between Cable & Wireless and BT - BT's Product Management,
Policy and Planning ('PPP') charge
Complainant: Cable & Wireless ("C&W")
Complaint against: BT
Case opened: 19 November 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 30 September 2003.
C&W has referred a dispute relating to the level of, and
recovery method for, BT's Product Management, Policy and Planning
PPP charges are levied by BT to cover the administrative costs
of providing interconnection.
C&W considers that BT's PPP charge places it in breach of
its regulatory obligations. C&W has requested that the Director:
BT's regulatory accounts to strip out any cost elements that
have been attributed to PPP but ought not to have been placed
within this category;
on the results of this examination, lower the PPP charge to
prevent incorrect or excessive cost recovery by BT;
cost recovery on a pence per minute basis only for those elements
within PPP which are truly volume driven;
recovery according to cost drivers for elements which are not
volume driven - for example, as a per operator charge where
recovery on a fair, reasonable and non-discriminatory basis
from both BT Retail and competing operators, to ensure effective
and efficient competition in downstream wholesale and retail
the PPP charge accordingly, dating from the point at which the
charge ceased to be reasonable, cost oriented and non-discriminatory.
Director is currently investigating BT's PPP charge as part
of a policy project that is linked to the review of the fixed
narrowband wholesale exchange line, call origination, conveyance
and transit markets. The Director's decision to investigate
the PPP charge separately was made clear in the Explanatory
Statement and Notification of 26 August 2003 relating to that
market review (http://www.oftel.gov.uk/publications/eu_directives/2003/fix_narrow_retail0803.pdf),
see paragraphs 9.80 and 9.81.
initial consideration, the Director considered that the investigation
of the PPP charge would involve an extensive cost investigation.
Thus, the Director has already scoped and planned such a cost
investigation for the purposes of the above-mentioned policy
project. On the information presently before the Director, it
would appear to the Director that it would need to consider
the same (or similar) costing issues in order to determine the
dispute now referred by C&W.
in the interests of efficient resource allocation and the time
needed to complete the investigation into costs, C&W's request
for dispute resolution will be considered as part of the policy
project. As a result, the dispute will not be handled in accordance
with the Director's standard dispute resolution procedures,
which are currently set out in the Oftel and Radiocommunications
Agency document "Dispute resolution under the new EU Directives"
the above-mentioned policy project is not expected to conclude
within the next four months. The Director considers for reasons
given above that this dispute has been referred in exceptional
circumstances and the requirement to resolve a dispute in four
months, as set out in section 188(5) of the Act, will therefore
not apply in this case. However, the Director is aiming, at
present, to complete his investigation and resolve this dispute
by 30 April 2004.
- 19 November 2003
on the scope of the dispute should be submitted to Oftel by
27 November 2003.
interested in the outcome of this dispute should notify Oftel
by 27 November 2003 describing the relevance of the outcome
of the dispute to their business.
with relevant information and evidence in respect of this dispute
should submit this to Oftel by 10 December 2003.
(Selina Chadha 020 7634 5307 e-mail:firstname.lastname@example.org)
Case Reference: CW/00700/09/03