British Sky Broadcasting plc (“Sky”) and British Telecommunications plc (“BT”) concerning charges for special fault investigation services (“SFIs”) and time related charges (“TRCs”)

26 September 2016

Dispute between: British Sky Broadcasting plc (“Sky”) and British Telecommunications plc (“BT”) concerning charges for special fault investigation services (“SFIs”) and time related charges (“TRCs”)
Case opened: 18 July 2016.
Issue: Ofcom has been asked to resolve this dispute under section 185 of the Communications Act 2003 (“the Act”) concerning the level of charges for SFIs and TRCs charged by BT to Sky.  
Relevant instrument: Ofcom intends to resolve this dispute using its powers under Chapter 3 of Part 2 of the Act.

Update note: 26 September 2016

Ofcom has today published its Provisional Conclusions (PDF, 446.8 KB) regarding this dispute.

The period for comments on the Provisional Conclusions will close at 5pm on 10 October 2016.

Please send responses to:

Tor Ahjem
Ofcom
Riverside House
2A Southwark Bridge Road
London
SE1 9HA

Or by email: tor.ahjem@ofcom.org.uk

End of update note

TRCs are services involving engineering work which is not included within service level agreements with BT. SFIs are services requested by CPs for further investigation of potential broadband faults on MPF and SMPF lines where no fault has been found using the standard Openreach line test.  

This dispute concerns allegations by Sky that BT’s TRC and SFI charges in relation to local loop unbundling (“LLU”) and wholesale line rental (“WLR”) services, in the period between 1 January 2009 and 30 June 2014 (“the relevant period”) were not cost-orientated and were therefore inconsistent with BT’s basis of charges obligations under SMP conditions imposed by Ofcom in successive reviews of the markets for wholesale local access services and wholesale fixed analogue exchange line services since 2003.(-1-)

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 a manner which is consistent with both Ofcom’s general duties under section 3 of the Act, and pursuant to section 4(1)(c) of the Act, the six Community requirements set out in section 4 of the Act which give effect, amongst other things, 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 section 185(1A) of the Act. Ofcom considers that the dispute meets the relevant statutory 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 Sky and BT, the scope of the dispute is to determine:

1) Whether the amount that BT charged Sky for TRCs and SFIs in the relevant period was compliant with Conditions AA3, FA3, AAA3, FAA4.1 and AAAA3, as applicable; and

2) If not, in order to resolve the dispute between the parties, what amount BT should have charged Sky for TRCs and SFIs in the relevant period and whether any repayments should be made.

Procedural matters:

In line with Ofcom’s Guidelines 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 29 July 2016, 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 29 July 2016.
Stakeholders who wish Ofcom to join them as parties to the dispute must provide evidence, as set out in Ofcom's Guidelines on the resolution of disputes that they are in dispute.

Case Leader: Tor Ahjem (tor.ahjem@ofcom.org.uk)
Case Reference: CW/01185/07/16

Footnotes:
1.- The relevant SMP conditions which Sky alleges that BT has failed to comply with were imposed under Oftel’s 2003 Review of the Fixed Narrowband Wholesale Exchange Line, Call Origination, Conveyance and Transit Markets; Ofcom’s 2004 Review of the Wholesale Local Access Market; Ofcom’s 2009 Review of the Fixed Narrowband Services Wholesale Markets; Ofcom’s 2010 Review of the Wholesale Local Access Market; and Ofcom’s 2010 Review of the Wholesale Analogue Exchange Lines Markets.