Enforcement of the requirement to implement and comply with a Dispute Resolution Scheme

08 June 2006

Complainant: Ofcom own-initiative investigation
Investigation against: Communications Providers who have not implemented a Dispute Resolution Scheme
Case opened: 16 August 2005
Case closed: 15 February 2006
Issue: Compliance with the requirement to implement and comply with a Dispute Resolution Scheme
Relevant instrument: General Condition 14.4 of the General Conditions of Entitlement

Update Note – 8 June 2006

Ofcom has now confirmed that ADSL4LESS is a brand name with subscribers contracted directly with Hotchilli Communications Ltd, a member of the Ofcom approved ADR scheme, Otelo. Ofcom is content that ADSL4LESS subscribers have access to Otelo through Hotchilli's membership. Ofcom has therefore closed the case.

In relation to Geo Internet, Ofcom has established that Nahda Technologies Ltd ran an ISP under this brand name but that it is no longer operational. Geo Internet subscribers have migrated to other ISPs. Ofcom has therefore also closed this case.

End of update note

Update Note – 11 May 2006

Following further investigation Ofcom has now confirmed that Prodigy Networks is a member of CISAS, an approved ADR Scheme.

In relation to ADSL4LESS and Geo Internet, Ofcom's further investigations have established that these entities may have possbile links (including ownership) with communications providers Nahda Technologies Ltd (in relaltion to Geo Internet) and Hotchilli Communications Ltd, (in relation to ADSL4LESS). Ofcom has therefore opened investigations into Nahda Technologies Ltd and Hotchilli Communications Ltd (CW/00902/05/06 and CW/00903/05/06 respectively) in order to establish the nature of any such relationships and, accordingly, whether Ofcom has reasonable grounds for believing that Nahda Technologies Ltd and/or Hotchilli Communications Ltd have contravened and are contravening, General Condition 14.4.

End of update note

Text puplished when the case was closed on 15 February 2006

Following notifications issued to four companies in December 2005, Ofcom has now decided to close this industry wide investigation.

Ofcom continues to monitor compliance with GC14.4 across the industry and may take steps to secure compliance where evidence suggests that providers are failing to provide access to an Ofcom approved independent Alternative Dispute Resolution Scheme for their customers. Ofcom may take action directly or open an investigation where appropriate and publish details via the Competition Bulletin.

Of the four companies to whom Ofcom issued a notification of contravention on 13 December 2005, for failing to secure access to an Ofcom approved ADR scheme, Genesis Communications has complied with the notification and joined an approved ADR scheme.

The remaining three companies: Prodigy Networks, ADSL4LESS and GEO Internet have not demonstrated compliance with the notification, and therefore remain in breach of their obligations under GC 14.4. Ofcom is now considering the next steps in terms of appropriate enforcement action. Any enforcement action undertaken will be announced via Ofcom's Competition Bulletin in due course.

Case Leader: Beverley Kotey (020 7783 4588 e-mail: beverley.kotey@ofcom.org.uk)
Case Reference: CW/00851/07/05

Text published when the case was opened

Own-initiative investigation: Enforcement of the requirement to implement and comply with a Dispute Resolution Scheme

Complainant: Ofcom own-initiative investigation
Investigation against: Communications Providers who have not implemented a Dispute Resolution Scheme
Case opened: 16 August 2005
Issue: Compliance with the requirement to implement and comply with a Dispute Resolution Scheme
Relevant instrument: General Condition 14.4 of the General Conditions of Entitlement

Update note – 13 December 2005

As part of its ongoing industry wide investigation to monitor compliance with General Condition 14.4 (GC14.4), Ofcom issued a notification of contravention to four companies on 13 December 2005 under section 94 of the Communications Act 2003 (the "Act").

GC14.4 requires Communications Providers (CPs) to implement and comply with an Ofcom approved independent Dispute Resolution Scheme (ADR) for their domestic and small business customers.

Ofcom has reasonable grounds for believing that the companies listed in the table below, and at Annex A of the notification, are in breach of the obligations under GC 14.4, and the notification sets out the Communications Providers' falure to comply with GC14.4. These Communications Providers have been identified for enforcement action based on the level of complaints received by Ofcom and referrals from other bodies such as Trading Standards or the approved ADR Schemes themselves.

The notification gives the Communications Providers until 14 January 2006 to ensure that domestic and small business customers are provided with access to an approved ADR Scheme.

Commmunications Provider

Service Provided

Genesis Communications
Waterfold Park
Rochdale Road
Bury
Greater Manchester
BL9 7BJ

Provider of mobile airtime to business customers

Prodigy Networks
217 Portobello
Sheffield
S1 4DP

UK wide provider of internet and telephone products for domestic and business users

ADSL4LESS
The Executive Centre
Piccadilly
London
W1J 7NW

UK wide provider of Broadband services to domestic customers

Geo Internet
Suite 126
Great Underbank
Stockport
SK1 1LE

UK wide provider of Broadband services to domestic and business customers

Representations concerning this notification

The Communications Providers have until 14 January 2006 to make representations to Ofcom about the matters set out in the notification.

Continuing investigation

Ofcom's investigation will continue to examine whether Communications Providers are complying with the requirements of GC14.4 and providing access to a dispute resolution scheme.

Where the evidence suggests a Communications Provider is not complying with GC14.4, and has a requirement to do so, Ofcom may take enforcement action by issuing further notifications under section 94 of the Act.

End of update note

Ofcom has opened an industry wide investigation into compliance with General Condition 14.4, which requires Communications Providers to implement and comply with an Ofcom approved independent Dispute Resolution Scheme for their domestic and small business customers, in relation to the provision of public electronic communications services.

Two such Dispute Resolution Schemes have been approved by Ofcom. They are the Office of Telecommunications Ombudsman (Otelo) ( http://www.otelo.org.uk ) and the Communication and Internet Services Adjudication Scheme (CISAS) ( http://www.arbitrators.org/cisas/index.asp ).

More than 300 Communications Providers have implemented such a Dispute Resolution Scheme through being a member of either Otelo or CISAS. The investigation will monitor compliance with General Condition 14.4 across the industry and will target those Communications Providers who are not members of a Scheme.

Remedial action could also follow any non-compliance with GC 14.4. Under section 94 of the Communications Act 2003 ("the Act"), Ofcom may issue a notification where it has reasonable grounds for believing there has been a contravention of a General Condition.

Further, under Section 96 of the Act, Ofcom may impose a penalty of up to 10 per cent of turnover for failure to comply with such a notification within the time period specified.

Case Leader: Beverley Kotey (020 7783 4588 e-mail: beverley.kotey@ofcom.org.uk )
Case Reference: CW/00851/07/05