COMMUNICATIONS giant BT has been hit with a fine of £42 million by Ofcom after it admitted breaching the regulator’s rules by cutting its compensation payments for delays in connecting high-speed business lines.
It follows an investigation by Ofcom into BT’s network division Openreach, which found that between January 2013 and December 2014 it misused the terms of its contracts to reduce compensation payments to other telecoms providers for failing to deliver ethernet services on time.
These are dedicated high-speed cables used by large companies and mobile and broadband providers to transmit data, as well as providing vital links for hospitals, schools and libraries.
Most telecoms companies rely on access to BT’s network to provide services to their customers, and Ofcom took action because BT breached the rules covering this “significant market power”.
Gaucho Rasmussen, the regulator’s investigations director, said: “These high-speed lines are a vital part of this country’s digital backbone. Millions of people rely on BT’s network for the phone and broadband services they use every day. We found BT broke our rules by failing to pay other telecoms companies proper compensation when these services were not provided on time. The size of our fine reflects how important these rules are to protect competition and, ultimately, consumers and businesses. Our message is clear – we will not tolerate this sort of behaviour.”
The £42m penalty incorporates a 30 per cent reduction to reflect BT’s admission of full liability, and its agreement to set up a scheme to compensate the affected providers with 12 months. BT will also be fined £300,000 for failing to provide accurate and complete information to Ofcom.
The company acknowledged Ofcom’s findings, and Openreach CEO Clive Selley said: “We apologise wholeheartedly for the mistakes Openreach made in the past when processing orders for a number of high-speed business connections. This shouldn’t have happened and we fully accept Ofcom’s findings.”
Gavin Patterson, BT Group chief executive, said: “We take this issue very seriously and we have put in place measures, controls and people to prevent it happening again. My management team and I are determined that BT applies the highest standards when serving our customers.”
Dan Howdle, from broadband advice site Cable.co.uk, said: “Today’s ruling offers insight into just some of the factors contributing to Ofcom’s decision to split BT and Openreach into two separate entities. Customers must never be allowed to become collateral damage in the battle to gain the upper hand in the market.”
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