Disputes between BT and each of Cable & Wireless, Gamma, Colt, Verizon, and Opal regarding the repayment by BT of certain charges for the transit of traffic

21 October 2010

Disputes between: British Telecommunications plc (BT) and each of Cable & Wireless Worldwide (C&W), Gamma Telecom Holdings Ltd (Gamma), Colt Technology Services (Colt) and Verizon UK Limited (Verizon), Opal Telecom (Opal) (together, the Transit Customers) regarding the repayment by BT of certain charges for the transit of traffic terminating with particular mobile network operators (MNOs) during different periods between September 2006 and March 2007.
Case opened: 21 June 2010
Case closed: 20 October 2010
Issue: Ofcom was asked to resolve these disputes under section 185(1) of the Communications Act 2003 (the Act) about whether BT has a regulatory obligation to repay the Transit Customers certain charges for the transit of traffic to particular MNOs for different periods between September 2006 and March 2007. The Transit Customers asked for a direction by Ofcom requiring certain repayments to be made as an adjustment for overpayments, plus interest.
Relevant instrument: Ofcom resolved these disputes using its powers under Chapter 3 of Part 2 of the Act.

On 20 October 2010, Ofcom issued final determinations under sections 188 and 190 of the Act resolving these disputes to the parties in dispute and the party which registered as an interested party. Please see related item.

Update note: 28 September 2010

On 27 September 2010, Ofcom issued a draft determination to the parties and interested party in relation to this dispute (please see related item). Ofcom will be consulting on its proposals until 5 pm on 6 October 2010.

Please submit responses by this date to:

Sue Merrifield
Ofcom
Riverside House
2A Southwark Bridge Road
London SE1 9HA

Or by e-mail to sue.merrifield@ofcom.org.uk

End of update note

Update note: 16 July 2010

Just prior to publication of the original Competition and Consumer Enforcement Bulletin entry relating to a dispute between BT and each of C&W, Gamma, Colt and Verizon (together, the Transit Customers) we received a further dispute submission from Opal.

Ofcom recognises that on the face of the additional dispute submission received, there appears to be a dispute between BT and Opal that commercial negotiations have failed to resolve. We therefore consider that it is appropriate for us to handle the additional dispute. Having considered this request and decided that it is appropriate for Ofcom to handle the dispute, we consider that the principal issues in dispute between Opal and BT are essentially the same as the issues we are already considering in the dispute between BT and the Transit Customers regarding the repayment by BT of certain charges for the transit of traffic terminating with particular mobile network operators (MNOs) during different periods between September 2006 and March 2007. Accordingly, we consider it appropriate to join Opal to this dispute.

End of update note

These disputes concern BTs charges to the Transit Customers for transiting calls to certain MNOs between September 2006 and March 2007.

On 7 July 2007, Ofcom determined five disputes between BT and each of T-Mobile, O2, H3G, Orange and Vodafone concerning the mobile call termination (MCT) rates charged by each of these five mobile operators to BT for direct interconnection to its network for the following periods:

  • 1 September 2006 to 31 March 2007 with respect to T-Mobile and O2;
  • 1 October 2006 to 31 March 2007 with respect to Vodafone and Orange; and
  • 1 November 2006 to 31 March 2007 with respect to H3G.

In its judgments of 20 May and 15 August 2008 the Competition Appeal Tribunal (CAT) upheld appeals of Ofcom’s determinations and set out revised MCT rates to be charged by the relevant parties for the relevant periods. On 16 January 2009 Ofcom issued re-determinations re-setting the MCT rates between the parties as directed by the CAT in its Order of 17 November 2008.

Following Ofcom’s re-determinations, the Transit Customers claimed repayments from BT for certain charges relating to the transit of traffic to the relevant MNOs during the relevant periods.

Ofcom considers that on the face of the referrals there appears to be disputes 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 disputes meet the relevant statutory criteria and it is appropriate for Ofcom to handle them according to section 186 of the Act, and accordingly, Ofcom has accepted the disputes for resolution.

Scope of the dispute:

After consideration of the submissions received by each of the Transit Customers and the responses by BT, the scope of the disputes is whether BT is required under the regulatory framework to repay the Transit Customers certain charges for the transit of traffic to particular MNOs for different periods between September 2006 and March 2007.

The Transit Customers are asking for a direction by Ofcom requiring certain repayments be made as an adjustment for overpayments, plus interest.

Procedural matters:

Guidance on the resolution of disputes 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 these disputes should be submitted to Ofcom by 5pm on 30 June 2010.

Stakeholders interested in the outcome of these disputes should notify Ofcom by 5pm on 30 June 2010 describing the relevance of the outcome of the disputes to their business. Stakeholders with relevant information and evidence in respect of these disputes should submit this to Ofcom by 5 pm on 14 July 2010.

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

Case Leader: Sue Merrifield (e-mail: sue.merrifield@ofcom.org.uk)
Case Reference: CW/01048/06/10