"Ofcom has concluded that the costs of deploying [the CDB] solution will be outweighed by the benefits if direct routing is implemented by fixed networks as and when they deploy Next Generation Networks ("
" Article 30 Number portability 1. Member States shall ensure that all subscribers of publicly available telephone services, including mobile services, who so request can retain their number(s) independently of the undertaking providing the service: (a) in the case of geographic numbers, at a specific location; and (b) in the case of non-geographic numbers, at any location. This paragraph does not apply to the porting of numbers between networks providing services at a fixed location and mobile networks. 2. National regulatory authorities shall ensure that pricing for interconnection related to the provision of number portability is cost oriented and that direct charges to subscribers, if any, do not act as a disincentive for the use of these facilities. …"
" 45 Power of OFCOM to set conditions (1) OFCOM shall have the power to set conditions under this section binding the persons to whom they are applied in accordance with section 46. (2) A condition set by OFCOM under this section must be either— (a) a general condition; or (b) a condition of one of the following descriptions— (i) a universal service condition; (ii) an access-related condition; (iii) a privileged supplier condition; (iv) a significant market power condition (an "
" 3 General duties of OFCOM (1) It shall be the principal duty of OFCOM, in carrying out their functions— (a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition. … (3) In performing their duties under subsection (1), OFCOM must have regard, in all cases, to— (a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed; and (b) any other principles appearing to OFCOM to represent the best regulatory practice. … 4 Duties for the purpose of fulfilling Community obligations (1) This section applies to the following functions of OFCOM— (a) their functions under Chapter 1 of Part 2; … (2) It shall be the duty of OFCOM, in carrying out any of those functions, to act in accordance with the six Community requirements (which give effect, amongst other things, to the requirements of Article 8 of the Framework Directive and are to be read accordingly). (3) The first Community requirement is a requirement to promote competition— (a) in relation to the provision of electronic communications networks and electronic communications services; (b) in relation to the provision and making available of services and facilities that are provided or made available in association with the provision of electronic communications networks or electronic communications services; ..."
" 7 Duty to carry out impact assessments (1) This section applies where— (a) OFCOM are proposing to do anything for the purposes of, or in connection with, the carrying out of their functions; and (b) it appears to them that the proposal is important; but this section does not apply if it appears to OFCOM that the urgency of the matter makes it impracticable or inappropriate for them to comply with the requirements of this section. (2) A proposal is important for the purposes of this section only if its implementation would be likely to do one or more of the following— (a) to involve a major change in the activities carried on by OFCOM; (b) to have a significant impact on persons carrying on businesses in the markets for any of the services, facilities, apparatus or directories in relation to which OFCOM have functions; or (c) to have a significant impact on the general public in the United Kingdom or in a part of the United Kingdom. (3) Before implementing their proposal, OFCOM must either— (a) carry out and publish an assessment of the likely impact of implementing the proposal; or (b) publish a statement setting out their reasons for thinking that it is unnecessary for them to carry out an assessment. (4) An assessment under subsection (3)(a) must set out how, in OFCOM's opinion, the performance of their general duties (within the meaning of section 3) is secured or furthered by or in relation to what they propose. (5) An assessment carried out under this section— (a) may take such form, and (b) must relate to such matters, as OFCOM consider appropriate. (6) In determining the matters to which an assessment under this section should relate, OFCOM must have regard to such general guidance relating to the carrying out of impact assessments as they consider appropriate. (7) Where OFCOM publish an assessment under this section— (a) they must provide an opportunity of making representations to them about their proposal to members of the public and other persons who, in OFCOM's opinion, are likely to be affected to a significant extent by its implementation; (b) the published assessment must be accompanied by a statement setting out how representations may be made; and (c) OFCOM are not to implement their proposal unless the period for making representations about it has expired and they have considered all the representations that were made in that period. ..."
