BT wins legal challenge against Ofcom's definition of business broadband markets

Out-Law News | 28 Jul 2017 | 10:10 am | 1 min. read

Plans to require BT to allow competing telecoms companies access to spare telecoms capacity, so that they can deliver rival broadband services to business customers, have been "quashed" by the UK's Competition Appeal Tribunal (CAT).

The CAT ruled (5-page / 51KB PDF) on Wednesday that UK telecoms regulator Ofcom incorrectly defined the markets in which those reforms should be implemented. BT had lodged a legal challenge against Ofcom's market definitions. 

Ofcom outlined measures to enable so-called 'dark fibre' access to BT's rivals in a final statement at the conclusion of its business connectivity market review in 2016. The regulator also imposed controls on the amount of money BT can charge its competitors for such access. 

Dark fibre is a term used to describe the unused additional optical cables operators which installed alongside their active network to allow for easier expansion of the capacity of their network in future. 

The measures were set out by Ofcom in a bid to address competition concerns it had identified in business broadband markets. According to the CAT's ruling, Ofcom considered that there was "a single product market for contemporary interface symmetric broadband origination (CISBO) services of all bandwidths", but identified four separate geographic markets for such services within the UK – Central London; the London periphery; Hull; and the rest of the UK. 

The CAT said Ofcom had "erred" in defining a single product market for CISBO services of all bandwidths and for determining that the rest of the UK constituted a "single geographic market". The regulator also "erred in its determination of the boundary between the competitive core segments and the terminating segments of BT’s network", the CAT said. 

As a result, Ofcom's remedies for those markets are "quashed", it said. It is up to Ofcom to reconsider the matter. 

The CAT ruling followed 16 days of hearings in the case in April and May. 

Separate hearings in BT's case against the remedies Ofcom set out at the end of its business connectivity market review are scheduled to take place in September. However, the CAT said that Ofcom's plan to impose the dark fibre access remedy was "contingent" on Ofcom correctly defining the relevant markets for reform. 

The full reasons for the CAT's decision have not yet been published. Ofcom will have three weeks from the date those reasons are published to file an appeal.