Superfast broadband price control appeal referred to CMA

7 Jan 2016

Two appeals over restrictions to charges that British fixed line incumbent BT is permitted to make for use of its superfast broadband network have been referred to the Competition and Markets Authority (CMA) by the Competition Appeal Tribunal (CAT). Previously, BT and rival TalkTalk both lodged appeals with the CAT following a decision on superfast broadband pricing by local telecoms regulator Ofcom in March 2014. As the largest retail provider of fibre broadband services over its network, BT is required to allow other operators to use its infrastructure to sell superfast broadband to consumers under a virtual unbundled local access (VULA) model. Ofcom’s pricing rule aims to ensure that BT maintains a sufficient margin between its wholesale and retail superfast broadband charges, in order to allow other providers profitably to match its prices.

Under the UK’s 2003 Communications Act, if decisions by Ofcom are appealed to the CAT and include a price control matter, then the issue must be referred to the CMA for determination. As such, both parties are said to have ‘sought a reference to the CMA of the price control matters in their respective appeals’. A press release has also confirmed that the CAT has permitted both TalkTalk and another of the country’s alternative broadband providers, Sky UK, to be ‘interveners’ in the appeal brought by BT, while the incumbent will be an intervener in the appeal brought by TalkTalk. A determination will be made by a group of independent panel members supported by a case team of CMA staff, and the CMA has six months to send its final determination to the CAT. Following this, the CAT will include the determination in its judgment alongside the other issues it has considered as part of the appeals.