Openreach

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Openreach
Subsidiary
Industry Telecommunications
Founded 2006
Headquarters London, United Kingdom
Key people
Joe Garner (Chief Executive)[1]
Parent BT Group
Website www.openreach.co.uk

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.[2][3]

Openreach manages BT's local access network which connects customers to their local telephone exchange, starting at the Main Distribution Frame (MDF) in the exchange and ending at the network termination point (NTP) at the end user's premises. Openreach also manages the connections between the MDF and the BT Wholesale/Local Loop Unbundling (LLU) termination points located in the exchange, often referred to as jumper connections.

History[edit]

Following the Telecommunications Strategic Review (TSR), 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.[4] 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.[5] The resulting organisation, Openreach, opened for business in January 2006 and reports directly into the BT chief executive.

Economists estimate that the functional separation of Openreach from BT has had mixed results. Economists J. Gregory Sidak and Andrew Vassallo have argued that Openreach’s creation has led to the short-run benefit of lower prices, but they maintain that Openreach’s creation has also had long-run costs, such as declines in telecommunications investment, customer satisfaction, and measures of the United Kingdom’s global competitiveness in telecommunications.[6]

Today, the company is structured such that it is a wholly owned subsidiary of British Telecommunications plc (BT), 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.[7] The deal was the largest in ECI's history.

Operations[edit]

Openreach van
Openreach Engineer

Field engineers install and maintain the physical network wiring from the telephone exchange into end customers' premises on behalf of 537 communication providers (CPs) 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.[8]

Accountability[edit]

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.[9]

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.[10]

References[edit]

  1. ^ BT Press Releases: Joe Garner to be CEO of Openreach
  2. ^ Undertakings given to Ofcom by BT pursuant to the Enterprise Act 2002
  3. ^ Ofcom's Strategic Review of Telecommunications
  4. ^ See OFFICE OF COMMUNICATIONS, OPENREACH ESTABLISHMENT—AN OVERVIEW (2006), http://stakeholders.ofcom.org.uk/binaries/telecoms/policy/bt/overview.pdf (U.K.).
  5. ^ OFFICE OF COMMUNICATIONS, FINAL STATEMENTS ON THE STRATEGIC REVIEW OF TELECOMMUNICATIONS, AND UNDERTAKINGS IN LIEU OF A REFERENCE UNDER THE ENTERPRISE ACT 2002, at 25–29 (2005), http://www.ofcom.org.uk/consult/ condocs/statement_tsr/ (U.K.).
  6. ^ J. Gregory Sidak & Andrew P. Vassallo, Did Separating Openreach from British Telecom Benefit Consumers?, 38 WORLD COMPETITION 31, 32 (2015), https://www.criterioneconomics.com/docs/did-separating-openreach-from-british-telecom-benefit-consumers.pdf.
  7. ^ ECI's BT contract (Yedioth Ahronoth)
  8. ^ Openreach's website: Our organisation. Retrieved 27 August 2014
  9. ^ http://stakeholders.ofcom.org.uk/telecoms/ga-scheme/specific-conditions-entitlement/market-power/fixed-access-market-reviews-2014/
  10. ^ "Labour MP calls for Ofcom to force BT split from Openreach". eCall. 25 August 2015. Retrieved 26 August 2015. 

External links[edit]