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| Oftel'S Management Plan for 1996/97 and Beyond (May 1996) | |
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CHAPTER 4: PROMOTING NETWORK COMPETITION INTRODUCTION This chapter sets out the work Oftel is undertaking to promote fair, efficient and sustainable network competition. This chapter is about Oftel's most important work. Oftel remains strongly committed to the development and maintenance of competition from and between network operators (infrastructure competition). Competition from service providers and between service providers and network operators can provide additional choice for consumers and is therefore to be welcomed. Network services are, however, a crucial element in delivering Oftel's goal. Without network competition, there is a risk of consumers being disadvantaged by any inefficient and/or expensive provision of network services which are an essential input to any services provided over networks. A key plank in the development of network competition is to promote competition in the access network (operators who own the line from the customer to the exchange). Cable operators are rapidly building out their networks and offering direct competition to BT, particularly for residential customers. Radio based operators, eg Ionica, will be starting to offer service in 1996. To promote network competition Oftel has sought to remove barriers to entry to the market which derive from BT's position as a monopoly supplier prior to 1984. In particular Oftel has worked to develop fair arrangements and charges for the interconnection of competitors' networks with BT's. A key part of this work has involved the introduction of a system of accounting separation for BT's different regulatory businesses involving the production of audited regulatory accounts. There is now an agreed list of standard interconnection services which BT must offer to other operators and Oftel determines the charges for these services. (Interim charges are set for the financial year ahead on the basis of forecasts and the Final Charge determined when regulatory accounts for the year in question are available). PRIORITY PROJECTS
Project objective: To promote liberalisation, competition and transparency in international telecommunications. Fit with Oftel's objectives: This project aims to promote network competition and provide a better deal to the customer through competitive choice and value for money. Participate in ECTRA Ongoing Issue the determination on IDD Interconnection Charges taking into account move towards full international liberalisation. May 96 Participate in DTI review of the liberalisation of the international licensing regime July 96 Review of accounting rate regime end July 96 Following the publication in 1995 of International Accounting Rates for OECD countries, publish for all international accounting rates. December 96
Project objectives: To ensure that tranches of suitable spectrum are available to accommodate requirements arising from growth in the telecommunications industry. To ensure that spectrum allocations are made in an efficient manner and are consistent with overall telecommunications policy. To influence, on a continuing basis, the Radiocommunications Agency and DTI policies in this area. Fit with Oftel's objectives: It is important to ensure that availability of spectrum does not present an unreasonable constraint to entry into the telecommunications market and to ensure that sufficient spectrum of the appropriate frequencies is made available in a timely manner to accommodate technological developments in telecommunications, particularly telephony, and to meet international telecommunications requirements. Oftel input into work on spectrum pricing. April 96 Use of radio for local access (award of licences for the provision of radio access services at 2 and 10 Ghz) - Oftel involvement in the drawing up of licences April to June 96 - Oftel input into guidelines and licensing process for DECT involving EU Member States from July 96 - Oftel input into the development of policy on the use of local access techniques such as CT2 and PCS. Ongoing Future use of 50 MHZ of "frozen" PCN Spectrum - Oftel input into DTI decisions on the allocation of this spectrum. Date set by DTI Band 3 and Mobile Data - to provide advice to DTI on allocations made from time to time of further spectrum for Band 3 and mobile data. As required Identify by direct consultation what telecommunications operators (both fixed and mobile) want from the radio spectrum, and the relative importance they attach to allocations in particular bands. July 96
Project objective: To review policy for telecommunications numbering and the administration of the National Numbering Scheme, in full consultation with interested parties, in order to ensure that number allocations support fair and effective competition and that customers derive maximum benefit. Fit with Oftel's objectives: This project supports Oftel's objectives of promoting network and services competition, securing fair trading and protecting consumer interests. In the light of the 95/96 Numbering Demand Study, identify the main options to ensure the Numbering Scheme meets future numbering needs. April 96 Refine and evaluate the options taking into account: the future demand for numbers, number portability, number mobility, fixed and mobile convergence, multi-media developments, advances in telecommunications networks, developing services competition, and the information customers need in numbers. April-June 96 Publish a consultative document which describes and evaluates the options and recommends a future numbering strategy. July 96 Publish statement on conclusions, future numbering policy, and outline of changes to be made to the Numbering Scheme December 96 Draw up detailed implementation plans and schedule January 97
