Level 3 Accuses BT of Overcharging it for UK Partial Private Circuits

Ofcom has today opened a new dispute after network operator Level 3 Communications UK accused BT of overcharging it for Partial Private Circuit services, including a 2Mbps local end service and Point of Handover additional charges, between 2009 and 2011.

Apparently commercial negotiations have “failed to resolve the dispute” and so the telecoms regulator has stepped in to help examine whether or not BT’s charges for the relevant services were compliant with their rules, specifically SMP (Significant Market Power) Condition G3.1.

Ofcoms Statement

SMP Condition G3.1 requires that BT secure and be able to demonstrate to the satisfaction of Ofcom, that each and every charge offered, payable or proposed for Network Access covered by Condition G1 is reasonably derived from the costs of provision based on a forward looking long run incremental cost approach and allowing an appropriate mark up for the recovery of common costs including an appropriate return on capital employed.

Ofcom will now need to decide whether or not BT overcharged Level 3 and, if they did, how much they should pay to correct for any mistake. The regulator will keep the dispute open to responses until 13th February 2014 (here).