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BT overcharged rival ISPs, ordered to refund £95 million

by Mark Tyson on 21 December 2012, 11:34

Tags: British Telecom (LON:BT.A), TalkTalk, Virgin (NASDAQ:VMED)

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Today Ofcom ordered BT to repay its corporate customers almost £95 million. The independent communications regulator said the repayment was required because BT has been overcharging for Ethernet Services. ISPs and service providers including BSkyB, TalkTalk, Virgin Media, Verizon UK and Cable & Wireless will all get some refund payments.

BT Ethernet Services are mainly used by businesses to provide high speed data services between separate sites. However prices charged by BT were “not cost orientated” according to customer complaints to Ofcom from 2010 onwards. Today Ofcom has finished looking at the evidence and decided refund payments totalling £94,823,000 must be made by BT.

BT has two months to decide whether to appeal against Ofcom’s decision.

BT’s 4G bid

In related news there has been quite a bit of speculation concerning BT’s bid for 4G spectrum. Despite bidding the company has announced that it is not planning to become a mobile operator again. Due to the rules of the auction however, BT can’t say what its planned use of the spectrum is. According to PC Pro’s information coming from “analysts and industry experts” BT may use any 4G spectrum wins to provide broadband access to homes in otherwise slow broadband areas. BT participated with EE in 4G trials in Cornwall.

UPDATE: I've just has an email from BT's press office which explains "...note that this ruling relates to Ethernet backhaul services where CPs use the technology to connect their core network to Openreach’s network and also Ethernet services that CPs use to supply major corporate customers with business services. The products in dispute were replaced some time ago".

HEXUS Forums :: 8 Comments

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I can't understand why they charge so much. recently changed to talktalk, which BT rang me telling me how bad talktalk was and would offer me the same adsl2 unlimited service for £26 + line, tried explaining there is a massive difference between £26 and £6.50 which talktalk charge.
If they actually said “How bad TalkTalk” were then they're guilty of breaching Ofcom's rules concerning the selling of communications systems (broadband & phones).
That's up to 10% of total earnings fines per breach on a per case basis (emphasis on the “UP TO” just like the broadband they sell :P )

Used to work for BSkyB sales inbound for 7 years (yeah I'm the guys that told ya that ya needed (pick a package any package)) and later selling BT's Fiber on a PT basis for a laugh so I do know the “Idiots guide to Ofcom Selling Rules” which is basically “No badmouthing the competition or we can fine you up to 10% of your gross earnings”. Nasty.
I've sold broadband for another major company and trust me they never told any of the staff about the ofcom selling rules. I only knew because of watching some consumer reports program like watchdog.
Basically if any sales jobs are outsourced then the rules can go out of the window. Replaced by sell however you can or lose your job.
Thing is, no matter how much BT overcharged, the customers wont get to see a single penny even though it only effect them.
While they get some stick for pricing I can't really fault the service. Running the 80MB fiber service and it's been excellent so far. Had 1 evening of slightly dodgy connection in just over a year.
The ADSL service from BT probably isn't worth the premium but the infinity product is very nice.