In a judgment handed down on 4 May 2017, the Court of Appeal upheld the judgment of the Competition Appeal Tribunal rejecting appeals against Ofcom’s determination that BT overcharged for Ethernet services by £95 million between 2005/06 and 2010/11.
The judgment considers the scope of Ofcom’s dispute resolution powers following
a finding of overcharge, the proper approach to the assessment of compliance
with a cost orientation obligation and Ofcom’s jurisdiction to award interest
on the amount of any overcharge required to be repaid.
Ofcom successfully resisted BT’s challenge to the scope of its dispute resolution powers.
Ofcom also successfully resisted a challenge by TalkTalk in which it was contended that Ofcom had significantly underestimated the extent of overcharging by BT by using a costs standard that permitted over-recovery of common costs.
Cable & Wireless, Virgin Media and Verizon successfully argued that Ofcom should award interest on their overcharges and were supported by Ofcom in their argument that the regulator had jurisdiction to do so.
The Court of Appeal commented on the extent to which it may be appropriate to intervene in matters of economic assessment by Ofcom. Arden LJ, delivering the judgment of the Court, accepted Ofcom’s submission that it had a considerable area for regulatory judgment as to what cost orientation obligations to impose in any particular situation and that it was not for the Court of Appeal to later doubt the extent to which Ofcom’s choice was supported by the economic factors or opinion when assessing Ofcom’s approach to compliance with those obligations.
The full judgment can be read here.
Ofcom was represented by Pushpinder Saini QC, Kate Gallafent QC, Hanif Mussa and Emily Neill.
Cable and Wireless, Virgin Media Limited and Verizon UK Limited were represented by Dinah Rose QC and Tristan Jones.