1 BT is not required by this determination to make retrospective repayments to CWC in respect of 'overpayments' made to it by CWC in respect of CWC's deemed NTS retail price ('D') for the period 1 October 1997 to 31 December 1999.

2 Any repayments for CWC's de-averaged NTS conveyance charge ('C') shall take effect from 1 November 1999.

3 Any amount payable by BT to CWC should be paid together with interest calculated in accordance with Clause 13.13 of the Standard Interconnect Agreement.

4 Any amount payable by CWC to BT should be paid together with interest calculated in accordance with Clause 13.13 of the Standard Interconnect Agreement.

5 In this determination, words or expressions used have the same meaning as in the Act or the Licence.

6 The parties shall modify their interconnect agreements to give effect to this determination.

Keith Long

March 2000

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DETERMINATION UNDER THE PROVISIONS OF REGULATION 6(6) OF THE TELECOMMUNICATIONS (INTERCONNECTION) REGULATIONS 1997 OF A DISPUTE BETWEEN BRITISH TELECOMMUNICATIONS PLC ("BT") AND CABLE AND WIRELESS COMMUNICATIONS ("CWC")

Explanatory Memorandum

Chapter 1

Summary

1.1 This Determination has been made in respect of a dispute between Cable and Wireless (CWC) and BT plc (BT) in respect of CWC's deemed NTS retail price 'D' from 1 October 1997 to 31 December 1999 and CWC's de-averaged NTS Conveyance charge 'C' from 1 February 1999 to 1 December 1999.

1.2 The Director General of Telecommunications ("the Director") has considered the correspondence supplied by Cable and Wireless and BT. He has also considered the oral submissions made by both parties who met with Oftel on a number of occasions. As a consequence, the Director issued a draft determination on 30 November 2000 to the parties for consultation. Comments were received as requested in the Explanatory Memorandum to the draft determination and these have been considered before making this final determination.

1.3 The Director General of Telecommunications ("the Director") has issued a determination in accordance with the provisions of Regulation 6(6) of the Telecommunications (Interconnection) Regulations 1997 (which implements Article 9(5) of the Interconnection Directive 97/33/EC) for the resolution of a dispute between British Telecommunications plc ("BT") and Cable & Wireless Communications ("CWC") under the terms of their Interconnection Agreement. The determination sets out the Director's decision on whether CWC should receive retrospective repayment of any 'overpayments' made to BT as a result of differences between both operators' NTS charges.

1.4 In relation to CWC's operator specific 'D' for the period 1 October 1997 to 31 December 1999, the Director has concluded that, despite some correspondence between the parties from December 1997 to mid 2000, at no time was there a formal agreement between them requiring CWC's 'D' to be paid retrospectively for this period. CWC may have had an expectation that BT would do this, but failed to accept BT's conditional offer. CWC also failed to provide information within the time allowed by BT or to formally contest BT's deadline dates at the time. BT's offer therefore lapsed and no agreement was made. In the absence of an agreement, the Director determines that BT is not required to make retrospective repayment of any 'overpayments' made by CWC by virtue of differences between its 'D' and BT's calculation of its 'D'.

1.5 In relation to CWC's 'C' for the period 1 February 1999 to 31 December 1999 the Director determines that the principles applied to BT in Oftel's Direction of BT's NTS Conveyance made on 14 November 1999, should apply equally to CWC in this case. As such, CWC's 'C' should apply retrospectively from 1 November 1999. Furthermore, if the parties are unable to agree the basis for the calculation of 'C', then the same method applied to the calculation of BT's 'C' in the Direction could be used to establish CWC's charge. If the parties remain unable to agree a charge the matter may be referred to Oftel for determination.

