Ofcom keeps axe hovering over BT

Appearing at parliament on Tuesday, Ofcom revealed it is still digesting BT's offer to change the way it is structured and governed in return for not being broken up.

Stephen Carter, Ofcom chief executive, told MPs that the regulator is "spending every day" examining whether BT's proposals go far enough, and are feasible.

"If not, our only option is to look for a more structurally separated solution," Carter told the Trade and Industry select committee.

BT made its proposal at the start of February, in its response to Ofcom's strategic review of the UK telecommunications market. It has offered to split off part of its wholesale operation into an "access services" division, which would be responsible for giving BT's rivals fair access to its network.

This follows years of complaints from other telecoms operators that they get a raw deal from BT as it favours its own retail operations.

Some on the select committee appeared unconvinced by BT's proposal.

"I get the feeling that BT's statement is like St Augustine's prayer," joked one MP. "Make me good, God, but not yet."

Mary Turner, chief executive of the UK arm of broadband and Internet content company Tiscali, is also suspicious of BT's offer to create a separate access division.

"It will be no different to BT Wholesale…with the same managers and the same shareholders, reporting to the same board," Turner told the committee.

BT has suggested that two places on the access division would be open to non-BT staff, possibly nominated by Ofcom itself.

If Ofcom decides that BT's proposals don't deliver genuine "equality of access", the regulator will resort to an investigation under the Enterprise Act which could see BT's future decided by the Competition Commission.