<BR>&nbsp;

<H1>

Dealing with anti-competitive behaviour&nbsp;<BR>

– an Oftel Guide</H1>

December 1997

<HR>

<H2>

<A NAME="CONTENTS"></A><B>Contents</B></H2>

<A HREF="#Summary">Summary</A>



<P><A HREF="#Chapter 1">Chapter 1</A> Introduction



<P><A HREF="#Chapter 2">Chapter 2</A> What is anti-competitive behaviour?



<P><A HREF="#Chapter 3">Chapter 3</A> The legal framework



<P><A HREF="#Chapter 4">Chapter 4</A> Oftel’s approach to competition casework



<P><A HREF="#Chapter 5">Chapter 5</A> Sources of information and advice



<P><A HREF="#Chapter 6">Chapter 6</A> Helping us to help you



<P><A HREF="#Annex A">Annex A</A> Complainant check list



<P><A HREF="#Annex B">Annex B</A> Key contacts within Oftel

<HR>

<H2>

<A NAME="Summary"></A><B>Summary</B></H2>

Oftel’s goal is to provide the best possible deal for the customer in the

telecoms market in terms of quality, choice and value for money. We believe

that a fully competitive market in telecoms networks and services will

deliver this goal by spurring innovation, offering choice, delivering improvements

in quality and driving prices down.



<P>Oftel therefore commits a large amount of resources and focus on investigating

potential anti-competitive behaviour in the telecommunications industry,

and in 1996 commenced 72 such investigations. Although some investigations

are launched on Oftel’s own initiative, the majority were launched as a

result of complaints from, among others, network operators, independent

service providers and large users.



<P>This document is aimed at potential complainants and is designed to

increase the speed with which Oftel can handle complaints by making complainants

aware of Oftel’s procedures in handling competition casework. It summarises

the type of behaviour Oftel considers to be anti-competitive, the legal

framework within which Oftel can take action to stop such behaviour, the

procedures which Oftel follows to investigate complaints, sources of other

useful information on Oftel’s competition casework and, finally, the type

of information which should, wherever possible, be provided by complainants

to Oftel when a complaint is first made.



<P><B>CHRISTOPHER WRIGHT</B>



<P>Director, Competition and Fair Trading



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<BR>

<HR>

<H2>

<A NAME="Chapter 1"></A><B>Chapter 1</B></H2>



<H2>

<B>Introduction</B></H2>

1.1 Oftel’s goal is to provide the best possible deal for the customer

in the telecoms market in terms of quality, choice and value for money.



<P>1.2 We believe that a fully competitive market in telecoms networks

and services will deliver this goal by spurring innovation, offering choice,

delivering improvements in quality and driving prices down.



<P>1.3 One of our key objectives is therefore ensuring fair, efficient

and sustainable competition. We are strongly committed to the development

and maintenance of competition from both network operators and from service

providers offering telecoms services over the networks of others.



<P>1.4 Oftel therefore commits considerable resources and focus on investigating

potential anti-competitive behaviour in the telecommunications industry.

In 1996, Oftel opened 72 cases into potential anti-competitive behaviour.

Oftel opened 10 of these on its own initiative, but the great majority

of cases were instigated following complaints from, among others, network

operators, service providers and large users.



<P>1.5 Since June 1996, Oftel has operated a two-phase approach to the

assessment of complaint-generated cases of anti-competitive behaviour.

A preliminary enquiry is first conducted to gather the basic facts of a

complaint and to establish whether the behaviour complained about may have

an anti-competitive impact on the relevant market. Oftel aims to complete

this preliminary enquiry within 30 working days, though many will be completed

much earlier.



<P>1.6 If Oftel considers that there is a case to answer, a complaint is

moved to the investigation phase, where further information may need to

be gathered and considered to form a final view. This may result in formal

action being taken. Oftel’s target is to complete 75% of investigation

phase cases within 3 months and all cases within 6 months, though, again

many are completed much sooner.



