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There is an interesting wrinkle with BT and Ofcom about the lack of investment in fibre optic technologies at the moment. When Ofcom separated BT it had a range of choices. Around that time the OECD stepped in with a paper and basically said separating your national incumbent carrier is a very risky thing. It can have consequences for future investment. I'm not saying it is a causal relationship, but now we are seeing a lack of investment. Do you think Ofcom should revisit this whole separation?

I still think of Openreach as a servant to BT. When you look at the very effective and dynamic approach of National Grid to developing the electricity grid and the gas grid it's interest is in providing excellent services to those that want to use its wires and pipes. I think National Grid does a first-rate job. I am not as convinced that Openreach is as committed to investment and dynamism as it ought to be. It's almost a perfect parallel.

Wouldn't National Grid operate primarily in the interests of its biggest customer?

But it's a more competitive market. Not a perfectly competitive market but a more competitive market for gas and electricity. And that's a problem: The market is inadequately competitive so Openreach actually does have a comfortable relationship with its biggest customer, BT. I haven't done a detailed analysis, but that's my prejudice.

Well you would suspect most businesses tend to operate favourably to their largest client.

Exactly, and the innovation would be driven by the largest client's request. So if someone who had five percent of the market said "we would like you to do this", they would say "tough, it's not in our commercial interests". But in a properly competitive market, it would be in their interests. It's a matter of great concern to me. I really am quite worried about this. It's not clear to me that the undertakings offered by BT are being properly enforced by Ofcom. That's a question that was raised in the joint hearing and it certainly concerns the competitors.

Making a complaint

Take a consumer's point of view. If I have a problem with my telephone provider, I go to the provider first, then OTELO, then Ofcom will see me after three months. There is still a jumble of processes consumers have to go through.

Ofcom's trying to rationalise the way consumer complaints are done. I broadly sympathise with what they are doing. They are basically saying: let's empower the consumers...and keep the regulators out of it. That basic approach is one I actually have a lot of sympathy for. Otherwise the regulator gets bogged down handling individual consumer complaints. I think that is a good idea.

What about ICSTIS though? When this phone quiz scandal broke it was very convenient for someone to blame ICSTIS. And it's nameless and faceless. You could argue that it's just an accountability dodge.

I know. I am very uncomfortable about that. And that's not so much about convergence, it's more about sub-contracting enforcement. One of the enemies of democracy and regulation is complexity - it confuses those it is supposed to serve. Certainly, wherever possible one-stop-shops are very desirable, bringing together the accountability point you just made. But why should advertising regulation be handled separately? What good reason is there for it - not one I can think of. ®

A longer version of this interview can be downloaded frmo the Ofcomwatch blog.

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