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Chapter 2

Background

Description of NTS

2.1 The term Number Translation Services (NTS) describes a range of specially tariffed services, primarily used for telemarketing, which include 080X/0500 Freephone, 0345/0645/0845 local call fee access, 0870/0990 national call fee access and 08xx/09xx Premium Rate Services. It does not include services operating on 07xx numbers such as personal numbering which, although technically similar in many cases, offer different services than those for which NTS was established. NTS services are offered at specific price points in order that customers calling from any fixed network will be able to associate the number range with a particular pricing arrangement. For example, 0800/0500 calls are free to the caller.

2.2 On 30 January 1996 Oftel published the determination of Interim Charges for BT's Initial Standard Services for the year ending 31 March 1996 ("the 1996 Determination"). Annex 6 to the 1996 Determination described the new formula to apply to calls to BT's NTS services. This formula is:

Originating operator (ONO) retains:	P - D + C
Terminating operator (TNO) receives:	D - C

        
where:

P is the actual retail price charged by the originating operator to the customer;
C is the pence per minute charge for conveyance over a single tandem segment of BT's network determined in this determination (multiplied by the number of minutes of the call) plus an uplift to allow for retail costs incurred by the originating operator in handling these calls;
D is the Deemed Retail Price for the call and is:

• in the case of Freefone services, zero;
  
• in the case of national call fee services, the net retail price after discounts charged by the originating operator for national calls
  
• in the case of local call fee access services, the net retail price after discounts charged by the originating operator for local calls, disaggregated into two rates (for short and long duration calls) to allow for the effects of the originating operator's minimum call charge.
  
• in the case of Premium Rate Services, BT's retail price minus 3.5% to allow for average discounts and a further 4.4% to compensate for bad debts.
  

2.3 The principle underpinning the NTS formula was that originating operators should be able to cover their costs if they set prices at the deemed level. Terminating operators receive what is left from the retail price after the originating operator's cost have been deducted (excepting Freefone calls) and can also seek payment from their own customers (ie the service providers to whom calls are passed) for terminating calls.

2.4 Although the 1996 Determination applied for access to BT's services, Annex 6 to the 1996 Determination stated how the Director proposed that the rules set out should apply to other operators for their charges to BT for access to their NTS services.

2.5 In relation to Freefone, Lo-call and National Call services Annex 6 to the 1996 Determination stated:
"..…..For these calls 'D' is specific to the ONO, provided that it is less than, or equal to the maximum level of 'D' based on BT's retail prices. When the ONO's retail price is greater than BT's retail price, 'D' will be BT's retail price. For these purposes, 'D' is based on BT's retail tariffs and reduced by 7.5% to allow for average discounts in retail tariffs charged by BT for these calls [at that time]. Oftel has considered BT's representations to the draft determination, that 7.5% does not sufficiently reflect BT's average discounts for 1996/97. After consideration, Oftel does not propose to change that percentage in this determination since it has been carried forward into BT's interconnection offer under Network Charge Controls from October 1997 and BT has not provided an alternative figure. Oftel accepts, however, that average discounts will change in line with contemporaneous movements in actual discounts and the current level of discounts may be more appropriately used in setting interconnect charges in the future.

2.6 When 'D' is based on an ONO's retail price, it should be adjusted to take account of that ONO's average discounts.

2.7 'D' for 0800 calls is 0.00 because these calls are generally free to caller. The values of 'D' for 0345 and 0990 shown in the tables which follow have been calculated from BT's published price list and using the average price per minute of local and national calls respectively taking account of the minimum charge. The use of a minimum charge means that very short duration calls are charged at a higher than average per minute rate.

2.8 The underlying principle is that when the ONO sets the charge for P equal to the Deemed Retail Price, it recovers its costs which are represented by the amount for C. The reason for determining that for Freefone, Lo-call and National Call 'D' is specific to the ONO is that, for calls such as 0345 calls, customers expect to pay the local tariff of their Operator, rather than BT's local call charge. Failure to reflect this in the definition of 'D' would mean that those Operators whose local call charges are lower than BT's would not recover their costs if they charged their own local call charge for 0345 calls.

