BT has been ordered to pay additional sums after a tribunal ruled that interest is due on a previous settlement in which the company was found to have overcharged competitors for backhaul Ethernet services.
Ofcom first brought the case in December 2012, finding that BT had overcharged rivals by £95 million for the five-year period from 2006 to 2011. The regulator required BT to reimburse the overcharged amounts to affected providers, including Cable & Wireless Worldwide (now part of Vodafone), Sky, TalkTalk, Verizon, and Virgin Media.
The new Openreach will be built to serve all its customers equally
After the initial ruling, the parties appealed to the Competition Appeal Tribunal (CAT). In June 2015 the CAT decided that an additional £22 million in interest was due on top of the original sum and that BT should be required to pay that interest.
BT challenged the CAT decision, but the Court of Appeal recently upheld the tribunal’s judgment, confirming that Ofcom has the authority to award interest when resolving such disputes. A spokesperson for BT Openreach said the company will study the judgment carefully and consider whether to seek permission to appeal to the Supreme Court.
Separately, earlier this year BT faced another Ethernet-related penalty: in March it was charged £42 million for failing to compensate competitors promptly for delays in repairing leased-line services. Taken together with other adjustments, BT now estimates it will need to compensate affected providers by an additional £300 million for related shortcomings.
These findings and penalties have intensified scrutiny of BT’s relationship with Openreach and reinforced calls from rivals for a clearer separation. After years of regulatory pressure and legal exchanges, BT agreed in March to legally separate Openreach from the rest of the company.
“The new Openreach will be built to serve all its customers equally, working truly independently and taking investment decisions on behalf of the whole industry — not just BT,” said Ofcom Chief Executive Sharon White. “We welcome BT’s decision to make these reforms, which means they can be implemented much more quickly. We will carefully monitor how the new Openreach performs, while continuing our work to improve the quality of service offered by all telecoms companies.”
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