Dispute concerning various aspects of BT's LLU procedures and terms and conditions

25 February 2005

Complainant: The complainant wishes to remain anonymous
Complaint against: BT
Case opened: 13 May 2004
Case closed: 1 July 2004
Relevant instrument: Ofcom intended to resolve the dispute under Chapter 3 of Part 2 of the Communications Act 2003

The complainant has withdrawn this dispute. Ofcom therefore closed the case on 1 July 2004.

Case Leader: Jonathan Blackburn (email: Jonathan.Blackburn@ofcom.org.uk)
Case Reference: CW/00763/03/04

Text published when the case was opened

Complainant: The complainant wishes to remain anonymous
Complaint against: BT
Case opened: 14 May 2004
Relevant instrument: Ofcom intends to resolve the dispute under Chapter 3 of Part 2 of the Communications Act 2003

Issue:

Ofcom has received a request to resolve various disputes regarding a number of different aspects of BT's pricing, procedures and terms and conditions for LLU. The complainant wishes to remain anonymous, however BT has been advised of its identity.

Background:

In May 2003 the complainant raised certain issues with BT in relation to BT's LLU prices, terms and conditions and processes. This was separate from any discussions taking place on similar issues within the relevant industry forum. The complainant has stated that, notwithstanding discussions with BT, it has been unable to reach agreement with BT on a number of the issues raised. The complainant has therefore brought these issues to Ofcom in each case to be resolved as a formal dispute.

Among other matters the complainant has asserted that there should be parity in pricing, terms and conditions and levels of service, between LLU products on the one hand and certain other BT products and services provided both to itself and to other communications providers on the other.

Ofcom recognises that on the facts of the matter referred to its attention, there appears to be a genuine dispute between the parties in relation to a number of issues that commercial negotiation has failed to resolve and where there is an imbalance of market power between the two parties. Ofcom therefore considers that it is appropriate for it to handle this dispute pursuant to its powers under Chapter 3 of Part 2 the Communications Act 2003.

Scope of the dispute:

To determine the following:

  1. an appropriate level of connection charge for LLU Fully Unbundled MPFs;
  2. an appropriate level of connection charge for LLU Shared MPFs;
  3. an appropriate level of rental charge for LLU Shared MPFs;
  4. an appropriate minimum contract period (if any) for LLU Fully Unbundled MPFs and an appropriate level of any associated penalties and charges for early termination;
  5. an appropriate level of address matching requirements or otherwise a reasonable technical solution to the problem of address matching for placement of LLU Fully Unbundled MPF orders;
  6. an appropriate level of service for fault repairs to be offered by BT in relation to each of LLU Fully Unbundled MPF and Shared MPF products, in particular as regards timescales for repairs and for commencement of service;
  7. an appropriate timeframe for BT to provide co-location given the scope of technical and physical works to be carried out;
  8. an appropriate basis for setting the level of penalties (if any) to be imposed by BT for failure by a LLU operator to achieve its forecast volumes for LLU provision; and
  9. whether or not a caged co-location solution for co-mingling orders is appropriate.

Procedural matters:

Ofcom is currently conducting a market review of the wholesale local access market, in which it is addressing certain of the charges for LLU services. Ofcom currently expects to complete this market review by the end of the year.

After initial consideration, Ofcom considers that the resolution of the pricing issues raised by the complainant (issues (1) to (3) above) would involve considering the same or similar costing issues to those currently being addressed in the market review. Moreover, Ofcom considers that the resolution of these issues would involve an extensive cost investigation. Ofcom has already scoped and planned such a cost investigation for the purposes of the market review, and that investigation is already under way.

Therefore, in the interests of efficient resource allocation and the time needed to complete the investigation into the pricing issues raised by the complainant, Ofcom has decided to resolve issues (1) to (3) in the context of the market review. The market review is not expected to conclude within the next four months. Ofcom considers that, for the reasons given above, there are exceptional circumstances, as set out in section 188(5) of the Communications Act 2003, for it to defer this dispute, and the requirement to resolve a dispute in four months will therefore not apply in respect of issues (1) to (3) above.

Concerning issue (4) above, Ofcom considers that its consideration of the charges for LLU in the context of the market review (including the appropriate allocation between rental and connection charges) is likely to impact on how this issue should be resolved. Therefore, in the interests of efficient resource allocation, Ofcom has decided to defer consideration of this issue until after the conclusion of the market review. As noted above, the market review is not expected to conclude within the next four months. Ofcom considers that, for the reasons given above, there are exceptional circumstances, as set out in section 188(5) of the Communications Act 2003, for it to defer this dispute, and the requirement to resolve a dispute in four months will therefore not apply in respect of issue (4) above.

In respect of the other five issues (issues (5) to (9) above) Ofcom intends to resolve the dispute within four months.

All representations on the scope of the dispute should be submitted to Ofcom by 21 May 2004.

Stakeholders interested in the outcome of this investigation should notify Ofcom by 21 May 2004, describing the relevance of the outcome of the dispute to their business.

Stakeholders with relevant information and evidence in respect of this dispute should submit this to Ofcom by 4 June 2004.

Case Leader: Jonathan Blackburn (email: Jonathan.Blackburn@ofcom.org.uk)
Case Reference: CW/00763/03/04