<P>1.7 This two-phase approach - alongside other Oftel initiatives begun

over the last 18 months such as the Competition Bulletin and the suite

of guidelines - has led to an improvement in the speed with which cases

are handled, by eliminating at an early stage complaints where there is

clearly no case to answer and allowing Oftel to concentrate resources on

complaints where there is reason to believe there may be concerns. These

changes have also improved the transparency of our decision making process.



<P>1.8 Highlighting this improvement, only 24% of investigations opened

in the first half of 1996 were closed within 6 months. The comparable figures

for cases opened in the second half of 1996 and the first half of 1997

were 81% and 90% respectively.



<P>1.9 Oftel is aiming to make further improvements in the speed with which

investigations are handled. In Oftel’s experience, obtaining adequate and

reliable information is crucial at all stages to the efficiency and effectiveness

in dealing with fair trading matters. The more focussed and relevant the

information which Oftel receives when a complaint is made, the better equipped

it is to tackle the problem.



<P>1.10 To this end, this document is aimed at potential complainants and

is designed to increase the speed with which Oftel can handle complaints

by making complainants aware of Oftel’s procedures in handling competition

casework. It summarises the type of behaviour Oftel considers to be anti-competitive,

the legal framework within which Oftel can take action to stop such behaviour,

the procedures which Oftel follows to investigate complaints, sources of

other useful information on Oftel’s competition casework and, finally,

the type of information which should, wherever possible, be provided by

complainants to Oftel when a complaint is first made.



<P>1.11 It is not Oftel’s intention to place the burden of proof solely

on complainants and Oftel will follow up any non-frivolous representation

in whatever form it is made, provided there is some indication of a possible

licence contravention. However, it is hoped that this document, by increasing

awareness of Oftel’s procedures, will contribute to the expeditious investigation

of complaints of anti-competitive behaviour.



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<HR>

<H2>

<A NAME="Chapter 2"></A><B>Chapter 2</B></H2>



<H2>

<B>What is anti-competitive behaviour?</B></H2>

2.1 Fundamentally, one of Oftel’s key roles is to enforce those conditions

in Telecommunications licences which prohibit behaviour which has, or may

have, a material impact on competition in the relevant market, ie the market

in which the behaviour is taking place.



<P>2.2 Oftel views a fully competitive market as being one in which no

firm is able to act independently (in terms of either pricing or output

decisions) of any other firms competing in that market, or a market in

which an incumbent firm’s behaviour is effectively constrained by the threat

of entry from firms outside the market. In this situation no firm should

be able to raise and sustain its prices above the competitive level or

act in such a way that effected competition by foreclosing market entry

or competition.



<P>2.3 Therefore, Oftel’s assessment of complaints of anti-competitive

behaviour focusses on identifying the relevant market, identifying the

level of competition in that market and then assessing the impact of the

behaviour on competition.



<P>2.4 Oftel’s guidelines on the implementation of the Fair Trading Condition

give an extensive, although not exhaustive, account of the type of behaviour

which may be anti-competitive, such as:

<UL>

<LI>

undue preference/discrimination</LI>



<LI>

predatory pricing</LI>



<LI>

refusal to supply or connect</LI>



<LI>

anti-competitive concerted practices</LI>

</UL>

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<HR>

<H2>

<A NAME="Chapter 3"></A><B>Chapter 3</B></H2>



<H2>

<B>The legal framework</B></H2>

<B>Licences granted under the Telecommunications Act, 1984</B>



<P>3.1 Oftel’s primary instrument of enforcement at present is the Telecommunications

Act and the licences granted under it, particularly the conditions designed

to ensure fair trading.



