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March 27, 2017updated 28 Mar 2017 6:35pm

BT handed record £42m fine for Openreach installation failings

BT and Openreach have been fined a record £42 million for failing to comply with competition rules.

By Joe Clark

BT has been given a record £42 million fine from regulator Ofcom, for failing to compensate competitors for delays in Ethernet installation.

The £42 million fine is the largest a telecoms provider has received, and the company has also agreed to pay up to £300 million to competitors such as TalkTalk and Vodafone.

An investigation by Ofcom found that the Openreach side of BT’s business had not properly compensated for delays in service between 2013 and 2014. The investigation found that BT had broken rules that were put in place to prevent its market power being an unfair advantage.

BTClive Selley, Openreach CEO, 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.”

“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.”

Openreach is the UK’s largest provider of online infrastructure and failed to provide adequate compensation to other companies using this infrastructure if outages and installations were delayed. BT also, failed to disclose if delays would last longer than 30 days, something which it is legally required to do.

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On top of this the company was also fined a much smaller £300,000 for failing to provide Ofcom with all of the relevant information during the investigation.

Andrew Ferguson, editor of thinkbroadband.com, said: “The £42m fine is substantial, and could have been 30 per cent higher if BT had not agreed to take full liability. The full amount this mistake will cost the BT Group is unknown, as a compensation scheme will be created for the companies buying Ethernet services that were affected by the installation delays.”

“Ethernet and leased line services are the core of the business broadband world and is an area where BT Group is facing increasing competition and regulatory pressure to reduce the price it charges. However, if standards slip as they did between Jan 2013 and Dec 2014, fines like this are the result and it seems Ofcom is ready to act as regulator with a big stick.”

Last week saw Ofcom separate both BT and Openreach in order to ensure that Openreach would serve all of its customers fairly.

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