Project objective: To agree and implement number portability. Fit with Oftel's objectives: This project is a major component in securing fair, efficient and sustainable network competition by overcoming one of the main barriers to customers changing operators. Geographic number portability Further consultation on BT licence modifications April 96 Informal consultation on modifications to major OLO licences May 96 Discuss with DTI the inclusion of a revised condition in new licences May 96 Modification to BT's licence. Finalise Functional Specification. Make initial determinations under BT's licence May 96 Formal consultation on modifications to major OLOs' licences May 96 Complete modifications to major OLOs' licences June 96 If necessary reissue Functional Specification September 96 Non-geographic number portability (including 0800) Input into numbering policy consultative document May/June 96 NICC to complete necessary technical work on interim and long-term method of implementing non-geographic portability July 96 Review which non-geographic numbers to include in the Functional Specification. Consult on proposed extension By September 96 Finalise Functional Specification taking into account any relevant conclusions from the numbering policy review November 96 Determinations November/December 96 Operators begin offering non-geographic number portability using interim solution March 97 Mobile portability (a) Between service providers Negotiate amendments with network operators requiring their standard Service Provider Agreements to require inter-service provider portability April 96 Draft and informally consult on a licence modification to support this change May 96 Formal consultation on licence modification as part of numbering policy consultation document July 96 Complete modifications October 96 (b) Between network operators Input into numbering policy consultation May/June 96 Review responses on paper circulated to industry July 96 (circulated March 96) If required mandate NICC to look at technical issues Draft and consult on Functional Specification August 96 NICC complete work October 96 Draw on conclusions from numbering policy study to finalise policy on mobile portability, and if necessary issue licence modifications for formal consultation October 96 Make determinations if requested January 97 'Full' portability and converged services Feed into public consultation on numbering options July 96 Take decision on 'full' portability and convergence issues as part of numbering policy decisions October 96 Mandate NICC to consider 'full' portability technical issues October 96 Oftel announcement December 96
Project objective: To clarify the regulatory framework for decisions on what interconnect services PTOs should be required to offer, identifying any appropriate differences according to the market power of the operator. Fit with Oftel's objectives: Direct relevance to the promotion of network competition. This project will also clarify the different treatment of basic network services and enhanced service provision, so it will also assist Oftel's objective of promoting services competition. Focus Group Initial framework of interconnection requirements for when new retail service is introduced. April/May 96 Discussion with the industry in Interconnection Policy Forum May/June 96 Consideration of guidelines/licence amendments September 96 Consideration of obligations on access to new technology in networks Discussion paper for Interconnection Policy Forum June/July 96 Statement on general approach to interconnection of new services June/July 96 PROJECTS
Project objective: To fulfill the functions placed on the Director General under BT's and other operators' licences in dealing with requests for determinations on interconnection issues, in particular to determine charges for standard interconnection services. Fit with Oftel's objectives: Central to the furtherance of network competition. The annual determination of charges, and the re-determination are necessary to ensure that operators pay interconnection charges which are fairly derived from underlying costs of components. Determination of interim charges for 96/97 Draft published for consultation Early May 96 Final June 96 Determination of final charges for 95/96 Draft published for consultation September 96 Final December 96 Determination of interim charges for 97/98 Draft published for consultation End March 97 Other major determinations - IPLCs Final May/June 96 - IDD, pre April 1995 Final May 96 - Mercury International waiver Final May 96 - Mercury National waiver Final May 96 - ADC waivers (final round) Draft April 96 Final June 96 Overview report pulling together policy issues arising from determinations work December 96
