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Ofcom Provisionally Rules BT “Overcharged” TalkTalk for Fault Finding

Friday, August 12th, 2016 (1:52 pm) - Score 1,143

The UK telecoms regulator has today provisionally concluded that BToverchargedTalkTalk for their Special Fault Investigation (SFI) engineer service and Time Related Charges (TRC), both of which are often used to help resolve customer phone and broadband problems. A repayment could be due.

Complaints about the charges for Openreach’s (BT) SFI and TRCs are nothing new in this industry, with ISPs sometimes claiming that they’ve been overcharged or can end up being asked to foot the bill for BT’s engineers to effectively find and repair faults that exist within Openreach’s own realm (network).

A little over two months ago TalkTalk took a similar dispute to Ofcom, where they complained that BT’s related SFI + TRC charges between 1st April 2011 to 30th June 2014 “were not cost-orientated” and were therefore “inconsistent” with BT’s basis of charges obligations in relation to these services (here).

In today’s provisional conclusion Ofcom has broadly sided with TalkTalk and suggested that it is “appropriate and proportionate” for BT to make repayments, but they’ve left it up to BT and TalkTalk to agree the exact level of repayment. Sadly it’s not possible to calculate precisely much this might cost BT as the relevant data has been redacted from Ofcom’s report.

Ofcom’s Provisional Conclusions

We provisionally conclude that BT has overcharged TalkTalk for TRCs and SFIs during the Relevant Period and that it would be appropriate in this case to order BT to repay the overcharge to TalkTalk, with interest. We consider an appropriate repayment level to be the difference between the level of the charge and [Distributed Stand Alone Cost].

We have identified the amount by which BT has overcharged for each service in each year. We do not have accurate information as to the volumes of each service purchased by TalkTalk and therefore propose to leave it to the Parties to agree the exact levels of repayment that are due, based on our calculated unit charges. We note repayment is dependent on the outcome of the Ethernet appeals.

However BT has argued that Ofcom “does not have … the power to order retroactive payments in dispute resolution proceedings. This is because the CRF does not permit the NRAs to order administrative payments as a remedy for past breaches.”

At this point BT referred to the pending Ethernet appeals before the Court of Appeal, which has been going on for years since a 2009 decision in which Ofcom ruled against BT over the pricing of Partial Private Circuits (PPCs). BT has repeatedly tried to overturn the regulator’s decision, yet they still have an active appeal and this isn’t scheduled to be heard until March 2017.

The PPC case has some similarities to Ofcom’s regulatory approach in the above ruling, hence the need to link them. “We do not agree with BT’s argument that Ofcom does not have the power to order repayments in this case,” said the regulator.

Ofcom continued, “Overcharging for WLA services, including TRCs and SFIs, distorts competition between BT and its competitors, which is ultimately detrimental to consumers. We therefore believe it would be appropriate, in light of our duties to further the interests of consumers, where appropriate by promoting competition, in the Dispute to require repayments.”

A BT Spokesperson told ISPreview.co.uk:

“These are provisional findings relating to a detailed and complex pricing issue which couldn’t be resolved commercially.

BT followed Ofcom’s guidelines to set prices for TRCs and SFIs, so we’re disappointed that the way in which Ofcom has assessed this case differs from our understanding of that guidance.

We will continue to work with Ofcom in advance of any final settlement.”

The regulator has now allowed two weeks for BT, TalkTalk and any other interested parties to offer feedback on their decision, with the closing date being 26th August 2016. It’s worth pointing out that Sky Broadband has also lodged an almost identical complaint to TalkTalk’s and Ofcom now seem likely to reach a similar conclusion (here).

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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18 Responses
  1. Oggy says:

    So BT and Talk Talk are left to agree a repayment amount themselves.

    Talk Talk will say anything that BT will offer will be too little and BT will say that what Talk Talk want is too much!

    1. Evan Crissall says:

      A conservative assessment for damages owed to TalkTalk from BT’s dishonest overcharging is £150 million. There should be a punitive element added to stop BT from cheating TalkTalk and others ever again.

  2. dragoneast says:

    Usual story: BT being legalistic (which in fairness is protecting their shareholders as any company has a duty to do), and Ofcom trying to broaden their remit, by hook or by crook.

    My guess is that the courts will decide that an injustice needs a remedy, and say by necessary implication Ofcom can order repayment (unless they’ve misconstrued their own guidance, BT reserve their position on everything. Always have, they are past masters at this game). Otherwise, the law is an ass. May have to go to the Supreme Court to get some sense, though. Time (and delay) is money, as they say. Especially for the lawyers.

  3. jon says:

    Ofcom are a disgrace, bored idiots that cannot ever leave anything alone, trying to justify a salary by doing something that’s not needed time and time again.

  4. frffg fredd says:

    OpenReach and BT need to split.

    1. wireless pacman says:

      Wouldn’t stop Openreach fraudulently overcharging though.

  5. karl says:

    Funny BT Retail never seem to be overbilled isn’t it 😉 I wonder why that is… Steal from your enemies and not your friends springs to mind 😀

  6. Paul says:

    just show you how powerful BT really is!

  7. Chris says:

    I am an ouprnreach engineer amount of times I have been to a house and the DSL lead is in a Ethernet port, or the phone isn’t plugged in , or they have a filter plugged into a socket with dose not require one, all the checks on the phone are supposed to negate it , like plugging the phone into the test socket and so on.

    1. karl says:

      Blame the ISP concerned for not going through checks with the customer properly and then bill that ISP for the call out. No need to for the silly new rules from Ofcom.

    2. wirelesspacman says:

      Not always that simple though Karl.

      “Have you done A?” “Yes”
      “Please try B” “Done”
      “Now try C” “Done”
      “Are you sure the plug is in socket X?” “Yes, of course!”
      “Ok, we will send an engineer out”

      Engineer: “Oops, it helps if you plug this in here and not there!”

    3. karl says:

      Oh no i agree some people are just stupid, but it makes no difference as if an engineer comes and finds they have shoved a cable in the wrong connection then i highly doubt they will get or be entitled to any compensation.

    4. FibreFred says:

      Of course it makes a difference, the engineer has come out! An engineer that could be elsewhere

    5. karl says:

      If resources are that stretched perhaps they need more engineers. Frankly i doubt they are considering BT harping on about hiring more engineers for the past 2 years. Do they still not have enough engineers to cover the real jobs and time wasters?

    6. FibreFred says:

      Hire more engineers to go to appointments that do not require a visit?

    7. karl says:

      “Hire more engineers to go to appointments that do not require a visit?”

      If there are so many of those types of appointments then that is exactly what BT/Openreach have been doing because according to them they have been hiring more and more engineers. You will have to take it up with your CEO if you think that is the wrong solution.

    8. FibreFred says:

      Or we could just laugh at your ridiculous suggestion

    9. karl says:

      Or laugh at BT hiring more Engineers which they keep telling us about to “go to appointments that do not require a visit”.
      Smart business plan as always from them and an equally entertaining explanation from yourself.

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