The Competition Appeals Tribunal (CAT) has concluded that Ofcom erred in its decision to designate Hutchinson 3G (H3G) as an operator with significant market power (SMP) in the market for wholesale call termination on its network.

The CAT agreed with ‘3′ that Ofcom “did not carry out a full assessment of the extent to which BT had countervailing buyer power … At present we consider that the appropriate direction would be to require OFCOM to reconsider its determination of SMP taking into account the extent to which countervailing buyer power exists in BT, and considering such other matters as are relevant as at the time of its reconsideration. However, we would wish to give the parties an opportunity to address us on the form of relief to be granted should they wish to do so”.

This is a big blow to Ofcom, and as the European Commission did not disagree with Ofcom’s designation of H3G as being an operator eith SMP. At the case hearings in June BT (intervening on behalf of Ofcom) had submitted that the matter should be referred to the European Court of Justice, due to the fact that the Commission has agreed with Ofcom`s decision, and that if the 3 appeal were successful, regulation of the termination rates of other mobile operators would also be called into question.

I watch ofcom’s next move with interest.