Disputes between BT and each of T-Mobile, Vodafone, O2 and Orange about BT’s termination charges for 080 calls

19 April 2010

Disputes between: British Telecommunications plc (BT) and each of T-Mobile (UK) Limited (T-Mobile), Vodafone Limited (Vodafone), Telefonica O2 UK Limited (O2) and Orange Personal Communications Services Ltd (Orange) (together the Parties) regarding BTs termination charges for 080 calls
Case opened: 6 October 2009
Case closed: 5 February 2010
Issue: The Parties each asked Ofcom to resolve disputes under section 185(1) of the Communications Act 2003 (the Act) between themselves and BT concerning termination charges for 080 calls introduced in Network Charge Change Notice 956 (NCCN 956)
Relevant instrument: Ofcom resolved these disputes using its powers under Chapter 3 of Part 2 of the Act.

Update note: 27 July 2012

Ofcom has issued a determination (see related item) to give effect to the Court of Appeals Order dated 25 July 2012 (the Court of Appeal Order).  The Court of Appeal Order set aside:

(i) the order given by the Competition Appeal Tribunal (the CAT) in respect of case numbers 1151/3/3/10, 1168/3/3/10 and 1169/3/3/10, dated 12 August 2011 (the CAT Order), except for paragraphs 1(2), 1(5) and 4 thereof), and

(ii) the determinations made by Ofcom on 7 October 2011 (case: CW/01076/09/11), 28 February 2012 (case: CW/01076/09/11)  and 2 April 2012 (case CW/01076/09/11) (the Consequential Determinations).

It also restored the following determinations made by Ofcom:

(i) Ofcoms determination made by Ofcom on 5 February 2010 (case: CW/01036/09/09) (the 080 Determination); and

(ii) Ofcoms determination made by Ofcom on 10 August 2010 (case: CW/01042/01/10) (the 0845/0870 Determination).

Further, the Court of Appeal Order ordered that the matter should be remitted to Ofcom pursuant to s.195(4) Communications Act 2003 for Ofcom to direct that:

(i) BT must repay to each of O2, Everything Everywhere, Vodafone and H3G within 28 days of the date of the Court of Appeal Order, such monies as have been paid by each of them to BT pursuant to paragraphs 5 and 6 of the CAT Order and/or the Consequential Determinations that would not have been paid pursuant to the 080 and 0845/0870 Determinations, including, for the avoidance of doubt, amounts paid by each of O2, Everything Everywhere, Vodafone and H3G in respect of periods since the CAT Order; and

(ii) BT must pay interest upon the amounts repayable pursuant to the paragraph above, determined in  accordance with paragraphs 12.7 and/or 13.13 of the BT Standard Interconnect Agreement from the date of each such payment until the date of the repayment by BT.

End of update note

Update note: 19 April 2010

On 6 April 2010, BT filed an appeal with the Competition Appeal Tribunal (CAT) against Ofcoms determination to resolve this dispute. Details of the appeal can be found on the CATs website at http://www.catribunal.org.uk/.

End of update note

On 5 February 2010 Ofcom issued a final determination under Sections 188 and 190 of the Act resolving these disputes to the parties in dispute and the parties which registered as interested parties. Please see related items for the non-confidential version of the final determination.

Update note: 4 January 2010

A non-confidential version of the draft determination issued in relation to this dispute is now available (please see related item). The two pdf documents at the foot of this entry are referred to in the draft determination.

Ofcom will be consulting on its proposals until 5 pm on 12 January 2010. Please send responses to:

Matthew Peake
Competition Group
Ofcom
Riverside House
2a Southwark Bridge Road
London
SE1 9HA

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

End of update note

Update note: 30 December 2009

On 23 December 2009 Ofcom issued a draft determination in relation to these disputes to the parties in dispute and the parties which registered as interested parties. Ofcom will be consulting on its proposals until 5pm on 12 January 2010. A non confidential version of the draft determination will be published on Monday 4 January 2010.

End of update note

Update Note 16 November 2009

Inclusion of further parties to the dispute

Following publication of the original Competition and Consumer Enforcement Bulletin entry relating to a dispute between T-Mobile and BT, we received further dispute submissions from other Mobile Network Operators as follows:

  • On 9 October 2009, Vodafone asked Ofcom to resolve a dispute between Vodafone and BT about the termination charges notified in NCCN 956.
  • On 26 October 2009, O2 asked Ofcom to resolve a dispute between O2 and BT about the termination charges notified in NCCN 956.
  • On 30 October 2009, Orange asked Ofcom to resolve a dispute between Orange and BT about the termination charges notified in NCCN 956.