" 195 Decisions of the Tribunal (1) The Tribunal shall dispose of an appeal under section 192(2) in accordance with this section. (2) The Tribunal shall decide the appeal on the merits and by reference to the grounds of appeal set out in the notice of appeal. (3) The Tribunal's decision must include a decision as to what (if any) is the appropriate action for the decision-maker to take in relation to the subject-matter of the decision under appeal. (4) The Tribunal shall then remit the decision under appeal to the decision-maker with such directions (if any) as the Tribunal considers appropriate for giving effect to its decision. (5) The Tribunal must not direct the decision-maker to take any action which he would not otherwise have power to take in relation to the decision under appeal. (6) It shall be the duty of the decision-maker to comply with every direction given under subsection (4). …"
"Ofcom has previously considered the issue of requiring further changes to the fixed and mobile porting processes and, in particular, whether direct routing should be required. Until the advent of [Next Generation Networks], the costs of making changes to routing arrangements for calls to fixed ported numbers have been found to outweigh the benefits to consumers, and so Ofcom has previously decided against intervention."
"The size of the potential benefit will be determined by the likelihood that a network will fail and the costs associated with such a failure. These will depend partly on the extent to which consumers are put off switching because of the risks associated with network failure."
"9. In deciding whether to adopt its Decision, Ofcom was obliged: 9.1 to take appropriate steps to obtain all relevant evidence; 9.2 to take account of all relevant evidence; 9.3 correctly to evaluate the likely benefits and detriments arising from the implementation of its proposed Decision, via an appropriate impact assessment, in accordance with section 7 of the [CA 2003]; 9.4 to consult with all interested parties and, in order to allow such consultation to be undertaken effectively, to act transparently, by publishing full details of the evidence and reasoning on which its proposed Decision was to be based; and 9.5 to adopt the Decision only if, having observed all these requirements, it was reasonably satisfied that the implementation of the Decision would contribute to the attainment of the statutory objectives laid down in sections 3 and 4 of the [CA 2003], in compliance with section 47(2) of the [CA 2003]. 10. Ofcom's Decision is vitiated by its breach of each of the obligations identified in paragraph 9 above, each of which breaches individually, and some or all of which collectively, amount to serious procedural and/or substantive errors, as a result of which it is likely that, or there is a serious risk that, the conclusions which Ofcom draws from its cost benefit analyses (to the effect that there will be sufficient net welfare benefits to justify the adoption of the Decision) are wrong, both in respect of the decision to adopt a phased ACQ/CDB routing solution, and in respect of the decision to adopt a recipient-led two hour porting process, with the result that the Decision fails to comply with sections 3, 4 and 47 of the [CA 2003]. Accordingly, Ofcom's Decision should be set aside in its entirety."
"…this is an appeal on the merits and the Tribunal is not concerned solely with whether the [decision of OFCOM] is adequately reasoned but also whether those reasons are correct. The Tribunal accepts the point made by H3G […] that this is a specialist court designed to be able to scrutinise the detail of regulatory decisions in a profound and rigorous manner . The question for the Tribunal is not whether the decision to impose a price control was within the range of reasonable responses but whether the decision was the right one."
"82. It is […] common ground that there may, in relation to any particular dispute, be a number of different approaches which OFCOM could reasonably adopt in arriving at its determination. There may be no single "right answer" to the dispute. To that extent, the Tribunal may, whilst conducting a merits review of the decision, be slow to overturn a decision which is arrived at by an appropriate methodology even if the dissatisfied party can suggest other ways of approaching the case which would also have been reasonable and which might have resulted in a resolution more favourable to its cause. 83. But the challenges raised by the Appellants in these appeals are more fundamental. It was not suggested by OFCOM that the points raised by the parties were points which it had not been asked to consider during the consultation process. The grounds of appeal go far beyond alleging errors of appreciation…"
"[B]ecause the likelihood of error is greater in a prospective analysis, the prospective analysis must be proportionately more rigorous to account for this possibility"
"If (as I have stated) the court should be very slow to impugn the decisions of fact made by an expert and experienced decision-maker, it must surely be slower to impugn his educated prophesies and predictions for the future."
"Since, even without seeking to quantify the benefits of protecting consumers from network failure, the CBA calculation indicated positive net benefits of the move to direct routing, there was no need for OFCOM to seek to quantify the other benefits in order to conclude that mandating a transition to direct routing was justified."
"Cost information is not really known due to lack of specific implementation experience and uncertainty over aspects of implementation."
"Industry needs directives to agree a common approach so that the costs can be estimated."
"OFCOM did not consider it appropriate for it to seek to design, and to then consider imposing on industry, a detailed technical specification for direct routing. Industry participants are considerably better placed than OFCOM to develop such a specification."
