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Unresponsive freeholders are holding up ultra-fast broadband, warns BT

Clive Selley CEO of Openreach - Heathcliff O'Malley
Clive Selley CEO of Openreach - Heathcliff O'Malley

Unresponsive property owners and “red tape nonsense” are holding up Britain’s rollout of ultra-fast broadband, the head of BT's Openreach division has warned.

Clive Selley, chief executive of Openreach, said around 1.5 million flats – primarily in London – may never get upgraded because uncontactable freeholders will not sign off work.

Mr Selley said: “The owners of many of those blocks do not even have a name, all we can get is a post office box number. So it is really difficult to get permission.”

BT's Openreach infrastructure division is part-way through a £15bn programme to connect British households to so-called full fibre broadband, which uses fibre optic cables to bring a signal all the way into users' homes.

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Previous generations of fibre stopped at a telephone exchange box in the street, with the final stretch into houses completed on much slower copper wires.

A property in Ketton, Rutland, in the East Midlands became the ten millionth home to get BT's full fibre in March, and the company is upgrading houses at a rate of 60,000 a week.

But at present there are 575,000 flats where full fibre cables are “stumped” – meaning Openreach has built up to the front door but is unable to get permission to go inside for the final connection – even if the people who own leaseholds for the individual flats want the upgrades.

Britain’s full fibre rollout is going faster than any other country in Europe, but issues with freeholders are a peculiarly British problem because of the country's unusual property laws, Mr Selley said.

Most blocks of flats are owned by a freeholder – often an investor that is based abroad – with individual apartments sold to their occupiers on a long lease.

The freeholder, not the leaseholders, must give permission for BT to bring in a connection.

Mr Selley said: “The UK is one of the toughest countries in which to get permission to install fibre infrastructure. It is easier to do in most countries in Europe. We ask the Government just to remove these barriers, this red tape nonsense.”

The full fibre rollout is key for the Chancellor Jeremy Hunt’s hopes both of getting Britain back to work and turning the UK into a science and tech superpower.

Faster internet access could boost the UK economy by £72bn, according to the Centre for Economics and Business Research.

The new opportunities it provides for flexible working – particularly for older workers and those with children – could help 431,000 people to join the workforce by 2026.

Mr Selley said: “It is very reliable and it doesn’t go on strike. It’s not like when you commute to the office and the train is cancelled again. This will be the new infrastructure for working.”

Soon, access to full fibre will start flowing into house prices. If a block of flats does not have access when the rest of a neighbourhood does, it will likely fall in value, Mr Selley said.

He also called on the Chancellor to boost opportunities for workers to retrain mid-career.

Trainee engineers from BT Openreach, a unit of BT Group Plc, carry out work at the top of telegraph poles at the company's training facility at West Hanningfield, U.K - Chris Ratcliffe/Bloomberg
Trainee engineers from BT Openreach, a unit of BT Group Plc, carry out work at the top of telegraph poles at the company's training facility at West Hanningfield, U.K - Chris Ratcliffe/Bloomberg

Openreach has 11 training schools around the country and has 10,000 apprentices – a scheme which is supported by government funding. But there is a major gap in support for mid-career changes, Mr Selley said.

He added: “In this fast-moving world that we’re in now, you can’t as a youngster train in one thing and then spend 40 years doing just that.

“Technology moves at such a pace that you need to refresh and retrain mid-career.

“People mid-career are being overtaken by new technology. To stay relevant and useful and fulfilled they need to get reskilled. I say to the Government, please give us some help on that one.”

Labour costs have soared, but so too have the costs of materials – particularly the price of optoelectronics from Asia, fibre cables, and the chipsets used to create fibre networks.

The war in Ukraine also threw up unexpected challenges.

Openreach cables run either underground or overhead, across 4.5 million wooden poles imported from Scandinavia.

Mr Selley said: “We buy about 100,000 a year or so, and unbeknownst to me they used to be transported on Russian ships.”

Openreach poles are now transported under a different flag.