Project objective: To ensure the timely delivery of advice to Oftel on significant technical issues related to policy developments, and stimulate continuous improvement in the effectiveness of the NICC. Technical issues to be addressed include the further development of interconnect signalling standards, methods for achieving geographic and non-geographic number portability and definition of interfaces for service providers. Other aspects include the establishment of a Service Providers Interest Group and a technical advisory body to advise the Director General and provide strategic input for the NICC's activities. Fit with Oftel's objectives: Consistent with Oftel's objectives of promoting fair, efficient and sustainable competition, by defining UK C7 (IUP) signalling independently of BT Network Requirements, developing intelligent network and database solutions for number portability, advising on interfaces for the service provider and resale industry; and by refining current provision of calling line identity. Service Providers Interest Group established May 96 Remaining UK Interconnect signalling standards (C7) June 96 Agree deliverables for NICC (and monitor on 3 monthly cycle) July 96 Recommendations for non-geographic number portability July 96 Specifications for interfaces for 'no-ring' calls timing to be agreed Specifications for interfaces CLI timing to be agreed
Project objectives: The accounting separation framework is Oftel's key regulatory tool for ensuring that interconnection charges are fairly derived from underlying costs and that allegations of unfair trading can be pursued. The project aims to ensure that the framework, introduced only in 1995, is operating effectively to provide Oftel with the regulatory information it needs. The project is also addressing how the framework should be adapted to meet the requirements of the new interconnection charging regime coming out of the price control review. It is also considering more broadly how far BT's financial information systems provide Oftel with the range and depth of information needed for regulatory purposes. Fit with Oftel's objectives: This work is crucial to furthering the objective of network competition by enabling Oftel to be satisfied that interconnection and other charges are properly and transparently derived from underlying costs. The project also provides the essential underpinning required for Oftel to be able to meet its fair trading objective. Revision of Financial Statements - calls to mobile April/ May 96 - treatment of call/rental packages June 96 - review of matrix of components and parts April/May 96 - implications of the abolition of ADCs April/May 96 - review and follow up each set Statements August 96 and February 97 Detailed Attribution Methodologies - pilot investigation of single tandem, DLE cost allocations May 96 - plan approach for rest of work May 96 - set up regular meetings with BT and OLOs to take forward May-September 96 BT's Financial Information Systems - Review with BT of current system and developments planned April-June 96 - Stock-taking assessment July 96 New Interconnection System - link with price control review on new interconnection system. Tease out impact on accounting separation, reporting requirements, DAM etc. Need for licence modifications April/July 96 - put in place detail needed to meet requirements of new interconnection system Autumn 96 - review adequacy and scope of present CCA Financial Statements Summer/Autumn 96 - identify further information requirements for investigations of unfair trading Summer/Autumn 96 Implications of policy decisions on service providers - assess any changes needed to accounting separation framework to implement policy decisions on Service Providers and SB/SSB split April/July 96
Project objective: To investigate the methodology to set interconnection charges on a basis other than the current regime of pence per minute with time of day charges tied to BT's retail tariff gradient. In particular, to examine the practicalities of a capacity based charging regime for interconnection. Fit with Oftel's objectives: This work explores the practicalities of an alternative interconnection charging regime that could contribute to the objectives of promoting fair, efficient and sustainable competition in networks and services. Through discussions with PTOs, to identify issues relevant to the implementation of capacity based charging, and to set out the further work required to resolve outstanding issues. This project is dependent upon the industry's interest in pursuing capacity based charging. August 96
Project objective: To ensure that Mercury's licence is appropriate to Mercury's market position. Fit with Oftel objectives: This supports Oftel's objectives of promoting fair, efficient and sustainable competition in networks and services by removing the current requirement on Mercury to publish its tariffs 28 days in advance and bringing Mercury's licence closer (possibly fully) into line with other non-dominant PTO slimline licences. This also fits with Oftel's intention of reducing detailed prescriptive regulation where possible. Finalise arrangements for statutory consultation on Stage 1 of this project which will enable Mercury to publish its tariffs on an effective day basis and allow Oftel to delete certain obsolete conditions. April 96 Statutory consultation on Stage 1 May 96 Review responses to consultation June 96 Agree Oftel policy on Stage 2 of the project which will bring Mercury's licence closer (possibly fully) into line with other non-dominant PTO slimline licences August 96 Statutory consultation on Stage 2 (timescale dependent on the Ensuring fair trading project and the Liberalisation of international telecommunications project).
