If they were truly interested in promoting competition, they would make it easier for new companies to offer broadband rather than forcing them to go through an incumbent.
The incumbent is split into separate organisations, which are effectively not allowed to communicate behind closed doors. BT Openreach provides access to the local loop, whereas BT Retail sells broadband to consumers. The setup is designed so that other ISPs have exactly the same interface to BT Openreach as BT Retail.
BT offered this arrangement to avoid being broken up - look up the "General Conditions of Entitlement" for more detail.
