Modern Modern Electronic Early
Digital Digital Exchange Digital
Exchange Exchange TXE4(1) Exchange
System X System Y (to be replaced UXD5
(AXE10) by end of 1997)
Number of customers served 17.3m 5.4m 4.0m 0.12m
% of Total 64 20 15 0.6
Itemised Billing Y Y Y Y
Outgoing Calls Barred Y Y Y(2) Y
Charge Advice Y Y N N
PRS Barring Y Y Y Y
Selective Barring Y Y N Y(3)
Call Waiting Y Y N Y
Call Diversion Y Y N Y(4)
Three Way Calling Y Y N Y
Caller Display Y Y N N
Call Return Y Y N N
Call Minder Y Y N N
Reminder Call Y Y N N
ISDN Y(5) Y(5) N N
(1) Customers on a TXE4 exchange can generally be connected to a co-located System X or Y exchange without a change of number. This gives them access to the facilities of System X and Y.
(2) Not as flexible as for Systems X and Y.
(3) Only to other lines on the same exchange unit.
(4) Call barring on some TXE4s blocks calls to 999/operator, which digital exchanges permit.
(5) 93% of business customers and 95% of residential customers on modern digital
exchanges can have ISDN. ISDN not delivered in remote rural areas where minimal demand exists. This can be a function of both exchange type and local line length.
Total Disconnections Net Disconnections
1994
July 62,182 26,888
August 66,341 26,918
September 64,257 23,608
October 65,305 26,928
November 65,080 25,619
December 38,466 20,830
1995
January 84,974 20,253
February 62,281 28,832
March 61,674 26,556
April 50,850 22,573
May 72,760 15,744
June 70,786 32,121
July 66,525 30,107
August 71,939 29,559
September 68,581 30,933
*Net disconnections exclude those customers who are subsequently reconnected following payment of their outstanding bill.
Article 4C
"Without prejudice to the harmonisation by the European Parliament and the Council in the framework of ONP, any national scheme which is necessary to share the net cost of the provision of universal service obligations entrusted to the telecommunications organisations, with other organisations providing telecommunications networks and/or services, whether it consists of a system of supplementary charges or a universal service fund, shall
(a) only apply to undertakings providing voice telephony or public telecommunications networks;
(b) allocate the respective burden to each undertaking according to objective and nondiscriminatory criteria and in accordance with the principle of proportionality;
(c) contain incentives for providing universal service as efficiently as possible, and, in particular, allow any undertaking covered to propose to fulfil itself the relevant universal service obligation for a compensation equal at or below the cost claimed by the incumbent telecommunications organisation;
(d) provide for an efficient procedure for appeal to settle disputes as to the amount to be paid by operators, without prejudice to other remedies available under the applicable national law or under Community law.
Member States shall communicate any such scheme to the Commission so that it can verify the scheme's compatibility with the Treaty.
Member States shall allow their telecommunications organisations to rebalance tariffs and, in particular, to adapt rates which are not in line with costs and which increase the burden of universal service provision.
The Commission shall review by 1 January 2003 at the latest the situation in the Member States where the financing scheme consists in a system of supplementary charges to be paid in addition to the connection charges for interconnection at specified points of the public switched telecommunications network and assess in particular whether such schemes do not limit access to the relevant markets In this case, the Commission will examine whether there are other methods and make any appropriate proposals."
EC DRAFT INTERCONNECTION DIRECTIVE
Article 5
Interconnection and Universal Service contributions
1 Where a Member State determines, according to the provisions of this Article, that universal service obligations represent a unfair burden for an organisation, it may establish mechanisms for sharing the net cost of the universal service obligations with other organisations operating public telecommunications networks. Member States shall take due account of the principles of transparency, nondiscrimination and proportionality in setting the contributions to be made. Only the public telecommunications networks and public telecommunications services identified in Annex I, part 1, may be financed in this way.
2 Contributions to the cost of universal service obligations may be based on a mechanism specifically established for the purpose and administered by a body independent of the beneficiaries, or may take the form of a supplementary charge added to the interconnection charge.
