It has been announced that Openreach has received the largest recorded fine ever imposed on a telecoms company for breaching the terms and conditions of contracts that the company has held with a number of internet service providers in the UK. Reports suggest that Openreach have failed to abide by agreed installation times of new ethernet lines, preventing internet service providers from offering superfast connections to their customers, and hindering plans to meet the ‘95% availability’ goal.
It’s fair to say that Openreach hasn’t had the most successful of years. It was just a few months ago — in November 2016 — that Ofcom provided a formal notification of the plan to legally separate Openreach, which is the UK’s primary telecoms network, from broadband provider BT over claims that the company was favouring the retailer over other internet service providers, such as Sky, Talktalk, and Vodafone. This extra blow is expected to cost Openreach £42 million in fines, plus £300 million in compensation.
This news doesn’t come as much of a surprise, especially to those who have been following Ofcom’s updates relating to their ongoing concerns with the services offered by Openreach. It was in March 2016 when Ofcom first went public with concerns over installation times, claiming that leased line installation times had risen from an average 40 days to 48 days. It was also claimed that Openreach was failing to meet 1 in 4 agreed installation dates, limiting the ongoing growth and development of UK businesses.
Openreach has not only admitted to failing to meet deadlines, but also to failing to properly compensate internet service providers for this poor service. “We fully accept Ofcom’s findings”, says Clive Selley, CEO of Openreach. Vodafone commented that it hoped the ruling would put an end to ‘unreasonable practices’ by Openreach; practices which are said to have directly impacted Vodafone’s 4G rollout. As expected, BT’s share prices have taken a tumble as this news has spread around the technology world.
The fact that Openreach has received the largest fine ever imposed on a telecoms company highlights just how important installation of these high capacity ethernet lines really are to the future of the UK economy. “We will not tolerate this sort of behaviour” says Gaucho Rasmussen of Ofcom, “our message is clear”. Openreach have been given 12 months to provide full compensation to all internet service providers who have been affected by delays in installation, which is believed to include TalkTalk.