<P><B><I>Licence conditions</I></B>



<P>3.2 Listed below are those conditions in the licences of public telecoms

operators (PTOs) which Oftel most commonly uses or considers using to ensure

fair trading by licensees. Broadly speaking, these conditions fall into

the following four categories:

<UL>

<LI>

conditions requiring the licensee to provide services to the public - condition

1 (universal service obligation) of BT’s licence;</LI>



<LI>

conditions requiring the licensee to publish the terms and conditions on

which it provides services to the public - condition 16 of BT’s licence;</LI>



<LI>

conditions which directly prohibit anti-competitive behaviour - in particular

condition 17 (prohibiting undue preference/discrimination) of BT’s licence

and the Fair Trading Condition which Oftel has been incorporating into

PTO licences since October 1996 (see below);</LI>



<LI>

conditions giving the Director power to control the anti-competitive effects

of unfair subsidy or cross-subsidy of its businesses - conditions 18, 20B.15

and 20B.18 of BT’s licence.</LI>



<LI>

conditions to prevent an operator reducing margins for the provision of

certain services to a predatory level - condition 24F of BT’s licence.</LI>

</UL>

<B><I>Enforcement action</I></B>



<P>3.3 If following an investigation, Oftel concludes that a licensee is

or has been in contravention of one or more of its licence conditions and

that it is likely to contravene again, the Director General will take forward

enforcement action, such as issuing an order. If it <B>appears</B> to the

Director that the licensee is contravening and is likely again to contravene

he can issue a provisional order requiring the licensee to do such things

as specified or described in the order to secure compliance. A provisional

order will lapse after two months, unless confirmed. If the Director is

<B>satisfied</B> that there has been a contravention and it is likely to

reoccur or continue, he is normally required to issue a final order.



<P>3.4 If a licensee fails to comply with an order and any person suffers

damage as a result, that person is entitled to bring an action for damages

or other appropriate relief against the licensee. The Director General

can also obtain an injunction or other appropriate relief from the courts

to perfect compliance with his order.



<P><B><I>Licence modification</I></B>



<P>3.5 If necessary, licences can be modified either by agreement between

the Director General and the licensee or by the Director General after

referring the matter for investigation by the Monopolies and Mergers Commission

and the Commission finding that the practice in question is against the

public interest. However, most foreseeable types of anti-competitive behaviour

can be controlled by the conditions referred to above.



<P><B>Fair Trading Condition</B>



<P>3.6 The need for licence modifications to tackle anti-competitive behaviour

should recede with the implementation of the fair trading condition into

all PTO licences. Due to the detailed specific nature of licence conditions,

in the past it was often very difficult for the Director General to take

immediate enforcement action because the behaviour complained of does not

come within the precise terms of the licence condition, if it is covered

at all.



<P>3.7 As competition has now emerged and continues to grow, it is vital

that Oftel has the power to take effective and speedy action against anti-competitive

practices while beginning the essential process of withdrawing from prescriptive

rule-making. Therefore a Fair Trading Condition (FTC) prohibiting the making

of anti-competitive agreements and abuse of a dominant position was introduced

into BT’s licence, coming into effect on 31 December 1996. At present,

the FTC has been incorporated into the licences of around 100 operators

and by the end of November 1997 will be in a further 200 licences.



<P>3.8 The FTC closely mirrors the provisions of Articles 85 and 86 of

the European Treaty and puts the onus clearly on dominant operators to

ensure that they do not engage in the types of anti-competitive behaviour

prohibited by the condition. The FTC gives Oftel effective and speedy tools

to use against the full range of anti-competitive practices in whatever

form they appear, without having first to go through the lengthy process

of individual licence amendment.



<P>3.9 The procedures for taking formal action under the FTC differ slightly from 

  those for other licence conditions. Detailed <A href="../../../publications/1995_98/fair_trading/guidelin.htm">guidelines 

  on the operation of the FTC</A> are available on this web site or can be obtained 

  from <A href="../../../about/library.htm">Oftel’s Library</A>. 

