Wednesday, 15 August 2012

BT ruling on network charges sets “a precedent” for telecoms industry

The prices that British Telecom has been charging its competitors for the use of its network are not justified, the UK Court of Appeal has ruled. The Court has rejected BT’s claim that the Competition Appeal Tribunal (CAT) had not followed European telecoms rules when it decided BT’s charges were unacceptable. CAT had previously ruled that ‘BT’s prices had served to distort the market to the detriment of its rivals and consumers’.

The BT Tower in London
 “This case has set a precedent which is good news for all in the industry – well, except for BT”, said Paul Stone, a competition and regulatory partner at Charles Russell. “This was probably BT’s last roll of the dice to try to avoid having to repay the overcharge.”

Ofcom ruled in 2009 that BT had overcharged its competitors £42 million for access to network services and said Britain’s largest telecom operator should compensate its rivals. “That decision has now been upheld by both the Competition Tribunal and the Court of Appeal”, said Stone. Although “it is open to BT to seek permission to appeal” to the Supreme Court, Stone thinks it is “unlikely that BT will be successful in gaining permission in view of the Court’s judgment”.

Jan Willem van den Bos, Partner at SNR Denton in London, said “there have been few people who thought the decision could go in BT’s favour”, but adds that “with this decision now in the bag, there are several similar regulatory disputes currently running that could go the same way. Scrutiny [of network charges] is likely to get more intense.”

Michiel Willems © 2012 CP Publishing Ltd. Picture: