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BT fined after failing to pay compensation

Mar 27th, 09:25 by

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BT have been fined £42 million by regulatory board Ofcom after having delayed the installation of high-speed cable for a number of other broadband providers and then failing to pay them the correct amount of compensation.

The telecommunication giant had agreed to connect rival companies like Vodafone and TalkTalk up to their Openreach infrastructure, the network that’s responsible for supporting much of the UK’s broadband network, within a period of 30 days.

When BT failed to complete the work on time, they were ordered to pay-out a fair amount of compensation in order to cover any income lost as a result of their slow work.

An investigation was later launched after Vodafone stated that they believed BT were manipulating the terms agreed upon within the initial installation contract so that they’d be able to get away with paying out less than what was required.

The watchdog concluded that Openreach had reduced compensation payments to other providers between 2013 and 2014, and had committed a “serious breach” of Ofcom’s rules in doing so.

They will now also be required to pay out an extra £300,000 in compensation within the next year.

“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,” said Gaucho Rasmussen, Investigation Director at Ofcom.

“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’s fine was originally due to be even greater, but it was reduced by 30% after the provider admitted they were at fault and claimed full responsibility.

This second financial blow comes to BT just two month after improper accounting practices in their Italian arm caused the company’s shares to plunge by 21%.

Source: The Guardian

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