<P><B>General Competition Law</B>



<P>3.10 Oftel can also investigate allegations of anti-competitive behaviour

under the Competition Act, 1980 and the Fair Trading Act, 1973 under which

the Director General has powers concurrent with the Director General of

Fair Trading to take action in telecoms related matters. This may be appropriate

in areas where the activity in question is not covered by a licence or

where licence modification is not appropriate. Furthermore, Oftel could

recommend action under the provisions relating to restrictive trade practices

in the Restrictive Trade Practices Act (RPTA), 1976. The RTPA is administered

and enforced by the Director General of Fair Trading and the Restrictive

Trade Practices Court. Action could also be taken under Article 85 (prohibition

of agreements or other arrangements with an anti-competitive effect) or

Article 86 (prohibition of abuses of dominant market positions) of the

EC Treaty. Articles 85 and 86 are enforced by the European Commission but

form part of English law and can therefore also be enforced in civil actions

in the English Courts by private parties suffering damage from their breach.



<P><B>The Competition Bill</B>



<P>3.11 The Competition Bill, introduced into Parliament in October 1997,

proposes major changes in general competition law. Like the FTC, the Competition

Bill introduces two prohibitions based on Articles 85 and 86 of the EC

Treaty; namely a prohibition on the abuse of a dominant position and a

prohibition on anti-competitive agreements. It is proposed that Director

General of Telecommunications will have concurrent powers of enforcement

alongside the Director General of Fair Trading (DGFT).



<P>3.12 The Bill provides for new investigatory powers and would permit

the imposition of fines for breach of the prohibitions. Decisions by the

Director General of Telecommunications (or the DGFT) would be appealable

to a new Competition Commission Appeals Tribunal. Unlike Judicial Review,

appeals will be on the substance of the case and not just process.



<P>3.13 The Bill also provides for the DGFT and regulators to publish guidelines

on the interpretation of the prohibitions. Oftel will be working closely

with the Office of Fair Trading and other regulators in the coming months

on the development of these guidelines.



<P>3.14 The Bill is expected to finish its progression through Parliament

around summer 1998, but there is likely to be a transitional period of

at least one year before prohibitions come into force.



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<HR>

<H2>

<A NAME="Chapter 4"></A><B>Chapter 4</B></H2>



<H2>

<B>Oftel’s approach to competition casework</B></H2>

<B>Adapting to changing needs</B>



<P>4.1 The rapid growth of the telecoms industry in the UK in the 1990s

in terms of both the number of products available and the number of players

involved in network and service provision, has had two main consequences

for Oftel in the type of complaints received:

<UL>

<LI>

there are more complaints and representations made from a greater number

of complainants from large network operators to service providers; and</LI>



<LI>

a greater diversity and complexity of topics are generating concerns, ranging

from interconnection to digital broadcasting issues;</LI>

</UL>

4.2 This has required Oftel to:

<UL>

<LI>

apply additional and more focussed resources to this work;</LI>



<LI>

undertake more, and more extensive, investigations; and</LI>



<LI>

progressively to develop general principles, precedents and policies which,

over time, will build up an established framework within which individual

cases are considered.</LI>

</UL>

4.3 At present, 19 members of staff across Oftel have as the main focus

of their work the investigation of complaints of anti-competitive behaviour.

They are supported by expert advice from internal lawyers, accountants,

economists, statisticians and technical experts. Weekly panel meetings

with representatives from all the expert branches assess all new complaints

to identify the potential competition issues and evaluate what further

information may be needed. The panel meetings also revisit/reassess investigations

phase cases shortly before they reach the 3 and 6 months stage to assess

case progress.



<P><B>The two-phase approach to investigations</B>



<P>4.4 Upon receipt of a complaint (unless it is clearly without merit),

Oftel will assign a case officer to consider the case. The case officer

will acknowledge receipt of the complaint within 5 working days. In order

to assess complaints of anti-competitive behaviour Oftel adopts a two stage

approach.



<P><B><I>Preliminary Enquiry phase</I></B>



<P>4.5 During the Preliminary Enquiry phase, initial consideration is given

to determine whether there is a case to answer and whether to proceed to

an investigation. Oftel will ascertain whether it has the jurisdiction

to consider the complaint under the existing legal framework and take a

view on whether there may have been any anti-competitive practice, abuse

of monopoly power or other breach of the operators licence.



