Ofcom's Biggest Ever Fine Goes To BT

By Holly Brockwell on at

Ofcom's fining BT a record £42,000,000 for abusing its market power to reduce the amount of compensation it paid other companies.

In 2013 and '14, BT Openreach failed to deliver ethernet services to customers like Vodafone and TalkTalk within the required 30 working days. According to its contracts, it has to pay compensation when installation dates are missed. As anyone who's tried to get BT to install anything can attest, that wasn't likely to happen – but instead of paying the agreed compensation, BT retroactively gave itself an extension, then claimed it didn't have to pay compensation because the extended date wasn't missed.

Vodafone went to Ofcom in 2015 to complain about this, which kicked off the investigation and was likely one of the factors in the recent decision to split BT and Openreach.

Gaucho Rasmussen, Ofcom’s Investigations Director, explains why BT's behaviour is such a big deal:

"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."

The original fine was a whopping £60m, but BT got 30% off for admitting fault and setting up a compensation scheme (yes, it's compensating companies for failing to compensate them). There's also a £300,000 extra fine to pay for not giving "accurate and complete" information for any of the three enquiries into this issue.

In BT terms, that's about a year's line rental.