Ofcom recognises that on the face of the additional dispute submissions received, there appear to be disputes between BT and each of Vodafone, O2 and Orange that commercial negotiations have failed to resolve. We therefore consider that it is appropriate for us to handle the additional disputes.

Having considered these requests and decided that it is appropriate for Ofcom to handle these disputes, we consider that the principal issues in dispute between the Parties and BT are essentially the same as the issues we are already considering in the dispute between T-Mobile and BT relating to NCCN 956. Accordingly, we consider it appropriate to join the Parties to this dispute.

Representations on proposed scope

1) BTs charges for termination of 0845 and 0870 calls

T-Mobile asked Ofcom to extend the scope of this dispute to include a consideration of BTs new charges for termination of calls to 0845 and 0870 numbers. T-Mobile told us that these two price changes concern the same fundamental issue.

We do not consider that (i) these issues are sufficiently related such that they ought to be brought within the scope of the current dispute and (ii) that the requirements of a dispute have not been met in that the parties cannot satisfy us that commercial negotiations have been exhausted. Therefore, we will not extend the scope of the dispute to include these matters.

2) Level of charges notified in NCCN 956

T-Mobile stated in its response to the scope of this dispute that it considered it ought to be adjusted so that it not only consider whether BT is entitled to impose any charge, but also whether the specific charges (including the possibility that different amounts are charged to different operators for the same call termination service) are fair and reasonable.

We do not consider it appropriate to amend the scope of the dispute to include consideration of whether the specific charges introduced by BT are fair and reasonable. The main issue in dispute is BTs imposition of a new termination charge for 080 calls. Our first task, as set out in the published scope of the dispute, is to consider whether it is fair and reasonable for BT to impose any termination charge for calls to BT-hosted 080 numbers.

We therefore consider that T-Mobiles request for us to consider the specific charges notified in NCCN 956 is premature. Should we determine that it is fair and reasonable for any payments to be made by either party, we would expect the parties to enter into commercial negotiations following determination of this dispute to consider, what, if any, charges may be justifiable and only bring the matter back to Ofcom should these discussions fail.

Revised scope

The revised scope of this dispute is therefore to determine:

i) whether it is fair and reasonable for BT to impose any termination charge for calls to 080 numbers hosted on its network, which originate on the Parties networks; and
ii) whether the Parties, as originating mobile network operators, should receive a payment from BT sufficient to cover their costs of originating calls to 080 numbers hosted by BT.

End of update note

This dispute concerns the introduction of termination charges by BT for calls to 0800 and 0808 numbers (together 080 numbers) hosted on its network. 080 numbers are numbers that are generally free to the caller (except where charges are notified to the caller at the start of the call). See further the National Telephone Numbering Plan published by Ofcom on 3 August 2009 http://www.ofcom.org.uk/telecoms/ioi/numbers/.

On 3 June 2009, BT notified the industry via NCCN 956 of new termination charges for 080 calls. The charges vary depending on the retail charge applied by the ONO to its customer for originating the call. The new charges took effect from 1 July 2009.

On 16 September 2009, T-Mobile asked Ofcom to resolve a dispute between T-Mobile and BT about the termination charges notified in NCCN 956. T-Mobile opposes the imposition of the charges and, in addition, considers that BT should pay originating mobile network operators an origination fee for 080 calls which covers the cost of originating such calls. T-Mobile alleges that commercial negotiations between the parties have failed to result in agreement.

Ofcom recognises that on the face of the referral, there appears to be a dispute between 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.

Ofcom considers that the dispute meets the relevant statutory criteria and it is appropriate for Ofcom to handle it according to section 186 of the Act, and, accordingly, Ofcom has accepted the dispute for resolution.

Scope of the dispute:

After consideration of the submissions received by T-Mobile and BT, the scope of the dispute is to determine:

i) whether it is fair and reasonable for BT to impose any termination charge for calls to 080 numbers hosted on its network, which originate on T-Mobiles network; and
ii) whether T-Mobile, as an originating mobile network operator, should receive a payment from BT sufficient to cover its costs of originating calls to 080 numbers hosted by BT. 

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. See http://www.ofcom.org.uk/consult/condocs/enforcement/.

All representations on the scope of the dispute should be submitted to Ofcom by 5pm on 15 October 2009.

Stakeholders interested in the outcome of this dispute should notify Ofcom by 5pm on 15 October 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 5 pm on 29 October 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/01036/09/09