Project objective: To agree with Kingston Communications Ltd (KCL) the amendments which need to be made to its licence, to ensure it is consistent with other telecommunications licences. Fit with Oftel's objectives: This supports Oftel's goal of ensuring that the customer receives choice, quality and value for money. Kingston enjoys a dominant position in the Hull area but does not have all the licence conditions introduced into BT's licence following the end of the domestic duopoly in 1991. Neither do customers in Kingston have the range of choice available elsewhere in the UK. Write to Kingston with initial proposals August 96 Meet with Kingston September 96 Firm proposals to Kingston February 97 SERVICES AND FUNCTIONS Interconnection Policy Forum Oftel co-ordinates regular meetings (six weekly) of an industry/Oftel working group - the Interconnection Policy Forum (IPF) - which considers current interconnection issues. This provides a very valuable way of allowing Oftel to explain emerging thinking and take the industry's views. The Forum has agreed to set up special Focus Groups to deal with particular issues in depth and then report back. A Focus Group has been established to look at the terms on which retail services involving interoperability between networks should be interconnectable. This should report back in the Spring. Focus Groups have also been established to consider ETSI signalling and use of International ISDN Prefix and Rerouting. Advice on the granting of licences Oftel has the function of advising on Telecommunications Act licensing generally. The Secretary of State is required by the Act to consult the Director General before granting telecommunications licences and the Director General discharges that role in respect of the granting of and conditions to be attached to PTO and major non-PTO individual licences, including those for International Simple Resale and those based upon the class licences. Oftel provides advice to DTI and to the public, on questions concerning licensing, licence conditions etc, and, especially, the interpretation of the two main class licences under which most private networks are run, the TSL and the SPL. Cable and satellite issues Oftel undertakes ongoing work in relation to broadband cable, individual SMATV and individual satellite licences, for example, monitoring compliance with build obligations and taking necessary action where obligations are not met; issuing determinations requiring licensees to provide public emergency call services and regulating the supply by licensees of customer apparatus. In addition, Oftel provides advice to the ITC on the award of Local Delivery franchises and processing applications for satellite master antenna television (SMATV) systems. Regulation of private networks and telecommunications standards Oftel undertakes activities on the regulation of private networks and telecommunications standards. It administers the schemes for terminal apparatus approvals, registered installers and designated maintainers. Activities include issuing Site Specific Approvals, General Approvals, and General Variations to enable equipment to be connected where there is no alternative approval route. In this domain Oftel liaises with other interested parties- DTI, British Approvals Board for Telecommunications (BABT) and British Standards Institute (BSI) and participates in UK and European fora such as European Telecommunications Standards Institute (ETSI), Approval Committee for Terminal Equipment (ACTE) and Telecommunications Regulations Applications Committee (TRAC). Oftel also participates in European and other voluntary standards making activities, in particular ETSI and the Digital Audio Visual Council (DAVIC) in order to promote consistency with regulatory policy. Numbering administration The Numbering Unit in Oftel is responsible for allocating codes and blocks of numbers to licensed operators in accordance with agreed policy as set out in the 'Numbering Conventions'; for monitoring number and utilisation allocations; for auditing the efficiency of number utilisation; and for producing regular briefing information on the numbering scheme and number allocation for the industry and others with an interest. Go to Chapter 5 | Return to this Document's Table of Contents |
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