2.9 It would not be appropriate to make 'D' specific to the ONO where 'D' is greater than BT's 'D' without making 'C' also specific to the ONO. Otherwise, some ONOs would make a loss on the calls. The reason why 'D' for an Operator would exceed BT's 'D' would generally be that Operators' costs are higher than those of BT. For example, in the case of a mobile Operator, the local call charge is much greater than BT's local call charge and this reflects the higher costs of the mobile Operator. If 'D' for an 0345 call were set equal to the mobile Operator's charge for a local call, and the Operator set P equal to this, it would receive an amount equal to a single tandem charge, while both its costs and its charges to customers would exceed this."

2.10 With reference to 'C' Annex 6 to the 1996 Determination also stated that:
"……BT's single tandem charge is the basis for calculating the average charge of conveyance for an Operator when it accesses BT's NTS services. BT has suggested that the number of switching stages within its network required to access the services of an Operator may be greater than the number of switching stages required for an Operator to access BT's services. Oftel also recognises that costs may vary for other reasons among Operators. Nevertheless, on the information available, the Director considers that the use of the BT single tandem charge is the only practical starting point. Oftel will review this charge prior to future determinations if more precise information about Operators' costs becomes available."

2.11 The NTS principles were carried forward into all succeeding ICAS (Interconnection Accounting Separation) determinations of BT's charges and into the Guidelines for the Network Charge Controls issued in 1997.

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Chapter 3

History of the Dispute

History

3.1 As described in (2) above, prior to the introduction on 1 October 1997, by Oftel, of the Network Charge Control (NCC) regime, BT's interconnection charges were set by Oftel by determination under ICAS. Charges for access to BT's NTS services were established using the NTS formula. This gave that payment to:

originating operators was	P – D + C	and to…
terminating operators was	D – C	where…

P was the originating operator's headline retail price
D was the originating operator's deemed retail price
C was the originating operator's cost based originating retention

3.2 The level of charges was set by Oftel using BT's determined charges as a proxy for the industry in the absence of other operator's specific 'D' and 'C'. The determinations allowed for the fact that when other originating operators could identify their charges then these should be used to ensure all operators covered their actual costs.

3.3 Most other originating operators' retail prices for local and national calls are lower than BT's. In using BT's 'D' as a proxy the other operator will pay the same terminating outpayment (POLO) to terminating operators as BT, but will receive less retail revenue for the calls. As BT's interconnection charges are cost based, the other originating operators will probably not cover their network costs unless these are lower than BT's.

3.4 Prior to 1997, no originating operator had been able to provide details of its 'D' or 'C'. Following the introduction of the NCC regime BT asked operators, in a letter dated 15 December 1997, to supply details of operators' specific charges, from 1 October 1997, for BT terminated traffic and for BT transit traffic to other terminating operators to be provided by certain dates. The time scales for the provision of operator specific charges given by BT were 2 December 1997 for transit traffic and 31 March 1998 for BT terminated traffic. No operator met these timescales, nor, on the evidence available, responded to BT. CWC did subsequently commence discussions with BT on the subject later in 1998.

3.5 BT's letter of 15 December 1997 was designed to encourage operators to set their charges from 1 October 1997 and to settle these with a minimum of retrospection. Thereafter, charges would be reviewed quarterly and these would apply to future settlements.

3.6 The issue of operator specific charges became the subject of discussion at Oftel's Interconnection Policy Forum (now known as the Operator Policy Forum or OPF) and was one of the reasons why Oftel established the NTS Focus Group in July 1998. In the course of that group's discussions BT proposed that the industry, as a whole, agree that a further period should be made available in order to provide, evaluate and apply operator specific 'D's from 1 October 1997. It also said that Oftel would have to provide some form of guidance and help to BT and other operators to overcome the problems that had been identified.

3.7 The NTS Focus Group considered this matter at a number of its initial meetings and ultimately agreed a framework under which charges could be notified to BT and reviewed periodically. A sub group was established to turn the proposals into an operational manual for the industry to use to establish a consistent methodology.