<P>4.6 At the end of the preliminary enquiry phase, it is Oftel’s aim to

understand:

<UL>

<LI>

what the complaint is really about, and, in particular, what impact the

behaviour complained about may have on competitors and consumers in the

relevant market;</LI>



<LI>

the importance of the complaint, both to the complainant, consumers and

the industry as a whole;</LI>



<LI>

what further information needs to be acquired and from whom;</LI>



<LI>

what enforcement powers would be available to stop the behaviour.</LI>

</UL>

4.7 This process may involve exchanges of correspondence or meetings with

the complainant and/or the target of the complaint and/or other interested

or potentially interested parties as well as reference to precedents in

previous investigations.



<P>4.8 Once the necessary information has been gathered, Oftel will be

in a position to decide whether or not to take forward the complaint as

a full investigation. Once, this go/no go decision has been taken, the

complainant will be updated.



<P>4.9 Oftel’s target is to complete this phase within 30 working days

of receiving a complaint. However, if the initial evidence presented to

Oftel clearly indicates a potential licence breach, a decision to proceed

may be taken almost immediately.



<P><B><I>Investigation phase</I></B>



<P>4.10 During the investigation phase, Oftel will use the information

gathered in the preliminary enquiry phase and, if necessary, collect and

consider the further information to form a judgement on whether the conduct

complained about is having a damaging effect on competition in the relevant

market.



<P>4.11 To make a sound judgement, Oftel needs to answer the following

questions:

<UL>

<LI>

what is the relevant market (see below)?</LI>



<LI>

what is the competitive situation in that market (ie is the target of the

complaint able to act independently of other players)?</LI>



<LI>

what are the practical effects of the conduct complained about?</LI>



<LI>

what remedies would be appropriate if the complaint is substantiated?</LI>

</UL>

4.12 Requests for information will not only be directed at the licensee

which is the subject of the complaint. Oftel may also seek information

from the complainant, other market players, customers and research sources.



<P>4.13 Once Oftel has answered these questions, it would usually be in

a position to make a provisional judgement on the merits of the complaint

whether any enforcement action should be taken or whether the complaint

should be rejected. Comments would usually be sought from the licensee

who is the subject of the complaint, and potentially, the complainant and

other interested parties. Oftel will then make and implement its final

decision, including formal action, if appropriate.



<P>4.14 Oftel’s target is to complete 75% of investigations within 3 months

of the date they were moved to that phase and all investigations within

6 months. These targets are maxima and the Director General has issued

a provisional order less than a week after a complaint was received. However,

some cases, particularly those involving allegations of cross-subsidy,

may take longer than 6 months, as financial information needs to be gathered

and assessed. In all circumstances, the case officer will keep the complainant

informed of the progress of the complaint at regular intervals.



<P><B>Defining the relevant market</B>



<P>4.15 The approach that Oftel has proposed to adopt in respect of market

definition in the enforcement of all licence conditions follows that approved

by the European Court of Justice in the application of Articles 85 and

86 of the EC Treaty. Oftel will also have regard to decisions and notices

of the European Commission and relevant pronouncements of the Office of

Fair Trading and the Monopolies and Mergers Commission.



<P>4.16 A starting point is whether goods or services are considered substitutable

by consumers having regard to their characteristics, price or intended

use. The approach to market definition taken by these organisations therefore

focuses on the existence of constraints on the price-setting behaviour

of firms in the absence of price control. There are three main aspects

to consider:

<UL>

<LI>

demand-side substitutes for the product complained about - ie how far it

is possible for customers to substitute other services or products for

those in question;</LI>



<LI>

supply-side substitution/barriers to entry - ie how easily suppliers not

presently providing the products and services in question can readily do

so; and</LI>



<LI>

the geographical scope of the market.</LI>

</UL>

<B>Monitoring and Compliance</B>



<P>4.17 In certain investigations, the behaviour complained of has no clear impact 

  on competition in the relevant market at that time, but there is a concern that 

  it may have an effect in the future. In this case, Oftel closes the investigation, 

  but commits to monitoring the relevant market or licensee at regular intervals. 

