BT hit with £42m fine for lowering compensation pay-outs to rival providers

BT fined £42m for breaching telecoms contracts

Communications giant BT has been landed with a mammoth £42m fine by Ofcom after it was found to have illegally lowered compensation pay-outs to other telecoms providers for delays in connecting high-speed business lines.

Despite admitting its failure and agreeing to properly compensate the companies involved BT has now been slapped down with a multi-million-pound penalty as an example to others.

Gaucho Rasmussen, Ofcom's investigations director, said: "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."

Between January 2013 and December 2014 Ofcom found that BT’s network arm, Openreach, had paid out less in compensation than was required to other telecoms providers for failing to deliver ‘Ethernet’ high-speed data services on time.

Adding to BT’s woes the company has also been hit by a separate £300k fine for failing to furnish Ofcom with accurate and complete information relating to the original dispute.

BT is being closely scrutinized for the ‘significant market power’ it presently wields within the sector as a result of commercial rivals' reliance on access to BT’s network to offer their own services.

Sky and TalkTalk have previously called for OpenReach to be carved out of BT to enhance competition in the UK telecoms sector.

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