3.8 CWC has acknowledged that the calculation of its 'D' was not a matter for the NTS focus group, although it did apply a dual track approach to resolving the issue by partaking in, both, industry discussions and bi-lateral negotiations with BT.

3.9 BT agreed to draft the 'NTS Manual' but this was not produced until January 1999 and was considered too complex and unwieldy by operators. In addition, by this time the attention of the NTS focus group was on the review of the NTS formula itself and the issue of operator 'D's became overshadowed. The Manual never passed its draft form and no attempts were made to complete that part of the focus group's work. The matter of operator specific charges became secondary to the NTS review and it was left to individual operators to continue to seek agreement with BT.

3.10 CWC continued to discuss the matter with BT from mid 1998 onwards. In January 1999 CWC supplied data relating to its 'C'. It is believed that this was in response to BT's moves to de-average its own NTS conveyance charge in December 1998 which resulted in Oftel's Direction in November 1999. BT rejected the rates proposed by CWC for its 'C' and requested further back up information. CWC did not respond to BT or provide further information.

3.11 However, it was not until June 1999 that CWC first provided figures to BT in relation to 'D' undertaking to provide further information shortly thereafter. The further information was submitted by CWC to BT in February 2000. CWC admits that it could have been quicker to provide these figures to BT. BT considered this was too late to justify retrospection and rejected CWC's request. Despite subsequent discussions the parties failed to agree on both CWC's 'D' and 'C' and the dispute was referred to Oftel by CWC in May 2000.

Transit

3.12 In bringing the dispute, both parties have accepted that the question of 'D' relates only to calls originated by CWC and terminating on BT's NTS services. By far the greatest volume of calls handed to BT by CWC are transit traffic which BT hands to other operator's networks for access to their services. Both parties have acknowledged the difficulty that BT would face in attempting to recover 'overpayments' made to third parties and have agreed that this issued should be resolved outside of this dispute. BT's letter of 25 May 2000 and CWC's of 21 June 2000, both to Oftel, refer.

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Chapter 4

Responses to the consultation

BT

4.1 BT made no comment in regard to Oftel's rejection of CWC's request for its 'D' to be backdated to 1 October 1997, other than to welcome Oftel's conclusion. With regard to CWC's 'C' BT again explained why no agreement had been reached in the level of the charge. BT maintained that CWC's figures contained a high element of double tandem charges without any evidence to support the derivation of the figures.

4.2 In response to CWC's response, BT felt that it contained nothing that should necessitate a change in the decision proposed in the draft determination. BT also pointed out a reference, by CWC, to a Licence Condition that had been removed from BT's Licence in 1997. It is noted that this licence condition is referred to as the basis for the 1996 determination referred to at paragraph 2.2.

Cable & Wireless

4.3 The submissions made by CWC (including a paper prepared by its external legal advisers, Olswangs) are not reiterated in its entirety in this explanatory memorandum. However, as with all submissions made by the parties, the Director has considered all of the points made. The Director would like to comment, in particular, on the following points.

4.4 In relation to its 'D' CWC has set out the role of the Director under Article 9 of the Interconnection Directive 97/33/EC ("the ICD") and Regulation 6 of the Telecommunications (Interconnection) Regulations 1997. CWC submits that the Director must take into account the matters set out in Article 9(5) of the ICD; that the Director is being asked in this particular case to consider the contractual dispute between the parties taking into account those Article 9(5) considerations; that the Director should seek to obtain the proper legal position of the parties; and that the Director's decision must represent a fair balance between the legitimate interests of the parties. The Director agrees with these submissions which support the very approach taken by the Director in this case.

4.5 However, there are a number of other points made by CWC which show an inconsistency in its approach and which are not accepted by the Director. CWC submits that the Director may only change the terms of the agreement between the parties in exceptional cases pursuant to Article 9(3) of the ICD. Under Article 9(3) of the ICD, the Director may intervene on his own initiative, or at the request of parties, in order to specify issues to be covered in an interconnection agreement. In exceptional cases, he may require that changes are made to a concluded interconnection agreement.

