BT told to 'put its house in order' by MPs

Telecom giant BT has come under intense scrutiny after an investigation by the Commons Select Committee found the internet and phone provider exploited its position to take decisions that would favour its business.

The report, published on Tuesday (19 July), accuses the FTSE 100-listed group of "significantly under investing" in its Openreach subsidiary, with MPs claiming the "shortfall in investment" could amount to hundreds of millions of pounds a year.

Established in 2006, Openreach owns the pipes and telephone cables that the vast majority of businesses and homes in the UK to the national broadband and telephone network. Openreach was established after Ofcom, Britain's telecoms regulator, deemed rival telecom operators should have equality of access to BT's local network.

Since 2009, BT has barely invested in Openreach, MPs found, but has been "over-earning" from its subsidiary, despite the lack of financial commitment.

The committee also indicated BT exploited its role in the market to make decisions that "favour the group's priorities and interests", while the report added the service offered by Openreach remained poor.

As a result of the investigation, MPs have demanded BT significantly steps up the investment in Openreach, adding they would support the idea of the telecom giant being separated from its subsidiary if the increased investment fails to materialise.

Ofcom has previously called for greater separation between BT and Openreach and MPs have given their support to the proposal. Should BT fail to "offer the reforms and investment assurances necessary to satisfy our concerns", Ofcom should "move to enforce full separation of Openreach".

In March, BT was told to accelerate the process of rolling out lines to businesses and to reduce the amount it charges its rivals to use its fixed-line network. Ofcom said by the end of March 2017 the FTSE 100 group must be able to install high-speed lines to business customers within 46 days, which should then be cut to 40 days in 2018.

"Ofcom has decided that Openreach is taking too long to install leased lines and is not providing adequate certainty that the services will be provided by the date first given to the customer," the regulator said in a statement.