Eurobites: BT 'Fesses Up to Compensation-Fiddling on Ethernet ServicesEurobites: BT 'Fesses Up to Compensation-Fiddling on Ethernet Services

It never rains but it pours for BT Group plc (NYSE: BT; London: BTA): Last week the regulator Ofcom announced that consumers would be entitled to automatic compensation if fixed-line providers in the UK failed to meet certain levels of customer service; on Friday the Financial Times reported (subscription required) that BT's Global Services division had been accused of bid-rigging in Hong Kong; and today BT has been singled out and fined £42 million (US$52.9 million) for fiddling the compensation payments it paid to rival telcos for delays in its network access unit, Openreach , connecting Ethernet services. Under Ofcom's rules, BT is obliged to install Ethernet services to its wholesale customers in accordance with its contracts, which state that such services must be delivered within 30 days and, if these terms are not met, compensation must be paid. Exceptions can be granted if problems are encountered in the delivery of the services, but between January 2013 and December 2014 BT was found to be "encountering" such problems retrospectively, to reduce its compensation payments.

In addition to the £42 million fine, BT has also agreed to compensate the affected telcos (Vodafone Group plc (NYSE: VOD) and TalkTalk amongst them) in full, a commitment it expects to cost in the region of £300 million ($377 million). In a statement, BT admitted responsibility for the dodgy practices, saying: "We apologise wholeheartedly for the mistakes Openreach made in the past when processing orders for a number of high-speed business connections … This shouldn't have happened and we fully accept Ofcom's findings." (See Eurobites: Brits In Line for Cashback Over Fixed-Line Fails.)