Ofcom fines BT £6.3m for breaking rules over Northern Ireland contract

Britain’s telecom regulator has fined BT £6.3m ($8.3m) for breaking the rules over a major public services contract in Northern Ireland.

Ofcom said on Friday that BT’s (BT-A.L) network arm failed to give a rival firm the same information as its own bidding team during the tender process between April 2017 and March 2018.

Imposing the penalty, the watchdog reduced the fine by almost 30% because BT settled and admitted full liability.

Under Ofcom’s Significant Market Power (SMP) rules, BT must treat all its wholesale customers equally, this includes its own customer-facing business.

The breaches were revealed following an investigation into a complaint made by telecoms company Eir, relating to BT's conduct during the tender process.

Ofcom’s investigation found that BT breached its rules by failing to provide Eir with the same information about its Fibre to the Premises on Demand (FOD) product as BT's own team. BT's network arm told Eir it was not suitable and had "delivery limitations" while BT's bid team was told it could be used for major network projects, Ofcom said.

Crucially investigators said they haven’t made any findings whether BT’s actions “affected the outcome of the tender process.”

Ofcom also recognised that, during the tender, BT implemented compliance processes to address the risk of not treating the two bidders equally. “We do not believe that the breaches we have found were deliberate,” Ofcom said.

Gaucho Rasmussen, Ofcom's director of enforcement, said: “BT’s network arm broke our rules by failing to treat a rival company and BT’s own bid team equally during the tender for a major public sector contract in Northern Ireland. Our fine reflects how important these rules are, and how seriously we take compliance.”

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In 2018, the Northern Ireland Department of Finance announced that BT had won a major new contract, to provide connectivity services to 2,000 public sector organisations, in the country via the Public Sector Shared Network (NIPSSN).

As part of the contract BT would provide the services to organisations including schools, the police, government departments, local councils and other public bodies. The contract was initially valued at around £50m over 9 years — potentially rising to £400m via future changes to its scale and scope.

But in 2019, the telecoms regulator launched an investigation into the agreement to see whether the company had adhered to its SMP rules.

Philip O’Meara, regional director of Eir business Northern Ireland, said: “Eir Business Northern Ireland welcomes today’s decision by Ofcom that BT unduly discriminated against Eir in tendering for the Northern Ireland Public Sector Shared Network contract.

“The size of the fine imposed by Ofcom on BT illustrates the gravity of BT's behaviour. We firmly believe that had BT complied with its regulatory obligations, we would have retained the NIPSSN contract. We are considering our options in light of today's decision and BT's admission of liability. Eir Business Northern Ireland is keenly committed to its customers and to ensuring a fair and competitive market place for telecoms services.”

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Steps had been taken to ensure something similar doesn’t “happen again,” BT said. A spokesman for BT Group said, the company “regrets the level of service” it provided to Eir during tender process in Northern Ireland.

The spokesman added: "We've cooperated with and accepted Ofcom's findings and have already put measures in place to prevent this happening again.

"We also continue to review how we can improve our service.

"Ofcom recognises that these errors weren't deliberate and that we took a number of steps to comply with the regulatory obligations.

"Based on Ofcom's decision, we don't believe this impacted the tender outcome.

"Our focus remains on constantly improving our levels of service to customers as we make significant investments in 5G and full fibre networks across the UK."

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