg is now half off," he said. "A separate board, staff becoming Openreach employees, separate and more transparent budgets and strategies - these are the things you would do when preparing for a full split."

He added: "With pressure applied by government, consumers and competitors unlikely to let up any time soon, I can't read this any other way: Separation is now is case of when, not if."

What's next?

Today's recommendations regarding Openreach form just part of Ofcom's proposals resulting from its 10-year review, with the plans open to public consultation until early October.

The regulator plans to build on the review by setting out stricter minimum requirements on Openreach to repair problems and install new lines more quickly later this year.

Performance tables will also chart communication providers' quality of service on a number of metrics from next year, and interactive maps will show broadband coverage for individual addresses.

CEO of Ofcom, Sharon White, said: "We're pressing ahead with the biggest shake-up of telecoms in a decade, to make sure the market is delivering the best possible services for people and business across the UK."

Plans to make it easier to switch providers, and for telcos to automatically compensate customers for poor service, are also underway.

TalkTalk's CEO has blasted Ofcom's decision today not to separate BT from its fibre network arm, Openreach, but others have welcomed the promise of tougher oversight.

BT had faced full separation from Openreach in Ofcom's first review of the communications market in 10 years, but Ofcom instead opted to strengthen existing measures.

The telco must open up its network to its rivals, the regulator has ruled, though BT has said it will only do so if those competitors "invest very large sums" in expanding the fibre roll out.

CCS analyst Paolo Pescatore said that while other telcos will be satisfied with the ruling, BT "will breathe a sigh of relief".

"Openreach contributes significant profits to the company and being forced to open up its network will spur rivals and could drive greater competition," he added.

"Going forward we believe there will be a clear focus on fibre for the UK's broadband future driving competition in this area."

But TalkTalk CEO Dido Harding accused Ofcom of pulling its punches.

She said: "Ofcom has done well in identifying many of the worst problems, including recognising, finally, that BT's control of Openreach creates a fundamental conflict of interest which hurts customers.

"But having accepted all this, Ofcom has produced 100 pages of consultation with little concrete action behind it. The risk is that we end up with 10 more years of debate and delays, rather than facing up to the problems and delivering improvements for frustrated customers now."

Ofcom had come under huge pressure from rivals such as Sky, TalkTalk and Vodafone to split BT and Openreach, which it had initially separated in a market review 10 years ago.

Instead, it today chose to force BT to create a digital map' of Openreach's ducts and tunnels, so that competitors can use the network to run their own fibre services through.

The regulator also found that "Openreach still has an incentive to make decisions in the interests of BT, rather than BT's competitors".

As a result, Ofcom will overhaul Openreach's structure to make it more independent from BT, by introducing transparency on how costs are allocated between the two organisations and letting it take its own decisions on budget, investment and strategy.

It may even ringfence the division from BT when it provides detailed proposals later this year, reserving the right to spin it off into a separate organisation "if necessary".

However, such measures would require EU approval.

BT's group director of regulatory affairs, Mark Schumer, told IT Pro: "We're already heavily regulated so that we can't [be biased against rivals]. We now need to look in detail at Ofcom's review, and what we can do there to give people confidence."

Ofcom will also introduce tougher measures to force Openreach to repair faults and install new lines more quickly, and raise minimum standards on how often faults can occur.

A BT spokeswoman said: "Ofcom have today explained why breaking up BT would not lead to better service or more investment and that structural separation would be a last resort.

"We are happy to let other companies use our ducts and poles if they are genuinely keen to invest very large sums as we have done. Our ducts and poles have been open to competitors since 2009 but there has been little very interest to date. We will see if that now changes.

"We are keen to understand and address Ofcom's concerns so we will review their paper in detail. A great deal of what they are proposing is already in place and we are open to discussions about how the current rules can be amended and updated."

CCS Insight's Pescatore said: "All providers will now be claiming victory. BT's rivals have mounted enough pressure to raise concerns about how competing companies gain access to a shared infrastructure, and BT has acknowledged some of its shortcomings and has pledged to address them.

"Rivals will be delighted that Ofcom is calling for more independence of Openreach from BT with on overhaul of its governance, but will require EU approval which is no easy feat."

Cable.co.uk telecom expert, Dan Howdle, added that the review stops short of addressing broadband issues, with BT the sole firm delivering internet access to 95 per cent of the UK by 2017.

"With Openreach currently in the midst of its BDUK superfast broadband rollout the decision should be seen as one of least disruption. It is, perhaps, a case of poor timing winning out over common sense," he said.

BT has played down its control of Openreach amid calls for the subsidiary, responsible for rolling out fibre network across the UK, to be broken off from its parent company.

The telecoms firm said the fibre delivery company is "heavily regulated" and operates at "arm's length from the rest of BT", as industry regulator Ofcom seeks views on whether Openreach should be fully split from BT.

Its cables are used by BT but also leased to competitors to provide broadband and phone services, and Ofcom is considering fully separating the firms to ensure BT cannot discriminate against competitors.

However, in a company reshuffle following the acquisition of mobile provider EE, BT said Openreach would carry on as it is.

