Dispute between BT Wholesale and various operators about changes to AIT terms

29 July 2009

Dispute between: British Telecommunications plc (BT) and various operators (1RT Group Limited, Bestway Communications Limited, CFL Communications Limited, Callagenix Limited, Flextel Limited, Mars Communications Limited, Starcomm Limited and Telxl Limited) regarding proposed changes to Annex E of the BT Standard Interconnect Agreement (SIA).
Case opened: 30 March 2009
Case closed: 28 July 2009
Issue: BT has asked Ofcom to resolve a dispute under section 185(1) of the Communications Act 2003 (the Act) between BT and various operators concerning proposed changes to Annex E of the SIA, which sets out the industry agreed process for dealing with Artificially Inflated Traffic (AIT).
Relevant instrument: Ofcom resolved this dispute using its powers under Chapter 3 of Part 2 of the Communications Act 2003.

Ofcom has issued a final determination to resolve this dispute under sections 188 and 190 of the Act.

Please see the related item.

Update note - 23 June 2009

Ofcom issued a draft determination yesterday to the parties in this dispute. Please see the related item. Ofcom will be consulting on its proposals until 5 pm on 6 July 2009. Please send responses to:

Matthew Peake
Competition Group
Riverside House
2a Southwark Bridge Road

or by email to matthew.peake@ofcom.org.uk

End of update note

Update note – 30 April 2009

On 24 April 2009 BT confirmed to Ofcom that Vectone Limited (‘Vectone’) had signed the Supplemental Agreement on 17 April 2009, and that BT therefore no longer considers itself in dispute with Vectone.

In addition, on 29 April 2009 BT informed Ofcom that it also wishes Prodigy Internet Limited (‘Prodigy’) to be removed from the list of those in dispute.

Ofcom has accordingly removed Vectone and Prodigy from the list of operators in dispute.

End of update note

Text published when case was opened

This dispute concerns proposed changes to Annex E of the SIA. The SIA relates to the provision of network access by BT and is signed by all operators who interconnect with BTs network. Annex E of the SIA sets out the process for dealing with AIT.

AIT is traffic which is suspected of being fraudulent or having no legitimate commercial purpose. The AIT process halts the flow-through of monies to those suspected of generating AIT while the incidents are investigated and resolved. Since 2002 BT has been in discussion with some operators about potential changes to this process.

On 1 February 2008 BT issued Interconnect Notification 077/08, which initiated consultation with all SIA signatories on a new version of Annex E (the revised Annex E). The revised Annex E seeks to alter the AIT process in a number of ways, however for logistical and contractual reasons all signatories to the SIA must agree any changes before they can come into effect. Agreement on the revised Annex E is by way of the 2008 AIT Supplemental Agreement (the Supplemental Agreement).

The parties listed above have failed to sign the Supplemental Agreement and/or have rejected the terms of the revised Annex E. Ofcom recognises that on the face of the referral, there appears to be a dispute between BT and each of 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.

Scope of the dispute:

The scope of the dispute is to determine whether it is fair and reasonable to amend the existing SIA provisions in relation to AIT to reflect the changes entailed by BTs proposed Annex E (including changing the definition of AIT, the process for retaining monies where AIT is suspected and the associated dispute resolution procedure).

Procedural matters:

Guidance on the resolution of the dispute can be found in Ofcom's Guidelines for the handling of competition complaints, and complaints and disputes about breaches of conditions imposed under the EU Directives.

All representations on the scope of the dispute should be submitted to Ofcom by 6 April 2009.

Stakeholders interested in the outcome of this dispute should notify Ofcom by 6 April 2009 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 Ofcom by 22 April 2009.

Stakeholders who wish Ofcom to join them as parties to the dispute must provide evidence, as set out in Ofcom's Guidelines, that they are in dispute.

Case Leader: Matthew Peake e-mail:matthew.peake@ofcom.org.uk)
Case Reference: CW/01013/03/09