Trigger situation

A network operator cannot agree commercial terms for interconnection with another operator. An SMP provider receives a direction from Ofcom regarding its access obligations. A new entrant needs interconnection to reach its customers and the incumbent is not responding or is offering unreasonable terms. A business is involved in an interconnection dispute referred to Ofcom under section 185 of the Communications Act 2003.

Why it matters now

A new provider cannot reach customers without interconnection, so an incumbent has substantial bargaining power in the negotiation, and this power is subject to regulatory control through both the General Conditions (obligations on all providers) and SMP access conditions (obligations on providers with Significant Market Power). The framework has been amended repeatedly since 2003, most substantially by the Electronic Communications and Wireless Telegraphy Regulations 2011 and by the Electronic Communications and Wireless Telegraphy (Amendment) (European Electronic Communications Code and EU Exit) Regulations 2020. The growth of mobile operators, the rise of over-the-top services and cloud platforms, and the consolidation of the sector have created tension between the original regulatory design (protecting new entrants from incumbent abuse) and the current market structure (where incumbents themselves may be network new entrants in other markets, or where dominance is exercised in ways the 2003 Act did not anticipate).

Common interconnection compliance failures

Interconnection is a regulatory negotiation as well as a commercial and technical one. The terms of an interconnection agreement must be consistent with the General Conditions set by Ofcom under section 45 of the Communications Act 2003 and with any applicable SMP conditions. An operator that negotiates interconnection terms without checking regulatory consistency creates compliance risk that surfaces later, often during a dispute.

Interconnection is governed by three overlapping legal regimes. General Condition A1.2 (General Conditions of Entitlement, unofficial consolidated version with effect from 8 April 2026) requires a provider of a public electronic communications network, to the extent requested by any other provider of such a network, to negotiate with a view to concluding an agreement for interconnection, or an amendment to an existing agreement, within a reasonable period. It is an obligation to negotiate, not an obligation to agree, and it is not triggered by a request from a person who does not provide such a network. Ofcom’s consolidated version has no legal effect: the notification text under section 48(1) of the Communications Act 2003 takes precedence. If an operator has SMP in a relevant market, that operator is subject to specific SMP access conditions, which are typically set by Ofcom and impose additional obligations regarding access pricing, non-discrimination and transparency. Beyond both of these regimes, competition law applies. Under the Competition Act 1998, a provider with dominance (often, but not always, the same as SMP for telecoms purposes) cannot refuse access where that refusal amounts to abuse of dominance. All three regimes apply at the same time, and a counterparty can run its claim under any of them.

The Communications Act 2003, sections 185 to 188, 190 and 191, gives Ofcom the power to resolve disputes about network access when the parties cannot agree; section 189, which dealt with disputes involving other member States, was omitted on 31 December 2020. This is not mediation; it is binding determination. Ofcom can impose access terms, pricing, and technical conditions. Once Ofcom has made a determination under section 185, the parties are bound by it. The prospect of a section 185 determination is part of the commercial negotiation from the start, not a step taken once negotiation has failed.

Pricing obligations are carried in the SMP conditions themselves, and they vary with the type of access. The conditions imposed by the Telecoms Access Review 2026-31 are drafted service by service, so the condition that applies to physical infrastructure access is not the condition that applies to wholesale local access. Pricing for access to core network elements (such as ducts, poles, dark fibre) is assessed differently from pricing for bitstream access or switching services. Ofcom’s current pricing methodology, and the positions it has rejected in earlier decisions, set the range within which a price can realistically be agreed.

How an interconnection matter runs

An operator has to know which regulatory constraints apply before it opens the negotiation, not after the terms are agreed.

A provider without SMP starts from General Condition A1, which requires it to negotiate interconnection on a reasonable request but does not say which terms are reasonable. Ofcom’s published guidance and its enforcement decisions are where that meaning is found. Competition law applies on top: a provider that is dominant in a relevant product or geographic market can commit an abuse by refusing interconnection, whether or not Ofcom has designated it as having SMP.

SMP conditions are imposed on the named operator by the market review that designates it. Under the Telecoms Access Review 2026-31, for example, BT must provide network access to a third party that requests it reasonably and in writing, must publish a reference offer and must not depart from the charges, terms and conditions in it, and must not unduly discriminate. Many SMP access conditions also specify pricing methodologies, such as cost-plus or retail-minus, or they impose a requirement to make access available at a level of cost-orientation. Access conditions are provider-specific, so the constraint on a given negotiation is read from the operator’s own conditions and not from the general pattern.

