Ref: 67/02

Date: 21 November 2002

Oftel has today proposed a number of changes to the credit vetting arrangements BT intends to introduce for operators that use its interconnection services.

BT had referred the introduction of credit vetting arrangements to Oftel to resolve as a number of operators refused to sign up to the new procedures.

The proposed changes are set out in a draft Direction published today by Oftel.

BT plans to introduce credit vetting procedures to protect the company from bad debt if a company that interconnects with BT becomes insolvent.

The arrangements would apply to new operators that need to sign BT’s Standard Interconnection Agreement in order to receive interconnection services from BT, and potentially existing operators that already purchase interconnection services.

Oftel has proposed a number of changes, including the introduction of an appeals process if a company objects to being required to provide security in order to interconnect with BT.

David Edmonds Director General of Telecommunications said:

"BT already has credit vetting policies for other wholesale products used by operators, to protect it from bad debt if a company becomes insolvent.

"BT planned to introduce similar arrangements for its interconnection services, and referred the issue to Oftel when a number of operators either refused or failed to respond to the request.

"Oftel believes that BT is entitled to protect itself from bad debt, but must do so in a way that does not restrict market entry for new operators or restrict growth for existing operators.

"Any company will want to take all reasonable steps to avoid bad debt occurring in the first place, and credit vetting is an appropriate method of doing this.

"An appeals process should be included in the new arrangements, so that operators can dispute and appeal against credit vetting reports."

Oftel’s proposed changes to BT’s credit vetting arrangements are set out in a draft Direction published today. Comments are requested by 19 December.

Note to Editors

‘Draft Direction under the provisions of Regulation 6(6) of the Telecommunications (Interconnection) Regulations 1997 of a dispute between British Telecommunications plc (BT) and the operators listed in the schedule regarding the credit vetting supplemental agreement’ is published on Oftel’s website at www.oftel.gov.uk/publications/licensing/2002/credit1102.htm. Hard copies are available to the media from the press office on 020 7634 8991 and to the public from the Research and Information Unit on 020 7634 8761.