"Can OFCOM, or indeed any other sectoral regulator, only ever require industry to take certain actions when the regulator has itself specifically costed the exercise by way of drawing up a technical specification?"
"A mobile network is inherently more "intelligent" than a fixed network so is capable of doing the ACQ with minor capacity upgrade. At least two mobile networks have already implemented the Call Trap function. To do this they perform an ACQ on an internal database of ported-in numbers to identify calls to ported-in numbers and directly route them. Moving to an ACQ system for all routing (not just for ported-in numbers) is a simple extension of this process. The database would have to be much larger (a copy of the main CDB) and the routing prefix would have to be added to all ported numbers as they leave the network."
"direct routing will entail some additional costs above those that are involved in implementing Call Trap for a single network (in particular, because networks will have to co-ordinate between themselves the development of a central database)"
"Ofcom did not intend to exclude, or dissuade, transit arrangements as a result of its proposed changes to General Condition 18."
"Where there is uncertainty about the impact of an option, it is good practice to present an analysis of the sensitivity of the results to changes in some of the most important variables. This should help ensure that the Impact Assessment and the final policy decision are more robust."
"How far can a regulated entity […] decline to engage with the regulator and to provide the regulator with information in its possession as to the costs of the proposal, and then subsequently complain that the regulator's cost benefit analysis failed to take that matter into account?"
"A principle of seeking minimum reasonable costs was adopted in the modelling. This was because the cost elements put forward by operators were generally somewhat higher than experience elsewhere would deem reasonable, an observation that Mason considers to be consistent with the relatively high level of resistance to change articulated by the operators interviewed."
"how likely it is that the problem of network failure will recur and if it were to recur the likely magnitude of the problem in terms of how consumers would be affected."
"…it is worth noting that a relatively small proportion of total UK customers were affected by the network failure. Moreover it is Ofcom's view that a permanent network closure, such as occurred with Atlantic, is likely to be rare… it seems likely that the two key examples, Atlantic and Ionica, were exceptional… If a network faces financial difficulties it would be likely that its assets, notably its customer base, would be purchased or the company taken over or successfully refinanced… Moreover consumers do not seem to be avoiding switching supplier or porting their number because of the risk of network failure. Consequently the benefit in these terms of introducing a CDB is likely to be very low."
"6.156 [We] accept GEMA's submission that a code modification appeal should not be regarded as an opportunity for rival parties to debate exactly what value should be ascribed to particular items within a quantitative assessment of the costs and benefits of a proposal. Cost benefit analysis involves a degree of judgement and discretion. Unless the regulator has erred in logic or principle in quantifying a benefit, the CC will be slow to overturn the regulator's quantification of that cost or benefit. 6.157 [We] accept GEMA's submission that benefits need not be quantified in order for them to be reflected in a CBA, and that non-quantified benefits may be as important, or more important, than quantified benefits. However if a CBA is to be transparent, benefits should be quantified where possible. For the same reason, qualitative benefits should be explained clearly and in detail, so that it can fairly be seen whether there is any potential overlap between the qualitative and quantitative benefits."
"A1.66 The main task of deploying a recipient led process for porting numbers relates to the automation of systems to allow easy communication between the providers, and modification of call routing tables. To a large extent, the CDB itself will offer this functionality. Some customer-facing staff of recipient providers will also need to be trained and enabled to initiate port requests… A1.68 Ofcom has estimated that the incremental one-off total industry costs of moving to a recipient-led process is about£5 million (approximately£2.5 million in changes to network operator systems,£0.5 million in changes to network operator processes,£1 million in retailer processes and systems and£1.0 million contingency)."
"OFCOM does not have any compelling evidence to suggest that overall there will be a reduction in competition"
"In OFCOM's view the shorter the process, the better it is for competition and consumers."
"[OFCOM] has not considered whether the current arrangements for the payment of termination charges should or should not be subject to change. However, [OFCOM] notes that, where direct routing is in place, the recipient network would receive its own termination charge."
"while interveners are, of course, entitled to make observations in relation to [the Appellant's grounds of appeal] either to protect their own positions or to assist the Tribunal, they are neither co-appellants nor co-respondents, and should not be permitted to introduce what are new grounds"
"If the Tribunal is satisfied, having taken into account the observations of the parties, that the intervening party has a sufficient interest, it may permit the intervention on such terms and conditions as it thinks fit."