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Disputes between: Hutchison 3G UK Limited (“H3G”) and each of O2 (UK) Ltd (“O2”), Orange Personal Communications Services Ltd (“Orange”), T-Mobile (UK) Ltd (“T-Mobile”) and Vodafone Limited (“Vodafone”) (together “the MNOs”)
Case opened: 14 April 2008
Issue: H3G has asked Ofcom to resolve disputes under Section 185(1) of the Communications Act 2003 (“the Act”) between H3G and the MNOs concerning variations proposed by H3G regarding the manner in which mobile call termination rates (“MCT rates”) are charged where calls are routed to a ported number.
Relevant instrument: Ofcom intends to resolve these disputes using its powers under Chapter 3 of Part 2 of the Communications Act 2003.

These disputes concern an allegation by H3G that each of the MNOs has failed to agree to variations proposed by H3G to their respective Interconnection Agreements regarding the manner in which MCT rates are charged when calls are routed to a ported number. Currently, the recipient network operator is entitled to receive the donor operator’s MCT rate rather than its own. H3G has proposed to each MNO that for such calls the recipient network operator should be entitled to charge its own MCT rate. H3G alleges that commercial negotiations between the parties have failed to result in agreement.

Whilst H3G has submitted four separate dispute referrals, it suggests that Ofcom might decide to resolve these on an industry-wide basis.

Ofcom recognises that on the face of the referral, there appears to be disputes between the parties that commercial negotiations have failed to resolve.

In resolving disputes Ofcom must act in accordance with the six Community requirements that give effect to Article 8 of the Framework Directive.

In summary, those requirements are:

• to promote competition in communications markets;
• to secure that Ofcom contributes to development of the European internal market;
• to promote the interests of all European Union citizens;
• to act in a manner which, so far as practicable, is technology-neutral;
• to encourage, to the extent Ofcom considers it appropriate, the provision of network access and service interoperability; and
• to encourage such compliance with certain international standards as is necessary for facilitating service interoperability and securing freedom of choice for the customers of communications providers.

Ofcom considers that the disputes meet the relevant statutory criteria and it is appropriate for Ofcom to handle them according to section 186 Communications Act 2003 and, accordingly, Ofcom has opened an investigation.

However, Ofcom considers that these disputes raise issues which are currently being considered by the Competition Appeal Tribunal in the Mobile Call Termination appeals concerning the charge controls imposed on all five of the Mobile Network Operators in the wholesale markets for termination of voice calls by Ofcom’s Mobile Call Termination Statement dated 27 March 2007. The determination of disputes raising such issues would create an unacceptable level of legal uncertainty for the parties to the disputes and, further, would involve an inefficient allocation of Ofcom’s time and resources.

Therefore, Ofcom considers that there are “exceptional circumstances” in this case within the meaning of section 188(5) Communications Act 2003. Having regard, in particular, to the fact that the judgment will either supersede these disputes or otherwise have a significant bearing on them, Ofcom has decided to suspend the determination of these disputes pending the final ruling by the Competition Appeal Tribunal in the MCT appeals (for the avoidance of doubt, this includes both non-price control issues and the price control issues referred to the Competition Commission according to section 193 Communications Act 2003).

Ofcom will decide on the scope of these disputes and the procedure going forward following the Competition Appeal Tribunal’s final ruling.

Case Leader: Lisle Alden (020 7783 4406 e-mail: lisle.alden@ofcom.org.uk)
Case Reference: CW/00983/03/08

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