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Dispute relating to LLU MPF to WLR + LLU SMPF simultaneous migration offer

03 Mai 2013

Dispute between: (i) TalkTalk Telecom Group PLC (“TalkTalk”) and (ii) British Telecommunications plc (BT) concerning LLU MPF to WLR + LLU SMPF simultaneous migration special offer (Openreach ACCN: OR301).
Case opened: 4 January 2013
Case closed: 23 April 2013
Issue: Ofcom was asked to resolve a dispute under section 185 of the Communications Act 2003 (the Act) concerning BT’s special offer for LLU MPF to WLR transfer when purchased with LLU SMPF new provide.
Relevant instrument: Ofcom resolved this dispute using its powers under Chapter 3 of Part 2 of the Act.

On 23 April 2013, Ofcom issued a final determination under section 188 of the Act resolving this dispute. A non-confidential version of the determination is available under related items.

Update note: 5 March 2013

On 4 March 2013, Ofcom issued its provisional conclusions concerning this dispute to BT and TalkTalk (please see related item).

The period for comments on the provisional conclusions will close at 5 pm on Tuesday 19 March 2013. Please send responses to:

Catherine Warhurst
Ofcom
Riverside House
2A Southwark Bridge Road
London
SE1 9HA

Or by e-mail to catherine.warhurst@ofcom.org.uk

End of update note

This dispute concerns a special offer provided by Openreach (a BT Group business) for LLU MPF to WLR + LLU SMPF simultaneous migration as notified in Openreach ACCN: OR301 of 12 September 2012 (the “Special Offer”).

The Special Offer applies to orders placed and completed between 11 October 2012 and 30 April 2013 and discounts the cost of MPF to WLR transfer by £17.50, making it £17.36 when purchased at the same time as SMPF new provide. The cost for the two products when purchased at the same time is therefore £50.90, compared to the normal price of £68.40. This is illustrated in figure 1 below.

Figure 1

 

LLU MPF to WLR transfer

LLU SMPF new provide

Total - when provisioned simultaneously

Normal price

£34.86

£33.54

£68.40

Special Offer price

£17.36

£33.54

£50.90

TalkTalk considers that by providing the Special Offer and failing to provide an equivalent reduction in the charge for LLU SMPF to MPF transfer, Openreach is in breach of its obligations to ensure that its charges are cost-orientated (SMP Conditions FAA4 and AAAA3) and not unduly discriminatory (SMP Conditions FAA3 and AAAA2).

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 accordance with the six Community requirements that give effect 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 s185(1A) of the Communications Act 2003 in relation to BT’s compliance with its non-discrimination obligation under Condition FAA3. Ofcom does not consider that TalkTalk is in dispute with Openreach under s185 in relation to the other SMP conditions referred to in the TalkTalk submission because in each case no issue is raised as to terms of supply between TalkTalk and Openreach. 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 TalkTalk and Openreach, the scope of the dispute is:

To consider whether BT, in refusing to provide a reduction to the LLU MPF transfer price equivalent to that currently given (under a time-limited special offer) to the price of LLU MPF to WLR transfer when purchased with a simultaneous LLU SMPF new provide, is compliant with its obligation under Condition FAA3 not to unduly discriminate”

Procedural matters:

In line with Ofcom’s Guidance 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 18 January 2013, 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 18 January 2013.

Stakeholders who wish Ofcom to join them as parties to the dispute must provide evidence, as set out in Ofcom's Guidelines, that they are in dispute.

Case Leader: Catherine Warhurst (e-mail: catherine.warhurst@ofcom.org.uk )
Case Reference: CW/01097/12/12