Sure ordered to pay back £115,000 after overcharging

The Guernsey Competition & Regulatory Authority has made the ruling. It stated that Sure seemed to misunderstand how it was meant to calculate the charges in line with its price control decision.

Sure now needs to repay five companies affected by the overpayment between January 2021 and July 2022 before December.

‘This decision reinforces the GCRA’s commitment to fair competition in Guernsey’s telecommunications market,’ an authority spokesman said.

‘The GCRA will continue assessing compliance with the previous and current wholesale price control decisions.’

JT is set to get the biggest amount back, with £75,000 owed, while Sure will have to pay Newtel £22,000, Guernsey Airtel £8,600, Logicalis £7,100 and C5 IT Services £2,300.

The issue arose as wholesale leased lines must be priced against retail costs, less 20%, to prevent Sure imposing a ‘margin squeeze’. This is known as mirroring.

The dispute has centred around if and how Sure should calculate this against retail discounts.

In its report, the GCRA said that retail discounts, such as a 10% discount over three years, did not need to identically mirrored in the lease charges, but still needed to be accounted for.

‘In order to prevent margin squeeze, discounts offered at the retail level must be averaged across all equivalent products to determine the average retail price against which the wholesale price will be set,’ the GCRA said.

Sure countered that the GCRA had got things wrong.

‘Sure appears to contend that the statement that it is not required to mirror retail discounts at the wholesale level means that Sure is not required to take account of the retail discounts applied by it at all when setting its wholesale price,’ GCRA said in its report.

‘As a result of that misinterpretation, it proceeds to argue that whole sections of the GCRA’s reasoning and explanation on how retail discounts are to be taken into account in setting the wholesale price are “perverse and plainly wrong” because they are manifestly contrary to the statement that Sure is not required to take account of “mirror” retail discounts at the wholesale level.’

The GCRA said that Sure’s current interpretation of mirroring was inconsistent with the way the company had previously interpreted the terms of the price control decision. It said that Sure had got it right between 2015 and 2017.

Sure told the GCRA that its approach was unfairly distorting the market to Sure’s disadvantage, as other operators were not obliged to pass on discounts to customers.

JT also told the authority that it believed there should be no mirroring, and so to accept reimbursement from Sure of overpayments would be contrary to its principles.

The GCRA said both points were irrelevant as to whether Sure breached the price control terms, and noted that further repetition of its arguments would have added nothing to Sure’s understanding.

Following yesterday’s publication, Sure’s legal and regulatory director Chris Durnell said: ‘We have received the GCRA’s final direction today and will now carefully review the detail of the decision before issuing a formal response.’

JT declined to comment. Attempts were made to contact the other companies set to get money back.