3 In order to determine the burden which the provision of universal service represents, organisations with universal service obligations shall, at the request of their national regulatory authority, calculate the net cost of such obligations in accordance with the procedure in Annex III. The calculation of the net cost of universal service obligations shall be audited by a competent body, independent of the telecommunications organisation, and approved by the national regulatory authority. The cost calculation and the results of the audit shall be open to public inspection in accordance with the procedure in Article 14(2).
4 Where justified on the basis of this net cost calculation, and taking into account the market benefit which accrues to an organisation that offers universal service, national regulatory authorities shall determine whether a mechanism for sharing the net cost of universal service obligations is justified.
5 Where such mechanisms are established, national regulatory authorities shall ensure that the principles for cost sharing, and details of the mechanism used, are open to public inspection in accordance with Article 14(2).
National regulatory authorities shall ensure that an annual report is published giving the calculated cost of universal service obligations, and identifying the contributions made by all the parties involved.
6 Until such time as the procedure described in paragraphs 3 to 5 is implemented, any charges payable by an interconnected party which include or serve as a contribution to the cost of universal service obligations, shall be notified, prior to their introduction, to the national regulatory authority and the Commission. Where the national regulatory authority or the Commission finds that such charges are excessive, the organisation concerned shall be required to reduce the relevant charges. Such reductions shall be applied retrospectively, from the date of introduction of the charges.
7 Where appropriate, the Commission may, in consultation with the ONP Committee, acting in accordance with the procedure in Article 15, draw up guidelines on the costing and financing of universal service.
EC DRAFT INTERCONNECTION DIRECTIVE
ANNEX III
CALCULATING THE COST OF UNIVERSAL SERVICE OBLIGATIONS FOR VOICE TELEPHONY
ARTICLE 5(3)
Universal service obligations refer to those obligations placed upon an organisation by a Member State which concern the provision of service throughout a specified geographical area, including where required - geographical averaged prices for the provision of that service.
The cost of universal service obligations shall be calculated as the difference between the net cost for an organisation of operating with the universal service obligations and operating without the universal service obligations.
This applies whether the network in a particular Member State is fully developed or is still undergoing development and expansion. The calculation shall be based upon the costs attributable to:
(I) elements of the identified services which can only be provided at a loss or provided under cost conditions falling outside normal commercial standards.
This category includes service elements such as access to emergency telephone services, provision of certain public pay telephones, provision of certain services or equipment for disabled people, etc.
(ii) specific endusers or groups of endusers who, taking into account the cost of providing service, the revenue generated and any geographical averaging of prices imposed by the Member State, can only be served at a loss or under cost conditions falling outside normal commercial standards.
This category includes those endusers or groups of endusers who would not be served by a commercial operator who did not have an obligation to provide universal service.
In developed networks where such endusers are already being served, the cost calculation should be based on the savings that would be achieved if these endusers were not served.
In peripheral regions with expanding networks, the cost calculation should be based on the additional cost of serving those endusers or groups of end-users which an operator applying the normal commercial principles of a competitive environment would choose not to serve.
Revenues shall be taken into account in calculating the net costs. Costs and revenues should be forwardlooking.
Broadband - A service or connection allowing a considerable amount of information to be conveyed, such as for television pictures. Broadband networks have a capacity of at least 4MHz (analogue networks) or 2 Mbits per second (digital networks). This compares with narrowband which only allows a limited amount of information to be conveyed.
Churn rate - The rate at which customers give up receiving service from an operator, expressed as an annual percentage figure of the average customer base.
Connection charges - The fee paid by customers for connection to an operator's network.
Constraint on line rental charge - This phrase refers to the price controls under which BT is prevented from raising its charges for exchange line rental by more than RPI+2% per annum until 1997.
