This Determination sets out our resolution to the dispute brought by Cable & Wireless plc (C&W) against British Telecommunications plc (BT). We refer to this dispute as the Dispute and we refer to C&W and BT as the Parties.
The Dispute relates to the application to C&W by BT of price increases for number translation service (NTS)1 call termination on certain number ranges in respect of calls to ported numbers. These price increases were notified by BT through Network Charge Change Notice 500 (NCCN500)2 on 1 April 2004 and were in effect between 1 May 2004 and 31 December 2005 (the relevant period). From 1 January 2006, charges were reduced back to a level in line with those charged by other terminating parties, by means of Network Charge Change Notice 651 (NCCN 651).
During the relevant period, calls to ported NTS numbers involving both BT and C&W arose when:
a call was made to a number originally allocated to C&W and subsequently ported to BT, i.e. C&W was the donor network operator (DNO) and BT was the recipient network operator (RNO)3; or
a call was made to a number originally allocated to BT and subsequently ported to C&W, i.e. BT was the DNO and C&W was the RNO.4
Between April 2005 and July 2008, following a complaint by Energis (subsequently acquired by C&W), Ofcom investigated whether the price increases notified in NCCN500 amounted to an abuse by BT of a dominant position, contrary to section 18 of the Competition Act 1998 or Article 82 of the EC Treaty (the CA98 investigation). On 22 July 2008, we concluded that BT had not abused its dominant position in the market for NTS hosting/termination.
On 1 October 2009, C&W submitted a dispute to Ofcom, claiming that:
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the way that BT implemented NCCN500 contravened the provisions of the Standard Interconnect Agreement (SIA) and General Condition 18 (GC18) in respect of the treatment of calls to ported NTS numbers and therefore that a D/D regime, rather than a D/R regime5, should have applied to calls to ported NTS numbers.
Our powers and duties to resolve certain disputes are set out at sections 185-191 of the Communications Act 2003 (the 2003 Act). [ #% ] In accordance with section 186(4) of the 2003 Act, on 2 February 2010 we decided that it was appropriate for us to handle the second element of the dispute notified by C&W, namely the issues relating to calls to ported NTS numbers. We informed the Parties of our decision and published details of the Dispute, including the following scope, on the Competition and Consumer Enforcement Bulletin part of our website (the CCEB):
The scope of the dispute is to determine whether BT should pay to C&W an adjustment for potential overpayments made by C&W to BT and potential underpayments made by BT to C&W, plus interest, for calls to ported NTS numbers in the period 1 May 2004 to 31 December 2005, as a result of the approach taken by BT covering payments for calls to ported NTS numbers in this period; and if so, the level of that adjustment.
Accordingly, the Dispute does not [ #% ] require us to consider issues which apply to arrangements between the Parties outside the relevant period.
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Footnotes
1. These services are described in more detail in Section 2.
2. Network Charge Change Notices are notices issued by BT to inform communications providers of changes in its rates. NCCN500 is reproduced in Annex 1.
3. These are referred to by C&W as Type A ported calls.
4. These are referred to by C&W as Type B ported calls.
5. A D/D regime is a charging regime for calls to ported numbers, whereby the ONO pays the termination rate set by the DNO to the DNO and the DNO also pays the termination rate set by the DNO to the RNO; a D/R regime is a charging regime for calls to ported numbers, whereby the ONO pays the termination rate set by the DNO to the DNO and the DNO pays the termination rate set by the RNO to the RNO.