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The calls had gotten costly. We were retained as an economic expert for Vodafone, Verizon U.K., and Virgin Media in support of their intervention in British Telecommunications' (BT) appeal to the Competition Appeal Tribunal of an Ofcom decision concerning breach of cost orientation rules. 

Ofcom regulates access to BT’s infrastructure by third parties involved in voice and broadband retail markets. The appeal related to Ofcom’s determination of various disputes between communications providers and BT in relation to wholesale charges for Ethernet services. Ofcom considered that BT had breached its cost orientation obligation in relation to certain connections and rentals charges for Ethernet services, and required BT to repay the overcharges.  

Our expert adopted a framework for analyzing whether the overcharge may have had an impact, including an assessment of implications for allocative efficiency, incentives, and effects on competition, and further identified a number of reasons why the Ofcom approach to assessing cost orientation in relation to connections and rentals charges should be retained. The tribunal upheld Ofcom’s determination. 

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