  The recent investigations into some of BT’s Internet services resulted in such 

  a decision (a <A HREF="../fair_trading/net1197.htm">statement 

  on these investigations is available on this web site</A> or from <A HREF="../../../about/library.htm">Oftel’s 

  library</A>). 

<P>4.18 Furthermore, where the Director General has taken formal action

against a licensee, Oftel will monitor the licensee’s compliance with the

requirements of the enforcement action and/or until it is satisfied that

the problem has ceased.



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<HR>

<H2>

<A NAME="Chapter 5"></A><B>Chapter 5</B></H2>



<H2>

<B>Sources of information and advice</B></H2>

<A HREF="../../index.htm#Fair trading">Competition Bulletin</A> 

<P>5.1 Since June 1996, Oftel has published a quarterly <I><A HREF="../../index.htm#Fair trading">Competition 

  Bulletin</A></I> (or from <A HREF="../../../about/library.htm">Oftel’s library</A>). 

  The bulletin provides summaries of all new complaints and of all cases closed 

  in the previous three months. 

<P>5.2 The aims of the <I><A HREF="../../index.htm#Fair trading">Competition 

  Bulletin</A></I> are: 

<P>to make more visible the focus of Oftel’s work in relation to competition

policy and complaint casework, and provide a record of its results;



<P>to establish improved routes for communication with all players in the

industry so that Oftel can take full account of current developments in

the market; and



<P>to invite, where appropriate, broader input to, and comment on, reviews

and investigations that Oftel undertakes and any enforcement measures that

are proposed.



<P>5.3 Over time <I><A HREF="../../index.htm#Fair trading">Competition 

  Bulletin</A></I> should help the industry to understand better the analytical 

  background to Oftel’s work and thus the approach likely to be adopted in particular 

  problem situations. This should help equip the industry to operate within well 

  understood parameters of fair and effective competition without excessive reliance 

  on regulatory intervention. 

<P><B><A HREF="../../publications/ind_guidelines/guidelin.htm">Guidelines</A></B> 

<P>5.4 Over the last year Oftel has produced a number of guidelines both

in relation to specific telecommunications licences and associated licence

conditions (eg Fair Trading Condition, Conditional Access class licence)

and more general issues (eg affinity deals, trials of new services). They

provide information not only on Oftel’s procedures but also on how specific

competition issues are dealt with.



<P>5.5 The purpose of these guidelines is to ensure that the industry and

others have a proper understanding of Oftel’s approach to competition issues,

thus helping to promote fair, efficient and sustainable competition and

to secure fair trading.



<P>5.6 Existing guidelines relate to:

<UL>

  <LI> <A HREF="../../publications/1995_98/fair_trading/guidelin.htm">the Fair Trading 

    Condition</A>;</LI>



  <LI> <A HREF="../../../ind_info/broadcasting/conacc.htm">Conditional Access</A>;</LI>



  <LI> <A HREF="../../1995_98/licensing/iflguid.htm">International Facilities 

    Licences</A>;</LI>



  <LI> <A HREF="../../publications/1995_98/mergers/affinity.htm">Affinity Deals</A>;</LI>



  <LI> <A HREF="../../publications/1995_98/pricing/ncc1097.htm">the Network Charge 

    Controls</A>.</LI>

</UL>

<B>Competition Hotline</B>



<P>5.7 Oftel’s Competition Hotline (0171 634 8833) is available from 9am

to 5pm, Monday to Friday and provides a direct line to a member of the

Competition and Fair Tradingbranch and is designed to provide advice to

potential complainants.



<P><B>Competition surgeries</B>



<P>5.8 Every last Wednesday in the month a senior member of Oftel’s Competition

and Fair Trading branch will be available in person or on the Competition

Hotline for consultation on competition issues. The surgeries aim to give

potential complainants guidance on the approach to be taken by casework

officers in dealing with complaints and details of the type of information

needed by Oftel to pursue a particular issue.



