Q: What sort of dialogue involves ‘a lot of conversation’ but ‘no room for manoeuvre’?

A: The one Ofcom is having with BT according to an interview with Stephen Carter and David Currie in yesterday’s Independent.

Surely this doesn’t really make any sense. Indeed, it appears that when journalists pop over to Ofcom and get to sit in the glass walled offices on the top floor they get distracted by the spectacular views. As they revel in the new perspective on St Paul’s and watch the tourist boats swan along down the Thames they forget to ask any critical questions - and come up with articles like the one in The Independent - heavy on transcript/low on analysis.

A conversation with no room for manoeuvre isn’t really a conversation at all - it’s a decision. Of course, you could say - as indeed Carter and Currie do - that the conversation is about the detail of implementing the principles established by Ofcom in its Phase 2 Strategic Review of Telecoms consultation document - there is plenty still to emerge on this front. But this discussion is also constrained by the parameters already established in the consultation document, so it still not really a conversation as a much as BT detailing how the company will meet the regulator’s demands.

This isn’t something to get upset about. After all, this is why Ofcom was empowered - to use its discretion in developing a competitive market, delivering the best deal for consumers - oh…and making sure things are okay for citizens as well.

Of course, BT now has a very tricky decision to make. I suspect, after looking over the options available, the company has bounced around the idea of ‘voluntarily’ splitting its wholesale and retail divisions. This would do in practice what Ofcom are dictating in principle. No doubt it would be an extremely painful and disruptive move in the short term, and it is difficult to assess the detailed financial implications of doing so - certainly things look as though they are never going to be as lucrative again for the company as they once were - at least in traditional areas. But being bold and embracing a split would be extremely radical and deliver a number of things - in addition to making the sector highly competitive.

It would widen the parameters of BT’s current conversation with the regulator. It would also guard BT’s own innovation against competitors, since with ‘equivalence’ still somewhat ill-defined there is a danger that all the toys are on offer. Finally, it would re-empower one part of the company in the debate around development of future fixed line networks, such as 21CN. It may also - in the long run - make the individual resultant parts of the company fitter, leaner, more flexible and innovative.

Of course, I suspect a ‘voluntary’ split will never happen - it’s far easier to keep arguing and squeezing whatever you can, whenever and wherever possible. And the immediate commercial and economic pressures may dictate that a split is the wrong course of action in the short term. However, Stephen Carter has suggested that BT has the appetite for change - but it remains to be to be seen how much change the company is willing to embrace voluntarily - maybe it will surprise us all.

Happy to receive comments - blog@ofcomwatch.co.uk