This statement sets out our final decision on the modification of the charge control on BT in relation to its Point of Handover pricing, following our consultation published on 26 January 2011 ("the January Consultation") and a second consultation published on 22 June 2011 ("the June Consultation").
These consultations reconsidered a number of issues remitted back to Ofcom by the Competition Appeal Tribunal ("CAT") following the disposal of the Leased Lines Charge Control appeal ("the LLCC Appeal") on 20 September 2010. The remitted issues relate specifically to the cost recovery approach for Points of Handover ("POHs") used to deliver Partial Private Circuits ("PPCs").
A POH is a high capacity link provided by BT, which connects a Communications Provider's ("CP") network with that of BT and comprises the physical infrastructure (duct and fibre) as well as electronics at both or one end of the link. It is therefore an important component which enables infrastructure based competition.
In our January Consultation we made a number of proposals relating to the cost-recovery approach and the cost estimates for the additional POH charges. In particular:
The responses to the January Consultation raised a number of issues about our overall approach and also about the specific assumptions used in our bottom-up model. We considered that a number of those comments affected our cost estimates and therefore we published a second consultation in June which set out what changes we were proposing to make to our modelling assumptions and cost estimates in our bottom-up model. In particular:
We received four responses to the June Consultation and we have considered these comments carefully, as well as the comments received in response to the January Consultation, in reaching our conclusions on the appropriate cost recovery approach and additional charges for POHs.
We notified our proposed decision and draft statement to the European Commission, The Body of European Regulators for Electronic Communications (BEREC) and the national regulatory authorities ("NRAs") in other Member States for EU consultation under section 48B of the Act on 19 August 2011. We did not receive any comments from these bodies and therefore we are confirming our final decision in this statement.