The Competition Appeal Tribunal (CAT) has allowed an appeal by BT against Ofcom's handling of disputes relating to BT's termination charges for 080 and 0845/0870 phone calls.
In 2009, BT notified mobile network operators of new charging structures for call terminations. A number of network operators challenged the charges, and Ofcom published its final determinations to resolve the disputes in February 2010 (for the 080 disputes) and August 2010 (for the 0845/0870 disputes). Ofcom concluded that the new charges that BT proposed to implement were not fair and reasonable. It directed that the parties should revert to the terms in existence immediately prior to the implementation of the revised termination charges, and that BT should repay any additional amounts paid to it since their coming into force.
In considering BT's appeal against Ofcom's determinations, the CAT held that Ofcom had applied too strict a test when it conducted its assessment of the economic effects of the new charges on consumers (i.e. a welfare assessment). In particular, Ofcom had failed to properly weigh this assessment against the impact on competition and the parties' contractual rights (the CAT found that the evidence was in BT's favour in relation to these two factors).
The CAT has referred the disputes back to Ofcom, and directed it to allow BT's new call termination charges to stand.