British Telecommunications Plc v Telefónica O2 UK Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lloyd,Lord Justice Etherton,Lord Justice Elias |
| Judgment Date | 25 July 2012 |
| Neutral Citation | [2012] EWCA Civ 1002 |
| Docket Number | Case Nos: C3/2011/3121, 3124, 3315, 3316 and 2012/0692 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 July 2012 |
[2012] EWCA Civ 1002
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COMPETITION APPEAL TRIBUNAL
MARCUS SMITH Q.C., PETER CLAYTON, PROFESSOR PAUL STONEMAN
[2011] CAT 24 AND 26
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Lloyd
Lord Justice Etherton
and
Lord Justice Elias
Case Nos: C3/2011/3121, 3124, 3315, 3316 and 2012/0692
Jonathan Crow Q.C. and Robert O'Donoghue (instructed by S J Berwin LLP) for the Appellant Telefónica O2 UK Ltd
Jon Turner Q.C. and Philip Woolfe for the Appellants Everything Everywhere Ltd (instructed by Everything Everywhere Ltd), Vodafone Ltd (instructed by Herbert Smith LLP) and Hutchison 3G UK Ltd (instructed by Baker & Mackenzie LLP)
Graham Read Q.C., Sarah Lee and Richard Eschwege instructed by BT Legal for British Telecommunications plc
Javan Herberg Q.C. and Mark Vinall instructed by Ofcom for the Office of Communications
Hearing dates: 1–3 May 2012
Introduction
This judgment is given on several appeals from a decision of the Competition Appeal Tribunal (the Tribunal), itself on an appeal from determinations by the Respondent the Office of Communications (Ofcom) by way of the resolution of disputes under the Communications Act 2003 between, on the one hand, British Telecommunications plc (BT) and, on the other, a number of mobile telephone network operators.
If a person in the United Kingdom makes a phone call on his mobile telephone, the call is likely to be passed by the operator of the mobile phone network to which he subscribes to another operator in order to be connected to the person to whom the call is made. The chances are that BT will be involved in that process in one way or another. The general principle is that the caller pays for the call, and what he pays will depend on his contract with his network operator. However, when the call is passed from one operator to another a payment will fall to be made as between those two organisations. Because calls involving mobile phones are so very numerous, even small differences in the rate payable as between two operators may amount to large sums of money when applied to all relevant calls. The sector is regulated by Ofcom, largely under a system of regulation laid down by the European Union and known as the Common Regulatory Framework (CRF). A great deal of effort has been devoted to that regulatory process, in respect of the rates payable in these circumstances, and the parties involved have engaged large amounts of time and money on those processes, and in litigation arising from it, by way of appeals to the Tribunal and further appeals to the Court of Appeal.
The issue which led to these proceedings concerns the rates payable as between BT and four mobile network operators (the MNOs) in respect of calls to numbers beginning with 080, 0845 and 0871. Ofcom determined disputes between BT and the MNOs in two successive determinations, dated 5 February 2010 (for 080 numbers) and 10 August 2010 (for 0845 and 0871 numbers), deciding against BT in each case. BT appealed against those determinations. The Tribunal allowed those appeals in its judgment given on 1 August 2011, and gave a further judgment on consequential matters on 12 August 2011, disposing of the appeals by an order on that date. The Tribunal gave permission to appeal to the MNOs on a limited ground. More extensive permission to appeal was given to the appellants by the Court of Appeal (myself and Etherton LJ) on 15 February 2012: [2012] EWCA Civ 300. BT served a Respondent's Notice and applied for permission to cross-appeal on a particular point. I granted that permission in relation to the appellant Telefónica O2 but refused it in relation to the other MNOs, on 4 April 2012.
Thus we have before us four appeals, one by each of the MNOs, and a cross-appeal by BT against Telefónica O2 only. Telefónica O2 was represented before us by Mr Jonathan Crow Q.C., leading Mr Robert O'Donoghue. The other three MNOs, Everything Everywhere, Hutchinson 3G and Vodafone, made common cause and were represented by Mr Jon Turner Q.C., leading Mr Philip Woolfe. Mr Crow and Mr Turner diverged to some extent in their submissions, but were able to avoid unnecessary repetition. BT was represented by Mr Graham Read Q.C., leading Ms Sarah Lee and Mr Richard Eschwege. Ofcom, as an interested party, was represented by Mr Javan Herberg Q.C. and Mr Mark Vinall. I am grateful to all Counsel for their able and clear submissions.
