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BT bows to Ofcom pressure

Operational separation prevents full break-up

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BT - the UK's former telecoms monopoly that rivals accused for so long of uncompetitive behaviour - has given its backing to proposals to open up its network to competing operators.

If successful, the measures should given competing telcos the chance to offer consumers real alternatives to a dominant player that has been forced to cut prices by the regulator and badgered to introduce services such as unmetered dial-up net access and broadband.

Although BT has escaped the threat of being broken up, it has signed up the operational separation of the company.

Central to the regulatory deal announced today is the creation of a new Access Services division (ASD) - which will still be part of BT Group but "distinctly separate". With some 30,000 staff, the new ASD will control almost all of the telco's access infrastructure and facilities, including the copper local loop, local exchanges, ducts and other infrastructure.

Due to be set up shortly, it will provide access products - such as line rental and local loop unbundling (LLU) - to all telcos including BT Retail on an equal basis.

Employees of the ASD will even get their own HQ to keep them at arm's length from BT and their pay will be structured in such a way that rewards them for ensuring no company is given preferential treatment. In time, workers will even have their own logos on uniforms and vehicles to highlight their operational separation from BT Group.

An independent Equality of Access Board (EAB), which will ensure that BT plays by the rules.

BT - which has seen its share price rise this morning on the news - said the measures should see regulation focused on key areas and rolled back elsewhere.

"This has been a tough journey but it is important that we have regulation that encourages investment and innovation," said BT chairman Sir Christopher Bland. "The proposed settlement strikes the right balance and every player will benefit from the certainty and clarity it provides." ®

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