Dispute between Orange and BT - CSI Links connection and rental charges cost sharing

Complainant: Orange
Complaint against: BT
Case opened: 29 August 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. This dispute was referred to the Director on 21 July 2003.

Issue
Orange and BT are in dispute regarding the implementation of cost sharing arrangements in respect of the connection and rental charges associated with customer sited interconnect (CSI) links.

Background
In a determination dated 15 October 1999 (but effective 1 April 1998) Oftel stated that connection charges for CSI interconnect links should be shared between BT and Orange and the exact methodology for apportionment of these charges was to be negotiated by BT and Orange.

Despite on-going commercial negotiations dating from October 2002 between BT and Orange, this issue has not been resolved. Bilateral negotiations have failed and Orange has referred this matter to Oftel in order that a resolution be found to:

(1) the value of the rebate due to Orange in respect of connection charges already paid by Orange since 1 April 1998; and
(2) the methodology for the apportionment of connection charges going forward.

The 1999 Determination did not directly address the issue of CSI link rental charges. However, BT has argued that CSI link connection charges cannot be considered in isolation and must be considered in parallel with CSI link rental charges. This view has formed part of BT's position in the negotiations with Orange in this dispute.

BT added that it issued a review notice on the CSI product which resulted in an Network Charge Change Notice (NCCN) in August 2000, addressing both connection and rental cost sharing. This NCCN was issued in parallel to another NCCN that addressed issues with Number Translation Services (NTS) traffic. A number of operators objected to both NCCNs and BT referred the dispute to Oftel. Much of the discussion centred on NTS culminating in a determination of June 2001 which dealt with the NTS issue and did not explicitly address the CSI issues, maintaining the industry status quo on CSI.

Scope
To determine:
the methodology for the apportionment of CSI link connection and, to the extent that this also involves re-consideration of the current method of apportioning CSI link rental charges, CSI link rental charges, for all types of traffic carried over CSI links, without determining the level of the charges. The Director will consider whether or not any decision should be applied retrospectively.

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 5 September 2003.

Stakeholders interested in the outcome of this dispute should notify Oftel by 5 September 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 19 September 2003.

Update Note - 20 November 2003

On 19 November 2003 Oftel issued a draft Determination under Section 190 of the Communications Act 2003 and draft Direction under Regulation 6(6) of the Telecommunications (Interconnection) Regulations 1997. Comments on this consultation should be sent to the Oftel contact shown in the document by Thursday 4 December 2003.

Click here to access the draft Determination and draft Direction

Update note - 25 September 2003

For the avoidance of doubt, Oftel's investigation into this dispute will also consider the possible impact that any changes to the current method of apportioning rental and connection charges for CSI links will have on the process set out in BT's Standard Interconnect Agreement of refunding a proportion of the rental charges already paid in the event a CSI circuit is ceased.

Case Leader: Tanya Rofani (020 7634 8938 e-mail:Tanya.Rofani@oftel.gov.uk)
Case Reference: CW/00663/07/03