Competition Commission overrules Ofcom

The UK's Competition Commission has ruled against telecom regulator Ofcom's planned reduction in mobile termination rates. Instead of the four main UK mobile operators having to reduce their termination rates to 5.1 pence per minute by 2010/2011, as mandated by Ofcom, they must instead reduce them to 4 pence per minute. The other mobile operator, 3 UK, is given late entry protection by being required to cut only to 4.4 pence per minute.

The issue of mobile termination charges was referred to the Competition Commission by the Competition Appeal Tribunal following formal complaints by the dominant landline operator BT and H3G, the owner of 3 UK.

The Tribunal now has to decide whether to accept the Commission's recommendations. If it does so, the Tribunal will direct Ofcom to issue new mobile termination charge rulings. The substance of BT's original complaint was that Ofcom based its calculations on what the UK mobile operators paid for their 3G licences rather than what they are actually worth. Because Ofcom planned that the process of mobile termination charge reduction should take place over the period 2007-2011, the Competition Commission's ruling means some parties have overpaid. If the ruling is approved Ofcom will have to come up with a formula to recompense those affected.

For more on this story:
- go to The Register and Cellular News

Related stories:
EU: Big changes lie ahead for mobile termination rates
U.K.'s 3 hit by competition authority ruling

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