Contents:

Introduction

Consultation

Timetable

Section 1: Issues Paper

Section 2: Modelling Paper

Introduction

The current controls on NTL's prices set out in condition 8 of the licence granted by the Secretary of State under Section 7 of the Telecommunications Act 1984 ("the Licence") expire on 31 December 1996.

The Director General wishes to modify the Licence to implement further price control arrangements for the period from 1 January 1997 to 31 December 2002. It is expected that new arrangements will become effective on 1 January 1997.

Consultation

Prior to beginning statutory consultation on the proposed new price control arrangements Oftel considers it important that all interested parties have an opportunity to comment on the proposals. It is also important that NTL, its customers and all interested parties are aware of the background to, and the justifications for, the decisions Oftel will be taking. Accordingly, comments are invited on the proposals set out in this consultative document.

The consultation document is divided into two parts. First, an Issues Paper setting out the main issues raised by the Price Control Review. Second, a Modelling Paper setting out the bases and assumptions upon which the model was constructed and run. A range for new Po (the allowable revenue in the first year of the next control period) and the value of X to be applied to it subsequently are shown for two scenarios and cases.

Timetable

New arrangements are to be in place by 1 January 1997. If NTL and Oftel fail to reach agreement on proposed licence modifications the issue will be referred to the Monopolies and Mergers Commission. It is anticipated that any such reference would be made and completed prior to 31 December 1996. In these circumstances the following timetable for receipt of comments on the proposals is appropriate.

1. Informal consultation on Oftel's proposals - 24 January 1996

2. Deadline for responses to informal consultation - 15 February 1996

3. Second stage period for review ends - 29 February 1996

4. Statutory consultation on licence modifications - Early April 1996

5. Statutory consultation first stage ends - Early May 1996

6. Second stage period for review ends - Mid May 1996

7. Licence modifications agreed or referred to the Monopolies and Mergers Commission - Mid May 1996

Oftel believes that it is in the interests of all parties to progress in accordance with the above timetable while recognising that the informal consultation period is shorter than is normally the case. It is important to ensure that effective price control arrangements are in place by 1 January 1997.

The deadline for first stage responses is 15 February 1996. Comments on such responses should be submitted by 29 February 1996.

All written comments should be sent to:

Paul Ryan (ref: NTL)

Oftel

50 Ludgate Hill

London EC4M 7JJ

Short responses to the document can be sent to Oftel by filling in the form on the Web pages or by using the e-mail address: press.office.oftel@gtnet.gov.uk

Oftel intends to set up links between this Consultative Document on Oftel's Web site and comments placed on respondents' own Internet pages. Please contact Catherine Guiver at Oftel on 0171 634 8756 to organise this.

Any confidential material should be sent to Oftel by ordinary mail, not via the Internet.

Written comments will be made publicly available in Oftel's library except where respondents indicate that their response or parts of it are confidential. Respondents are therefore asked to separate out any confidential material into a confidential annex which is clearly marked as such. In the interests of transparency, respondents are requested to avoid confidentiality markings wherever possible.