Dispute relating to sub-loop unbundling charges

14 June 2011

Dispute between: (i) British Telecommunications plc (BT) and (ii) Digital Region Limited (“DRL”) and Thales UK Limited (“Thales”) concerning BT's certain charges for SLU connection and rental.
Case opened: 18 March 2011
Case closed: 15 July 2011
Issue: Ofcom was asked to resolve this dispute under section 185(1) of the Communications Act 2003 (the Act) concerning certain charges by BT for SLU connection and rental.
Relevant instrument: Ofcom resolved this dispute using its powers under Chapter 3 of Part 2 of the Act.

On 15 July 2011, Ofcom issued a final determination under sections 188 and 190 of the Act resolving this dispute. The final determination was issued to the parties in dispute. Please see related items for the non-confidential version of the final determination.

Update note: 14 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 5pm on 28 June 2011.
Please submit responses by this date to:

Lawrence Knight
Ofcom
Riverside House
2A Southwark Bridge Road
London SE1 9HA
Or by e-mail to lawrence.knight@ofcom.org.uk

End of update note

Text published when case was opened

This dispute concerns the charges set by Openreach (a BT Group business) for three of its sub-loop unbundling (“SLU”) wholesale products.

DRL is a predominantly publicly-funded project to deliver broadband services in South Yorkshire. Thales has been appointed to deliver and operate infrastructure on behalf of DRL, as well as providing facilities to enable the provision of services by DRL.

In order to provide their own Fibre to the Cabinet (“FTTC”) services, DRL/Thales use SLU products provided by Openreach. DRL/Thales contends that the charges set by Openreach for the following three SLU wholesale products are too high:

a) £106.62 charge for SL-MPF connection

b) £127.61 charge for SL-SMPF connection

c) £93.96 charge for SL-MPF annual rental

BT is subject to regulatory obligations in relation to the provision of SLU services and the charges it makes for them.

During discussions, DRL/Thales and Openreach have failed to agree on the level of the charges. DRL/Thales therefore referred the matter to Ofcom in February 2011.

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 from DRL/Thales and BT, the scope of the dispute is to determine:

1) Whether the following wholesale charges in relation to BT’s sub-loop unbundling services comply with applicable regulatory obligations to which BT is subject:   

a) SL-MPF connection charge of £106.62

b) SL-SMPF connection charge of  £127.61

c) SL-MPF  annual rental charge of £93.96; and

2) Whether a payment of sums by way of adjustment of an underpayment or overpayment should be required.

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 the dispute should be submitted to Ofcom by 31 March 2011.

Stakeholders interested in the outcome of this dispute should notify Ofcom by 31 March 2011, describing the relevance of the outcome of this dispute to their business. Stakeholders with relevant information and evidence in respect of this dispute should submit this to Ofcom by 14 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: Lawrence Knight (e-mail: Lawrence.knight@ofcom.org.uk