As the UK’s challenger network, Three believes that fair and open competition is the most effective way of ensuring that consumers get the best deals. Unfortunately, the system of appeals that applies to decisions made by the communications regulator, Ofcom, slows down and even prevents important decisions from being made.
Decisions made by regulators in other economic sectors, such as banking and energy, can only be challenged by judicial review. For their decision to be overturned, it must be either unlawful, irrational, or made with substantive procedural impropriety. This ensures that businesses still have means of redress and that regulators are held to account, whilst ensuring market certainty.
Unfortunately, the standard of appeal for Ofcom is not judicial review but on ‘the merits’. Unlike judicial review, a ‘merit-based’ standard involves consideration of whether a decision was correct, rather than just lawful, proper and rational. It means the regulator’s decision can be challenged on immaterial points of minor detail.
This has allowed for speculative challenges to Ofcom decisions, opening up each and every decision to repeated re-examination. As a consequence, the ability of Ofcom to make timely decisions in the interest of consumers and competition has been eroded.
A change to the standard of appeal would not only enable Ofcom to perform its functions more effectively, it would also bring substantial cost benefits to network operators, the regulator and consumers. Independent analysis carried out by Economic Insight using Government data estimates a net benefit of £238m – largely the result of faster appeals leading to more reform, lower prices and more competitive offerings.