Dispute relating to BT’s proposed payments for 080 call origination

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Dispute between: Vodafone Limited (“Vodafone”) and British Telecommunications plc (“BT”) concerning the terms of access and interconnection proposed by BT for calls to 080 number ranges.
Case opened: 22 April 2014.
Case closed: 21 August 2014.
Issue: Ofcom was asked to resolve these disputes under section 185 of the Communications Act 2003 (“the Act”) concerning whether the charges that BT proposed to pay for the origination of calls from a mobile or fixed network to 080 numbers would be compliant with BT’s regulatory obligations.
Relevant instrument: Ofcom resolved these disputes using its powers under Chapter 3 of Part 2 of the Act.

Update note – 25 March 2015

When resolving these disputes, Ofcom undertook to publish a revised calculation of the LRIC+ cost of mobile call origination for 2015/16 following the publication of Ofcom’s 2015 mobile call termination cost model.

The 2015 mobile call termination market review was published on 17 March 2015 and the attached update note sets out Ofcom’s revised calculation of the LRIC+ cost of mobile call origination and confirms that this has no impact on the mobile origination charge determined in the disputes.

End of update note

Update note – 28 July 2014

On 21 August 2014, Ofcom published its final determination resolving these disputes. A non-confidential version of the determination is available under related items.

End of update note

Update note – 28 July 2014

On 17 June 2014 we received a dispute submission from Hutchison 3G UK Limited (“Three”) that also related to the terms of access and interconnection proposed by BT for calls to 080 number ranges from the Effective Date.
Ofcom considers that on the face of the dispute submission received from Three, there appears to be a dispute between Three and BT that commercial negotiations have failed to resolve.

Having considered Three’s submission, we have decided that it is appropriate for Ofcom to handle the dispute. We consider that the scope of the issues in dispute between Three and BT is the same as the issues we are already considering in the dispute between BT and each of Vodafone and Telefónica relating to call origination charges for calls to 080 number ranges. Accordingly, we consider it appropriate to join Three to this dispute and retain the scope we published on 22 April 2014 as shown below.

End of update note

Update note – 07 July 2014

On 07 July, Ofcom published its provisional conclusions regarding this dispute (please see related item).
The period for comments on the consultation will close at 5 pm on 21 July 2014.
Please send responses to:
Martin Hill
Ofcom
Riverside House
2A Southwark Bridge Road
London
SE1 9HA
Or by e-mail martin.hill@ofcom.org.uk

End of update note

Update note – 16 May 2014

On 6 May 2014 we received a dispute submission from Telefónica UK Limited (“Telefónica”) that also related to the terms of access and interconnection proposed by BT for calls to 080 number ranges from the Effective Date. Telefónica requested that its dispute be joined to the existing dispute between Vodafone and BT.

Ofcom agrees that on the face of the dispute submission received from Telefónica, there appears to be a dispute between Telefónica and BT that commercial negotiations have failed to resolve. We therefore consider that it is appropriate for us to handle the dispute.

Having considered the request and decided that it is appropriate for Ofcom to handle the dispute, we consider that the scope of the issues in dispute between Telefónica and BT is the same as the issues we are already considering in the dispute between Vodafone and BT relating to call origination charges for calls to 080 number ranges. Accordingly, we consider it appropriate to join Telefónica to this dispute and retain the scope we published on 22 April 2014 as shown below.

End of update note

On 12 December 2013, Ofcom published its final statement on Simplifying Non-Geographic Numbers (the “Final Statement”) (see Related Items). The Final Statement set out Ofcom’s decisions on changes to the regulation of non-geographic calls, including the imposition of an Access Condition on Terminating Communications Providers (“TCPs”) that requires them, from the Effective Date, to purchase origination services for calls to 080 numbers from originating communications providers (“OCPs”) on fair and reasonable terms, including charges. The Effective Date is currently defined in the Access Condition as 26 June 2015. Alongside the Final Statement, Ofcom also published guidance (the “Guidance”) on how it would be likely to assess a fair and reasonable origination charge for calls to 080 numbers, if called to do so in a dispute (see Related Items).

This dispute concerns allegations by Vodafone that the charges BT proposes to pay Vodafone for the origination of calls from a mobile or fixed network to 080 numbers terminating on BT’s network with effect from the Effective Date would, if implemented, breach the Access Condition. Specifically, Vodafone claims that BT’s proposed charges are not fair and reasonable and are inconsistent with the Guidance.

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 Vodafone and BT, the scope of the dispute is to determine:
1) Whether the charges that BT proposes to pay Vodafone for the origination of calls from a) fixed networks and b) mobile networks to 080 numbers terminating on BT’s network with effect from the Effective Date would be compliant, as from that date, with the provisions of Condition 2 of the Access Condition set by Ofcom on 12 December 2013.
2) If not, in order to resolve the dispute between the parties, what charges should BT pay Vodafone for the origination of such calls from a) fixed networks and b) mobile networks with effect from the Effective Date.
Condition 2 of the Access Condition set by Ofcom on 12 December 2013 requires that, from and including the Effective Date, the Terminating Communications Provider shall purchase Origination Services from an Originating Communications Provider on fair and reasonable terms (including charges).

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 6 May 2014, 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 6 May 2014.
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: Gala Poole (e-mail: gala.poole@ofcom.org.uk)
Case Reference: CW/01126/04/14