BT Loses U.K. Appeal Over $68.3 Million Wireless Overcharges

BT Group Plc (BT/A), Britain’s largest phone company, lost an appeal to a regulator’s finding that it overcharged wireless providers such as Virgin Media Inc. (VMED) by 41.7 million pounds ($68.3 million) for access to circuits.

The Competition Appeal Tribunal in London today rejected BT’s claim that the regulator, Ofcom, misused a dispute resolution process by seeking repayment of the overcharges instead of setting fair prices for the future.

“Ofcom’s use of the dispute resolution process in this case was unimpeachable,” the tribunal said in the 106-page ruling. The regulator correctly used its power “by ordering that the entire amount of BT’s overcharge should be repaid.”

Ofcom said in October 2009 that London-based BT should repay with interest money overcharged from 2004 to 2008 for access to so-called partial private circuits, which wireless companies use to connect some customers to phone networks.

“BT is disappointed with the outcome of the appeal” and will now “consider the range of options open to us for what we might do next,” Gemma Thomas, a spokeswoman for BT, said in an e-mail. BT already paid the wireless companies after previously setting aside 52 million pounds to cover the dispute, she said.

London-based Cable & Wireless Communications Plc (CWC) and Colt Group SA (COLT), U.K. units of Hamilton, Bermuda-based Global Crossing Ltd. (GLBC) and New York-based Verizon Communications Inc. (VZ) are the other wireless operators that claimed they were overcharged.

At a hearing in the appeal in May, BT’s lawyer said the watchdog’s finding was “inherently wrong.”

Ofcom “is pleased that the CAT has supported our decision,” the regulator said in an e-mail.

Partial-private circuits allow wireless companies to connect their networks to their end-user customers in locations where they don’t have direct access, according to court papers.

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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