The fine follows an investigation by Ofcom into BT’s infrastructure arm Openreach
Ofcom has fined BT £42 million for breaching contracts with telecoms providers in order to reduce compensation for failing to deliver their services on time.
The investigation into the network infrastructure company that is owned by BT found that between January 2013 and December 2014, BT misused the terms of its contracts with telecoms companies to reduce the compensation due when network lines were not delivered on time.
Ofcom also found that BT, who has admitted failings, took advantage of it’s market power due to the fact that the high speed network cables that are used by businesses, mobile and broadband providers were owned and leased by the telecoms giant.
Ofcom investigations director Gaucho Rasmussen 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.
“Our message is clear – we will not tolerate this sort of behaviour.”
BT, who received an additional fine of £300,000 for failing to provide more information to Ofcom’s investigation, were able to reduce the fine by 30 per cent for admitting full liability and setting up a scheme to compensate the telecoms companies that have been affected.
Ofcom found that the actions taken by BT have harmed the UK businesses and consumers who reply on high quality, high-speed broadband services and will compensate all the telecom providers who faced financial loss as a result of BT’s actions.
BT Group chief executive Gavin Patterson 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.”
The fine comes after BT agreed to Ofcom’s conditions to legally separate BT Openreach into two separate companies in the midst of complaints from broadband rivals about high charges, poor services and a failure to invest in the sector.
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.
“Since I became CEO 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.”
Cable.co.uk consumer telecoms analyst Dan Howdle 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 and fines such as this are vital in maintaining a fair competitive marketplace in which business can thrive.”