Ofcom revise dispute resolution guidelines

Ofcom yesterday published revised guidelines for the handling of regulatory disputes. Whilst these revised guidelines are ostensibly a response to the revised European Regulatory Framework, as implemented by the Electronic Communications and Wireless Telegraphy Regulations 2011 (SI 2011/1210), in reality they also address significant judicial criticism of Ofcom’s approach to dispute handling. The apogee of this criticism was perhaps the CAT judgment on the core issues in the mobile termination rates case, where the CAT found that Ofcom had not approached dispute resolution in the right way. As well as ruling on the issues before it, in its judgment the CAT laid out detailed guidance as to how Ofcom should approach dispute resolution on a forward-looking basis – see paragraphs 175 onwards of that judgment for details. The new guidelines replace Ofcom’s (now largely ignored in practice) 2004 Guidelines, and 2006 draft (but never adopted) guidelines.

Summary of changes

Required by legislation

Ofcom summarise the key changes required by legislative change as being:

“the replacement of the duty on Ofcom to resolve network access disputes with a discretionary power for Ofcom to intervene in such disputes, [which means that] Ofcom’s mandatory duty to resolve disputes now relates only to existing obligations imposed on communications providers;

the expansion of the category of persons able to refer certain disputes to Ofcom for resolution;

a new requirement for National Regulatory Authorities (NRAs) involved in cross-border disputes to co-ordinate their activities and a power for Ofcom to seek an opinion from the Body of European Regulators for Electronic Communications (BEREC); and

the introduction of a discretionary power allowing Ofcom to recover its costs in resolving disputes from disputing parties.”

Other changes 

Ofcom has also introduced other changes to its procedure and processes, although as its  practice already diverges de facto from the 2004 guidelines (in the light of CAT criticism), it is perhaps more useful to review the new process as a whole,than to just focus on the changes.

Overview of dispute resolution process

Informal discussion

Ofcom encourage parties to speak to them informally before submitting a dispute. This is current best practice as it is often helpful in putting pressure on the other party to meaningfully negotiate and to gauge Ofcom’s likely reception of a dispute.

Formal dispute submission

The formal process starts with an ‘adequate, well-reasoned submission supported by evidence’,  following the format set out in schedule 6 to the new guidelines. The revised format largely builds on the existing requirements, but with more detail. By way of example. there is now a requirement to provide the following supporting information (or a justification as to why it is not relevant or available):

  • copies of the relevant contract or terms which are the subject of the dispute (see Section B);
  • business plans relating to the relevant product or service (see Section B);
  • all relevant documentary evidence of commercial negotiations between the Parties relating to the disputed matter or matters (see Section C);
  • relevant details about the provision of the product or service in question;
  • a full chronology of all the relevant facts;
  • detailed and specific cost/price information for the provision of the relevant product or service, as well as cost/price trends (where available). In all cases, costs/price information and data must, in view of the strict statutory timetable for resolving disputes, be presented in a usable format, including, where relevant, a fully executable model;
  • full and complete benchmarking data. This could be on an international, industry or other basis. In the alternative, explain why no such data is available or relevant; and
  • all relevant previous decisions, determinations, rulings by courts/tribunals, guidance, opinions/recommendations and policy statements at the UK or EC level.

The final requirement is new and is likely to result in Communications Providers needing more legal support (internally or externally) than has previously been the case and is the final nail in the coffin for the submission of disputes on a ‘quick and dirty’ basis.

Enquiry Stage

After submission of the dispute, the next phase is the enquiry stage, during which Ofcom will send a non-confidential version of the submission to other party to the dispute, invite comments and (in a change to current practice) share those comments with the submitting party. In another change to current procedure, Ofcom will then generally hold an all parties “Enquiry Phase Meeting”, which seems to have some similarities with a case management conference, although it doesn’t appear to be limited to solely procedural discussions. Prior to the Enquiry Phase Meeting the parties will be required to fill in a new pre-EPM questionnaire.

Following the EPM, Ofcom will decided whether it is appropriate for it to resolve the dispute – if it does so, a summary of the dispute will be published on the Ofcom web-site and the dispute will become public.

Resolution process

Ofcom may (but is not obliged) to consider similar disputes together.

There is some discussion of how it will approach cross-border disputes, but we will need to see how that works in practice.

Ofcom will generally use its statutory information gathering powers to request information from parties to the dispute, and in a change from current practice will not consult on these requests. It will generally set a 5-10 day deadline for a response.

The new guidelines summarise the potential remedies and approach that Ofcom will take to resolving disputes, but in practice the parties will look to the statute and CAT decisions for detail – not the new guidelines which very deliberately do not seek fetter Ofcom’s discretion in those respects.

Dispute Consultation – consultation on skeleton reasoning and conclusion at week 8, rather than full draft resolution

In another change to current practice, rather than consulting on a full draft resolution late in the process, Ofcom will now seek to consult on a skeleton of their provisional conclusions by around week 8 of the process. They will try to give parties a 15 day response window.   

New provisions on costs

The guidelines do not set out in detail how the new powers to recover costs will be applied in practice – that will be the subject of a further consultation. However, Ofcom do flag that costs orders will be used to incentivise the parties to explore other avenues of resolution, rather than using Ofcom as a first port of call.

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