http://www.ofcom.org.uk/bulletins/comp_bull_index/comp_bull_ccases/closed_all/cw...

Source: Ofcom

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Complainant : Cable & Wireless (formerly Energis Communications Limited)
Complaint against: British Telecommunications plc (BT)
Case opened: 8 April 2005
Case closed: 1 August 2008
Issue: Whether BT's charges for termination of certain types of NTS calls, effective from 1 May 2004, constitute an abuse of a dominant position
Relevant instrument: Chapter II of the Competition Act 1998 (abuse of a dominant position) and Article 82 of the EC Treaty

Update note – 1 August 2008

Ofcom has concluded that BT was dominant in the market for NTS call termination/hosting between 1 May 2004 and 31 December 2005, the period during which the prices notified in NCCN 500 were in force.

Ofcom has concluded that BT’s conduct did not constitute an abuse of its dominant position and that there are therefore no grounds for action.

A non-confidential version of Ofcom’s decision is available at the link below.

End of update note

Text published when the case was opened

On 1 April 2004 BT notified the industry, via Network Charge Change Notice 500 ("NCCN 500"), that its charges for termination of certain types of NTS calls would increase from 1 May 2004.

Ofcom has received a complaint from Energis alleging that BT's charges since 1 May 2004, for the termination of calls on the 0870, 0845 and 0820 ranges:

    * impose an anti-competitive margin squeeze on Energis;
    * discriminate in favour of BT's own business and against Energis in terms of price; and
    * are excessive.

Energis further alleges that the increased charges set out in NCCN500:

    * increase Energis's costs of providing a competing service;
    * increase BT's market power in relevant markets; and
    * form part of a strategy on BT's part to dilute competition.

As set out in section 25 of the Competition Act 1998, Ofcom may conduct an investigation if it has reasonable grounds for suspecting that the Chapter II prohibition has been infringed. In addition to the Chapter II prohibition, Ofcom also has the power to apply Article 82 of the EC Treaty in full.

Ofcom has now opened an investigation into the matters raised by Energis' complaint and will consider whether the charges notified in NCCN 500 constitute an abuse of a dominant position by BT under UK and EC competition law.

A number of other communications providers have indicated support for Energis's complaint:

    * Cable & Wireless plc
    * Centrica plc
    * Gamma Telecom ltd
    * Tiscali UK ltd

Case leader : Louise Marriage (020 7783 4333 e-mail : Louise.Marriage@ofcom.org.uk)
Case reference : CW/00823/03/05
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The full print version runs to 246 pages and can be downloaded here.

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We wait to see what will happen with the recent dispute between BT and various providers for 0870 termination rates. Also, I presume that these providers could appeal or go to the Competition Appeals Tribunal like the mobile providers have done.