Ofcom closes its margin squeeze investigation of BT

Fibre optics, hardware, circuit board in the background

A CRA economic consultant advised BT in Ofcom’s pricing investigation of its Wholesale Calls product. In June 2013, Ofcom closed its long-running investigation with a “no grounds for action” decision. The investigation focused on allegations of margin squeeze made by THUS plc and Gamma, two competitors to BT in the supply of wholesale calls that rely on BT for upstream inputs provided over BT’s copper access network. While Ofcom found that BT had earned negative margins on its Wholesale Calls product over a period of 10 months between July 2008 and April 2009, they concluded that the evidence on actual or potential anti-competitive effects was insufficient to find that BT had infringed competition law. Much of CRA’s effects’ arguments and modelling work was adopted in the Ofcom decision.

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