"Openreach will be unaffected by the re-organisation," BT said. "It provides all companies with equal access to BT's local access network in Great Britain and is heavily regulated with more than 90 per cent of its revenues coming from price regulated services."

Competitor TalkTalk and the Labour party supported a separation, and Ofcom is expected to make a decision next month.

If it does not instruct BT to drop its local access network, then it will likely impose tougher regulations on its dominance of the consumer broadband market.

Excluding Openreach, BT has split its business into five other branches to serve consumers, enterprise, the public sector and other industry players. Specifically, Openreach and its new Global Services division will provide wholesale services to other industry players.

Commenting on the restructure, Gavin Patterson, chief executive of BT Group, said: "The acquisition [of EE] provides us with a chance to refresh our structure and we have done that by creating a major new division that will focus on businesses and the public sector in the UK and Ireland.We want to support those sectors by offering customers the very best services whether that be dedicated private lines, network products such as fibre broadband, mobile solutions, IT services or cyber expertise to keep them safe.

"We will continue to offer many of these services to multinational companies and major overseas customers via our Global Services division. It is an important part of the company and this new structure will enable it to sharpen its focus on its key areas of strength."

BT's restructure will take effect from April.

BT also posted its results for the three months to December 31, which showed revenue rose three per cent to 4.6 billion.

25/01/2016: BT CEO opposes Openreach spinoff

BT's CEO Gavin Patterson has hit out at suggestions Openreach should be sold off, claiming it would create uncertainty in the market.

However, he admitted on the Today Programme on Radio 4 that Openreach, BT's arm responsible for rolling out fibre networks, needs to do more to provide broadband in rural areas and improve its business performance, following the publication of a damning report by British Infrastructure Group (BIG).

"Over 90 per cent of the UK can get super fast broadband today - which means that 10 per cent today cannot. Within the next 18 months that will only be 5 per cent and we are working with the Government to find ways to address the last five per cent," Patterson said.

"But even Department for Culture, Media and Sport and Ofcom have pointed out that we will get to 95 per cent of the UK by the end of next year."

The BIG report said that unless BT and Openreach are separated, they will "continue to paper over gaping cracks."

It added: "Whilst rural SMEs (small and medium-sized enterprises) and consumers are left with dire speeds, or even no service at all, Openreach makes vast profits and finds little reason to invest in the network, install new lines or even fix faults in a properly timely manner."

BT's operations have come under scrutiny over the last year, as part of Ofcom's Strategic Review of Digital Communications that is investigating into how the communications market is operating in the UK.

The regulator is considering splitting BT and Openreach to remove any incentive for the provider to discriminate against rivals, who rely on Openreach's fibre network that spans the UK to offer their own services to consumers.

Splitting BT and Openreach is not the only option Ofcom is considering other possibilities include allowing rivals to build their own networks, strengthening the existing model of functional separation', or making no changes at all.

The assessment also includes aspects such as pay TV regulation and broadband in rural areas, which has caused a great amount of controversy as BT, Virgin and Sky compete to become the leading broadband provider in the country.

19/11/2015: Ofcom lifts pay TV regulation as Sky-BT war continues

Ofcom has decided to remove the regulation requiring Sky to offer Sky Sports 1 and 2 on a wholesale basis, because the channels are available on other pay TV services on commerical terms.

Sky Sports is now available via commercial wholesale deals with various pay TV competitors, including BT, TalkTalk, and Virgin Media, as well as Sky's own NOW TV service, meaning the regulator deemed the stipuation to no longer be appropriate.

Ofcom has been looking at the pay TV market in the UK as part of the Strategic Review of Digital Communications, the first formal assessment of the sector for 10 years.

18/09/2015: Sky and BT have come to blows over the future of Openreach as Ofcom holds a 10-year review of the communications market in the UK.

In an opinion piece in the Telegraph, Mai Fyfield, Sky's chief strategy officer, accused BT of holding back the broadband market in the UK.

"BT's case for the status quo is built on unfounded or exaggerated claims about the benefits of vertical integration and the risks of separation," she said.

"Underinvestment by BT has led to unacceptable levels of faults and service problems that continue to affect consumers and businesses."

She added that creating Openreach as a separate division would be the only practical way of making sure the UK had proper investment in its broadband network.

"An independent Openreach would be a new, highly investable, FTSE 100 company that could catalyse the transformation of Britain's broadband infrastructure," she said.

"BT constantly emphasises that Openreach is entirely functionally separate, with its own assets, employees and accounts. So it is contradictory to argue that the next step of full separation is impracticable."

Her op-ed came hot on the heels of Openreach chief executive Joe Garner's article in the Telegraph, dated 13 September, in which he said that hiving off Openreach would be a "hugh mistake".

"Britain has gained, and will continue to gain, from Openreach as a part of BT benefiting from more investment, more coverage and more speed," he said.

"On investment, BT provides us with ready access to capital. BT's capital allowed us to meet the rapidly rising demand for internet services by rolling out superfast broadband which is, incidentally, 20 times faster than in 2005 and half the price."

24/08/2015: Labour has called for Ofcom to fully split BT from its fibre arm, Openreach, claiming the telecom giant is failing in its duty to bring high-quality broadband to UK homes.

