Freeserve and Oftel both claim victory in key competition dispute

Spin City

By John Leyden • Get more from this author

Posted in Telecoms, 16th April 2003 19:32 GMT

The Competition Appeals Tribunal (CAT) - the UK's highest specialist competition law court - today issued a ruling on a closely watched dispute between Freeserve and telecoms regulator Oftel.

Both sides are claiming victory.

The long-awaited ruling follows an appeal by Freeserve to CAT last year after Oftel dismissed a complaint by Freeserve about BT's allegedly anti-competitive behaviour in its broadband marketing.

Freeserve alleges that BT Openworld was given advance notice of a 40 per cent price reduction in wholesale broadband access early last year.

Freeserve said this enabled BT Openworld to put together marketing campaigns - and importantly price offers - in advance of the rest of the market, which Freeserve also believes were cross-subsidised and predatory.

However, this complaint was dismissed by Oftel, hence the appeal to CAT.

CAT considered four elements in Freeserve's complaint and Oftel's subsequent ruling:

Allegations of cross marketing between BT and BT Openworld
BT Openworld having advance notification of BT Wholesale price reductions
Predatory pricing by BT in the broadband sector
BT using its telephone census to the benefit of BT Openworld

On all but the predatory pricing allegation, CAT upheld Oftel's decision. The tribunal ruled that Oftel failed to properly explain its decision on predatory pricing. (Note: CAT didn't say that Oftel's decision was wrong, still less make any comment on BT's behaviour).

CAT has ordered Oftel to re-investigate Freeserve's allegation of predatory pricing within three months.

So 3-1 to Oftel then?

It's wrong to look at it that way, said a Freeserve spokeswoman, who argues that predatory pricing was the most important point of contention.

Freeserve has succeeded in getting this issue re-examined, she says, and the CAT's decision shows Oftel's original review was insufficiently thorough. Also Freeserve was awarded costs for part of the case, and BT (which supported Oftel) wasn't.

There's more point scoring in the respective releases from Oftel/a> and Freeserve. Reading both you'd be forgiven for thinking they were about separate rulings. Then you're left wondering how Oftel and Freeserve will co-operate productively in re-examining the issue.

CAT's ruling (PDF) can be found here. ®