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Sky Broadband in Ofcom Complaint Over BT’s Fault Investigation Charges

Tuesday, July 19th, 2016 (11:26 am) - Score 1,103

UK ISP Sky Broadband has mirrored TalkTalk’s recent move (here) by nudging Ofcom into launching a second parallel probe of Openreach’s (BT) Special Fault Investigation (SFI) engineer service and Time Related Charges (TRC), with both questioning whether such charges are being correctly applied.

Disputes over how much Openreach charges for engineer related work and the way that it applies those charges are of course nothing new to these pages, with ISPs sometimes complaining that they can end up being asked to foot the bill for Openreach to find and fix faults that exist within its own network; amongst other gripes (delays, other billing errors etc.).

In keeping with that Ofcom recently opened a related investigation after TalkTalk complained that the charges being applied to them between 1st April 2011 and 30th June 2014 “were not cost-orientated” and were thus “inconsistent” with BT’s basis of charges obligations in relation to these services.

Funnily enough Sky Broadband’s complaint is almost identical, except for covering a much longer period between 1st January 2009 and 30th June 2014.

Ofcom Statement

This dispute concerns allegations by Sky that BT’s TRC and SFI charges in relation to local loop unbundling (“LLU”) and wholesale line rental (“WLR”) services, in the period between 1 January 2009 and 30 June 2014 (“the relevant period”) were not cost-orientated and were therefore inconsistent with BT’s basis of charges obligations under SMP conditions imposed by Ofcom in successive reviews of the markets for wholesale local access services and wholesale fixed analogue exchange line services since 2003.

Ofcom recognises that, on the face of the referral, there appears to be a dispute between the parties that commercial negotiations have failed to resolve. In resolving disputes, Ofcom must act in a manner which is consistent with both Ofcom’s general duties under section 3 of the Act, and pursuant to section 4(1)(c) of the Act, the six Community requirements set out in section 4 of the Act which give effect, amongst other things, to Article 8 of the Framework Directive.

Ofcom stopped taking feedback for TalkTalk’s complaint on 16th June 2016, although any stakeholders / ISPs interested in the outcome of Sky’s separate dispute have until 29th July 2016 to respond. Should the regulator find against BTOpenreach then the operator could be forced to repay any incorrectly levelled amounts.

An Openreach Spokesperson told ISPreview.co.uk:

“This is a detailed and complex pricing issue which couldn’t be resolved commercially.

Ofcom hasn’t endorsed Sky’s case, but the regulator is legally obliged to investigate issues like this and we’ll engage fully in that process.”

The timing of today’s dispute, which comes on the same day as a damning new report of BT’s national broadband progress and infrastructure is published (here), can’t be ignored. The regulator may perhaps be hoping that the added pressure is enough to encourage Openreach into making a bigger concession towards their Strategic Review demands.

Leave a Comment
5 Responses
  1. Avatar Bob says:

    The latest government report says BT Openreach is considerably under invested and that unless it gets its act in order it will need to be broken up. Endless threats have been made to BT over this though but never followed through. In my view they now need to split Openreach from the main BT group by making it a wholly owned BT subsidiary company

    In my view it I clear hat the current vertical integration of the BT group is not in the interest of the public and stifles competition and I do not see BT changing there ways with the current set up

  2. Avatar dragoneast says:

    The water regulator, I believe, approves and makes requirements in respect of the companies’ investment plans, as does the energy regulator (at least for gas infrastructure). Why don’t Ofcom do the same for BTOR, even perhaps BTW? Answering my own question, the customers pay (as has happened with water and energy), and Ofcom’s strategy (such as it is) is to keep consumer prices as low as possible. That was OK to encourage take-up, but are we now dealing with a mature market more like other utilities?

    I wonder if all this talk of whether OR should be independent of BT or quasi separate as a subsidiary entity, is actually a red herring?

    1. Avatar wirelesspacman says:

      I suspect much of the reason is that the water and gas networks really do constitute a natural monopoly – whereas with telecoms there is at least the chance of having competing infrastructure.

      I agree about the coloured fish – from my own painful experiences with Openreach I really cannot believe that they would suddenly become a wonderful, customer focused organisation “just because” they were now a separate plc.

  3. Avatar wirelesspacman says:

    I’ve often wondered if adopting a corporate policy of deliberately overcharging in the manner that Openreach are so often accused of (and/or denying their clear financial responsibilities under SLA/SLG contracts) constitutes fraud?

  4. Avatar Evan Crissall says:

    Indeed Bob. The Split is long overdue. We can’t go on like this. BT is holding the country to ransom with its blundering repairs, lack of investment, abusing its dominance, and pillaging revenues to smooch the shareholders, while gambling its fortunes on high-risk media projects.

    P.S. The BT sock-puppets are noteworthy by their absence here. For once, with nothing to say?

    ———

    http://www.publications.parliament.uk/pa/cm201617/cmselect/cmcumeds/147/147.pdf

    http://www.thisismoney.co.uk/money/markets/article-3697237/BT-Group-told-MPs-Openreach-broadband-service-order-face-break-business.html

    http://www.cityam.com/245720/mps-slam-bt-put-house-order-face-split

    http://www.theregister.co.uk/2016/07/19/bt_lay_more_fibre_or_face_a_split_with_openreach_report/

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