The telecoms regulator is currently reviewing the state of the market amid concerns raised by BT's rivals that their access to the telco giant's vast fibre network suffers from poor service.

As a consequence, the watchdog is considering splitting BT from its fibre roll-out arm, Openreach, to remove the ability for BT to discriminate against competitors.

Writing today in the Telegraph, shadow culture secretary Chris Bryant urged Ofcom to pursue this option, claiming that under BT the UK's broadband rollout has been "too slow, too late".

He wrote: "The situation is now so bad that Ofcom's review should work on the presumption that Openreach should be split from the rest of BT unless their review produces conclusive evidence to the contrary."

Bryant's article comes after Ofcom launched a Strategic Review of Digital Communications, its first formal assessment of the sector for 10 years, which criticised Openreach for delays in providing superfast broadband to homes.

Under a government scheme called Broadband Delivery UK (BDUK), BT is aiming to deliver superfast broadband to 95 per cent of the UK by 2017.

But Bryant claimed the telco giant fears it won't reach the target until 2018 and also criticised the quality of broadband it is providing.

"What are Openreach and the Government delivering? Broadband that is too slow, too late," he said.

BT became the sole contractor for the BDUK project after Fujitsu dropped out and Bryant claimed this monopoly is not helped by BT owning Openreach, the arm responsible for delivering new fibre to homes and workplaces across the country.

Splitting BT and Openreach is not the only option Ofcom is considering other possibilities include allowing rivals to build their own networks, strengthening the existing model of functional separation', or making no changes at all.

However, Bryant said separating the telco giant from its division is the only one that would deliver benefits, while Ofcom believes it could lead to more focus on network investment and performance issues.

Bryant wrote: "It is right that Ofcom is now considering whether this provides an unfair advantage to BT and whether it should be split off in the interests of transparency and fair competition."

Ofcom itself needs to be "brought into focus", he argued, saying its ability to make big decisions is undermined by an "overly burdensome appeals process" that leaves its rulings vulnerable to companies with lots of money to spend on lawsuits.

BT has declined to comment on the matter and IT Pro was still waiting to hear from Ofcom at the time of publication.

A consultation period in which people can respond to the proposals put forward in Ofcom's review continues until 8 October.

Ofcom won't be intimidated by BT, says CEO

The news comes after Ofcom's CEO Sharon White told the House of Commons Culture, Media and Sport Committee in July that she has not come to a decision regarding whether BT should hive off Openreach.

She also said she would not be intimidated by any opposition by the provider or threats of litigation should Ofcom decide to separate the core BT operations and its Openreach internet offshoot.

"I can't say I'm easily intimidated, our drive is what's going to be the best possible deal for the consumer?" she said. "We don't start with a position that the Openreach separation is broken because if you look at how the market over the last ten years in which regulation has been a part of it, although most if it has been through the companies themselves, it's not a broken position."

She said she is happy to consider leaving the situation as is, splitting the company up into two and deregulating the current model.

"I would like to have an evidence-based conversation with BT and the other players about how we, for the next ten years, work towards a settlement that's best for the consumer," White added.

The fact BT owns Openreach means "it still has the incentive to discriminate against competing providers", according to the regulator.

It is now considering four different proposals under the Strategic Review of Digital Communications, one of which is to split BT and Openreach apart.

"This has the potential to deliver benefits, since it would address BT's underlying incentive to discriminate against competitors, and enable a simplified regulatory framework," said Ofcom in the report published in July.

"It may also increase Openreach's management focus on, and control over, network investment decisions and performance issues."

But such a decision would also be an intrusive and complex step for the industry as a whole, Ofcom admitted, with "substantial implementation challenges".

Other moves mooted include making no changes to the current regulations, strengthening the existing model of "functional separation", or allowing rivals to build their own networks.

Some operators, like Virgin Media, already do this, but Ofcom warned it would result in duplicated infrastructure.

White said in a statement: "This review is about ensuring people get the best possible communications services, wherever they live and work.

"Our priorities are clear. We want to promote competition, investment and innovation, so that everyone benefits from even better coverage, choice, price and quality of service in years to come."

BT believes Openreach separation would harm broadband investment

This is the first strategic review since 2005, which resulted in BT creating Openreach to separate itself from its network access division, and BT has warned that further separation would harm broadband investment in the UK.

However, Sky has called for Ofcom to pursue greater separation, with chief strategy officer Mai Fyfield today repeating a call for a full competition enquiry.

She said: "For too long, consumers and businesses have been suffering because the existing structure does not deliver the innovation, competition and quality of service that they need. We believe Ofcom should now move quickly to ask the Competition and Markets Authority (CMA) to undertake a full competition inquiry."

However, analysts do not believe the regulator will separate BT and Openreach, with such a move not necessarily the best one to deliver competition benefits to consumers.

Analyst Paolo Pescatore, director of multiplay and video at CCS Insight, said: "The big news here is the proposed break-up of BT. Many of its rivals have been lobbying hard for this for some time and they've clearly mounted enough pressure to raise concerns.

"The major focus of the latest strategic review of the digital communications market is all about how well competition is delivering benefits to consumers and businesses. With this in mind, it seems that a full separation is unlikely as stated by Ofcom."

