The UK’s Competition Appeal Tribunal (CAT) has dismissed an application by Vodafone to prevent Floe Telecom (in administration) from introducing new evidence in their appeal against a decision to allow Vodafone to disconnect GSM gateway services offered by Floe. Back in November 2003, the legacy telecoms regulator, Oftel found that Vodafone was right to disconnect Floe’s GSM gateway services. The CAT then found that decision to find the disconnection legal was based on incorrect and/or inadequate reasoning and ordered Ofcom to re-investigate the matter. Ofcom did so confirming that by ceasing to supply Floe and VIP, Vodafone and T-Mobile were complying with a legal requirement and could not be in breach of UK competition rules, and that the GSM gateway services provided by Floe and VIP were unlawful.

Floe is now challenging the criteria used by Vodafone, and accepted by Ofcom, to identify commercial muti-user GSM gateway providers, and claims there are other providers - the example of Recall Support Services (Recall) is used - who have not been switched off by Vodafone. The CAT has accepted that this evidence is relevant to whether there has been any discrimination by Vodafone in this regard, and that introducing this during the appeal process does not constitute a new complaint.

This case has been dragging along for quite some time now, but has been an interesting one to follow, if only for the staying power of Floe who just keep plugging away and who just don’t know how to quit.

For those playing catch-up on this case here’s a potted history:

First off -what is/are GSM gateway services.

GSM gateway services enable fixed telephone networks to connect via a mobile phone radio link directly to mobile networks and essentially allow callers to make cheaper fixed to mobile calls. To quote Luke in an earlier post “they allow calls from corporate telephone systems to be routed directly to a GSM handset over a GSM link rather than the local loop. The GSM gateway acts like a ‘fixed’ mobile phone containing many GSM SIM cards. When a company installs a GSM gateway in its telephone systems, calls to mobile numbers are detected by the internal exchange and routed through the appropriate SIM card within the GSM gateway. The mobile network detects that a mobile to mobile call is being made and the gateway SIM card is charged a mobile-to-mobile call rate.”

Timeline

July 2005: Ofcom and the Office of Fair Trading (OFT) are denied permission to appeal to the Court of Appeal a judgement by the CAT setting a timetable for the reinvestigation of a complaint. Ofcom and the OFT objected to the position taken by CAT that an appeal remains open until any reinvestigation ordered has taken place. CAT has refused permission to appeal to the Court of Appeal.

June 2005: Ofcom clears Vodafone and T-Mobile of infringing competition rules by disconnecting GSM gateway providers Floe Telecom and VIP Communications. Ofcom confirms that the GSM gateway services provided by Floe and VIP were unlawful. By ceasing to supply Floe and VIP, Vodafone and T-Mobile were complying with a legal requirement and could not be in breach of competition rules.

May 2005: CAT grants Ofcom an 8 week extension in which to finalise its reinvestigation of complaints brought by Floe and VIP

May 2005: CAT rejected an application from Ofcom to to remove the time limit in relation to its reinvestigation of complaints from Floe and VIP. CAT rejected the request stating it was within its power to order the reinvestigation within a 5 month deadline.

March 2005: Ofcom consults on a statement intended to clarify the legal position in relation to the use of GSM gateway services. Ofcom states that the wireless telegraphy licences held by the 2G mobile operators (Orange, T-Mobile, Vodafone and O2) do not cover the use of GSM gateways, and that the commercial operation of GSM gateways is currently prohibited by UK law.

Dec 2004: Ofcom opens reinvestigations into complaints against Vodafone and T-Mobile in relation to the alleged refusal to supply and disconnection of GSM gateway services

Nov 2004: CAT orders Ofcom to reconsider its decision to allow Vodafone to disconnect GSM gateway services offered by Floe Telecom, setting aside Oftel`s decision on the grounds of incorrect and/or inadequate reasoning.

Jul 2004: CAT grants T-Mobile permission to intervene in Floe Telecom’s appeal against the Ofcom. T-Mobile had previously been granted permission to intervene in a similar appeal before CAT, brought by VIP Communications. However, this case was stayed following an undertaking by VIP that it would be bound by CAT`s decision in the Floe appeal. T-Mobile was, therefore, granted leave to intervene in the Floe appeal instead.

May 2004: Following an undertaking from VIP to be bound by the decision in the Floe case, CAT has ordered that the VIP case be stayed pending the Floe decision.

Feb 2004: CAT grants Vodafone leave to intervene in Floe appeal against a decision of the legacy telecoms regulator, Oftel

Jan 2004: The administrators of Floe appeal to the CAT against the decision of the legacy telecoms regulator, Oftel, that Vodafone was not in breach of UK competition rules by disconnecting GSM gateway services offered by Floe. The appeal is based on grounds that: (i) the original investigation did not cover “private” GSM gateways, although they formed part of Floe`s complaint; (ii) the investigation was not based on the legislation prevailing at the time; and (iii) Oftel`s decision was based on the assumption that Floe had been made an interconnection offer by Vodafone, although this was not in fact the case.

Nov 2003: Oftel states that Vodafone has not breached the Competition Act 1998 by disconnecting public GSM gateway services offered by Floe Telecom. The Radiocommunications Agency, which issues licences for the use of spectrum, stated that public GSM gateways will be illegal unless a mobile operator expressly authorises the use of the gateway equipment in writing in accordance with their wireless telegraphy licence. Oftel held that there was no evidence that Vodafone had given Floe Telecom written authorisation to operate its public GSM gateways under the terms of Vodafone`s wireless telegraphy licence. As Floe Telecom`s services were illegal, Vodafone had an objective reason to refuse to supply it and was not abusing a dominant position.

Looks like this case could make it into 2006.