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Ofcom sides with mobile operators on 0845

BT asked to pay back fees

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Ofcom will ask BT to pay back termination fees for calls to 0845 and 0870 numbers, as basing them on what mobile operators charged punters isn't fair.

Since November last year BT has been charging mobile operators a termination rate for 0845 and 0870 calls which was dependent on what that operator was charging its customers - the more the customer paid, the more BT gets. But in April the operators cried foul, and now Ofcom has published a consultation saying it agrees and BT will have to return the money.

The termination rate is the proportion of what the customer pays which is passed on to the receiving network. In the case of numbers starting 0870 and 0845 that's almost always BT, which is able to charge what it likes as long as the amount allows originating networks to recover costs, is reasonably simple to implement, and works to the benefit of end customers.

Under BT's new rates a mobile operator is required to pay a basic fee, such as 2.6654 pence per minute for an 0845 call during the day, but if the operator is billing its customers more than 32.50 pence per minute then BT would demand 13 pence of that. BT's share is on a sliding scale - in the above example an operator charging the end customer less than 12.49 pence a minute would only pay the basic 2.6654 to BT, while one charging more than 12.49 (but less than 17.49) would pay an additional tuppence a minute, and so forth.

If that's not confusing enough, mobile operators are also expected to pay BT a call set-up charge of 2.0171 pence, but that's not part of the dispute here, which relates to the legitimacy of BT's sliding scale of charges.

On that question Ofcom has ruled (mind-numbing pdf) that the sliding scale is not in the interests of end customers, though it admits that it's a fine line. Equally debatable is how complex the sliding scale is for operators to manage - they claim it's too complicated but, unsurprisingly, BT sees it differently.

On balance Ofcom reckons BT was in the wrong, and therefore must repay the money the network operators have handed over since November. That decision is open for comment until Thursday, but given the wealth of evidence already presented it's hard to imagine anything changing Ofcom's stance now. ®

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