Ofcom proposes new incentives for Openreach

BT Group got a pat on the back from Ofcom for its over-all performance as an ISP since 2005, however, the UK telecom regulating body asked BT to improve the services offered by its major division Openreach. Ofcom now says it is about to offer new incentives for Openreach in this regard.

Ofcom acknowledges that the regulatory measures have yielded good results during the last two years. The broadband prices have come down sharply. In 2006, the prices have become more than 60 percent cheaper when compared with the prices prevalent a year ago. The second major change that took place in 2006 was the entry of many broadband providers into UK broadband market resulting in a wide range of choices available for broadband customers. Although, BT is still the largest telecom and broadband provider in the UK, there are more than 10 million customers who have subscribed to the service of other operators. When compared with the statistics of 2005, more number of customers switched their broadband ISPs (5%) or their landline services (8%). Ofcom considers these changes as part of healthy competitive environment which is supposed to help the customers.

BT launched Openreach which is responsible for selling and renting the BT lines to other ISPs and telecom operators in January, 2006. BT Openreach was established as an independent body with an aim to offer the wholesale products of BT to other service providers on an equivalent basis. Ofcom recognized the role of Openreach in helping other ISPs to access its local exchanges and deploy their own equipment to setup their LLU lines. This has led to healthy competition between providers and roll out of various products for consumers.

Ofcom now suggests that Openreach should improve the quality of its service and roll out better products to suit the requirements of the ISPs and finally, the endusers. Ofcom says that Openreach should come with following actions on voluntary basis when it fails to provide and repair services which it has agreed as targets.

• Openreach should pay compensation to its customers on voluntary basis
• Paying compensation every time when its service fails to meet the standards set in contract
• Paying compensation each time problems persist with no upper limit to the amount which must be paid
• Pay additional levels of compensation for failure to activate ‘live’ lines which is double the amount that it presently pays.

Ofcom announced that the last date for getting responses to its consultation on Openreach service performance will be 25th January 2008.