Oftel SETS OUT TESTS FOR OPENING ACCESS TO COMMUNICATIONS NETWORKS

Ref: 29/00
Date: 27 April 2000

New regulatory tests to decide when to require communications network operators to open their networks to other companies have been published by Oftel today.

An open access obligation would require a communications network operator to make its network available to service providers that wanted to offer telecommunications services direct to customers.

The tests for open access are set out in the consultation document ‘Open Access to communications networks: Ensuring competition in the provision of services’.

The proposed framework reflects Oftel's new strategy of regulating only where necessary, restricting regulation to a minimum and regulating where competition alone is not sufficient to achieve Oftel's main goal - delivering the best deal for customers.

Oftel believes that open access would be justified if the following three tests were all satisfied:

• the operator of the network in question has market power in the relevant market sector;

• the expected benefits from mandating open access are sufficient to justify the costs; and

• open access is an effective and proportionate measure to deal with insufficient competition in the market.

Oftel has applied these tests to consider whether television channel providers, Internet service providers and others should have a right to offer their services over cable networks. Oftel’s provisional conclusion is that it is not necessary to impose open access as a regulatory requirement for the time being because cable operators lack power in the relevant markets.

Oftel seeks views on the framework proposed and on its provisional conclusions about cable.

In reaching a conclusion on this issue, Oftel will discuss the responses to the consultation and its analysis of them with the ITC and OFT in order to ensure coherent regulation.

David Edmonds, Director General of Telecommunications said today:

"Oftel believes that it is important to establish a clear and coherent framework for considering all future open access questions now because of the speed of development in the market. Competition is increasing, new technologies and services are being introduced and the boundaries between the telecoms, broadcasting and IT industries are becoming ever more blurred.

"Oftel's aim is to ensure that consumers get the best deal in terms of choice, quality and value for money. Competition is the force that drives the delivery of these new services.

"Open access can aid competition in the provision of services but it is important to ensure that it is only imposed when justified. Regulating where it is not necessary could hamper competition, not promote it.

"Oftel is proposing a unified framework for all questions of open access to ensure a consistent and coherent approach. Each request for open access will be considered on its merits and will be assessed against the three tests I propose in the document.

"Open access will only be imposed when a request or complaint has been rigorously tested against the three conditions proposed above. Oftel looks forward to working closely with the ITC, the OFT and industry to both develop its proposed framework and to consider its provisional conclusions in the light of responses received."

Notes for Editors

1. The consultation document: "Open access to communications networks: Ensuring competition in the provision of services" is available on Oftel's website at www.oftel.gov.uk. Printed copies are available to the media from Oftel's Press Office on (020-7634 8991) and to the public from Oftel's Research and Intelligence Unit (tel: 020-7634 8761).

2. The consultation period lasts until 16 June 2000. There will be a further period of two weeks for comments on responses. A final statement will be published later this year.

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