Telephone numbers which begin with 08 may be on lines provided by BT or on lines provided by one of a number of other fixed network operators (including Cable & Wireless). They are different from numbers which begin with 01 or 02, and they are known as Non-Geographic Numbers. The distinction is drawn pursuant to a plan published by Ofcom called the National Telephone Numbering Plan ("the Plan"). Publication of the Plan is required of Ofcom by section 56 of the Communications Act 2003 ("the Act" or "the 2003 Act"). The Plan specifies 080 as the prefix for Special Services numbers, on which there is to be no charge to the customer, except where charges are notified to the customer at the start of the call. Numbers beginning 0845 are specified as Special Services basic rate, to be charged at BT's standard local call rate for BT customers (prices charged by other networks may vary), and 0870 calls in turn are to be charged, in effect, at the relevant network's normal national call rates except where different call charges have been published. I will have to say more about the sums payable in respect of calls to these three kinds of numbers. When a caller rings a non-geographic number the call is translated by the network to a geographic number to deliver the call to its destination. For this reason non-geographic numbers are sometimes called number translation services, or NTS, numbers.
The idea behind these NTS numbers, as appears from the Plan, was that the call should either be free to a caller on a BT line, or that the rate payable by the caller should be related to geographic call charges. For an 0845 number the organisation to which the call is made may be located far away from the caller, outside the scope of a local call, but the caller should expect to pay only the local rate. The difference is to be made up to the operator by the recipient of the call. Equally, for an 080 number, the recipient, offering a service to those interested in contacting it which is or may be free to the caller, can be expected to bear the cost of the call.
Calls to a small class of 080 numbers are operated entirely free to callers. These are to those starting with 080880, which are confined to certain charity helplines. It seems that calls on these numbers are free both to the caller and to the recipient, whatever networks are involved in making and transmitting the call.
Although Ofcom's Plan contains provisions about the rate of charges on calls to NTS numbers, it is not allowed to impose price controls by this means. Therefore, apart from those cases where by agreement there is no charge to the caller (as for the charity helplines mentioned above), there may be a charge, or a higher charge, to the caller, than is envisaged by the Plan. This explains the requirement, in respect of 080 numbers, for the caller to be told at the start of the call (if relevant) that there is a charge for the call.
Calls to NTS numbers from a fixed network telephone number are not the subject of these proceedings. The issues concern calls made to NTS numbers from a mobile network number. As with calls from a mobile telephone to geographic numbers on a fixed network, this will involve the use of at least two networks. All telephone users expect to be able to call any number from any telephone, regardless of what network is used by the caller or the recipient. This is known as end-to-end connectivity, and it is one of the objectives reflected in the CRF. In order to achieve this, communications providers (CPs) enter into contractual arrangements with each other for the provision of access to each other's networks. In the simplest cases, where caller and recipient use different networks, two CPs are involved: the originating CP (OCP) and the terminating CP (TCP). In the case of calls other than to NTS numbers, the caller will pay a charge to his network, the originating CP, and that CP will pay a charge, known as the call termination charge, to the terminating CP. The charge is expressed in pence per minute, or ppm. BT, as the major fixed network CP in the UK, may also be involved even if it is neither the originating nor the terminating CP, because it provides transit services for calls between other CPs. In such a case BT will pay a termination charge to the terminating CP, but it will pass that on, as well as imposing fees or charges for the transit service, to the originating CP. The use of transit services makes it possible for a CP to ensure that all calls using its network can be connected, whatever other network may be involved, without having to enter into a separate contract with all other CPs that might possibly be relevant. It can rely on BT having made the necessary arrangements as an intermediary, so to speak. Nor is BT the only supplier of either call hosting or transit services; both Cable & Wireless and Opal Telecom, each of which participated before the Tribunal as an intervener, provide both fixed network services and...
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