Dispute relating to MPF rental charges

24 January 2012

Dispute between: (i) British Telecommunications plc (BT) and (ii) TalkTalk Group (TTG) concerning BT's charge for LLU MPF rental.
Case opened: 23 September 2011.
Case closed: 23 January 2012.
Issue: Ofcom was asked to resolve this dispute under section 185(1A) of the Communications Act 2003 (the Act) concerning the charge set by BT for LLU MPF rental.
Relevant instrument: Ofcom resolved this dispute using its powers under Chapter 3 of Part 2 of the Act.

Closure note 24 January 2012

On 23 January 2012, Ofcom issued a final determination under sections 188 and 190 of the Act resolving this dispute.

A non-confidential version of the determination is available under related items.

Update note 14 November 2011

On 14 November 2011, Ofcom issued a Dispute Consultation to the parties, setting out its provisional reasoning and assessment in relation to this dispute (please see related item). Ofcom will be consulting on this until 5 pm on 28 November 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

This dispute concerns the charge set by Openreach (a BT Group business) for its local loop unbundling (LLU) wholesale product for MPF rental.

Up to 31 March 2011, BTs charges for MPF rental were subject to a charge control set by Ofcom. Ofcom has consulted on a new charge control but has yet to conclude on this (the Consultation see related item). Since 1 April 2011, in the absence of a charge control BT has charged 91.50 for MPF annual rental. TTG contends that based on proposals set out in the Consultation, this charge is too high.

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

During discussions, TTG and Openreach have failed to agree on the level of the MPF rental charge. TTG therefore referred the matter to Ofcom in September 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 TTG and BT, the scope of the dispute is to determine:

(i) whether BTs charge of 91.50 for MPF rental is compliant with the regulatory obligations to which BT is subject, including:

  • Condition FAA1 (Requirement to provide Network Access on reasonable request); and
  • Condition FAA4 (Basis of charges)

and (ii) whether a payment of sums by way of adjustment of an underpayment or overpayment should be required.

Procedural matters:

In line with Ofcoms Guidance on the resolution of disputes published in June 2011, Ofcom is not consulting on the scope of this dispute. Ofcoms guidelines can be found at: Ofcom's Guidelines for the handling of regulatory disputes
Stakeholders interested in the outcome of this dispute should notify Ofcom by 11 October 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 11 October 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)
Case Reference: CW/01075/09/11