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BT loses on termination fee back payment

Tribunal says yes, court says no

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BT is considering its options after losing its claim for hundreds of millions of pounds in overpaid termination fees, despite the Competition Appeals Tribunal ruling in its favour.

The Tribunal hearing decided that Ofcom had set the termination rates too high, and that BT was entitled to claim the money back. So BT took Vodafone, T-Mobile, O2 and Orange to court, only for the judge to decide that the Tribunal doesn't have the power to make such demands, so the mobile operators get to keep the cash.

BT's complaint goes back to Ofcom's 2007 calculations, and accuses the regulator of using the wrong figures to calculate the amount that calling networks pay to mobile operators (the mobile "termination rate"). The termination rate is supposed to be based on what it costs to carry the call, but that includes some pretty contentious figures - such as using the cost of 3G licences, rather than their value.

BT argued that the calculated rate was too high, and that it should be repaid the money already handed over to the mobile operators at that higher rate. The mobile operators pointed out that it was BT customers, rather than BT, who paid the price and paying them all back would be impractical, and said the Tribunal didn't have the power to retrospectively apply a lower rate.

Last January the Tribunal upheld BT's complaints, and unanimously declared that it did have the right to do so.

But the court disagreed, and the mobile operators will be able to hang onto their cash while BT tells us that it is "disappointed" and "considering our options". ®

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