Ovum's regulation analyst, Matthew Howlett, added that additional separation wouldn't necessarily solve competition issues.

"While Ofcom recognises there are challenges with Openreach, in particular in relation to service quality, it heavily suggests that further separation will not address these, and could ultimately be disproportionate," he said. "That's not to say that tweaks to the Openreach model aren't likely."

Pay TV

The review is taking place as the CMA considers BT's proposed 12.5 billion takeover of mobile operator EE, with BT set to offer landline, mobile, broadband and pay TV services if it is passed.

While rivals are trying to separate BT and Openreach, BT has responded by calling for a detailed review of the pay TV market.

Ofcom then announced in November 2015 that the regulation requiring Sky to offer Sky Sports 1 and 2 on a wholesale basis will be removed, due to the channels being available on other pay TV services on commerical terms.

Sky Sports is available through various pay TV competitors, including BT, TalkTalk and Virgin Media, as well as Sky's own NOW TV service, and the regulation was thus deemed to no longer be appropriate.

The pay TV market as a whole is being reviewed by Ofcom, with BT claiming the UK pays half a billion pounds more a year than the European average for such services.

However, Ofcom conducted an inquiry into pay TV just five years ago, when it forced Sky to provide certain channels to rivals, and is currently investigating its agreement with BT on this sharing set-up.

Still, a BT spokesman told IT Pro pay TV remains its focus, adding that Ofcom would find the broadband market to be "vibrant and healthy".

He also said: "There has been huge progress this past ten years with an explosion in competition and broadband usage. Consumers are getting more for less and the UK has outpaced its European peers in terms of superfast broadband.

"Much of that progress is down to BT investing billions of pounds in fibre at the height of the recession. That investment wouldn't have occurred had BT been split in two a decade ago and our ambitious plans for ultrafast broadband also depend on BT remaining intact.

"Ofcom have overseen a regime that has balanced investment with competition and we hope they will once again put the needs of the UK and its consumers ahead of those who have tried to keep the UK in the digital dark ages."

The watchdog's consultation is open to comments until 8 October 2015, before it publishes its initial findings in January next year.

This article was originally published on 16 July 2015 but has since been updated to reflect developments in the story, most recently on 25 January 2016.

TalkTalk claims BT will be more powerful than ever after its 12.5 billion takeover of EE was formally approved by the Competition and Markets Authority (CMA) today.

Go-ahead for the merger means BT can now develop a quad-play strategy, bundling up landline, mobile, pay-TV and broadband services for customers.

The CMA's seal of approval follows its preliminary decision to clear the merger in October last year, and it claimed today that the move would not kill telecoms competition in Britain.

Its inquiry chair, John Wotton, said: "The evidence does not show that this merger is likely to cause significant harm to competition or the interests of consumers.

"The retail mobile services market in the UK is competitive, with four main mobile providers and a substantial number of smaller operators. As BT is a smaller operator in mobile, it is unlikely that the merger will have a significant effect. Similarly, EE is only a minor player in retail broadband."

However, BT rival TalkTalk has hit out at the decision, claiming the move could lead to price rises of 25 per cent, if a similar proposed Three-O2 merger gets approval.

"We are disappointed, although not surprised," the company said in a statement. "It is dangerous that the regulator has looked at this merger in isolation, given the unprecedented levels of consolidation taking place in the wider telecoms industry.

"The UK has long been one of the most competitive markets in Europe, but if the Three/O2 merger also goes through, this would end. Moving from four to three mobile providers will lead to price increases of 25% or more."

The firm added: "Given BT Group's increased size and scale, the need to ensure that the UK's broadband infrastructure is not neglected is more important than ever, and we have every confidence that Ofcom will take this into account when considering the future structure of Openreach."

ITSPA, the trade association for "next generation" communication services, also expressed major fears for the future of the communications sector after the announcement.

Chair Eli Katz said: "The competitiveness of the UK mobile sector is a genuine concern for our industry, and threatens to harm consumers and inhibit UK growth.

"ITSPA already had serious competition concerns around the market and we had hoped the CMA would have considered potential wholesale mobile remedies in its final report, when approving the proposed BT/EE merger."

It claimed the CMA panel's opinions had been split over the merger's effect on the mobile market, lamenting that this was not reflected in the ruling.

Editor-in-chief of Cable.co.uk, Dan Howdle, pointed this out too, before adding: "The CMA believes the new merged company is, by default, financially incentivised to continue to supply wholesale services to other providers (Virgin Mobile, for example runs on the EE Network), which will prevent it from closing its doors to third-party operators in an attempt to monopolise its own network infrastructure.

"The greatest concern for its competitors, then, is that, though unlikely as the CMA points out no firm measure has been put in place to actively prevent it.

Regulator Ofcom, which did not see any issues with the deal prior to the CMA's approval, simply said:"Ofcom has worked with the CMA on its review. We provided evidence and analysis about the effects of the deal, which the CMA has taken into account in its final decision."

