Dispute between BT and various communications providers about cancellations during the CPS and WLR transfer process

18 April 2005

Complainant: Broadsystem Ventures Ltd, Caudwell Communications Ltd, Centrica Telecommunications Ltd, MCI Worldcom Ltd, Opal Telecom Ltd, Telco Global Ltd, THUS plc, Your Communications Ltd
Complaint against: BT
Case opened: 22 September 2004
Case closed: 21 January 2005
Relevant instrument: Ofcom resolved this dispute under Chapter 3 of Part 2 of the Communications Act 2003

Update note – 18 April 2005

On 18 April 2005, Ofcom published its proposals to modify the direction of 21 January 2005. Please see related item.

Ofcom will be consulting on its proposals until 5pm on 18 May 2005. Please send responses to:

Chris Rowsell
Competition & Markets
Fourth Floor
Ofcom
Riverside House
2a Southwark Bridge Road
London
SE1 9HA

or by email to Chris.Rowsell@ofcom.org.uk

End of update note

On 21 January 2005 Ofcom published a Determination under Sections 188 and 190 of the Communications Act 2003 resolving this dispute.

Please see related items.

Case Leader: Louise Marriage (e-mail: Louise.Marriage@ofcom.org.uk)
Case Reference: CW/00786/09/04

Text published when the case was opened

Dispute between BT and various communications providers about cancellations during the CPS and WLR transfer process

Complainant: Broadsystem Ventures Ltd, Caudwell Communications Ltd, Centrica Telecommunications Ltd, MCI Worldcom Ltd, Opal Telecom Ltd, Telco Global Ltd, THUS plc, Your Communications Ltd
Complaint against: BT
Case opened: 22 September 2004
Relevant instrument: Ofcom intends to resolve the dispute under Chapter 3 of Part 2 of the Communications Act 2003

Update note – 23 November 2004

Ofcom published its proposals to resolve this dispute on 22 November 2004 . Please see the related item.

Ofcom will be consulting on its proposals until 5pm on 23 December 2004 . Please send responses to:

Louise Marriage
Competition and Markets
Ofcom
Riverside House
2a Southwark Bridge Road
London
SE1 9HA

or by email to louise.marriage@ofcom.org.uk

End of update note

Issue:
Caudwell Communications Ltd ("Caudwell"), on behalf of the communications providers listed above, has submitted a dispute for resolution under Chapter 3 of Part 2 of the Communications Act 2003 following the breakdown of negotiations between BT and the industry about the circumstances in which BT should cancel an order to transfer a customer to a provider of Carrier Pre Selection (CPS) and Wholesale Line Rental (WLR).

Background:
The complainants all provide services which use CPS or WLR provided by BT Wholesale (BT Wholesale provide wholesale network services and network capacity to communications providers). The complainants provide retail calls and access services to end users and/or wholesale calls and access services to resellers using inputs bought from BT Wholesale.

On 8 July 2003, following an own initiative investigation, Oftel published the Direction Carrier pre-selection 'save' and 'cancel other' activity ("the Cancel Other Direction").

'Cancel Other' refers to the situation where BT cancels an order placed by alternative providers. The Cancel Other Direction limited BT's use of Cancel Other to cases of 'slamming' (slamming is a term used to describe a situation where a provider attempts to transfer the customer without that customer's consent), 'internal customer miscommunication' (where for example, permission has been given by someone at the customer's address but the bill payer has not agreed) and situations where a customer's BT line is ceased during the transfer period.

Following publication of the draft Cancel Other Direction, BT initiated discussions with the industry to address industry concerns surrounding BT's use of Cancel Other and to negotiate an alternative process for managing customer complaints and cancellations during the CPS and (since its introduction) WLR transfer process. These proposals for an alternative process are known as the 'CEO initiative'. BT has indicated to the industry that it is not prepared to implement the proposed CEO initiative process and has declined to negotiate further.

Caudwell has submitted proposals for an alternative process (the "interim solution") which are supported by the other parties to the dispute.

Scope:
Ofcom recognises that on the facts of the matter referred to its attention, there appears to be a genuine dispute between the parties that commercial negotiation has failed to resolve. There is also likely to be an imbalance of market power between the parties and therefore Ofcom intends to make a direction, subject to consultation with each party, concerning the steps they should take to resolve this issue. The scope of the dispute is to determine whether the existing processes governing BT's use of Cancel Other remain appropriate; and if not to determine:

  • under what circumstances BT may use 'Cancel Other' and in particular to determine;
  • the circumstances in which BT may use 'Cancel Other' when the relevant consumer has not contacted the gaining provider and the information on the use of 'Cancel Other' that BT is obliged to provide to other providers.

Stakeholders should note that the scope of this dispute does not include addressing broader issues surrounding the mis-selling of fixed line telecoms services but is limited to process issues related to the provision of network access.

Procedural matters:
Guidance on the resolution of the dispute can be found in Ofcom's Guidelines for the handling of competition complaints, and complaints and disputes about breaches of conditions imposed under the EU Directives (http://www.ofcom.org.uk/bulletins/comp_bull_index/eu_directives/?a=87101).

All representations on the scope of the dispute should be submitted to Ofcom by 29 September 2004.

Stakeholders interested in the outcome of this investigation should notify Ofcom by 29 September 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 13 October 2004.

Case Leader: Louise Marriage (e-mail: Louise.Marriage@ofcom.org.uk)
Case Reference: CW/00786/09/04