4.6 The Director may, however, also amend an interconnection agreement if to do so, represents a fair balance between the legitimate interests of the parties in the resolution of an interconnection dispute referred to him under Article 9(5) of the ICD. European, and the UK implementing law, therefore provides for variance from any contractual rights between the parties. As CWC points out, the interconnection agreement specifically provides that a charge determined by the Director prevails.

4.7 CWC relies on the 1996 determination forming an agreement between the parties. However, this is not correct. The 1996 determination was made in relation to BT and did not form part of any agreement between BT and CWC. The 1996 determination set out a framework for the agreement of charges between BT and other operators. It was for BT and individual operators to agree charges between them in accordance with that framework. BT and CWC have been unable to agree these charges which is the dispute before the Director.

4.8 CWC referred to the interconnection agreement entered into by the parties on 25 September 1997 and to a subsequent agreement between the parties, on 1 May 1998, to vary the terms of the interconnection agreement with retrospective effect from 1 October 1997. This variation provided that any charges for interconnection determined by the Director should be reflected in BT's Carrier Price List. CWC then argued that Oftel's earlier determination relating to NTS charges, made as part of its determinations of BT Charges for Standard Services, allowed for BT's charges to apply until operators could calculate their own charges. In this sense there was an agreement for CWC's charge for 'D', provided later, to apply from 1 October 1997.

4.9 Oftel rejects this interpretation. All the agreements referred to were made under the requirements of BT's Standard Interconnection Agreement. This requires that changes to charges in BT's Carrier Price List proposed by either party must be made in the form of pricing notices which are agreed by both parties. In the case of a change to CWC's 'D' this would require CWC to issue Operator Charge Change Notices (OCCN) to propose changes to the payments CWC would make to BT for terminating calls to BT's NTS services. BT would have to agree the OCCNs in writing before any changes can take place. Neither CWC or BT have offered any evidence that such an agreement was made.

4.10 In further considering all the representations made in this dispute Oftel has had to look closely at the question of whether BT's notice of 15 December 1997, inviting, operators to provide details of their specific charges, constituted a declaration of intent that those charges would apply.

4.11 Oftel concludes that BT's notice was intended to give originating operators the opportunity to provide sufficient information to enable agreement of a 'D' which was specific to the originating operator. However, the offer to apply originating operators' 'Ds' in this way was conditional. That offer lapsed without CWC accepting it. It became apparent that ONOs in general, including CWC, were unable to supply the necessary detail for BT to be able to apply their 'Ds'. When operators did subsequently submit data, BT was unable to use their figures to set a realistic 'D' covering the period back to October 1997 or a figure that could be used on an ongoing basis. Operators' retail prices can vary over time and their specific discounts have also to be included.

4.12 BT has to ensure it is not unduly discriminating between operators and has, therefore, to be confident that the retail prices it uses for each operator are transparent and auditable. The prices are used not only to determine the payments made to BT for access to its services but also where BT acts as transit operator for calls from originating operators to other terminating operators' services.

4.13 With regard to CWC's specific 'C', in seeking to distinguish the present case from Oftel's decision not to allow backdating of BT's 'C', CWC referred to its original submission of 4 May 2000 and submitted that its representations had been dismissed with limited explanation. Oftel believes, however, that the circumstances leading to the decision in the Direction of BT's NTS Conveyance in November 1999 are sufficiently similar that a consistent approach to both disputes is justified. This is explained more fully in paragraphs 5.17 to 5.22. CWC accepts that consistency in decision-making is an important guiding principle.

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Chapter 5

The Director's considerations

The Parties

5.1 One of BT's key arguments was that there was no agreement between BT and CWC. A second argument put forward by BT for rejecting CWC's unilateral offer for its charges (both 'D' and 'C') was that it would be unfair to expect BT as a terminating operator to make retrospective payments unless other terminating operators were doing the same. However, CWC rely on, inter alia, BT's letter of 15 December 1997 and other aspects of its conduct as creating an agreement in principle.

