Judgment (Non price control matters - non-confidential version)

Neutral citation:

[2008] CAT 11

Published:

20 May 2008

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Summary:

Judgment of the Tribunal disposing of those aspects of H3G’s appeal which did not comprise “specified price control matters” within the meaning of section 193 of the Communications Act 2003 and the Tribunal Rules, the specified price control matters raised in the appeal having been referred to the Competition Commission for determination on 18 March 2008: see [2008] CAT 5.

The main issues considered in the judgment were H3G’s challenges to OFCOM’s findings that H3G had significant market power in the market for termination of voice calls on H3G’s network and to OFCOM’s decision that a charge control should be imposed on the supply of mobile call termination on H3G’s network for the 2007-2011 period as a result.

The Tribunal held that OFCOM was correct in concluding that the availability of its dispute resolution powers under section 185 of the Communications Act 2003 did not constrain H3G’s market power to a degree sufficient to preclude a finding of significant market power.

The Tribunal also held that OFCOM was correct to conclude that the evidence of initial negotiations between H3G and BT in 2001 and 2002 did not indicate that BT had sufficient countervailing buyer power during the period covered by the decisions under appeal (2004 onwards).

In the judgment of the Tribunal, OFCOM was entitled to conclude that H3G had (and continued to have) significant market power because of its 100 per cent market share, the existence of absolute barriers to entry and the absence of sufficient countervailing buyer power on the part of its main customer, BT.

The Tribunal also concluded that none of the reasons put forward by H3G as to why it was inappropriate to impose a price control remedy on H3G was well founded. The Tribunal held that OFCOM was correct in deciding to set a price control for H3G, as well as for the other mobile network operators, in its 2007 Mobile Call Termination Statement.

Accordingly, the Tribunal dismissed H3G’s appeal in so far as it comprised matters which were not specified price control matters which had been referred to the Competition Commission.

This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.