BT now faces integration challenges

BT's CEO, Gavin Patterson, welcomed the announcement, saying: "The combined BT and EE will be a digital champion for the UK, providing high levels of investment and driving innovation in a highly competitive market. I have no doubt that consumers, businesses and communities will benefit as we combine the power of fibre broadband with the convenience of leading edge mobile services. I look forward to welcoming EE into the BT family".

While it plans to close the deal on 29 January, analysts have warned the firm faces several of its own difficulties now the agreement has official endorsement.

Saying it is inevitable that BT will rebrand EE, CCS Insight analyst Kester Mann added: "A greater priority for BT will be the complex task of reworking back-end and billing systems as it merges the UK's largest fixed-line and mobile operators, and only then should it start to articulate changes to consumers.

"BT's legacy association with fixed-line services could be a challenge for the company's mobile ambitions in the consumer market."

Sky has called for a competition enquiry into BT's broadband network, claiming the telecom giant has been failing its customers.

Grounds exist for Ofcom's Competition and Markets Authority (CMA) to conduct an inquiry into BT's Openreach division in regards to both quality of service and competition in the UK market, according to Sky's formal submission to the regulator.

Sky cited a "history of under-investment" leading to a "range of service quality problems including an excessive number of network faults, failure to meet targets for repairing faults, long waits to have new lines installed, appointments that are missed and jobs that are not completed," among reasons behind the call for inquiry.

Additionally, Sky claims that more than 90 per cent of new line installations take 10 calendar days or longer to complete, and almost one in ten takes longer than 30 days.

Mai Fyfield, Sky's chief strategy officer, said: "We are drawing attention to the problems in broadband because they are important to the economy as a whole. They affect competition and have a direct impact on consumers and small businesses, resulting in dissatisfaction and loss of productivity.

"The UK needs to get the basics right in broadband as well as develop the networks and services of the future."

Along with problems with BT Openreach's service raised by Sky, the company also raised concerns over future competition in the broadband market, with superfast broadband regulated differently to traditional broadband.

This, Sky alleged, has resulted in a reduction in competition over superfast broadband.

However, BT hit back at its rival by pointing out holes in its figures. "They claim that Openreach investment is down, yet it is up," a BT spokesperson said. "They can only substantiate their claim by ignoring the billions of pounds we have pumped into fibre broadband.

"They also make claims about customer service whilst failing to acknowledge that Openreach has passed all sixty of the service targets it was set by Ofcom. We acknowledge there is more to do on customer service but breaking up BT is not the answer.

"It would lead to huge uncertainty and fundamentally undermine the case for future investment dragging the UK backwards at the very time it needs important investment in its infrastructure."

The news comes as Ofcom considers whether BT should be allowed to buy EE for 12.5 billion, which would give the telecoms firm a quad-play offering of landline, mobile, pay-TV and broadband.

Rivals have asked Ofcom to break up BT and Openreach, arguing the latter should exist as a standalone entity.

Ofcom last month proposed that BT should open up its dark fibre network to rivals, meaning it would have to give competitors physical access and direct control over its fibre-optic cables, known as dark fibre because rivals would light' the cables at either end with their own equipment.

Currently, the telco giant is already compelled to offer leased line products for use by its rivals, but these are bundles of fibre-optic cables and BT's own network gear.

If Ofcom's rules are passed, it would mean rivals would no longer have to pay for BT's equipment, allowing them to create tailored, high-capacity data services using BT's cables with their own hardware.

IT Pro reached out to Ofcom for comment, who said: "Ofcom is carrying out an overarching review of the communications market, including questions around strucutre and competition. We welcome evidence and analysis from all parties to help inform that work, and we will publish an update later in the summer."

BT is targeting hard-to-reach broadband weak spots in the City of London, following the roll out of a fibre network across the Scottish Highlands.

The comms giant will trial what it calls "fibre to the basement" in two central London buildings come January, with the aim of improving people's broadband speeds from 20Mbps to 80Mbps.

London's broadband quality was found to be second only to Seoul in accountants PWC's recent assessment of 30 cities' technology infrastructure.

But BT said a small minority of inner city buildings are served by exchange-only lines, which connect to the local telephone exchange directly rather than to one of BT's street cabinets (pictured), which house faster fibre.

Due to London's tightly packed streets and buildings, BT could not build street cabinets to serve those properties without incurring huge costs and planning complexities.

Joe Garner, CEO of Openreach, BT's infrastructure division, said: "City-centre locations present unique challenges when it comes to upgrading consumer broadband.

"For example, there is less room for us to install a fibre cabinet on the pavement, and it is often harder to get permission to close roads to do the work. We also need to secure permission from multiple landlords to run new cables across their land and properties."

To get around the problem, BT plans to install its fibre broadband kit into buildings' basements instead.

The New Year trial will connect 225 homes in the Middlesex Estate and around 50 SMBs at 65 London Wall to faster broadband provided by more than 130 different service providers.

Graham Bell, CIO of the City of London Corporation, said: "All businesses are keener than ever to be well-connected and this fibre to the basement pilot is a welcome step forwards, especially for smaller SMBs, who are critical to London's commercial dynamism.

"We hope the trials will lead to further expansion of fibre broadband across the Square Mile for residents and SMBs, complementing the Ethernet infrastructure already available to larger firms."

