BT were recently hit with a huge £42 million fine from the Telecoms regulator Ofcom. If that wasn’t enough of a blow to the communications giant, they’ll also be expected to pay another £300 million to corporate customers, to make up for delays in installing their high-speed lines.
According to Ofcom, this is a record-breaking fine, and the largest it’s ever had to hand down. The regulator company noted that it had found out the Openreach division of BT had cut down compensation for telecoms providers who had been hit by delays in installing lines throughout 2013, and 2014. The chief executive for OpenReach, Clive Selley, apologised for the mistakes “wholeheartedly”.
Unfortunately, Ofcom’s investigation found that BT had broken the rules that had been created to counter its significant position in the market, by reducing payments. Gaucho Rasmussen, Ofcom’s investigations director, noted that the high-speed lines promised by BT were part of the UK’s digital backbone. BT broke the rules by not paying out compensation to the relevant companies when services weren’t provided on time.
The “Appropriate Notice” Issue
Openreach is currently responsible for providing the various cables and wires that power the UK’s landline phone network, and broadband. In these circumstances, the company failed to pay complete compensation to providers when it was late to the post for installing ethernet lines – the high-speed cables used commonly by large businesses and broadband providers to transmit data.
BT is supposed to be able roll out its high-speed lines within a period of no more than thirty days. If the business is unable to meet this standard, then it can give notice and inform customers that it might need a little longer. Unfortunately, Mr. Rasmussen said that if BT didn’t give the right “appropriate notice”, then it would be required to pay compensation to telecoms providers for the delay.
In the Ofcom investigation, it was found that no notice was provided. On top of the huge fines that BT had already racked up, they were also given another fine for £300,000 because they didn’t give Ofcom all the information they asked for to support the investigation. said an Ofcom spokesperson:
“We have powers that compel companies to provide us with information, and it’s important that the information is provided to us in a complete manner.”
BT Continues to Fall Short
Not too long ago, BT agreed to the demands set by Ofcom which required it to legally separate Openreach from the main business. Under these changes, OpenReach will become a distinct company with its own strategy, staff, and management.
The chief executive for BT, Gavin Patterson, noted that Ofcom’s investigation had revealed that the brand had fallen short of the high standards that had been set for serving Ofcom providers. BT went on to say that they were taking the matter very seriously, and had since put measures in place to prevent such problems from happening again.
