IPStream to DataStream Migration / Equal terms for DataStream

Complainants: Tiscali UK Limited and Thus plc
Complaint against: BT
Case opened: 15 August 2003 (submitted to Oftel on 4 June 2003)
Relevant instrument: The Director intends to resolve the dispute under Chapter 3 of Part 2 of the Communications Act 2003 as from 25 July 2003. In resolving this dispute, to the extent the Director decides to consider the matter retrospectively and in relation to any period before 25 July 2003, he intends to do so under regulation 6 of the Telecommunications (Interconnection) Regulations 1997, by virtue of paragraph 22 of Schedule 18 of the Communications Act 2003.

Update note - 4 December 2003

This dispute involves a request to determine a reasonable charge for BT's IPStream to DataStream migration product. The market definitions and access obligations imposed under the Communications Act 2003 which relate to this issue are currently being considered as part of the wholesale broadband market review. Therefore, in the interests of efficient resource allocation and regulatory certainty, this dispute will be dealt with following the conclusion of the wholesale broadband market review consultation.

As a result, the dispute will not be concluded within four months from the date Oftel accepted the dispute. Therefore the dispute will not be handled within Oftel's standard dispute resolution timetable as set out in the Oftel and Radiocommunications Agency document Dispute resolution under the new EU Directives (http://www.oftel.gov.uk/publications/eu_directives/2003/eud0203.htm). The Director considers that the circumstances surrounding this dispute are exceptional circumstances and that, in accordance with Section 188(5) of the Communications Act 2003, Oftel is not bound by the requirement to resolve this dispute in four months. However, the Director is aiming, at present, to complete his investigation and resolve this dispute by the end of April 2004.

Issue
Tiscali and Thus have requested that BT make available a reasonably priced automated migration product for migration from IPStream to DataStream. Tiscali and Thus allege that the proposed price for IPStream to DataStream migrations is too high, and does not reflect actual costs of provision. Further, it has been alleged that BT is obstructing customer migration by imposing excessive network downtime, refusing to work at off-peak times to minimise disruption or to automate the process such that it operates effectively.

Tiscali and Thus have also requested that BT align the minimum contract terms for IPStream and DataStream.

Background
At present, operators who want to move users across from IPStream to DataStream are required to cancel an existing service and place a new order with BT, which incurs the standard connection charge and results in more downtime for the end user. It has been alleged that BT is obstructing customer migration by imposing excessive network downtime, refusing to work at off peak times to minimise disruption or to automate the process such that it operates efficiently.

BT has indicated that it is developing an automated service for IPStream to DataStream migrations. However, Tiscali and Thus argue that the proposed target price (£30) is neither fair nor reasonable for the following reasons:

1. The proportion of migrations which would incur re-jumpering is smaller than suggested by BT;
2. Even where re-jumpering is required at BT's exchanges, BT could reduce the costs associated with the migrations by processing operators' orders in bulk;
and
3. BT has charged £50 for activiations since the IPStream service was launched, and the actual costs to provide this service must have decreased over time as the proportion of connections has increased. It is suggested that BT's recent offer of a reduced activiation charge of £25 for IPStream demonstrates that the actual cost to deliver the service is probably much lower than £50.

In addition, Thus and Tiscali argue that BT is discriminating in favour of IPStream against DataStream by offering a one month minimum contract term for IPStream, compared to three months for DataStream.

BT has argued that there is no dispute, as it is developing an automated migration process, and discussions with Tiscali and Thus are continuing. Further, BT argues that the assumptions underlying Thus and Tiscali's claim that the proposed migration charge is unreasonable are flawed. BT has also argued that both issues fall outside the Interconnection Regulations.

The Director considers that there is clearly a failure for the parties to reach agreement regarding the pricing of a migration product, and on the minimum term for DataStream, and therefore proposes to investigate this dispute as set out below. He considers that this dispute concerns interconnection and is in relation to Network Access and therefore falls within his powers to resolve.

Scope of the dispute
To determine whether BT is obstructing customer migrations between IPStream to DataStream. As part of this assessment, Oftel will examine whether BT should be required to provide an automated migration product for migrations between IPStream to DataStream.

If the Director concludes that BT should be obliged to make such a product available, the Director will determine a reasonable price for both single migrations and bulk migrations.

The Director will also determine whether the minimum term for DataStream should be aligned to the minimum term for IPStream.

Procedural matters
The resolution of the dispute is subject to the procedures set out in the joint statement by Oftel and the Radiocommunications Agency "Dispute resolution under the new EU Directives" of 28 February 2003.

All representations on the scope of the dispute should be submitted to Oftel by 27 August 2003.

Stakeholders interested in the outcome of this dispute should notify Oftel by 27 August 2003 describing the relevance of the outcome of the dispute to their business.

Stakeholders with relevant information and evidence in respect of this dispute should submit this to Oftel by 10 September 2003.

Case Leader: Ruth Gibson (020 7634 8976 e-mail: ruth.gibson@oftel.gov.uk)
Case Reference: CW/00626/06/03