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<HR>

<H2>

<A NAME="Chapter 6"></A><B>Chapter 6</B></H2>



<H2>

<B>Helping us to help you</B></H2>

6.1 The purpose of this document has been to increase the transparency of Oftel’s 

operations in relation to dealing with complaints of anti-competitive behaviour. 

We hope that by doing this and by referring to the suite of guidelines and to 

the precedents summarised in <I><A HREF="../../publications/index.htm#Fair trading">Competition 

Bulletin</A></I> complainants will be aware of both the type of behaviour we are 

able to take action against and the type of information we would need to acquire 

during the course of an investigation. 

<P>6.2 It is not Oftel’s intention to place the burden of proof on the

complainant. However, in Oftel’s experience of casework, the complainant’s

supply of all available information and ongoing support can be crucial

to the expeditious pursuit of a complaint by enabling Oftel to make well-informed

initial decisions as to what the focus of the investigation should be.



<P><B>Basic information required</B>



<P>6.3 The very least a complaint should contain is:

<UL>

<LI>

name, address , phone and fax number of contact;</LI>



<LI>

confirmation whether the complainant’s name can be disclosed to the target

of the complaint - complainants often prefer to remain anonymous, but it

is helpful to Oftel if it can quote the name of the complainant in seeking

information from the licensee who is the subject of the complaint or detail

the circumstances of the complaint. This will often enable that company

more quickly to understand the nature of the complaint and respond appropriately;</LI>



  <LI> confirmation whether Oftel can disclose the complainant’s name in <I><A HREF="../../index.htm#Fair trading">Competition 

    Bulletin</A></I>;</LI>



<LI>

a summary of the complaint; and</LI>



<LI>

urgency of complaint, with reasons.</LI>

</UL>

6.4 However, set out below is a list of questions which Oftel would usually

have to answer during the course of an investigation. If potential complainants

at least consider, and ideally answer, all or some of these questions before

making a complaint, it would help to speed up the process of investigation.



<P><B>Questions relating to market definition:</B>



<P>What do you consider to be the relevant market? How does this market

operate? Do any other market definitions suggest themselves?



<P>What function does the product fulfill?



<P>Who are the target customers for the relevant products? What features

are important to the customer? - marketing brochures or leaflets would

be a useful source of information in this respect.



<P>Are there any close substitutes to the product in question - how would

customers react if the product went up in price ie what other products

could they switch to?



<P>Would there be costs involved in switching to alternative products eg

is equipment dedicated? Is there any evidence of customers switching between

products?



<P>Does the product share a common technology or common network facilities

with any other products?



<P>Are there any firms which are in a position to switch existing capacity

to supply this product? Would it be feasible for them to do this?



<P>What is the relevant geographical scope of the market for the supply

of this product eg regional, national (ie UK) or even international?



<P><B>Questions relating to the level of competition in the relevant market</B>



<P>What are the (approximate) relevant turnover of the parties in the complaint?

Annual reports would be an obvious source of information.



<P>What is the approximate total size of the market - in value and volume

terms (if relevant - it may be a completely new service)?



<P>Which other firms compete in this market? What are their market shares?

How have these moved over the last 3-5 years?



<P>How do firms compete in this market? eg on price, on quality/service.

How is competition organised - eg are there formal tendering processes?

Do customers have a degree of buyer power?



<P>How do the prices charged by different companies differ? What do we

know about the price history of this market eg are prices on a downward

or upward trend?



<P>Are economies of scale or scope important in this market?



<P>Are there any significant first mover advantages in this market?



<P>Are there any significant barriers to entry into this market - ie what

problems might a new entrant face eg are there large fixed costs which

must be incurred; are any key elements/processes protected by intellectual

property rights (eg patents, licences)?



<P>Have any new firms entered in the last 3-5 years? Have any exited?



