BT calls for Ofcom to accept 'voluntary agreement' to avoid legal dispute

BT's regulatory chief tells Computing that agreement can be made if 'parties act sensibly'

BT has called for communications regulator Ofcom to accept its proposals to fix competition concerns about its Openreach arm, claiming that if Ofcom decides to go to the European Commission, there will be lengthy delays that would be detrimental for all UK broadband providers.

Yesterday, Ofcom fell short of recommending that Openreach should be spun out of BT as a fully independent company, and instead demanded that it should be reformed, with rivals given access to its network to install their own fibre alongside Openreach's cables.

It said that a new model for Openreach was necessary because Openreach still has an incentive to make decisions in the interests of BT, rather than BT's competitors, which could lead to competition problems. Ofcom added that a forced break-up could still be an option.

In a call yesterday afternoon, BT's director of regulatory affairs, Mark Shurmer, responded to Ofcom's review and said that BT is open to discussion to see how the rules could be built upon.

He said he was pleased that Ofcom did not make a reference to the CMA (Competition and Markets Authority) - which would have meant that the regulator deemed a structural separation necessary.

Ofcom was clear when it said that proposals put to them by BT did not go far enough in addressing competition issues, but Shurmer said that he was confident that the telecoms giant could come up with a set of proposals "that can work for everyone".

"I think it's in everyone's interests to do that so that it can be dealt with more quickly but it's not a deal we'll cut at any cost, what we have to have is a sensible and proportionate response to the issues that Ofcom say they've found in the market, and that's why we want to take some time to look at the detail and consider it to see how we can enhance and amend our offers to ensure they address those concerns," he said.

Shurmer said that if a "voluntary agreement" can't be struck with Ofcom, then the communications regulator would have to report to the European Commission.

"Ofcom would have to go to Brussels and say ‘we've found a problem in the market; none of our existing powers can deal with it'," he said, adding that such a move would be very onerous for Ofcom as the regulator would have to provide a very detailed analysis of the case.

"Brussels would then act as a referee and has a right to veto on those proposals but we think that's a very challenging and long process, which is why it's in everyone's interests to use a shortcut," he said.

Shurmer told Computing that he believed a voluntary agreement could be made if "parties act sensibly".