Dispute between Openreach and each of Opal Telecom and British Sky Broadcasting Limited (Sky) about LLU charges

21 July 2011

Dispute between: Openreach (a BT Group business) and each of Opal Telecom (Opal) and British Sky Broadcasting Limited (Sky) regarding Openreachs charges for Local Loop Unbundling (LLU) services.
Case opened: 21 March 2011
Case closed: 20 July 2011
Issue: Ofcom was asked to resolve this dispute under section 185(1) of the Communications Act 2003 (the Act) regarding BTs charges for certain LLU services during the period 20 June 2009 to 14 October 2010.
Relevant instrument: Ofcom resolved this dispute using its powers under Chapter 3 of Part 2 of the Act.

On 20 July 2011, Ofcom issued a final determination under sections 180 and 190 of the Act resolving this dispute. A non-confidential version of the determination is available under related items.

Update note 15 June 2011

On 14 June 2011, Ofcom issued a draft determination to the parties in relation to this dispute (please see related item). Ofcom will be consulting on its proposals until 5 pm on 29 June 2011.

Please submit responses by this date to:

Paul Dean
Ofcom
Riverside House
2A Southwark Bridge Road
London SE1 9HA
Or by e-mail to paul.dean@ofcom.org.uk

End of update note

Update note 19 April 2011

Inclusion of further parties to the dispute

Following publication of the original Competition and Consumer Enforcement Bulletin entry relating to a dispute between Opal Telecom and Openreach, we received a further dispute submission from British Sky Broadcasting Limited (Sky) dated 8 April 2011. We consider Sky and Openreach are in dispute in relation to the same charges and have exhausted commercial negotiations on this issue. We therefore consider that a dispute exists between Sky and Openreach that falls within the scope of section 185(1) of the Act. We have decided, pursuant to section 186 of the Act, that it is appropriate for Ofcom to handle the dispute. We consider that the principal issues in dispute between Sky and Openreach are essentially the same as the issues we are already considering in the LLU charges dispute. On this basis, we consider it appropriate to join Sky as a party to the LLU charges dispute.

End of update note

This dispute concerns Openreachs charges for certain LLU services (MPF rental, SMPF rental and MPF new build) during the period 20 June 2009 to 14 October 2010. Opal is seeking repayment of some 3 to 4 million in charges incurred during this period.

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 Openreach and Opal, the scope of the dispute is:

should Ofcom exercise its discretion under s 190(2)(d) to direct Openreach to repay an amount to Opal for charges for Local Loop Unbundling services to reflect the suggested adjustments to Ofcoms LLU price control set out in the Competition Commission 31 August 2010 Determination (-1-) for the period 20 June 2009 to 14 October 2004.

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://stakeholders.ofcom.org.uk/consultations/enforcement/.

Stakeholders interested in the outcome of this dispute should notify Ofcom by 5pm on 30 March 2011 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 13 April 2011.

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: Paul Dean (e-mail: paul.dean@ofcom.org.uk)
Case Reference: CW/01066/02/11

Footnotes:

  1.-Carphone Warehouse Group PLC v Office of Communications Case 1111/3/3/09 [2010] CAT 26