<P><B>Questions relating to the effect on competition of the behaviour

complained about</B>



<P>What is the effect on the business of the complainant? eg loss of market

share, loss of revenues.



<P>What is the effect on customers?



<P><B>Questions relating to possible remedies</B>



<P>What licence conditions may have been breached, or what other legal

provisions are relevant?



<P>What remedial action is sought? - the complainant will often be better

placed than Oftel to know what changes would deal with the matter of concern;



<P>Have there been previous cases of the same or similar type?



<P>6.5 Complainants should also consider sending supporting evidence, such

as contracts, offending letters, etc. These should be marked confidential

if necessary.



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<HR>

<H2>

<A NAME="Annex A"></A><B>Annex A</B></H2>



<H2>

<B>Complainant Check List</B></H2>

1. Name, address, telephone and fax numbers of contact.



<P>2. Name of company against whom the complaint is made, including, if

appropriate, the relevant part or business of that company.



<P>3. Permission to disclose complainant’s name and full details of complaint

to the target of the complaint.



<P>4. Permission to disclose complainant’s name in <I><A HREF="../../index.htm#Fair trading">Competition 

  Bulletin</A></I>. 

<P>5. Summary of complaint.



<P>6. Urgency of complaint, with reasons.



<P>7. Consider and, if possible answer questions relating to the definition

of the relevant market;

<UL>

<LI>

questions relating to the level of competition in the relevant market;</LI>



<LI>

questions relating to the effect on competition of the behaviour complained

about;</LI>



<LI>

questions relating to possible remedies.</LI>

</UL>

6. Enclose any evidence supporting the above.



<P>7. Mark all information that is to remain confidential.



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<HR>

<H2>

<A NAME="Annex B"></A><B>Annex B</B></H2>



<H2>

<B>Key contacts within Oftel</B></H2>

<B>Please send all correspondence to:</B>



<P>Oftel



<P>50 Ludgate Hill



<P>London



<P>EC4M 7JJ



<P><B>In the first instance, complaints should be addressed to:</B>&nbsp;

<TABLE BORDER CELLPADDING=5 WIDTH="100%" >

<TR>

<TD WIDTH="50%"><I><FONT SIZE=-1>for competition, licence enforcement and

fair trading issues:</FONT></I></TD>



<TD WIDTH="50%"><FONT SIZE=-1><I>for competition policy and pricing issues:</I>&nbsp;</FONT></TD>

</TR>



<TR>

<TD><FONT SIZE=-1>Andreas Avgousti,&nbsp;</FONT>



<P><FONT SIZE=-1>Deputy Director</FONT>&nbsp;



<P><FONT SIZE=-1>0171 634 8825</FONT></TD>



<TD><FONT SIZE=-1>William Lea,&nbsp;</FONT>



<P><FONT SIZE=-1>Manager, Competition Policy Group</FONT>&nbsp;



<P><FONT SIZE=-1>0171 634 8983</FONT></TD>

</TR>



<TR>

<TD COLSPAN="2"><FONT SIZE=-1><B>Competition Hotline:</B> 0171 634 8833</FONT></TD>

</TR>



<TR>

<TD COLSPAN="2"><FONT SIZE=-1><B>Fax number:</B> 0171 634 8949</FONT></TD>

</TR>



<TR>

<TD COLSPAN="2"><FONT SIZE=-1><B>e-mail:</B> <A HREF="mailto:fairtrade.oftel@gtnet.gov.uk">fairtrade.oftel@gtnet.gov.uk</A>&nbsp;</FONT></TD>

</TR>

</TABLE>

&nbsp;<B>Questions or comments on <I>Competition Bulletin</I> should be

addressed to:</B>



<P>Philip Taylor



<P>Competition Casework Team Leader



<P>0171 634 8829



<P><B>Questions or comments on guidelines should be addressed to:</B>



<P>William Lea



<P>Manager, Competition Policy Group



<P>0171 634 8983&nbsp;

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<H3>

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