Judgment

Neutral citation:

[2011] CAT 5

Published:

22 Mar 2011

Download:

Summary:

Judgment on an appeal by British Telecommunications plc (“BT”) under section 192(2) of the Communications Act 2003 (“the 2003 Act”) against a determination of OFCOM dated 14 October 2009 (“the Determination”) resolving disputes between BT and each of Cable & Wireless UK, Virgin Media Limited, Global Crossing (UK) Telecommunications Limited, Verizon UK Limited, Colt Technology Services and Thus plc (together, “the Altnets”) in relation to BT’s charges for partial private circuits (“PPCs”). OFCOM concluded in the Determination that, amongst other matters, BT had overcharged the Altnets by £41.688 million in respect of 2 Mbit/s trunk services purchased by the Altnets from BT in the period 1 April 2005 to 30 September 2008, and that BT should make repayments to the Altnets in the amounts by which they had been overcharged, with interest.

BT challenged the Determination on a number of grounds, which can be broadly summarised as follows:

- OFCOM had misused the dispute resolution process contained in sections 185 to 191 of the 2003 Act (“the Dispute Resolution Process”) in determining the dispute between the Altnets and BT by way of this process.

- OFCOM had erred in law in its construction of the cost orientation obligation that was imposed on BT in 2004, alternatively OFCOM was obliged to apply the cost orientation obligation in a manner different from the true construction of this provision because OFCOM had engendered in BT an expectation regarding the manner in which the cost orientation obligation would be enforced. Either way, BT contended that OFCOM’s conclusion that BT had overcharged the Altnets was wrong.

- OFCOM had misused its powers under section 190(2)(d) of the 2003 Act by ordering that the entire amount of the overcharge should be repaid by BT to the Altnets.

The Tribunal dismissed BT’s appeal, concluding in particular that:

- OFCOM’s use of the Dispute Resolution Process was unimpeachable.

- OFCOM applied the cost orientation obligation contained in Condition H3.1in accordance with its true construction, and BT had no right to expect that Condition H3.1 would be applied in any other way.

- OFCOM correctly applied its powers under section 190(2)(d) of the 2003 Act by ordering that the entire amount of BT’s overcharge should be repaid by BT to the Altnets.

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