Dispute relating to BT’s Standard Interconnect Agreement (“SIA”)

15 August 2013

Dispute between: (i) Everything Everywhere Limited ("EE") and (ii) British Telecommunications plc (BT) concerning BT's SIA.
Case opened: 14 February 2012.
Case closed: 15 August 2013
Issue: Ofcom has been asked to resolve this dispute under section 185 of the Communications Act 2003 (the Act) concerning terms of paragraphs 12 and 13 of the main body of BT's SIA.
Relevant instrument: Ofcom intends to resolve this dispute using its powers under Chapter 3 of Part 2 of the Act.

On 15 August 2013, Ofcom issued its final determination concerning this dispute to BT, EE, H3G and Telefónica  (please see related item).

Update note: 1 October 2012

On 28 September 2012, Ofcom issued its provisional conclusions concerning this dispute to BT, EE, H3G and Telefónica  (please see related item).

The period for comments on the provisional conclusions will close at 5 pm on 15 October 2012. Please send responses 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

Update note: 12 June 2012

On 1-3 May 2012 the Court of Appeal heard on an expedited basis the appeals brought by Telefonica on the one hand, and collectively Vodafone, EE and H3G on the other, against the CAT’s decision relating to Ofcom’s determination of the disputes concerning BT’s tiered termination rates (cases C3/2011/3121, 3124, 3315, 3316 and C3/2012/0692A; the “08x cases”).

In light of the analysis that we have conducted up to date in order to resolve the dispute relating to paragraphs 12 and 13 of BT’s SIA and the nature of the arguments put to the Court of Appeal by the parties in the 08x cases, we now believe that the Court of Appeal’s judgment in the 08x cases is likely to be relevant to the issues raised in this dispute. Accordingly, whilst Ofcom intended to make a final determination in respect of this dispute no more than four months after the date of the case being opened (14 February 2012),  we now consider that exceptional circumstances exist for the purposes of section 188(5) of the Communications Act 2003 such that it is appropriate not to issue our provisional conclusions until after the Court of Appeal hands down judgment and we have had an opportunity to consider the implications of the judgment on the matters in dispute in this case.

In the meantime, we will continue to consider the matters in dispute as appropriate, so that we can resolve the dispute as soon as possible following the Court of Appeal’s judgment.

End of update note

Update note: 10 April 2012

An interested party has asked us whether the scope of the dispute has been extended to include operators other than the disputing parties. In this respect, we point out that the scope of this dispute as set out below has not been changed. However, we acknowledge that the issues raised by this current dispute may in certain circumstances have industry-wide application affecting third parties. 

If, during the course of our investigation of the dispute, it appears likely that we may reach conclusions that would have a broader industry wide effects then we would consider at that point whether a separate formal policy consultation on these conclusions is appropriate. Any such policy consultation would provide all relevant parties with an appropriate opportunity fully to consider the impact of any change with an impact beyond the parties to the dispute.

If we did commence a separate policy consultation then it is likely that we would not determine the current dispute until after the conclusion of that exercise.

End of update note

Update note: 12 March 2012

Inclusion of further parties to the dispute

On 5 March Telefónica UK Ltd ("Telefónica") provided us with a dispute submission and requested that we joined Telefónica as a party to this dispute.

We consider that Telefónica and BT are in dispute in relation to BT's Standard Interconnect Agreement ("SIA") and have exhausted commercial negotiations on this issue. We therefore consider that a dispute exists between Telefónica and BT within the meaning of s185(1A) of the Communications Act 2003. If that were not the case, we consider that we would have jurisdiction under 185(1)(a) of the Communications Act 2003, and that we would exercise our discretion to handle the dispute. 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.
Further, we consider that the principal issues in dispute between Telefónica and BT are essentially the same as the issues we are already considering in the existing dispute between BT and EE. Further, in line with Ofcom's Guidance on the resolution of disputes published in June 2011, Telefónica has confirmed that:

  • it agrees to the dispute proceeding based on the facts, issues and scope of the existing disputes; and
  • it agrees that Ofcom should not be required to repeat procedural steps.

In line with our Dispute Resolution Guidelines, we forwarded a non-confidential version of Telefónica's submission to the parties to the existing dispute and have considered their responses.

Accordingly, we consider it appropriate to join Telefónica as a party to this existing dispute.

Interested third parties

The following stakeholders have been registered as interested third parties:

Cable&Wireless Worldwide, Gamma Holdings Limited, IV Response Limited, British Sky Broadcasting Limited, TalkTalk Group, The Number UK Limited, Virgin Media and Vodafone Limited.

Requests for copies of the dispute submissions

Ofcom has received a number of requests for copies of the dispute submissions. In line with our guidance on the resolution of disputes, we share the submissions between the parties to the dispute and we may also publish non-confidential versions when we publish a final determination.

Arrangements are not in place for Ofcom to forward submissions to stakeholders that are not a party to the dispute and we are unable to meet such requests.

End of update note

Update note: 24 February 2012

Inclusion of further parties to the dispute

We received further a dispute submission from Hutchison 3G UK Limited ("H3G") dated 2 February 2012. We consider that H3G and BT are in dispute in relation to BT's Standard Interconnect Agreement ("SIA") and have exhausted commercial negotiations on this issue. We therefore consider that a dispute exists between H3G and BT within the meaning of s185(1A) of the Communications Act 2003. If that were not the case, we consider that we would have jurisdiction under 185(1)(a) of the Communications Act 2003, and that we would exercise our discretion to handle the dispute. 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.

We consider that the principal issues in dispute between H3G and BT are essentially the same as the issues we are already considering in the existing dispute between EE and BT. Accordingly, we consider it appropriate to join H3G as a party to this existing dispute.

End of update note

BT's SIA provides the terms and conditions on which calls are connected between the respective networks of BT and EE.

This dispute concerns Paragraph 12 of BT's SIA and the rights this confers on BT to introduce changes to charges for BT services or facilities supplied under the SIA, as compared to the rights Paragraph 13 confers on EE to introduce changes to charges for its services supplied under the SIA.

EE advises that the rights conferred on BT by Paragraph 12 may be exercised unilaterally, whereas under Paragraph 13 EE may only propose a charge to BT, which will not take effect unless BT consents, or a dispute is referred regarding the charge.

EE further advises that whereas BT has the right to propose changes to the charges for EE's services under Paragraph 13, EE has no equivalent right to propose changes to charges for BT Services.

EE contends that the imbalance between the terms of Paragraph 12 and Paragraph 13 is unfair and unreasonable.

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 there is a dispute between the parties within the meaning of s185(1A) of the Communications Act 2003. If that were not the case, we consider that we would have jurisdiction under 185(1)(a) of the Communications Act 2003, and that we would exercise our discretion to handle the dispute. 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 EE and BT, the scope of the dispute is to determine:
Whether the operation and/or effect of paragraphs 12 and 13 of BTs Standard Interconnect Agreement ("SIA") is such that they constitute fair and reasonable terms or conditions as between the parties to the dispute; and
Whether, in light of Ofcoms conclusions on the above question, Ofcom should exercise its powers to give a direction under section 190(2)(b) and/or section 190(2)(c) of the Communications Act 2003.

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 29 February 2012, 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 29 February 2012.

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/01083/01/12