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The Supreme Court has given its first judgment on the EU Common Regulatory Framework for Electronic Communications.

In 2009, BT introduced “ladder pricing”, a scheme of wholesale termination charges for telephone calls to numbers beginning “08” which varied according to the amount which the originating network charged the caller. The mobile network operators challenged the scheme under Ofcom’s dispute resolution procedure. The new charges would have complex economic effects, and it was not clear whether they would be beneficial or harmful to consumers overall. Ofcom disallowed the charges. Its decision was reversed by the Competition Appeal Tribunal but restored by the Court of Appeal. BT appealed to the Supreme Court.

In a unanimous judgment given by Lord Sumption, the Supreme Court holds that the charges should have been allowed, because BT had a contractual right under the Standard Interconnect Agreement to introduce them, in the absence of a positive finding that they would be contrary to the policy objectives set out in Article 8 of the Framework Directive (Directive 2002/21/EC). Also, the Tribunal was entitled to rely on the anti-competitive effect of preventing the introduction of innovative charging structures, and the Court of Appeal (whose powers are limited to points of law) should not have interfered with its conclusion on that point. The Court was, however, “not convinced” by BT’s primary ground of appeal, that Ofcom’s decision was impermissible price control of a firm without significant market power.

Javan Herberg QC and Mark Vinall appeared on behalf of Ofcom.