Garner added: "We are optimistic that this new solution will prove that fibre broadband can be installed into building basements quickly, smoothly and economically. It could also have the added benefit of being less disruptive for our customers and the general public."

Ofcom is being called upon to reduce BT's hold over the UK market by introducing initiatives that would see access to its networking infrastructure shared amongst its competitors.

In a new series of reports by the UK Competitive Telecommunications Association (UKCTA), which counts EE, Sky, Virgin Media, Vodafone as members, it states that Ofcom must do more to boost competition within the UK telecoms market, and improve the level of service offered to business users.

In the case of the latter, Ofcom is accused of having a "regulatory bias" towards the needs of residential users, which means business users lose out.

To help remedy this, it's calling for access to BT's passive infrastructure to be opened up to all providers. This would allow them to lay their own cables in the telco giant's ducts and improve overall levels of connectivity to business users, it is claimed.

Furthermore, it's also calling for more pressure to be applied to BT with regard to the performance of its Openreach arm, as failings in this area can have a knock-on effect for other suppliers.

This is because many of them have to rely on Openreach to deliver their own broadband and telephony services to customers.

Domhnall Dods, a telecoms lawyer from UKCTA, said efforts have been made to open up competition within parts of the telecoms sector, but more needs to be done.

"Thirty years ago we saw the start of a new era in the UK telecommunications market. Although increased competition now helps manage the issues of pricing and consumer protection in today's broadband market, the greater issue of BT's market dominance remains," said Dods.

"We believe Ofcom and its new CEO should review its agenda and target the root causes of this remaining market power, including the way the core BT platform is regulated. The UK's consumers and businesses cannot afford for Ofcom to ignore the problems identified in these reports."

In a statement to Reuters, a BT spokesperson downplayed the reports' findings by declaring the UK has a "vibrant wholesale business connectivity market" with good levels of competition and innovation.

An Ofcom representative also told the site the work it does goes "hand-in-hand" with promoting competition.

BT Openreach is on a recruitment drive, hoping to bring on board an additional 500 engineers to boost its customer service delivery, fibre broadband deployments and the building of high speed links for businesses.

In a similar recruitment campaign run earlier in the year, the company received 26,000 applications - more than 16 per role - and hopes to have the same reception this time around.

Joe Garner, CEO of BT Openreach, said: "Our fibre broadband rollout is making a really positive contribution to the lives and business of people right across Britain. We are seeing strong demand for our superfast fibre service, as well as our ultra high-speed business services like Ethernet.

"We are recruiting more people so that we can continue to build our network rapidly, and serve our customers better. Broadband growth is great for our customers and for Britain. These new engineers will help ensure that Openreach continues to meet and exceed the rising demands of our customers in an internet age."

The majority of the new engineers will work in London, Surrey and Aberdeen and will be recruited to deliver improved levels of customer service.

The company is currently ahead of service level targets set by Ofcom for new installations and repairs, but wants to exceed them further with the help of its new recruits.

The other new starters will be responsible for speeding up delivery of broadband in homes and businesses around the country. One big focus is the installation of high-speed Ethernet in medium to large businesses and some of the engineers will be maintaining these connections to enhance the company's customer service record.

Culture Secretary Sajid Javid said: "BT's creation of 500 full-time engineering jobs is tremendous news. Government is taking superfast broadband to 95 per cent of the UK by 2017, and it's vital that a skilled workforce is in place to cope with the resulting increase in demand."

BT Openreach could face fines in future for failing to repair faults with end users' telephone or broadband services within two working days, if new sanctions by Ofcom get the go ahead.

Ofcom has been working with Openreach, the company responsible for maintaining connections to BT networks on behalf of competing telcos, to improve its performance since the start of 2013.

This intervention was prompted by concerns raised in 2012 about the company's response times.

While Ofcom admits Openreach's fault response times have improved since then, it wants to introduce further measures to ensure the company's progress in this area continues.

As such, Ofcom has set out a list of performance targets it wants Openreach to adhere to in full by April 2016. If these are not met over a 12-month period, the company could be fined.

The proposals state Openreach must complete approximately 80 per cent of repairs within one-to-two days of faults being reported, and book in 80 per cent of new line installations within 12 working days of appointment requests being made.

If these performance standards are not met, Openreach must provide reasons why for Ofcom monitoring purposes.

"The new measures all relate to Openreach's most-used products, which are used by telephone companies to offer phone and broadband to consumers and businesses," said Ofcom, in a statement.

"The targets are designed to ensure better service for telephone and broadband customers in future while also avoiding any significant effect on prices."

The proposals are up for consultation at the moment, until 13 February 2014, with Ofcom expected to announce if they've been given the go ahead by spring 2014.

In a statement, a BT Openreach spokesperson said the challenge for the company in meeting Ofcom's target will be keeping costs down.

"Openreach's charges are already among the lowest in the world, allowing UK consumers and businesses to enjoy very low prices, so the challenge is balancing those low prices with an increased focus on service," said BT.

"Our concern is that the prices being proposed are insufficient to fund the higher level of service that Openreach wishes to deliver and its customers expect."

