Ref: 41/02
Date: 24 June 2002

Oftel has today announced new proposals to ensure that highway authorities have access to funds to cover the costs they incur when removing redundant telecoms apparatus, such as phone boxes and street cabinets.

Under the proposed new scheme, each individual telecoms operator would have to provide Oftel with a certificate approved by its Board of Directors certifying that it had funds in place. Companies would also have to provide details of how they would ensure that these funds are made available, for example, insurance or performance bonds.

Telecommunications licences state that operators must have access to funds available, so that highway authorities can remove apparatus from streets and roads in the event that a telecoms company ceases to trade or has its licence revoked.

The new proposals follow a consultation last year in which Oftel sought initial views from a wide range of parties.

Announcing the proposals, David Edmonds, Director General of Telecommunications, said today:

"Telecoms operators have an obligation to ensure they have access to sufficient funds to cover the removal of redundant apparatus on streets owned by highway authorities.

"If a company ceases to trade and no other operator takes over the equipment, redundant items such as phone boxes and street cabinets need to be removed by highway authorities.

"Informal arrangements have worked well up until now, but as there are now many more telecoms operators, Oftel believes that a more formal scheme is needed.

"Under the proposed scheme, operators will have to satisfy Oftel that they have funds in place and provide details of how they will access them.

"The new scheme is consistent with Oftel's strategy of moving away from regulation where appropriate and encouraging the industry to take greater responsibility."

Notes to Editors

1. Funds for liabilities: the way forward is available from Oftel's website at www.oftel.gov.uk/publications/licensing/2002/funds0602.htm . Hard copies are available to the press from Oftel's press office on 020 7634 8991 and to the public from Oftel's research and intelligence unit on 020 7634 8761.

2. Oftel launched a consultation, Funds for liabilities, last year (www.oftel.gov.uk/publications/licensing/2001/funds0601.htm) on which it set out initial proposals for a new scheme.

3. Oftel's strategy is one of 'appropriate regulation'. Appropriate regulation means regulation adjusted to the level of competition in the market and focused on the area of concern. Too much regulation, as well as too little regulation, can work against consumers' interests by deterring investment and innovation.