Credit: Alcook101

Sky boss calls for BT break-up - again

Jeremy Darroch wants his rival to be separated from Openreach.

by Jack Torrance
Last Updated: 15 Jun 2016

The ongoing battle over Britain’s broadband network will reach an important milestone on Thursday when Ofcom publishes its strategic review into Britain’s digital communications. Many had hoped the regulator would call for a break-up of BT and its Openreach division, which is responsible for tending to the nation’s digital infrastructure, but it is expected to fall short of calling for such drastic action.

That hasn’t stopped Sky from speaking out though. Writing in today’s Times its chief executive Jeremy Darroch said that ‘freeing up’ Openreach from BT’s clutches would ‘allow the right level of investment to be made,’ helping Britain’s network catch up with its international rivals.

The former state monopoly’s competitors have long grumbled about the state of its network, which uses copper wires to connect consumers' homes to the fibre-obtic network, instead of a faster ‘fibre to the premises’ system. ‘This approach will not deliver the 1gb/s speeds Britain needs and anything less is unambitious,’ Darroch said. ‘Investing in copper in 2016 is, as Henry Ford would have put it, like breeding a faster horse rather than building a car.’

He was keen to emphasise that this isn’t just about BT’s rivals, who have to deal with grumpy customers because of problems with Openreach’s network, but about the economy at large. ‘Consumers, small businesses, think tanks and MPs have all said that change is needed,’ he said. ‘I’ve never seen such a coalition of support.’

Darroch might have a point, but there’s more to this than broadband. Sky and BT are fighting on a different front too in the big money world of pay TV. While it had arguably been neglecting its broadband network, BT has been ploughing lots of cash into sports broadcasting rights, including for the Premier League and the Ashes, two franchises that Sky has enjoyed dominating.

A BT break-up would certainly be a boon to Sky’s broadband business. But perhaps even more beneficial would be measures to force BT to focus more on Openreach – distracting it from expanding its burgeoning media empire.

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