Mobile termination fees go to Competition Commission

Tribunal passes the buck

Posted in Mobile, 19th March 2008 14:40 GMT

Webcast: Building Applications for the 21st Century

BT's argument that Ofcom used the wrong formula to set mobile termination fees has proved compelling - the ongoing case against the regulator has been handed over to the Competition Commission.

The case is being pushed by BT and 3UK, the two who have most to lose through the new termination fees set by Ofcom in March last year, while Ofcom has O2, T-Mobile, Vodafone and Orange in its corner.

BT loses out as it has to pay mobile operators every time one of its fixed-line customers calls a mobile, while 3UK used to get a special deal on termination as a newcomer with correspondingly fewer customers. Even the new prices, which came into effect on 1 April, give a slight advantage to 3UK - though not as much as it'd like.

3 would really like to see termination fees abolished entirely, arguing that this would make life simpler and open the options for more flexible tariffs, but until that happens it would like to go back to the biased system which favoured the newcomer.

3 argued that Ofcom doesn't have the right to set pricing, and therefore its attempts to do so are unlawful. The Tribunal is still considering that argument, but is assuming that Ofcom isn't breaking the law while the competition commission considers the matter.

BT's take is that Ofcom used the wrong methods to set the termination fees, and it is on this matter that the competition commission will rule in the next few months.

With the new prices already a year in effect, and the end of termination fees looming in the distance, it might seem a lot of squabbling over nothing, but termination fees are an important battle ground in deciding the future of telecommunication networks.®

Free Download - The Reg Guide to Extended Validation