In the week beginning 15 October the Competition Appeals Tribunal (“CAT”) heard the appeal of Colt Technology Services (“Colt”) against Ofcom’s decision not to impose passive remedies that would allow communication providers to gain access to BT’s physical infrastructure to provide business connectivity services.
As part of the most recent Business Connectivity Market Review (“BCMR”), published on 28 March 2013, Ofcom found BT to have significant market power (“SMP”) in various business connectivity markets outside of the more competitive ‘WECLA’ (Western, Eastern and Central London Area). As a remedy for the identified SMP, Ofcom applied, inter alia, charge controls taking the form of a RPI-X price cap on a basket of services.
The remedies imposed are all in regard of so-called ‘active’ services, that is services that supply data connectivity in various formats, rather than so-called ‘passive’ access to underlying physical assets such as duct, poles and dark fibre. While recognising that passive access remedies could support competition in downstream markets, Ofcom decided not to mandate passive access as, in its view, such remedies would be unlikely to lead to better market outcomes than the package of remedies already being proposed, and in some cases could lead to worse outcomes for consumers and competition.
Colt appealed against Ofcom’s decision on a number of grounds including that: passive and active remedies are not necessarily alternatives; Ofcom’s starting point should have been that it should regulate as far upstream as possible; Ofcom was incorrect to believe that active remedies would promote innovation and competition at least as effectively as passive remedies; and Ofcom was wrong to determine a lack of demand for passive remedies.
The CAT held a four-day hearing between 14 and 17 October 2013 in which it heard evidence from Colt, Ofcom and BT (as an intervener in the case). DotEcon provided an Expert Report in support of BT’s case and Dr Dan Maldoom gave evidence during the hearing.
The parties now await the publication of the CAT’s decision.