Disputes between BT and each of EE and Three regarding BT’s wholesale termination charges for calls to 03 numbers

17 December 2014

Disputes between: (i) Everything Everywhere Limited (“EE”), (ii) Hutchinson 3G Limited (“Three”) and (iii) British Telecommunications plc (“BT”) concerning BT’s wholesale termination charges for calls to 03 numbers hosted on BT’s network.
Case opened: 13 October 2014
Case closed: 12 February 2015
Issue: Ofcom has been asked to resolve these disputes under section 185 of the Communications Act 2003 (the Act) concerning BT’s wholesale termination charges for calls to 03 numbers hosted on BT’s network.
Relevant instrument: Ofcom resolved these disputes using its powers under Chapter 3 of Part 2 of the Act.

On 12 February 2015, Ofcom published its Final Determination resolving these disputes. A non-confidential version of the Determination is available under related items.

Update note –17 December 2014

Ofcom has today published its Provisional Conclusions regarding this dispute (please see related item).

The period for comments on the Provisional Conclusions will close at 5 pm on Wednesday 7 January 2015.

Please send responses to:

Catherine Warhurst
Ofcom
Riverside House
2A Southwark Bridge Road
London
SE1 9HA

End of update note

This dispute concerns BT’s wholesale termination charges for calls to 03 numbers hosted on BT’s network.

On 3 August 2009, BT published its termination rates for charges to 03 numbers in Network Charge Change Notice (“NCCN”) 966. In 2010, EE brought a dispute against BT concerning its termination charges for calls to 03 numbers that were notified in NCCN 966. In January 2011, we determined this dispute, finding BT’s charges were fair and reasonable at that time. EE and Three (the “referring parties”) have now asked BT to reduce its termination charges for these calls as they assert that there has been a very substantial reduction in the underlying costs used in setting the rates.

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(1)(a) of the Communications Act 2003. Ofcom considers that the dispute meets the relevant administrative priority 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 the referring parties and BT, the scope of the dispute is:

Whether, in light of regulatory and market developments, the wholesale termination charges notified by BT in NCCN 966 for calls to 03 numbers that terminate on BT’s fixed network are no longer consistent with the policy objectives in Article 8 of the Framework Directive including end-to-end connectivity.

Procedural matters:

In line with Ofcom’s Guidance on the resolution of disputes published in June 2011, Ofcom is not consulting on the scope of this dispute. Ofcom’s 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 27 October 2014, 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 27 October 2014.

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: Catherine Warhurst (e-mail: catherine.warhurst@ofcom.org.uk )
Case Reference: CW/01139/09/14