The CMA’s determination in 2 superfast broadband price control appeals has been published.
In January, the Competition Appeal Tribunal (CAT) referred 2 appeals to the Competition and Markets Authority (CMA) over restrictions to the charges BT is permitted to make for use of its superfast broadband network. The deadline for the determination to be notified to the CAT is 5 July 2016.
British Telecommunications plc (BT) and TalkTalk Telecom Group plc (TalkTalk) both appealed to the CAT following Ofcom’s decision on superfast broadband pricing in March last year.
BT is currently the largest retail provider of fibre broadband services over its network, but is required to allow other operators to use its network to sell superfast broadband to consumers under a process known as ‘virtual unbundled local access’ (VULA).
The Ofcom pricing rule aims to ensure that BT maintains a sufficient margin between its wholesale and retail superfast broadband charges, in order to allow other providers to profitably match its prices.
In its final determination on the BT appeal published by the CAT today (and also available on the CMA’s case page), the CMA dismissed BT’s challenges in all but one of the issues it was asked to look at. It agreed with BT that Ofcom had made an error in setting the length of the relevant compliance period and determined that this should be extended to 6 months from the current one month.
The CMA dismissed the challenges in TalkTalk’s appeal.
Under the 2003 Communications Act, if decisions by Ofcom are appealed to the CAT and include any specified price control matters, then these matters must be referred to the CMA for determination. Both parties therefore sought a reference to the CMA of the specified price control matters in their respective appeals.
The determination was made by a group of independent panel members supported by a case team of CMA staff.
On 24 March 2016, the CAT handed down its judgment on the appeal on matters other than those that had been referred to the CMA. The CAT is required to determine the specified price control matters in accordance with the CMA’s findings, unless the CMA’s determination is set aside on judicial review grounds. Further details on the BT and TalkTalk appeals are available on the CAT website.
Notes for editors
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
- Ofcom’s detailed explanation of its superfast broadband decision is set out in ‘Fixed Access Market Reviews: Approach to the VULA margin’.
- The CAT hears appeals against decisions made by the CMA and sectoral regulators such as Ofcom.
- Enquiries should be directed to Rory Taylor (firstname.lastname@example.org, 020 3738 6798)
- For information on the CMA see our homepage, or follow us on Twitter @CMAgovuk, Flickr and LinkedIn. Sign up to our email alerts to receive updates on regulatory references and appeals.