5.2 In considering the dispute Oftel has, therefore, made no presumption of dominance by either party; CWC in call origination or BT in call termination. The dispute has, accordingly, been treated as a dispute between the parties alone and the Director's decision is based upon the facts presented by these two parties. Any future disputes involving other operator's specific charges will likewise be treated on a case by case basis on the evidence provided to Oftel. As a consequence, Oftel consulted the parties alone on the draft determination and only their responses were taken into consideration in making the final determination.

CWC's 'D'

5.3 Having considered the dispute carefully, Oftel had to consider two possible approaches . The first was to decide whether, from the correspondence between the parties, CWC had been given an expectation that it would receive a repayment of the difference between its 'D' and BT's for the period of the dispute (ie 1 October 1997 to 31 December 1999) and that it was reasonable to rely on such an expectation. It is clear that BT made attempts to encourage operators to provide the necessary data in support of their 'D' in its letter of 15 December 1997.

5.4 The fact that CWC failed to meet BT's required timescale does not mean that it relinquished any expectation of receiving retrospective payments when it was eventually able to provide the necessary information to BT. On the contrary it commenced a dialogue in 1998 and this carried on, albeit with lengthy intervening spells of inactivity, through 1999 and into 2000. The question of retrospection remained prominent in the discussions and BT never formally reversed its statement of intent.

5.5 BT, for its part, also continued the dialogue, but from 1998 onwards asserted that any agreement must be both according to an industry framework and agreed with Oftel. At this point in time therefore, BT had changed its position from encouraging the submission of operator specific 'D's for retrospection in early 1998, to an industry wide settlement only. BT's offer in its letter of 15 December 1997 lapsed without acceptance.

5.6 In these circumstances and adopting this approach, the Director would have to consider whether CWC's legitimate expectations outweighed BT's insistence on a universal rather than unilateral settlement between the parties.

5.7 Oftel believes, however, that any decision reached on this basis would be open to reasonable challenge from the 'losing' party. The second approach Oftel could adopt would be to anticipate the basis for the ruling given by a court in the event of such a challenge and the Director has considered that this is the best approach in this case.

5.8 The Director's decision has been based on legal advice, an analysis of the facts (including consideration as to whether there was an agreement between the parties in law) and consideration of the criteria set out in Article 9(5) of the Interconnection Directive 97/33/EC (as implemented in Regulation 6(8) of the Telecommunications (Interconnection) Regulations 1997).

5.9 The consideration of the latter has meant that the Director has considered, inter alia, the relevant market positions of the parties and the public interest. The Director has considered that it would not be in the public interest to allow retrospective payments back to 1997 in this case because any requirement placed upon BT could result in other originating operators seeking similar repayments from both BT and other terminating operators who terminate significant volumes of NTS traffic. These operators will in turn have made payments to their service providers based upon revenues received. The Director considers that it would be impractical for them, in turn, to seek repayments from service providers who may no longer be their customers. In creating any such expectation amongst originating operators such a decision by the Director may therefore serve to destabilise an industry which is already having difficulty adapting to market changes and the resultant downward pressures on revenues through increasingly competitive pricing.

5.10 His conclusion is that, on this approach, the only basis for granting retrospective payment of CWC's 'D' from 1997 at this late stage would be if an agreement existed between the parties or between BT and the industry stating that it would do so.

5.11 As stated in (5.3) above BT made attempts to encourage operators to provide the necessary data in support of their 'D' in its letter of 15 December 1997. In doing so it offered a conditional agreement for retrospection. However, it set deadlines that operators did not meet, probably because the necessary data was not readily available from their billing systems. Nevertheless, from the correspondence provided it appears CWC made no attempt to challenge BT's deadline or to offer any alternative timescales for the collection and provision of information in support of its 'D' from 1 October 1997.

