Draft Determination to resolve a dispute between BT and each ofVodafone, T-Mobile, H3G, O2 and Orange about BT’s termination charges for 0845 and 0870 calls

This Draft Determination sets out our proposals to resolve disputes referred to us by each of Vodafone Limited (Vodafone), T-Mobile (UK) Limited (T-Mobile), Hutchison 3G UK Limited (H3G), Telefonica O2 UK Limited (O2), and Orange Personal Communications Services Ltd (Orange) (together, the MNOs) against British Telecommunications plc (BT).

We joined each party to the original dispute submitted by Vodafone, so we therefore refer to this dispute as the Dispute; and we refer to the MNOs and BT collectively as the Parties.

On 23 December 2009, we received a dispute submission from Vodafone concerning BTs termination charges for calls to 0845 and 0870 numbers. On 4 March 2010 we decided that it was appropriate for us to handle the Dispute and we informed Vodafone and BT of our decision to handle the Dispute under section 186(3) of the Communications Act 2003. We published details of the Dispute, including the proposed scope, on our website (the CCEB entry).

Following further submissions, we joined the following MNOs as parties to the Dispute:

• 8 March 2010 T-Mobile
• 12 March 2010 O2
• 15 April 2010 Orange
• 15 April 2010 H3G

The arguments contained in each of the Parties submissions are outlined in Section 3 and considered in detail in Sections 4 and 5. An updated CCEB entry was published on 20 April 2010.

This Dispute concerns the introduction of additional termination charges by BT for calls to 0845 and 0870 numbers hosted on its network (for such calls BT is the terminating communications provider (TCP)). BTs new 0845 and 0870 termination charges consist of the pre-existing termination rates (the fixed charge) applied to all calls terminated on BTs network, plus a new charge that varies depending on the average retail price of calls to the relevant number range charged by the MNO (the variable charge). No variable charge is applied where the average retail price is less than 12.5 pence per minute (ppm). Above 12.5ppm the variable charge is levied in increasing amounts as the average retail price increases, up to an additional charge of 13ppm (in respect of calls to 0845 numbers) and 15ppm (in respect of calls to 0870 numbers) where the average retail price is 32.5ppm or above. The variable charges are set out in Tables 1.1 and 1.2 below.

Each of the MNOs offers its customers the ability to call 0845 and 0870 numbers (and when a customer calls a number, the MNO offering that call is the originating communications provider (OCP) in respect of those calls). BT hosts certain number ranges within the 0845 and 0870 ranges. BT considers that each of the MNOs charges its own customers more than 12.5 ppm on average for calls to BTs 0845 and 0870 numbers and is therefore subject to BTs new variable charges in addition to the fixed charge.

BT notified the industry of these new charges on 2 October 2009 via Network Charge Change Notices 985 and 986 (NCCN 985 and NCCN 986), and the charges took effect from 1 November 2009. The variable charges in dispute are set out in Tables 1.1 and 1.2 below.

Table 1.1: BT Termination Charges for calls to 0845 numbers following NCCN 985

Table 1.2: BT Termination Charges for calls to 0870 numbers following NCCN 986