Dispute between Everything Everywhere and BT regarding termination charges for 0844, 0843, 0871, 0872, 0873 and 09 number ranges

Dispute between: Everything Everywhere Limited (EE) and British Telecommunications plc (BT) regarding BT's termination charges for 0844/3 and 0871/2/3 and 09 calls.
Case opened: 4 April 2012
Case closed: 4 April 2013
Issue: Ofcom was asked to resolve this dispute under section 185(1) of the Communications Act 2003 (the Act) concerning termination charges introduced by BT for calls to 0844/3 and 0871/2/3 (NCCN 1101) and 09 (NCCN 1107) number ranges.
Relevant instrument: Ofcom resolved this dispute using its powers under Chapter 3 of Part 2 of the Act.

Update note 3 June 2013

On 24 May 2013 BT filed a Protective Notice of Appeal with the Competition Appeal Tribunal (CAT) against Ofcom’s determinations to resolve this dispute and the related disputes about termination charges for 080 numbers (CW/01055/08/10). Details of BT’s appeal can be found on the CAT's website at http://www.catribunal.org.uk/.

End of update note

On 4 April 2013, Ofcom issued its final determinations of this dispute and of the related disputes about termination charges for 080 numbers (CW/01055/08/10) to the parties in dispute.

We have published a non-confidential version of our final determinations (see related items).

Update note 19 December 2012

We have received requests to extend the period for comment on the provisional conclusions.  Following these requests and the fact that the current period for responses includes the Christmas holiday period, we have decided to extend the period for comments on the provisional conclusions to 5pm on 4 January 2013.  

End of update note

Update note 4 December 2012

On 4 December 2012, Ofcom issued its joint provisional conclusions concerning this dispute and CW/01055/08/10 to BT, EE, H3G, O2 and Vodafone (please see related item).

The period for comments on the provisional conclusions will close at 5 pm on 28 December 2012. Please send responses to:

Melanie Everitt
Ofcom
Riverside House
2A Southwark Bridge Road
London
SE1 9HA

Or by e-mail to melanie.everitt@ofcom.org.uk

End of update note

Update note 28 June 2012

On 1-3 May 2012 the Court of Appeal heard on an expedited basis the appeals brought by O2 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 (the "08x cases"). (-1-)

We have been working towards making a final determination in respect of this dispute within the statutory period of four months from opening the case on 4 April 2012. However, in light of the analysis that we have conducted up to date in order to resolve the dispute, and taking into account the nature of the arguments put to the Court of Appeal by the parties in the 08x cases, we have concluded that the Court of Appeal's judgment in the 08x cases is likely to be relevant to the issues raised in this dispute.

Accordingly, we will not be able to proceed to making any provisional conclusions until that judgment has been handed down and we have had an opportunity to consider the implications of the judgment on the matters in dispute in this case.  We consider that this constitutes exceptional circumstances for the purposes of section 188(5) of the Communications Act 2003 and the timeframe for resolving the dispute. 

Notwithstanding these circumstances, we will continue to consider the matters in dispute insofar as we are able, so that we can resolve the dispute as soon as possible following the Court of Appeal's judgment.

End of update note

Under the terms of its Standard Interconnect Agreement (SIA), BT has the right to notify proposed changes in the prices it charges to those who use the BT network. Notification of these changes is given by a Network Charge Change Notice (NCCN).

On 2 September 2011 BT notified originating call providers (OCPs) of the termination charges in relation to 0844/3 and 0871/2/3 numbers in NCCN 1101, effective from 1 October 2011. On 3 October 2011 BT notified OCPs of the termination charges in relation to 09 premium rate numbers in NCCN 1107, effective from 1 November 2011.

The charging structure of NCCN 1101 and NCCN 1107 essentially involves BT setting its wholesale charge by reference to the individual retail pricing practices of each OCP. EE alleges that:

• the termination charges in NCCNs 1101 and 1107 are not fair and reasonable;
• NCCNs 1101 and 1107 are likely to result in a material disbenefit to consumers or, alternatively, doubt whether there is a benefit to consumers;
• BT has a dominant position in the market for the supply of the service of wholesale call termination of non-geographic calls on BTs network, including but not limited to 0844/43, 0871/2/3 and 09 calls; and
• BT's NCCNs 1101 and 1107 represent an abuse of any dominant position in the market for the supply of the service of wholesale call termination of non-geographic calls on BT's network.

The structure of NCCN 1101 and NCCN 1107 in relation to wholesale termination charges for calls to 0844/3, 0871/2/3 and 09 number ranges is similar to that applied by BT in the following previously referred disputes in that the wholesale termination charge levied by BT is linked to, and varies according to, the average retail charge of the originating call provider:

• Ofcom case ref: CW/01036/03/09: A dispute concerning tiered, variable termination charges for calls to 080 numbers, which was determined on 5 February 2010;
• Ofcom case ref: CW/01042/01/10: A dispute concerning tiered, variable termination charges for calls to 0845 and 0870 numbers, which was determined on 10 August 2010; and
• Ofcom case ref: CW/01055/08/10: A dispute concerning tiered, variable termination charges for calls to 080 numbers, in relation to which exceptional circumstances apply in so far as it would not be appropriate for Ofcom to proceed to resolve this dispute at the present time.

Ofcom is also currently considering a dispute concerning the terms of paragraphs 12 and 13 of the main body of BT's SIA, which confers rights on BT to introduce the NCCN charges in dispute. Ofcom case ref CW/01083/01/12.

Ofcom considers that there is a dispute between the parties within the meaning of s185(1A) of the Act. If that were not the case, we consider that we would have jurisdiction under 185(1)(a) of the Act, 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. Accordingly, Ofcom has accepted the dispute for resolution as detailed below.

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.

Scope of the dispute:

The scope of the dispute is:

To determine whether it is fair and reasonable for BT to apply termination charges for calls to 0844/3 and 0871/2/3 number ranges, specifically set out in NCCN 1101, and the 09 number range, specifically set out in NCCN 1107, hosted on its network, which are based on the level of the retail charge imposed by OCPs for calls to these numbers.

Procedural matters:

In line with Ofcom's Guidelines for the handling of regulatory disputes published in June 2011, Ofcom is not consulting on the scope of this dispute. Ofcom's guidelines can be found here.

Stakeholders interested in the outcome of this dispute should notify Ofcom by 28 April 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 28 April 2012.
Stakeholders who wish Ofcom to join them as parties to the dispute must provide evidence, as set out in Ofcom's Guidelines for the handling of regulatory disputes that they are in dispute.

Case Leader: Melaine Everitt (e-mail: melanie.everitt@ofcom.org.uk)
Case Reference: CW/01088/03/12

Footnotes:
  1.- Cases C3/2011/3121, 3124, 3315, 3316 and C3/2012/0692A. The CATs decision is BT and Everything Everywhere Limited v Ofcom [2011] CAT 24.