This document (the Provisional Conclusions) sets out for comment the main elements of our provisional reasoning and assessment of the matters in dispute.
This dispute (the Dispute) has been brought separately by Everything Everywhere Limited (EE), (-1-) Hutchison 3G UK Limited (H3G) (-2-) and Telefonica UK Limited (O2) (-3-)(collectively the MNOs) against British Telecommunications plc (BT). It concerns Paragraph 12 of BT's SIA (-4-) and the rights this confers on BT to introduce changes to charges for BT services or facilities supplied under BTs SIA, as compared to the rights that Paragraph 13 confers on Communication Providers (CPs) such as the MNOs to introduce changes to charges for their services supplied under the SIA.
The SIA provides BT's standard terms for the provision of interconnection for telephony. The SIA sets out the contractual obligations of each party, where a CP connects its public electronic communications network (PECN) to that of BTs, allowing calls to pass between the different networks. The SIA includes, amongst other things, mechanisms for either party to make changes to charges for these services and facilities.
Under Paragraph 12 of the SIA, BT does not need to obtain a CPs consent to change its charges. BTs new charges can take effect 28 days from notification for unregulated services (and up to 90 days for regulated services). Paragraph 12 does not include a provision for CPs to propose changes to BTs existing charges.
In contrast, under Paragraph 13, CPs may only propose an alteration to a charge to BT. A proposed alteration will not take effect unless BT consents, or if it is endorsed by Ofcom following reference of a dispute. Paragraph 13 does not specify when a CPs new charge becomes effective, however, an implementation period of 56 days is set out in BTs Charge Change Manual. (-5-) In addition, Paragraph 13 allows BT to propose variations to a CPs charges.
The MNOs contend that BTs ability to unilaterally change its prices under Paragraph 12, and the absence of an equivalent provision under Paragraph 13, or the ability to propose changes to charges for BTs services, creates an imbalance between the rights of the contracting parties that is unfair and unreasonable.
In referring the Dispute to us, the MNOs have asked us to determine that there should be an amendment to the SIA, such that the imbalance is removed with BT being required to seek agreement of its proposed price changes before they take effect.
BT considers that the arrangements are justified in practical terms, as BT is the only operator with an end-to-end connectivity obligation (-6-) and advises that the current arrangements are supported by many smaller CPs, who rely on BTs transit services for much of their traffic.
We have also had a number of submissions from third parties, including some CPs who argue that the current arrangements should not be changed to reflect the MNOs proposals as a result of this Dispute.
1. EE submission of 23 January 2012 (EEs dispute submission).
2. H3G submission of 2 February 2012 (H3Gs dispute submission).
3. O2 submission of 5 March 2012 (O2s dispute submission).
4. BTs Network Charge Change Control Standard Interconnect Agreement, which provides the terms and conditions on which calls are connected between the respective PECNs of BT and other CPs.
5. Annex I to BT / Operator Charge Change Manual (Issue Number 2), 25 Feb 2010.
6. This is an obligation placed on BT requiring that it must purchase call termination from other providers of public electronic communications networks (i.e. fixed or mobile telephony providers wanting BT to terminate voice or data calls).