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Summary

1.1 On 22 September 2005 BT Group plc (“BT”) offered, and Ofcom accepted, a set of undertakings (“the Undertakings”) pursuant to section 154 of the Enterprise Act 2002 in lieu of a reference of certain markets to the Competition Commission. At the time the Undertakings were formulated it was realised that in the interest of reaching a conclusion in a timely manner, to ensure that the benefits could be felt by consumers as quickly as possible, it would be inappropriate to consider all BT’s products in the context of to which products Equivalence of Inputs (EOI) should apply. Therefore, a process was included into the Undertakings to allow Ofcom and BT to consider the EOI requirement for certain products at a later stage. In addition, the Undertakings provide that under certain circumstances BT may apply for exemptions from certain provisions.

1.2 In January 2006, BT provided Ofcom with a proposed list of products (which had not been specifically identified in the original Undertakings) to which EOI should apply and a number of requests for exemptions and requests for agreement from Ofcom. BT needs to seek such agreement since, for instance, Openreach pursuant to the Undertakings cannot supply products on a non-EOI basis unless it has the agreement of Ofcom.

1.3 Since receiving the requests from BT, Ofcom and BT have been discussing the substance of the requests and modifying the requests in line with those discussions. Ofcom has taken the view that it would only consult with other stakeholders, either formally or informally, once it was satisfied that the substance of the requests is something to which Ofcom would be minded to agree.

1.4 Ofcom published a statement on 15 June 2006 in respect of the first batch of exemptions Requests from BT for specified exemptions and agreements to its Undertakings under the Enterprise Act 2002 – Part 1 (“Exemptions Part 1”) and included in this a list of the 15 outstanding requests. In recognition of the complex issues surrounding some of these requests, and the view that receiving comments on them from the wider industry would help inform Ofcom’s decision making process, on 18 October 2006 Ofcom published a consultation Requests from BT for specified exemptions and agreements to its Undertakings under the Enterprise Act 2002 – Part 2 in respect of 13 of these outstanding requests.

1.5 This statement concludes that consultation and includes a decision by Ofcom to agree to the nine requests which do not cover fibre-based products and includes the text of the agreement between Ofcom and BT formalising this decision. In respect of the four fibre-related exemptions (i.e. Redcare CCTV, Media & Broadcast services, managed radio communications services and Wavestream) Ofcom has decided that the complexity of the issues highlighted by respondents around these requests – and the need for the results from Openreach’s current ethernet portfolio review^(-1-) to feed into the analysis – means that Ofcom needs more time to resolve these issues. Ofcom has therefore decided through a variation of the Undertakings to extend the existing temporary exemption in respect of these requests up to 31 March 2007^(-2-).

1.6 Two of the requests identified in Exemptions Part 1 as outstanding (i.e. initial wideband planning and inter-exchange capacity planning) are not covered by this statement and remain under discussion between Ofcom and BT.

1.7 Also, it is possible that Ofcom may receive further requests from BT for specified exemptions and agreements in respect of products or services not currently identified, e.g. through the deployment of its Next Generation Network, “21CN”. Ofcom will decide whether to consult on these on a case-by-case basis.

Footnotes:

1.- http://www.openreach.co.uk/orpg/downloads/pdf/Briefing_WESBES014.pdf

2.- http://www.ofcom.org.uk/telecoms/btundertakings/exemptionsandvariations/variation6.pdf

The full document is available below:

• Requests from BT for specified exemptions and agreements to its Undertakings under the Enterprise Act 2002 [pdf]
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