The news that Ofcom is to launch a wide scale review into the UK's digital communications infrastructure has been widely celebrated by telecommunications industry. The last time such a review was conducted was in 2005, when Ofcom suggested that BT offer their broadband and telephony infrastructure at wholesale rates to UK competitors. That led to the formation of BT Openreach, which manages the UK's infrastructure. It also led to the likes of Sky, TalkTalk, Virgin and many more launching their own Internet and phone services and greatly increasing the competition within the UK.
Of course, the market has changed drastically since then. With the advent of 4G, the proliferation of smart devices, the emergence of the connected home and much more, the time truly is nigh for Ofcom to once again examine the state of the industry and its infrastructure again. For the first time, this will include players like Sky, who, during the last review, were not considered a part of the UK's digital infrastructure. Today, they sell broadband, have a prominent Internet TV service in the shape of Now TV and are constantly looking for new ways to expand in the new era of super-fast mobile Internet. That makes them a potentially key player in this newest review, and gives them a certain interest in the way things turn out. Sky were reached out to on the Sky News phone number for comment, and they returned this statement from group CEO Jeremy Darroch:
"We welcome OFCOM's announcement of a review of the UK's telecommunications sector. The sector is vital to the UK's future but there are serious questions about whether the existing structure can deliver the infrastructure, innovation and choice that consumers and businesses need."
"Structural separation of Openreach, the UK's only nationwide broadband infrastructure, is at the heart of creating a sustainable industry; one that provides the capacity and incentive to invest whilst also harnessing the power of multiple competing retailers to drive higher take up and lower prices for customers."
"Ofcom must now take the opportunity to address Openreach’s conflict of interest as a subsidiary of BT or risk extending the problems that are affecting the industry and its customers today."
Those comments are particularly interesting, as they indicate a desire on Sky's part to see the Openreach company formed in the wake of Ofcom's last review separated entirely from BT and its vested interests and run as a structurally separate company. TalkTalk, too, echo that sentiment, stating “A decade ago, Ofcom failed to break up BT and instead created Openreach. Whilst the last 10 years have seen a lowering of prices and increased take-up, it is increasingly clear that the current market structure is not fit for purpose."
BT have also welcomed the report, but stop short of mentioning anything to do with Openreach, obviously hoping to keep it part of the BT portfolio. We reached out to the Sky enquiries phone number for further comment, but they declined. Whatever the outcome of the review though, we can be sure that it'll cause major waves within the UK's communications sector.
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