Use of information for marketing activity directed at Wholesale Line Rental ("WLR")

25 February 2005

Complainant: The complainant wishes to remain anonymous
Complaint against: BT
Case opened: 12 January 2004
Case closed: 11 May 2004
Issue: Use of information for purposes of save and winback activities by BT directed at customers who have moved to WLR
Relevant instrument: General Condition 1.2 of the General Conditions of Entitlement which governs the use of certain information provided in the context of Network Access arrangements. Sections 94 to 104 of the Communications Act 2003 governing enforcement of the General Conditions.

Update Note 27 May 2005

On 25 May 2005, Ofcom issued a Notification of Contravention of General Condition 1.2 to BT under the Communications Act 2003. Please see below.

The Notification relates to ‘save activity’ undertaken by BT prior to June 2004 in connection with the provision of wholesale line rental (WLR).

A notification regarding the same matter was previously issued by Ofcom on 11 May 2004. That notification was appealed by BT to the Competition Appeal Tribunal (CAT). At that time, however, the CAT was considering another appeal by BT against a similar notification concerning carrier pre-selection (CPS). Following the CAT’s judgment in the CPS appeal (issued on 9 December 2004), Ofcom decided to withdraw the first WLR notification in order to address certain comments made by the CAT. The Notification published on 25 May 2005 replaces the original WLR notification against BT.

End of update note

 

Update Note - 3 March 2005

Ofcom has today withdrawn the notification of contravention of General Condition 1.2, which it issued to BT under section 94 of the Communications Act 2003 on 11 May 2004 (the WLR Notification).

In the WLR Notification Ofcom noted the proceedings in the Competition Appeal Tribunal in Case 1025/3/3/04 in relation to an earlier notification issued by Oftel to BT concerning CPS save activity (the CPS Appeal), which were pending at the time. Ofcom indicated that it would need to take into account the implications of any judgment in those proceedings on the WLR Notification.

On 12 July 2004 BT appealed the WLR Notification to the Competition Appeal Tribunal (Case 1040/3/3/04). The Tribunal stayed the appeal pending the outcome of the CPS Appeal.

The Competition Appeal Tribunal issued its judgment in the CPS Appeal on 9 December 2004 (the CPS Judgment), in which it upheld Oftel's CPS Notification. A copy of the CPS Judgment is available from the Competition Appeal Tribunal's website at:
http://www.catribunal.org.uk/documents/Jdg1025BT091204.pdf

Having considered the CPS Judgment, Ofcom considers that the most appropriate course of action is to withdraw the WLR Notification and to issue a new notification. The new notification will be based on the original complaint and investigation, but will take into account the CPS Judgment and in particular the Tribunal's comments at paragraphs 330 and 331 of the CPS Judgment in relation to the potential for BT's conduct to provide it with a competitive advantage.

Ofcom has indicated to the Competition Appeal Tribunal that it would withdraw the WLR Notification as expeditiously as possible and that in its best view a further notification will be issued within two months.

End of Update Note

Text published when the case was closed

Ofcom has closed this investigation by issuing a notification of contravention of General Condition 1.2 under section 94 of the Communications Act 2003.
http://www.ofcom.org.uk/bulletins/comp_bull_index/comp_bull_ccases/closed_all/cw_739/notification.pdf

BT has to comply with General Condition 1.2 by 14 June 2004, which Ofcom will monitor. Ofcom may take enforcement action if BT does not comply.

Case leader: Katherine Dinsdale (e-mail: katherine.dinsdale@ofcom.org.uk)
Case reference: CW/00739/12/03

Text published when the case was opened

Use of information for marketing activity directed at Wholesale Line Rental (WLR)

Complainant: The complainant wishes to remain anonymous
Complaint against: BT
Case opened: 12 January 2004
Issue: Use of information for purposes of save and winback activities by BT directed at customers who have moved to WLR
Relevant instrument: General Condition 1.2 of the General Conditions of Entitlement which governs the use of certain information provided in the context of Network Access arrangements. Sections 94 to 104 of the Communications Act 2003 governing enforcement of the General Conditions.

Ofcom has received a complaint regarding alleged save and winback activity carried out by BT directed at customers who have moved to WLR. The complaint has been made by a company engaged in provision of services to consumers by means of WLR.

Since 2002, BT has been obliged to provide a WLR product. This product allows alternative suppliers of telecoms services to rent access lines on wholesale terms from BT. These suppliers can then resell the lines to end users, supplying them with a single bill for calls and line rental.

Ofcom is concerned that BT may be using information provided solely for the purpose of Network Access negotiations or arrangements to carry out marketing activity towards customers who have opted to switch to alternative suppliers using the WLR product.

BT is free to carry out marketing activity directed at such consumers generally, for example based on publicly sourced third party data. However, if BT uses information provided by another Communications Provider in the context of Network Access negotiations or arrangements for such marketing activities, it may be in breach of General Condition 1.2.

Ofcom is therefore investigating this complaint under the Communications Act 2003 to establish whether BT is in breach of its regulatory obligations.

Case leader: Selena Bevis  e-mail: selena.bevis@ofcom.org.uk)
Case reference: CW/00739/12/03