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BT hit with record £42m fine over delayed broadband installations

Wednesday, March 29th 2017 by Phil Wilkinson-Jones

BT has been fined a record £42m after cutting compensation payments to other broadband providers for late installations.

The telecoms giant is also expected to pay out around £300m in compensation to the affected providers.

Ofcom imposed the fine following an investigation into Openreach, BT’s network division.

The regulator found that between January 2013 and December 2014, BT failed to pay the right amount of compensation when it failed to deliver high-speed Ethernet services on time.

These leased line services are used by large businesses as well as mobile and broadband providers, and provide vital links for schools, hospitals and libraries.

BT is obliged to deliver such services to customers such as Sky, TalkTalk and Vodafone within 30 working days or pay compensation.

If BT encounters unforeseen problems it can sometimes assume that a customer has agreed to an extension of this deadline, but Ofcom found it had consistently done this retrospectively to reduce the amount of compensation it had to pay.

Ofcom said this is likely to have harmed UK businesses and consumers as well as telecoms providers.

Gaucho Rasmussen, Ofcom’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.

'This shouldn't have happened'

“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.”

Ofcom has also fined BT a further £300,000 for failing to provide information to the regulator during the investigation and the dispute with Vodafone that preceded it.

Openreach CEO Clive Selley said the company apologised “wholeheartedly” for its mistakes.

“This shouldn’t have happened and we fully accept Ofcom’s findings,” he said.

“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.”

Earlier this month BT agreed, at Ofcom’s request, to make Openreach a legally separate company.

Openreach will become a distinct company with its own staff and management, although Mr Selley will still have to report to BT’s group CEO Gavin Patterson, who has said the change will “serve the long-term interests of millions of UK households, businesses and service providers”.

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