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CityFibre Limited -v- Ofcom [2022] CAT 33

The trouble with appeals to the CAT about decision of Ofcom is that they’re not a review of the merits. Rather they are considered in the light of Judicial Review principles.


That narrows things down to:

1. Illegality

2. Breach of natural justice (including in respect of a consultation)

3. Rationality – you have to show that Ofcom was officially acting barking mad at the time it took the decision.


The above case reinforces the general view that by and large, money spent challenging Ofcom decisions would be better spent elsewhere.


The case concerned what is described as the Equinox Offer made by Openreach to ISPs. This in essence provided a discount for ISPs to put more connections in BT’s way than other “altnets”.


The arguments in the end, came down mainly in respect of whether or not Ofcom had properly considered something called the Overlap Conclusion, which is to take into account properly, the degree to which altnets and Openreach will overlap in the provision of FTTP services in the medium term which would say be 12-24 month out from now.


Ofcom essentially approved the Equinox Offer and CityFibre called “foul” because it didn’t think that its view had been taken into account and indeed the whole of its argument it thought had been not given proper consideration by Ofcom. That is not so said that the Competition Appeal Tribunal.

Having been both a regulator and in private practice for a long time, I think can say with some authority, that trying to overturn decisions like the one in these circumstances is beyond difficult.


Ofcom may have got it wrong and that may have a significant anti-competitive effect on CityFibre. That is to some considerable degree exacerbated by CityFibre’s business model. It doesn’t sign customers up and provide the whole raft of services, it only sells wholesale to ISPs. As much as I can see advantages in not having to run a considerably large consumer facing operation if your business is the provision of telecoms network infrastructure, then successes in the UK in the fixed system markets have come from, either having a partner ISP or you being an ISP as well as a network provider.


There is no doubt (there could be no doubt), that things will get stickier for the altnets when they start to overlap with BT’s FTTP services.


So, you could say, in one way that it is a wholly unexceptionable decision of the CAT. The Tribunal was in any event somewhat swayed one might imagine by the fact that Ofcom essentially said it was going to take the matters into review from time to time.


I’ve always been in favour of direct regulatory action over simple use of Competition law in the telecoms area. It is, at the least, marginally swifter but doesn’t provide any recompense for the damages for operators there might be which could be gained through a competition law action. Competition law actions, however, are complicated and require deep pockets or those of third-party funding for the litigation. Moreover, the results of Competition law matters can be decided effectively by one side quoting Ofcom’s views on the subject.


So, what can you do about a decision that you don’t like? The answer is I’m afraid is that you have to put time and effort into replying to consultation documents and if you take the words of the Tribunal into account in this case, you should look at not just at answering the questions that you are asked by Ofcom but looking at the matter more generally. There is just a glimmer of the fact that the decision in the above case might have been different if CityFibre had gone outside of the questions actually asked by Ofcom and put its full case as it were earlier. It might have been possible to argue in the circumstances that its views had been simply ignored though I am sure that Ofcom would have argued that whatever CityFibre had said about the Overlap issue, nothing would turn on it.


So, if you do have a large gorilla of a competitor making things difficult for you, what can you do? You can go at the jugular and try a competition action or try and find something that the gorilla has done that actually offends against a General Condition or directly against some regulatory diktat.


There is little doubt that the altnets have created a better fixed line environment for consumers in this country by giving BT Openreach a run for its money. As I say, most progress in competition in the UK is through the use of competitive networks and this has borne fruit. Indeed, the use of competitive networks as a means of encouraging competition invasion and lowering prices has been a feature of the UK regulatory theme, since the early 1990s.


CityFibre probably quite rightly opposed the intervention by other altnets in this matter but more generally it would be useful at the least if the altnets try and avoid each other’s patches and they might consider a degree of co-operation so long as they don’t fall foul of the competition laws when taking action against the incredible benefit from their initial monopoly position that BT enjoys.


Ted Mercer is a Partner in Maddox Legal’s Litigation department, with an expertise in telecommunications and technology start-ups.


If you would like to speak with Ted in relation to all things telecoms, please contact his Personal Assistant, Nicola Costa at ncosta@maddoxlegal.co.uk.


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