Seconds out: it’s BT versus Sky

In the red corner: BT, draping itself in the flag as the national champion of the UK’s digital future. In the blue corner: Sky, with an argument that it is anti-competitive for BT to own both a broadband provider and BT Openreach, which provides the infrastructure used by BT, Sky and others to sell super-duper mega-fast broadband.

BT wants the status quo, arguing that it is already heavily regulated and that if Sky want to lay its own cables, as BT did some years ago, it’s welcome to try doing so.

Au contraire, says Sky. While BT might be regulated, strategic decisions on Openreach will be made purely in the interest of BT as a business. If that means compromising the national interest, so be it.

As such, it wants BT Openreach spun off into what would be an independently listed company, one that would make a rather compelling investment case, particularly to overseas bidders given that entry into the FTSE 100 is comparable to putting up a “For Sale” sign. The short-term horizons of investors in the UK stock market mean Openreach might not remain long on the public markets.

Thursday is the deadline for submissions to Ofcom’s review of digital communications, and the likelihood is that neither will win by a knockout. But the direction of the points decision could have a huge impact on the future health of the UK’s digital economy and on the UK’s economy, full stop.

Sky would like a neutral arbiter to at least look at the case, namely the Competition & Markets Authority, and there’s something to be said for that. However, the questions posed by BT, Sky and the rest may be too big even for the latter’s remit.

BT is right that the UK’s internet infrastructure is in pretty good shape, particularly when compared to European rivals. It’s in decent shape globally. Keeping it that way will involve taking carefully nuanced decisions. The stakes are very high and that is one reason why the Government will probably want to avoid getting involved. Even though it probably should.