Big UK Telecoms Operators Strangle Ofcom via Costly Legal Appeals

Consumer Futures (formerly Consumer Focus), which is a Non-Departmental Public Body that was setup to act as a national consumer council, has joined with Which?, TalkTalk and Three UK to warn the UK Government that big telecoms and broadband ISPs are harming pro-consumer measures by tying the regulator up with long and costly legal challenges.

According to The Guardian, Ofcom has faced 61 appeals over the last 5 years (fighting these cases can allegedly cost between £2m and £4.5m a year) and nearly all of its rulings have been challenged through the Competition Appeals Tribunal (CAT); often after complaints by lawyers acting on behalf of the big telecoms operators.

Readers might recall that last year’s auction of 4G based Mobile Broadband spectrum (800MHz and 2.6GHz) was plagued by years of legal challenges, threats and other complexities that ultimately forced the UK into being a late adopter.

The recent moves to improve switching (migration) between broadband and phone providers has also faced a similar mix of concerns and now won’t be ready until June 2015, although in fairness the proposals have suffered due to complex cost and technical challenges that will affect all ISPs; both big and small alike.

Consumer Futures Letter Extract

“There are significant concerns that under the current regime, Ofcom’s decisions can be derailed too easily, through technical challenges that ignore the substance of the regulator’s judgments. The routine use of legal challenges has had a chilling effect on policy. It diverts time and money into legal disputes and away from good regulation. This is bad news for competition, for the industry, and for consumers.”

The move appears designed to support and encourage on-going efforts by the Government, which is working to make it harder for TV operators, telecoms and broadband ISPs to object to Ofcom’s decisions on mere technicalities.

But big operators fear that any changes could make it easier for Ofcom to implement measures that contain mistakes or incorrect assumptions (e.g. Ofcom’s semi failed attempt to loosen Sky’s grip on premium TV film and sports content). By comparison a quicker mobile operator transfer process has been stalled for years thanks to Vodafone’s 2008 legal challenge.

Suffice to say that the Government’s culture secretary, Maria Miller, has her work cut out and is expected to outline some changes in the very near future.