BT Lose Appeal Over Ofcom Demand for £22m Ethernet Interest Payment

After years of fighting, the Court of Appeal has rejected BT’s most recent attempt to stop a ruling by Ofcom over the rate of interest payable in respect to their past overcharging for Ethernet services, which could force them to pay £22m+ to rivals. Next stop.. Supreme Court?

The problem itself goes all the way back to the 2006-2011 period and Ofcom appeared to have reached a conclusion in June 2015, when they ruled that BT had overcharged for business Ethernet (Backhaul Extension Services). This initially required them to repay £94m+ to Sky (Sky Broadband), TalkTalk, Virgin Media, Cable & Wireless Worldwide (Vodafone) and Verizon (here).

At the time Ofcom decided as follows..

Ofcom’s Provisional Conclusions on the Remitted Matters

1.7.1 Adjusting for the ECC overpayment, the correct amount of principal overcharge by BT is £94,620,000.

1.7.2 The corrected figure above takes account of the repayment that BT is entitled to in respect of the exclusion of ECCs of £203,000.

1.7.3 The interest on the corrected principal overcharge payable by BT is £22,422,000.

1.7.4 The net amount which BT should repay to the Disputing Parties (i.e. the interest less the ECCs adjustment) is £22,219,000; and

1.7.5 From 29 December 2012, BT should pay interest on the net amount due to the Disputing Parties at a rate of BoE+1%.

1.8 From 29 December 2012, BT is entitled to interest on the ECC overpayment. By calculating a net amount due to the Disputing Parties, and allowing for interest on that net amount only, BT’s entitlement has been given effect to in these Provisional Conclusions.

Shortly after that the Court of Appeal granted BT permission to dispute a related judgement by the Competition Appeal Tribunal (CAT), with the telecoms giant asking the court to “consider whether Ofcom has power to award interest in resolving a dispute.” Yesterday the court finally came back to uphold CAT’s judgement and Ofcom has thus printed their Final Determination.

However the case might not be over just yet because a spokesperson for BT has said that the operator plans to review the judgement before deciding “whether we appeal to the Supreme Court.”