Telecoms giant BT has been fined a record £42 million for a ‘serious breach’ of rules by industry regulator Ofcom. An investigation into BT’s controversial Openreach business, which maintains the country’s telecoms network, found it was breaking rules about fair market competition. Most telecoms companies, such as Talk Talk, Vodafone and Sky, rely on BT’s Openreach to give their customers access to broadband. BT fined £42 million by Ofcom for 'serious breach' of rules in largest penalty ever imposed by the regulator. It comes just two weeks after BT agreed to a legal separation of its Openreach branch The investigation found BT was deliberately giving other telecoms providers less compensation than they were owed for severe delays in setting up internet connections. It is the largest fine ever given out by the regulator to a telecoms company, more than 10 times bigger than the £3.7 million fine given to Vodafone in 2016. It comes just two weeks after BT agreed to a legal separation of its Openreach branch, which experts believe will make the market fairer. The investigation covered Openreach activity between January 2013 and December 2014. It found BT was not giving proper compensation for late Ethernet installations, which is a type of leased-line internet connection that allows large businesses, as well as hospitals and libraries, to get high-capacity internet access. Under Ofcom rules, BT has to set-up Ethernet services to its wholesale customers - providers such as Vodafone and TalkTalk - and make compensation payments for late delivery. BT’s contracts require it to deliver Ethernet services within 30 working days, or pay compensation to the company affected. But it did not properly compensate companies, which Ofcom said not only harmed other telecoms companies, but it also ‘harmed the UK businesses and consumers who rely on high quality, high-speed, broadband services every day.’ Gaucho Rasmussen, Ofcom’s Investigations Director, said: ‘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. ‘We found BT broke our rules by failing to pay other telecoms companies proper compensation when these services were not provided on time. 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.’ It is the largest fine ever given out by the regulator to a telecoms company, more than 10 times bigger than the £3.7 million fine given to Vodafone in 2016 A spokesman said the hefty size of the fine was to reflect BT’s ‘deliberate activity’ over a sustained period of time, and because it had breached important rules about dominating market power. Ofcom has taken enforcement action because BT breached rules that address the company’s ‘significant market power’. Clive 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. ‘This issue is unrepresentative of the vast majority of work conducted by Openreach and we are committed to delivering outstanding service for our customers.’ Earlier this month, BT reached an agreement with Ofcom to legally separate Openreach. The company had faced growing calls from rivals to hive off Openreach, and now it is set to become a distinct, legally separate company with its own board. It will remain in the BT Group. Openreach builds and maintains the tens of millions of copper and fibre lines that run from telephone exchanges to homes and businesses across the UK.
BT has been fined £42m by regulator Ofcom for a serious breach of fair competition rules by its Openreach business, which provides many telecoms companies with access to broadband. Ofcom found that BT was intentionally withholding full compensation to certain telecoms providers for the severe delays they experienced while setting up internet connections. The fine is the largest ever given by Ofcom and follows BT’s decision to legally separate from Openreach to increase market fairness.