Openreach Takes UK ISP TalkTalk to Court Over Unpaid Fees

Network access provider Openreach (BT) has confirmed that they’ve “reluctantly” begun a high court case against budget broadband ISP TalkTalk, which reportedly centres on a dispute over unpaid fees (said to be worth c.£16m) for wholesale access to its high-speed fibre optic based Ethernet products.

According to The Telegraph, TalkTalk’s arrears date back to the end of September, when the provider was due to make its monthly payment of about £70m. Apparently, some of this payment was withheld by the ISP because they claim that Openreach had failed to meet the service level guarantees set out in their contract. The money being withheld represents around 1% of what the ISP pays Openreach on an annual basis.

“It is usual to withhold payments when service levels are not met, so we are disappointed by Openreach’s actions,” said a spokesperson for TalkTalk. The core of this issue appears to centre around Openreach’s use of the “deemed consent” clause to allow for installation delays, which can avoid the need for a compensation payment (i.e. if the delay is justified).

The deemed consent mechanism exists to cover a variety of factors that could cause delays, such as when dealing with infrastructure damage, the clearance of blocked cable ducts, tackling asbestos, gaining specific approvals for street works or a variety of other issues.

In short, if Openreach encounters problems that require more time to resolve (i.e. extend the provision window), then in certain circumstances it can assume that a customer has agreed to an extension. Clearly TalkTalk believes that the operator has not been playing fair on this front, which Openreach denies. Back in 2017 Openreach was hit by Ofcom with a fine of £42m for a similar issue (here) and told to repay ISPs.

A Spokesperson for Openreach said:

“TalkTalk is one of our biggest, most valued customers, so we’re reluctantly pursuing this through the courts. Our priority is to continue to support TalkTalk and their millions of customers throughout the UK, in a period when connectivity’s never been more important.”

Openreach’s minimum service levels have improved a fair amount over the past few years, which is partly due to regulatory pressure from Ofcom, although TalkTalk clearly feels as if it has examples where things have not gone quite as smoothly. The court will ultimately decide which side is right and which is wrong, although such cases often take a while to reach a conclusion.

The move comes shortly after TalkTalk announced that it was considering taking legal action against Ofcom over a key change in the regulator’s Wholesale Fixed Telecoms Market Review 2021-26 (FTMR), which could result in Openreach charging higher wholesale prices (here). Tis the season to be jolly for litigation.