July 18, 2019
Ofcom has kicked-off an investigation to determine whether BT has complied with regulations concerning Excess Construction Charges (ECCs).
The ECCs are effectively charges for extra work BT-owned Openreach has to do to meet customer-specific network construction requirements. After the first £2,800 in excess cost, BT has been allowed to balance the spreadsheets with a standard connection charge for all relevant business connectivity services. BT has admitted it may not have applied the charge correctly and could be in-line for some wrist-slapping from the regulator.
“BT has provided Ofcom with information indicating that it may not have correctly applied the ECC exemption to a number of relevant business connectivity orders since the beginning of the ECC exemption regime,” an Ofcom statement reads.
“Having considered the information provided by BT, we have decided to open an investigation to examine whether there are reasonable grounds to believe that BT has failed to comply with its obligations under the following SMP conditions from 16 May 2014.”
Although some might suggest that a wholesaler such as Openreach should wear the cost of constructing its own assets, there are some exceptions. Occasionally, when delivering a new high-capacity leased line, for example, additional costs need to recouped by Openreach. This would be considered reasonable business practice, assuming Openreach plays fairly and by the rules.
Thanks to a prior Business Connectivity Market Review conducted by Ofcom, pricing controls have been placed on Openreach. Since 16 May 2014, the firm has been under these pricing restrictions in the pursuit of fairness.
As with most of these statements from Ofcom, there is little information for the moment. However, as BT informed the regulator of the potential over-charging, it would appear this is a case where judgment has already been reached. All Ofcom has to do now is understand the severity of the non-compliance and dish out a suitable penalty.