Openreach is the infrastructure division of the British telecommunications
company BT Group. It was established in 2006 following an agreement between BT
and Ofcom to implement certain undertakings, pursuant to the Enterprise
Act 2002, to ensure that rival telecom operators have equality of access to
BT's local network. Openreach manages BT's local access
network which connects customers to their local telephone exchange, starting
at the Main Distribution Frame in the exchange and ending at the network
termination point at the end user's premises. Openreach also manages the
connections between the MDF and the BT Wholesale/Local Loop Unbundling
termination points located in the exchange, often referred to as jumper
connections. BT have been accused of abusing their
control of Openreach, which generates most of BT's profits, particularly by
underinvesting in the UK's broadband infrastructure, charging high prices and
providing poor customer service. The UK's telecoms regulator Ofcom is
currently investigating whether to order BT to sell Openreach, and is expected to
report in January 2016. In 2009, BT announced Openreach would
connect 2.5 million British homes to ultra-fast FTTP by 2012 and 25% of the
UK. However, by the end of September 2015 only 250,000 homes were connected.
Instead, BT offered an 'FTTP on Demand' product. In January 2015, BT stopped
taking orders for the on-demand product. History
Following the Telecommunications Strategic Review, in September 2005
British Telecom signed Undertakings with Ofcom to create a separate division, for
the purpose of providing equal access to BT’s local access network and backhaul
products. Ofcom previously argued that BT had significant market power in the
British telecommunications market, specifically in residential voice
services, business retail services, leased lines, wholesale international
services, and wholesale broadband and fixed narrowband services. The resulting
organisation, Openreach, opened for business in January 2006 and reports
directly into the BT chief executive. The functional separation of Openreach
from BT has had mixed results, according to economists J. Gregory Sidak and
Andrew Vassallo, who have argued that while Openreach’s creation produced the
short-run benefit of lower prices, it also led to long-run costs, such as
declines in telecommunications investment, customer satisfaction, and
measures of the United Kingdom’s global competitiveness in telecommunications.
Today, the company is structured such that it is a wholly owned subsidiary of
British Telecommunications plc, which itself includes the four separately
managed businesses and virtually all other assets of the BT Group.
In July 2010 Openreach signed an £800 million contract with ECI Telecom to
help it service and create a fibre-optic network serving 18 million households in
the UK. The deal was the largest in ECI's history.
Operations Field engineers install and maintain the
physical network wiring from the telephone exchange into end customers'
premises on behalf of 537 communication providers which sell services directly
to end customers. Openreach engineers visit around 29,500
homes and offices every weekday on behalf of its customers, the CPs, make
80,800 provision visits on copper, fibre and TV, and manage 90,000 repairs to its
copper, fibre and broadband networks every week, remove around 40,000 unused
cable connections from its exchanges and provide another 75,000 every day.
Every week they also deal with 650 Network break downs due to damage, theft
and weather, test 12,000 poles and replace 920, replace 85 cables and
street cabinets, fix 100 low wires and connect another 3,000 newsite plots to
its network. Controversy
Telecoms provider customers who have problems cannot directly contact
Openreach and have to go indirectly through their reseller. Openreach are
accountable to each of the telecoms providers, as well as Ofcom. In July
2014, Ofcom completed a review of Openreach's service, resulting in
mandated performance levels on key services.
In August 2015, Labour MP Chris Bryant called for Openreach to be split from
BT, criticising the infrastructure and stating that it is too slow to fix
faults and install new lines. BT have been accused of using their
Openreach monopoly as a source of billions of pounds in profits whilst
underinvesting in the UK's broadband infrastructure, charging high prices and
providing poor customer service. National Security Threats & Personal
Privacy Between 2010 and 2012 the UK
intelligence community initiated an investigation aimed at Huawei, the
foreign supplier of BT's new fibre infrastructure with increasing urgency
after the USA, Canada and Australia prevented the company from operating in
their countries. Although BT had notified the UK government in 2003 of
Huawei's interest in their £10b network upgrade contract, what they did not do
was raise the security implications as BT failed to explain that the Chinese
company would have unfettered access to critical infrastructure. On 16 December
2012 David Cameron was supplied with a in-depth report indicating that the
intelligence services had very grave doubts regarding Huawei, in that the UK
governmental, military, business community and private citizen's privacy
may be under serious threat. Subsequently, BT's Infinity program and
other projects are now under urgent review.
On 7 June 2013, British lawmakers concluded that BT should never have
allowed the Chinese company access to the UK's critical communications network
without ministerial oversight, saying they were 'deeply shocked' that BT did
not inform government that they were allowing Huawei and ZTE, both foreign
entities with ties to the Chinese military unfettered access to critical
national systems. Furthermore, ministers discovered that the agency with
responsibility to ensure Chinese equipment and code, was threat-free was
entirely staffed by Huawei employees. Subsequently, parliamentarians confirmed
that in case of an attack on the UK there was nothing at this point that
could done to stop Chinese infiltration attacking critical national
infrastructure. Another Chinese company ZTE supplying
extensive network equipment and subscriber hardware to BT Infinity is
also under scrutiny after the US, Canada, Australia and the European Union
declared the company a security risk to its citizens.
References External links
Official website