Ofcom has given BT a major slap on the wrist in the form of a £42 million fine, which was imposed due to the telecoms giant’s unfair reduction of compensation payments given out for the late installation of leased lines.
As you’re probably aware, leased lines are dedicated high-speed internet connections used by businesses, and in some cases when these are being installed, BT doesn’t make the deadline.
If the leased line is for a third-party provider’s installation, compensation is due to the service provider implementing the line – but Ofcom found that between January 2013 and December 2014, BT ‘misused the terms of its contracts’ to reduce the amount of compensation paid out.
BT is supposed to deliver leased lines within 30 working days, although Ofcom noted that if problems occur, in certain circumstances, BT can get an extension on that deadline, or assume a customer has agreed to an extension. But Ofcom observed that “BT did this retrospectively over a sustained period, to reduce the level of compensation it owed to telecoms providers”.
The £42 million penalty is the largest the watchdog has ever handed down, and Gaucho Rasmussen, Ofcom’s Investigations Director, observed: “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.”
BT has admitted full liability and will set up a scheme to compensate affected telecoms providers, and given its compliance and cooperation, Ofcom said the fine had been reduced by 30%.
All compensation will have to be paid within the next 12 months.
Ofcom also said that BT is to be fined a further £300,000 for failing to provide accurate and complete information during the investigation.
Clive Selley, Openreach CEO, commented: “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 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.”
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