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It's time to end BT's toxic relationship with Openreach for sake of the UK's digital economy

Stuart Lauchlan Profile picture for user slauchlan January 24, 2016
Summary:
BT is a national disgrace - and an economically dangerous one at that. Its toxic relationship with Openreach is poisoning UK digital competitiveness. Time for drastic action.

gavin_patterson
Gavin Patterson

Earlier this month I posed the question of how it was possible for BT to have spent so much money on CRM technology over the decades and still have such an appalling track record with customers?

Siloed systems is one explanation.

A fractured organizational structure is another.

And of course, naked arrogance and contempt for the customer is another possible thesis.

Over the weekend we got an insight into just exactly how probable that third option is - and it’s well worth checking out.

On the back of a new report from the government that contains some incredibly harsh - if thoroughly well-deserved - criticism of the company’s attitude to customers, the BT press office contacted Conservative MP Grant Shapps’s office to obtain a copy.

But the PR gurus for the phone company made one fatal error - they forgot to hang up the phone!

What follows on the answerphone is a series of snide comments and sarcasm about a report from a cross-party committee of MPs.

This is a pretty serious and potentially damaging document which has major implications for BT at time when the House of Commons Culture select committee is conducting an inquiry into Britain's broadband coverage.

And the immediate reaction from the company’s public face is to sneer.

Have a listen to PR professionalism in action:

Enough said?

Shapps took to the airwaves with the recording of their comments, stating:

They are pretty contemptuous and dismissive of the entire issue. They appeared simply not to care about it.

Probably, Mr Shapps,  because they don’t.

Breaking up is hard to do

The report itself, the first from the British Infrastructure Group (BIG) set up by Shapps, is endorsed by 121 MPs from across the political divide.

It says that BT and Openreach are delivering connection speeds to 5.7 million customers that are so slow that they break the minimum 10Mbps speed set by the regulator Ofcom. That, claims the BIG, is costing UK Plc over £11 billion a year.

And for this, BT and Openreach have supposedly pocketed £1.7 billion in subsidies from the public purse. (There's a fair bit of questionable arithmetic here.)

The report - Broadbad - says there is an urgent need to break-up BT and Openreach. For context, Openreach was spun off from BT and is functionality separate, but still a wholly-owned subsidiary of the BT Group. Crucially it maintains and owns the copper-wire network infrastructure that connects up the UK.

The report calls for an urgent severing of the ties between BT and Openreach, stating bluntly:

Unless BT and Openreach are formally separated to become two entirely independent companies little will change.

They will continue to paper over gaping cracks. Whilst rural SMEs (Small and Medium Enterprises) and consumers are left with dire speeds, or even no service at all, Openreach makes vast profits and finds little reason to invest in the network, install new lines or even fix faults in a properly timely manner.

The report adds:

We believe that Britain should be leading the world in digital innovation. Yet instead we have a monopoly company clinging to outdated copper technology with no proper long-term plan for the future. We need to start converting to a fully fibre network so we are not left behind the other nations who are rushing to embrace digital advancement. However, we will only achieve this by taking action to open up the sector.

Given all the delays and missed deadlines, we believe that only a formal separation of BT from Openreach, combined with fresh competition and a concerted ambition to deliver will now create the broadband service that our constituents and businesses so rightly demand.

For its part, the official reaction from BT - as opposed to the PR incompetence version - has been equally sneering, calling the report:

misleading and ill-judged.

So the BIG is probably on to something here...

Empty words

Meanwhile BT’s Chief Executive Gavin Patterson was sent out to parrot the usual party-line, claiming:

Over 90% of the UK can get super-fast broadband today - which means that 10% today cannot. Within the next 18 months that will only be five percent and we are working with the Government to find ways to address the last five percent.

To which the only response can be to sneer back at such empty-worded rubbish.

As I said in my earlier story, I live in the very center of Brighton, in a business and residential area of what is supposed to be one of the UK's digital hubs, and can barely hit 5Mbps on a good day.

And I'm lucky. My neighbours both work from home and have such an appalling connection that they are literally unable to be logged on to the internet at the same time!

Since my earlier article was published, I’ve been in direct contact with Patterson’s office in search of an official response as to why businesses and residents in the heart of a major city in the South East of the UK in 2016 can’t be given super-fast broadband. The reaction to that has provided an interesting insight into just how dysfunctional and unhealthy the current operating relationship between BT and Openreach is.

The BT CEO’s Office - let me repeat that, this is the office of the man in overall charge of BT, the head honcho, the grande fromage - is unable to provide me with any information on that until Openreach deigns to provide the CEO's Office with it.

That, according to one person I talked to, should take 5 days.

It’s now 14 days later and I - and they - have no answers.

That’s because Openreach simply hasn’t provided the CEO’s Office with the requested information. Let that sink in for a moment.

In some respects it’s encouraging that Openreach clearly treats communication from the very top of BT executive management with the same level of indifference that they do any form of interaction with customers. No favoritism here.

But really? The CEO’s representatives want some pretty simple information - the schedule for roll-out of Infinity in Brighton must be on record as part of the overall program plan - and two weeks later they still can't access it and haven't been provided with it by another arm of the same organization.

Faced with such a level of organizational disfunction, I have a grudging respect for Patterson's ability to go on the BBC to defend the indefensible and claim with a straight face that the UK's broadband roll out is working just fine for almost everyone.

I'd be shamefaced with embarassment - and rightly so.

My take

From the report:

We deserve better. We should be leading the world on digital investment and innovation. Instead we have a company that clings to outdated copper technology with no long term plan for the future.

There should be no more delays, no more small incremental changes. A bold proactive decision is needed for the benefit of the UK economy and those of us who use the internet every day. Open up the market, separate Openreach from BT and reap the rewards.

While it’s possible to question some of the data in the Broadbad report as out-of-date, in terms of the overall conclusion I can’t say any better than that.

Patterson’s ’90%’ claim is specious claptrap. Maybe, just maybe, 90% of the country can potentially access broadband, but the speed of those connections is massively variable, with plenty of anecdotal evidence to support the view that they’re primary at the low end of the scale.

BT is a national disgrace - and an economically dangerous one at that. Its toxic relationship with Openreach is poisoning our digital competitiveness.

As things stand, there is just no incentive for BT to improve the situation. The current working (hah!) arrangement with Openreach is a nice little earner. In fact, it’s a very big earner and any change from the status quo would punch a big hole in BT’s bottom line.

Ofcom needs to intervene now. The bad joke is over. It's time to wipe the smirk off those BT press officers faces.

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