Consumer Panel - Oftel has established a panel of five experts to advise the Director General on the interests of residential telecommunications customers during the current Price Control Review. The panel comprises Moira Black, Chairman of the English Advisory Committee on Telecommunications and previously a Partner at Price Waterhouse; John Hughes, Chairman of the National Consumer Council's (NCC) Economic Policy Committee and former member of the NCC; Stephen Locke, Director of Research and Policy at the Consumers' Association and Executive Member of the Bureau of European Consumer Unions; Richard Thomas, Director of Public Policy at Clifford Chance and previously Director of Consumer Affairs at the Office of Fair Trading; and Courtenay Thompson, Chairman of the Northern Ireland Advisory Committee on Telecommunications and former member of the Northern Ireland General Consumer Council. Its terms of reference include advising on universal service issues.
Digital Communications -The transmission of information held in the form of a language (known as Binary Code) based on the relative positions of a string of the two digits "zero" and "one".
Functional Equivalence - The principle that customers with disabilities which might affect their use of telecommunications services and equipment should be able to experience the same real delivery at the same net cost as other customers.
Geographic Averaging - The principle under which BT charges customers the same price for a given service wherever they are in the country, subject to its published tariff.
Incremental revenue - All the revenue that the operator would forgo if it was to discontinue the activity under consideration. For example, for a residential customer it would include the exchange line rental, the bill for outgoing calls, revenue received by the operator for incoming calls (either retail tariff or interconnect payment) and called-party-pays revenue (eg Freephone calls).
Interconnection services - Interconnection services are services provided by one telecommunications organisation to another for the purpose of the conveyance of messages and information between the two systems and including any ancillary services necessary for the provision and maintenance of such services.
ISDN - Integrated Services Digital Network - a network providing end-to-end digital connection, supporting a wider range of services than available across the PSTN.
ISR - International Simple Resale. Collecting traffic from the PSTN in the UK, switching it into a leased line to another country across the international gateway which is operated by BT or Mercury, and then breaking back out onto the public network in the other country.
Long run avoidable costs - The costs that the operator would avoid over the long run if it was to discontinue the activity under consideration. For a single customer it would be the marginal cost of the customer's exchange line and calls (both outgoing and incoming). For an area it would be the cost of all the exchange lines and calls to and from the area, including the indirect costs and overheads that would be saved if service was no longer provided to the area.
Long run incremental costs - as long run avoidable costs above.
Network externality - The benefit derived by the existing users of a network from new users joining the network because the number of users that can be accessed over the network (and thus the usefulness of the network) has increased.
Operator - A body licensed to, and planning to, provide a network service.
Other operators - The operators excluding BT.
PCN - Personal Communications Network. High capacity digital cellular networks. (Orange and Mercury 1-2-1 are the current UK PCN operators).
Penetration - The percentage of UK households connected to a telecommunications network.
Premium Rate Services - Services, including recorded information and live conversation, run by independent service providers. All calls to these companies are charged at a higher rate than ordinary calls to cover the companies' costs in providing the content of the call and the operator's costs for the special network facilities needed.
PSTN - Public Switched Telephone Network. The telecommunications networks of the major operators, on which calls can be made to all customers of all PSTNs.
PTO - Public Telecommunications Operator (see Operator above).
Selective Call Barring - The ability to programme a Public Switched Network access line, so that outgoing calls to certain related groups of numbers such as special charge rate, international or mobile services cannot be made.
Statutory Advisory Committees - The Director General has six committees representing consumer groups which advise him on telecommunication issues. There are national advisory committees for England, Scotland, Wales, Northern Ireland, a committee for disabled and elderly people and one representing small business users.
Summer Statement - The Director General's statement in July 1995, "Effective Competition: Framework for Action", on the future of interconnection, competition and related issues including universal service. This developed ideas put forward in the consultative document "A Framework for Effective Competition", issued in December 1994.
Text Phone - A device used by hearing and speech impaired people to communicate over networks in typed text rather than speech (ie the device is needed at both ends of the call).
Text Relay - A service enabling textphone users to communicate via the network with other customers, by means of an on-line translation service.
Wideband - An intermediate bandwidth without the fuller capacity of broadband (see Broadband above).
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