Telecoms regulator Ofcom has ordered BT to separate legally from its Openreach division, which runs the UK's broadband infrastructure.
The regulator said that Openreach should become a distinct company within the BT group, and that BT had not voluntarily addressed competition concerns Ofcom laid out in July.
However, BT said its proposals were “fair and sustainable” and that it would continue negotiating with Ofcom. The regulator said it was preparing a formal notification to the European Commission to start the separation process.
Earlier this month, before Ofcom’s decision was announced, BT Openreach chief executive Clive Selley told the CLA that under the current model, there’s a case to invest more in fibre broadband networks, but a smaller standalone business would “struggle to make that case and invest as much as Openreach plans to”.
CLA Senior Business Adviser Charles Trotman said: “Any formal break between BT and Openreach must not lose sight of the goal to deliver broadband to rural areas. Ofcom must make it clear that the conditions of the separation include guarantees for future investment to further support rural digital connectivity.”