A telecoms interconnection claim.
- 01$380mAmount in dispute
- 025Expert reports filed
- 038 daysEvidentiary hearing
- 04ICCArbitral institution
Our team was appointed by claimant’s counsel in a dispute with an incumbent network operator over interconnection charges—a matter turning on cost-oriented pricing, the regulator’s long-run incremental cost model and the traffic that would have flowed at compliant rates.
The question
Our client alleged that the incumbent had charged termination rates well above cost for most of a decade, in breach of its interconnection agreement. The tribunal needed to determine a cost-oriented rate for each year and the resulting overpayment, including the effect on retail traffic volumes.
Our approach
We rebuilt a bottom-up long-run incremental cost model from network engineering data and regulatory accounts, reconciled it to the regulator’s published benchmarks, and estimated the traffic response to lower wholesale rates. Each year’s rate was presented alongside the cost drivers that determined it.
The evidence
The incumbent’s expert defended its rates by reference to fully allocated historical costs. We showed that this approach recovered common costs several times over and diverged from the regulator’s own methodology, a point the tribunal tested closely in a dedicated session of concurrent evidence.
The outcome
The tribunal held that the agreement required cost-oriented rates on the regulator’s methodology and awarded restitution of the overpayments on the basis of our model. The parties subsequently agreed forward-looking rates using the same framework.
Where a regulator has already chosen a cost standard, departing from it needs a very good reason.