BT has been fined a record £42m fine by telecoms regulator Ofcom because of delays in connecting high-speed business lines – a severe breach of the regulator’s rules.
The fine is the result of an investigation carried out by Ofcom into BT’s network arm, Openreach. Openreach owns and maintains the UK’s main telecoms network, which is used by telephone and broadband providers.
Ofcom found that Openreach misused the terms of its contracts to cut compensation payments it owed to other telecom providers for failing to deliver ethernet services on time between early 2013 and late 2014.
With most telecoms companies having to rely on access to BT’s network to provide services such as broadband to their customers, Ofcom deemed it necessary to take action as BT breached rules that address the company’s ‘significant market power’.
BT has also set aside £300m to repay providers that were affected.
Gaucho Rasmussen, Ofcom’s investigations director, said: “These high-speed lines are a vital part of this country’s digital backbone.
“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.”
Clive Selley, Openreach CEO, said in a statement: “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.
“Since I became CEO of Openreach in February 2016, we have monitored this area very closely, we have made improvements to how we process and deliver such connections, and we will make sure the same mistakes aren’t repeated in future.
“This issue is unrepresentative of the vast majority of work conducted by Openreach and we are committed to delivering outstanding service for our customers.”
Gavin Patterson, BT Group Chief Executive said: “The investigation into historical Deemed Consent practices at Openreach revealed we fell short of the high standards we expect in serving our Communications Provider customers.
“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.”
Earlier this month BT agreed to demands by Ofcom that called for the telecoms giant to legally separate Openreach into a separate entity from its main business.