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BT cuts ribbon on new Openreach biz

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The great and the good of the UK's telco sector are converging on central London to celebrate the formal launch of BT's network access business, Openreach.

Speaking today, Steve Robertson, Openreach's chief exec, said: "The big day has arrived. The whole Openreach team is utterly committed to providing Britain's communication providers with equivalent access to the local access network and to serving all our customers in the same even-handed way.

"This is an exciting time for the telecoms industry and Openreach has a vital role to play in making sure that Britain's consumers and businesses have access to the most innovative and competitive communications market in the world. We're ready to do our bit."

Robertson might not be able to contain his enthusiasm for this new venture, but there are plenty of those in the industry who are still not convinced. And BT would do well to remember why it has been forced to splash out £70m creating this new division. For Openretch - as it's known - forms part of a regulatory deal with Ofcom to ensure that rival telcos and operators get transparent and equal access to BT's phone network.

Operators have long complained that the UK's dominant fixed-line telco has stifled competition, failed to develop new services fast enough and given preferential treatment to its own businesses.

In a bid to increase competition, the regulator struck a deal with BT comprising 230 "legally binding undertakings", with the monster telco promising never again to engage in the kind of behaviour that "restricts competition" and "discriminates" against its competitors.

The deal - which Ofcom reckons will encourage investment in infrastructure by other operators and promote innovation, while also leading to greater competition, lower prices and improved services - meant BT was spared an investigation that could have led to the break-up of the dominant telco.

Key to the deal was the creation of an access services division within BT - Openreach.

Ofcom is confident the new separate division - which will provide access to the local loop and be overseen by an independent body - will allow "all communications providers to gain real equality of access to critical BT infrastructure on fair and equal terms".

However, critics remain cautious and have called on regulator Ofcom to keep a close eye on BT and Openreach.

A spokeswoman for telecoms trade group UKCTA, which represents a number of firms including AOL, Cable & Wireless, EasyNet and Thus, told us: "Openreach is still in the implementation phase and has yet to be proven." ®

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