5.12 In these circumstances the Director has concluded that CWC failed to meet the conditions of BT's offer within any reasonable timeframe and that no agreement exists between the parties. BT is therefore not liable for any retrospective repayment in respect of CWC's 'D'.

5.13 It should be noted that Oftel's NTS Statement of December 1999 entitled Oftel's Statement on the Relationship between Interconnection Charges and Retail Prices for Number Translation Services held that operator 'D's ceased to apply from 1 January 2000. Originating operators, other than BT, are free to set their own retail price and conveyance charges subject to paying the terminating operator's required outpayment.

CWC's 'C'

5.14 Oftel believes this is a more straightforward issue than that surrounding 'D'. CWC made its claim for a de-averaged 'C' in response to BT's proposals made in December 1998. BT's proposals were rejected by the industry as a whole and the resultant dispute referred to Oftel. This resulted in Oftel's Direction entitled Direction of BT's NTS Conveyance made on 14 November 1999 with effect from 1 November 1999.

5.15 From the correspondence submitted in this dispute, it appears that CWC initiated its claim for a de-averaged 'C' in direct response to BT's OCCN 270 issued in December 1998. CWC, in common with BT, had used BT's single tandem charge in calculating its call origination charge despite the fact that, according to claims in the correspondence, BT's interconnection arrangements caused CWC to route some calls over more than one of its tandem switches.

5.16 BT and CWC have the two most extensive networks in the UK. They interconnect at virtually all of BT's tandem switches (DMSUs). Calls originating on either network should, in theory, use only one tandem switch before being handed over to the other operator. For technical reasons involving call routing, this is apparently not the case and both operators hold that the costs for calls originated by their customers average slightly more than the single tandem rate.

5.17 In making the determination of BT's conveyance charge in November 1999 (referred to above), Oftel declined to backdate BT's charge on the grounds, inter alia, that it had failed to substantiate each operator's charge, preferring simply to provide unsupported 'route factors' that could not be checked. Furthermore, the imposition of retrospective conveyance charges to BT's date (February 1999) would be unfair to terminating operators who would have passed a proportion of their payments from BT on to their service providers.

5.18 This decision was made by the Director despite the fact that BT had signalled its intention to recover 'overpayments' made when it became able calculate its true 'C', according to the original NTS determination. Paragraph (2.10) above refers.

5.19 The Director believes that, because CWC issued the claim for its 'C' in direct response to BT's OCCN, the decision made in BT's case should apply equally to CWC. BT had proposed a de-averaging of its 'C' without providing any transparency of its figures. BT has made similar comments in regard to CWC's 'C' (see paragraph 4.1). In the absence of a reasonable methodology for calculating BT's 'C' Oftel directed how its charges would be based using an interim methodology with effect from 1 November 1999 until such time as BT's INCA billing system could operate for NTS interconnection charges.

5.20 Oftel considers that CWC had also proposed charges for its 'C' which, according to BT, could also not be substantiated. There were, therefore, distinct similarities in the background to the two operators' determination requests and full justification for Oftel to treat both cases consistently.

5.21 Accordingly, any repayments due to undercharging by CWC for its 'C' should have effect from 1 November 1999. This assumes that the figures submitted by CWC have been agreed and that retrospection is the only issue. If this is not the case, the methodology directed to apply to BT's charge in advance of automatic billing by INCA could be used to calculate CWC's charge for call origination. In the event that an agreement on 'C' can still not be reached, either party can refer the matter to the Director to determine the charge.

5.22 As referred to in paragraph (5.11) above, Oftel's December 1999 NTS Statement holds that operator specific conveyance charges ('C') ceased to apply from 1 January 2000.

Interest Charge

5.23 In accordance with Clause 13.13 of BT's Standard Interconnect, any 'over' or 'underpayments' in relation to CWC's specific 'C' resulting from this determination will be repaid including interest at the Oftel rate. This is the London Inter-Bank Offered Rate (LIBOR) plus 3/8 per cent.