BT has announced the latest wave in its plans to roll out fibre-based broadband.

The latest batch of exchanges to be hooked up to the fibre network will cover 705,000 homes and businesses, according to the company. In total, BT says it now covers 16m homes and businesses. It will announce a further batch of fibre-ready exchanges this summer.

BT is also planning to increase the speeds of its fibre connections. Fibre to the cabinet (FTTC) will increase to 80mbps downstream and 20mbps upstream.

BT's faster fibre to the premises (FTTP) connections will see a 3-times boost in speed, from 110Mbps downstream to 3330Mbps downstream, and up to 30Mbps upstream. According to BT this will be a "premium product offering very fast speeds and will be aimed at small to medium businesses, not the mass market". The FTTP connections will be offered through BT Openreach.

Businesses interested in fibre services can check if they are near an enabled exchange

BT Openreach has not yet received any bids for its fibre broadband Physical Infrastructure Access (PIA) product, even though it launched in November 2011, IT Pro understands.

BT has been trialling its PIA offering with other providers, including Fujitsu and Sky, on the Wirral, but it has not helped inspire any firm offers from other ISPs yet.

PIA relates to the ducts and poles Openreach rents out to other providers in remote areas, in a bid to bring high-speed internet to the UK countryside.

Once local authorities announce the outcome of the tenders, we will have a much better idea of whether PIA is a dead duck.

Britain's number one telecoms provider came under fire for its management of PIA last year, with a host of rivals including Virgin and TalkTalk complaining prices were too high.

Even when BT cut prices, operators were still not happy with the changes.

BT didn't explain why it thought no one had bid yet, but simply noted how it had worked to "launch a PIA product that meets the needs of industry and according to the timetable set out by Ofcom."

"The regulator has been very supportive of the revised prices that we published in Autumn last year and we will continue to work closely with interested communications providers," a spokesperson told IT Pro.

As for why other operators had not yet made PIA bids, Fujitsu, which is leading a consortium including Virgin and TalkTalk to bring superfast speeds to remote areas, said it was still collaborating with BT on "defining the final product definition."

"Subject to satisfactory interim and final product definitions, Fujitsu may choose to use Openreach's PIA products," Fujitsu said.

TalkTalk said it was not planning to use PIA itself. "We understand that the product, while improved from a year ago, still remains expensive and difficult to use in practice," a TalkTalk spokesperson said.

A Sky spokesperson, meanwhile, said the company was "still only at a trial stage" and was currently "focused on launching our wholesale fibre service and continuing to build out our LLU network."

BDUK fears

Many may simply be waiting for Broadband Development UK (BDUK) funds to emerge before they make bids for PIA.

IT Pro understands BDUK allocation announcements are coming in the next two weeks.

"Once local authorities announce the outcome of the tenders, we will have a much better idea of whether PIA is a dead duck, or a swan just waiting for its time to flourish. LLU was similar in its first year or two of existence," said Andrew Ferguson from thinkbroadband.com.

"Alas the race to make Britain a Great Broadband Britain is a slow one, with thousands of trees paying the price in terms of consultation documents. Real progress on the projects are not expected until 2013 - one or two BDUK pilots may start to deliver a few connections in 2012.

"The bigger question is this: why are new startups in places like Russia getting the investment capital to install fibre loops, but the UK is struggling to do the same with funds from here and there, or dare one say in usual British haphazard fashion."

When BDUK allocations are announced, many expect legal issues to arise. Cumbria-based superfast provider NextGenUs recently indicated it would take legal action if its county's council gave its BDUK funds to BT, according to the Br0kenTeleph0n3 blog.

Geo Networks, which is helping deliver superfast networks in Wales in partnership with the Welsh Assembly, has already withdrawn bidding for Government-provided BDUK funds after claiming the market was "non-contestable."

BT Openreach has launched its Fibre to the Premises (FTTP) product, pledging it will offer downstream speeds of 300Mbps by spring next year.

At present, the service can hit 110Mbps downstream speeds and will be available in just six locations from the end of October.

These are significant announcements and good news for the UK.

More locations will be added and speeds will rise, however, with a 1Gbps service currently being trialled in Kesgrave, Suffolk.

The six initial locations which will enjoy FTTP services are Ashford in Middlesex, Bradwell Abbey in Milton Keynes, Highams Park in North London, Chester South, St Austell and York.

"These are significant announcements and good news for the UK. High-speed broadband is essential for economic growth, which is why we want the UK to have the best superfast broadband in Europe by 2015," said communications minister Ed Vaizey.

"Improving the UK's broadband infrastructure will help our high-tech, digital industries grow. It will ensure the UK is an attractive place to start-up and base the businesses of tomorrow."

BT is looking for public funds to expand its fibre reach beyond the two-thirds it has pledged to cover.

"As always, we want to go further and faster and so our journey doesn't end here," said Olivia Garfield, CEO of Openreach.

"We can turn up the dial should there be demand and so we can look to the future with confidence."

Other service providers will be able to rent Openreach's FTTP lines and offer their own services, although there has been industry in-fighting over BT's pricing of its fibre products.

