On 1 September 2008, the Competition Commission accepted undertakings from Arqiva as a remedy to the substantial lessening of competition created by the merger of Arqiva and National Grid Wireless . As part of those undertakings, an independent Adjudicator is required to be appointed by Ofcom to address disputes regarding the effective operation of the undertakings (the “Adjudicator”).
As required by the undertakings, Ofcom must issue guidance to the Adjudicator in order to enable him to produce his own guidance on the approach he will take in settling disputes between Arqiva and its customers pursuant to the undertakings. On 21 October, we therefore published a document containing Ofcom’s draft guidance and invited comments on this text before preparing the final form of our guidance to the Adjudicator.
There were 6 responses to our guidance document and we have considered these before preparing our statement. Section 2 of this document discusses the key points raised in our consultation and Ofcom’s comments on them.
Sections 3-5 provide Ofcom’s guidance to the Adjudicator. Section 3 provides some background to the guidance and section 4 discusses the objectives Ofcom considers the Adjudicator should work from. Section 5 discusses the various cost concepts that can be used to arrive at prices and provides general guidance on these.
We note that our guidance is not intended to be a prescriptive methodology applicable to all transmission services  as it is not possible to have a single methodology that might be equally appropriate in all circumstances. Rather, it provides general guidance on the analysis of costs and prices. In discharging his functions under the undertakings the Adjudicator must use his judgement of what can be considered reasonable in any particular circumstance. We would also stress that the Adjudicator will create his own guidance (which may differ from Ofcom’s) and will also consult on that guidance in due course.
 The undertakings given by Arqiva and the Macquarie Funds in respect of the acquisition of National Grid Wireless to the Competition Commission, which were accepted on 1 September 2008 – for the remainder of this document, they will simply be referred to as ‘the undertakings’.
 As defined in the undertakings.
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