A draft interconnection agreement is measured against the General Conditions, any applicable SMP conditions and competition law. The clauses that carry compliance risk are those imposing unreasonable switching costs, those discriminating between access requestors, and those reserving rights Ofcom has already closed off to the SMP provider. Each is tested against what would survive an Ofcom determination or a competition law challenge, with disputes co-counsel where the matter proceeds to litigation.

Either party may refer the dispute to Ofcom under section 185, and Ofcom’s determination of the terms of access binds the parties. There is no statutory test of fair and reasonable terms. On a dispute about network access, section 190(2A) requires Ofcom to exercise its determination powers in the way that seems to it most appropriate for securing efficiency, sustainable competition, efficient investment and innovation, and the greatest possible benefit for the end-users of public electronic communications services. The obligations already imposed on the parties by the General Conditions and by any applicable SMP conditions frame what Ofcom is asked to determine. A submission answers the concerns Ofcom is actually working on. An operator weighs the cost of continuing the dispute against the value of the terms it is holding out for.

The pricing rules that bind an operator are in the SMP conditions imposed on it, read with the market review statement that explains them. Under the Telecoms Access Review 2026-31, the charge controls on wholesale local access operate on weighted average charges across each relevant year, so whether a given published price breaches the control is a question about the basket rather than about that price alone. An operator may propose an alternative methodology, or challenge Ofcom’s guidance, where the published approach does not reflect the costs and risks of providing the access in question.

Access conditions are often tied to other obligations: transparency, number portability and co-location. An agreement negotiated without reference to those obligations leaves the operator to reconcile them afterwards.

When to instruct

You should instruct Bratby Law if you are negotiating an interconnection agreement and want to ensure that the agreed terms are legally sound and are likely to be acceptable to Ofcom. You should instruct if you are the subject of an access request and want to understand your obligations and the commercial terms you should propose. You should instruct if you are involved in a section 185 dispute or are considering referring a dispute to Ofcom. You should instruct if you are acquiring a business with existing interconnection obligations and want to understand the compliance risks. You should not instruct for routine questions about whether interconnection is technically possible or about standard technical specifications, unless those questions have regulatory implications.

How Bratby Law helps

The work runs from identifying which regime governs a given interconnection, through review of the agreement against the General Conditions, the applicable SMP conditions and competition law, to access pricing under Ofcom’s methodologies and, where negotiation reaches an impasse, a referral or a response under section 185. It also covers the interaction between interconnection obligations and the transparency, number portability and co-location obligations that apply alongside them.

Related telecoms regulation pages

Other telecoms regulation pages:

Am I regulated?
Ofcom General conditions of entitlement
SMP regulation and market reviews
Numbering
Code Powers and access to land
Spectrum
Lawful intercept and the Investigatory Powers Act 2016
Telecoms Security
Ofcom Licence Fees
Ofcom: Advice for Operators, Investors and Platforms
Complaints and investigations
Connected Vehicles and IoT Regulation
EU Digital Networks Act

Frequently asked questions

What is interconnection and why does it matter?

Interconnection is the arrangement that allows one electronic communications network to connect to another network, so that customers on one network can communicate with customers on another network and can access services provided via other networks. Without interconnection, a network would be isolated and its customers could not reach anyone outside that network. Interconnection is the regulatory mechanism for ensuring that network dominance does not foreclose access to customers.

What is the difference between interconnection and access?

Interconnection and access are related but distinct concepts. Interconnection is defined in section 151(2) of the Communications Act 2003 as the linking, directly or indirectly and by physical or logical means or a combination of the two, of one public electronic communications network to another, so that users of one can communicate with users of the other or use services provided by means of it. Access typically refers to the services and facilities provided by one provider to another, such as access to duct, fibre, or switching capacity. In practice, the terms are sometimes used interchangeably, but they describe different things. The Communications Act 2003 defines network access in section 151(3): it covers the interconnection of public electronic communications networks, and also other services, facilities and arrangements by which one person is able to use another’s network, apparatus or associated facilities in order to provide an electronic communications service. Section 73 does something different. It sets the permitted subject-matter of access-related conditions, and it imposes no general obligation to provide access on fair and reasonable terms.

What is General Condition A1?