Earlier this year, telecoms companies including Virgin and TalkTalk sent a letter to the Government complaining about BT's pricing. BT responded by saying it was offering prices below the European average.

The war of words continued last month, as TalkTalk raised concerns over a potential monopolising of the fibre market. BT responded by saying it was listening to other providers as the roll-out progressed.

For the new FTTP services at 100Mbps downstream speeds and 30Mbps upstream speeds, BT is charging providers 436.32 a year for those with an existing wholesale line rental (WLR) or metallic path facility (MPF - essentially the copper a service provider pays for) service. Those wanting to pay for the same services without WLR or MPF deals will have to pay 537 a year.

Meanwhile, BT said it is improving its FTTC service and has been given permission to roughly double speeds at some point in 2012.

Despite the emphasis BT is placing on fibre, the majority of its customer base will be on copper for at least the next few years.

BT has announced a further 156 locations set to benefit from superfast broadband, bringing services to another 1.5 million consumer and business premises.

Most of the new exchanges will be up and running this year, although some will not be fibre broadband-enabled until the end of 2012.

Included in the additional locations are the 10 exchange areas which won BT Retail's recent Race to Infinity competition, during which people were invited to vote for their community.

Rural areas such as Caxton in Cambridgeshire and Marton, Warwickshire will soon be able to access next-generation services.

"We'll continue to work closely with industry and local and devolved authorities around the country in deciding where to deploy the technology next," said David Campbell, managing director of next generation access for Openreach.

Around four million premises can now order a fibre-based broadband service from their chosen supplier thanks to the BT rollout.

The news may do something to either temper or fuel the war of words between various ISPs and BT.

A group of providers, including Virgin Media and TalkTalk, sent a letter to the UK Government to complain about how much BT is asking them to pay for access to next-gen poles and ducts.

BT hit back, saying its prices for duct access compared "very well with European averages," whilst claiming its plans for pole access have been held up due to other ISPs delaying trials.

BT has accelerated the rollout of super-fast broadband for homes and businesses in Glasgow, but only after there were issues' with one of the broadband pilots in London.

Earlier this month, Haringey Council stopped the installation of roadside cabinets in Muswell Hill, London over aesthetic issues in a conservation area.

Although a BT spokesperson said that the vast majority of boxes had now been installed, the issue has forced BT to move the Glasgow super-fast broadband deployment forward to reach the "desired footprint", in terms of the number of lines included in the pilot overall.

Misfortune in London has led to Glasgow's gain, with more than 15,000 homes and businesses in Hillington, Cardonald and Crookston benefiting from BT Openreach focusing on the area before schedule.

This means that Openreach will build 56 new street cabinets as well as 30 miles of fibre from the exchange to the boxes. In Edinburgh and Glasgow, around 75,000 premises could benefit in the future.

According to BT, the tech will support super-fast broadband speeds of up to 40Mbs, with a potential 60Mbps in the future. Initial upstream speeds will be between 5Mbs and 10Mbs, potentially rising to 15Mbs.

If the UK plan goes on schedule, 1.5 million homes could have fibre broadband by the summer of 2010, a first step in BT's aim of making it available to 40 per cent of Britain (around 10 million homes).

BT has pledged 1.5 billion, which it states is the UK's biggest single commercial investment in fibre broadband.

BT has revealed the first locations to receive super-fast broadband.

From early 2010, BT Openreach will deploy fibre to the cabinet (FTTC) technology at 29 exchanges across Britain.

Areas of Belfast, Cardiff, Edinburgh, Glasgow, London and Greater Manchester will be lucky enough to access speeds of up to 40Mbps, with the potential for that to increase to 60Mbps.

The majority of locations will be in urban areas, but BT has picked Calder Valley near Halifax and Taffs Well near Cardiff to test deployment in more isolated environments.

It is all part of BT's grand plan to spend 1.5 billion on a national fibre-optic broadband service, which will allow 40 per cent - around 10 million - of UK's homes and businesses to access fibre-based services.

The FTTC technology will be piloted this summer in Muswell Hill, London and Whitchurch, Wales, connecting up to 30,000 customers ahead of the wider roll-out.

FTTC involves installing fibre between local exchanges and the cabinets located near homes and businesses.

The connections from cabinets to their targets will still be over copper, but the speeds will still be much faster than those possible over ASDL.

Last week, Ericsson demonstrated technology that would allow high-speed data transfer over copper wires.

"The wider industry will now be able to plan ahead as we will be making our services available on a wholesale basis," said Openreach chief executive Steve Robertson in a statement.

"This approach will benefit customers as there will undoubtedly be fierce competition for their business."

He said that the regulatory picture will still be complex, although Ofcom has given BT a "welcome green light" to invest.

The full list of exchanges to receive FTTC tech are Chelmsford, St Albans, Watford, Hemel Hempstead, Leagrave, Luton, Canonbury, Chingford, Edmonton, Enfield, Highams Park, Tottenham, Thamesmead, Woolwich, Bury, Didsbury, Failsworth, Heaton Moore, Oldham, Rusholme, Belfast Balmoral, Dean, Glasgow Halway, Glasgow Western, Cardiff, Taff Well, Halifax, Pudsey and Calder Valley.