General Condition A1 is in Part A of the General Conditions of Entitlement (unofficial consolidated version with effect from 8 April 2026). Condition A1.2 applies to any person who provides a public electronic communications network and requires that provider, to the extent requested by any other provider of such a network, to negotiate with a view to concluding an agreement for interconnection, or an amendment to an existing agreement, within a reasonable period. Condition A1.3 applies to any communications provider and requires information acquired in confidence in the course of negotiating network access to be used only for the purpose for which it was supplied. Condition A1 does not require the parties to reach agreement and does not set the terms on which interconnection is to be provided. The consolidated version has no legal effect; the notification text under section 48(1) of the Communications Act 2003 takes precedence.

What are SMP access conditions?

If Ofcom finds that a provider has Significant Market Power (SMP) in a relevant market, Ofcom can impose specific obligations on that provider, including obligations to provide access to its network on specific terms. SMP conditions are set under section 45(2)(b)(iv) of the Communications Act 2003 and are imposed by the publication of a notification under section 48(1). They are separate from the General Conditions of Entitlement and apply to a named provider in a defined market. Section 87 authorises, among others, conditions requiring the provider not to discriminate unduly, to publish the terms on which it will enter into an access contract, to maintain accounting separation and, subject to section 88, to comply with price controls and with rules about cost recovery and cost orientation. Which of these apply to a given operator depends on the conditions Ofcom set in the market review in question. They often specify technical parameters and security requirements for access. SMP conditions are more stringent than the baseline General Condition A1 obligation.

What is section 185 of the Communications Act 2003?

Section 185 of the Communications Act 2003 gives Ofcom the power to determine disputes about network access when two providers cannot agree on the terms. Either party can refer a dispute to Ofcom. Ofcom can then investigate and determine what access terms are fair and reasonable. Ofcom’s determination is binding on the parties. Section 190 limits what Ofcom may do. Its main power is to declare the rights and obligations of the parties, to fix the terms or conditions of transactions between them, to require them to enter into a transaction on the terms it fixes, and to order the repayment of an underpayment or overpayment of charges. Under section 188(5), Ofcom must make its determination within four months of deciding that it is appropriate for it to handle the dispute, except in exceptional circumstances.

Can Ofcom force a dominant network to provide access at cost?

Ofcom can direct an SMP provider to provide access on cost-oriented terms if that is what Ofcom’s published access conditions require. Cost orientation takes its content from the condition that imposes it. Under the Telecoms Access Review 2026-31, Condition 6.2 requires BT’s charges for physical infrastructure access, averaged over each relevant year, to be reasonably derived from the costs of provision, based on any related external charge, its forward-looking long run incremental costs, an appropriate mark-up for the recovery of common costs and an appropriate return on capital employed. The authority for a condition of that kind is section 87(9) of the Communications Act 2003, which is subject to the tests in section 88.

See also

• Why Bratby Law? Specialist telecoms, data protection, payments, transactions and digital regulation lawyers
• Services
• Transactions
• Co-counsel
• Fractional General Counsel
• EU Digital Networks Act

Frequently asked questions

What is interconnection regulation?

General Condition A1.2 requires a provider of a public electronic communications network to negotiate interconnection with another such provider within a reasonable period. Separately, SMP conditions imposed on a designated operator may require it to provide network access on terms Ofcom has set, including terms as to non-discrimination and price.

Who must comply with GC A1?

Condition A1.2 applies to any person who provides a public electronic communications network, whatever its size or market position. Condition A1.3, on the confidentiality of information acquired in negotiating network access, applies to any communications provider.

What are SMP access obligations?

SMP obligations are additional duties imposed on providers with Significant Market Power, requiring them to provide specified network access on regulated terms.

Can Ofcom resolve interconnection disputes?

Yes. Either party may refer a network access dispute to Ofcom under section 185 of the Communications Act 2003. Where Ofcom decides that it is appropriate for it to handle the dispute, section 188(5) requires it to make its determination within four months of that decision, except in exceptional circumstances, and section 190(8) makes the determination binding on all the parties.

How does competition law apply?

Competition law may apply where conduct amounts to refusal to supply, discrimination, margin squeeze or other anti-competitive practices.

Independent directory rankings

Our specialist expertise is recognised in major independent legal directories:

• Chambers & Partners: Rob Bratby is ranked as a Band 2 lawyer in the UK Guide 2026 in the “Telecommunications” category: Chambers
• The Legal 500: Rob Bratby is listed as a Leading Partner for Telecoms in London (TMT: IT and Telecoms). The Legal 500
• Lexology: Rob Bratby is recognised in the Lexology Index as a Global Elite Thought Leader for telecoms and media, and as a Thought Leader for data privacy and protection: Lexology