B.1 The Director General wishes to receive industry views on his proposal, subject to informal consultation, to delete the following 17 conditions from BT's licence. These proposals are suggested in the context of BT's licence having been modified to include the anti-competitive practices condition. It should be noted that it is intended to apply a similar deregulatory approach to all other significant licences simultaneously to the introduction of the anti-competitive practices condition. Comments would therefore be welcome both in relation to the specific condition contained in BT's licence but also, where appropriate, in relation to the equivalent condition in other licences. This will be done in accordance with the timetable set out at Annex C. The Director General anticipates that deletion of one condition, Condition 46 - Private Circuits, will require close attention from all operators. He believes that deletion, to the same timetable as proposed for the other 16 conditions, will be to the best advantage of customers and the industry. He is nevertheless concerned to assure all those with an interest in this condition that if the consultation shows more time is required to achieve understanding then this will be provided.
1. Condition 7 :Calls made by emergency organisations
B.2 This condition is obsolete. It was necessary where telephone numbers could not be direct dialled and there was therefore a need for operator-assisted voice telephony services. As it now possible to direct dial Emergency Organisations the condition is unnecessary.
2. Condition 17A Differential charging
B.3 This condition was inserted to provide BT with a programme for introducing greater tariffing flexibility. In particular over a period from its introduction through to August 1995 BT were able to introduce in a structured way, call tariffs down to a floor of fully allocated cost. Since BT are now able to price at fully allocated cost, the condition has served its purpose and is no longer necessary. Its deletion will, however, subject any use of such flexibility to examination under fair trading licence conditions and any anti-competitive practice will also be subject to the operation of the proposed new condition. In addition Condition 24F (as currently drafted and now out for statutory consultation) will oblige BT to obtain the permission of the Director General before introducing controlled retail prices below fully allocated cost.
3. Condition 22 : Prohibition of preferential treatment
B.4 The objective of this condition when it was first introduced was to enable third party maintainers to avail themselves of similar terms from BT for certain services obtained by certain BT businesses. The scope of the condition is likely to be encompassed by the proposed anti-competitive practices condition and thus it is unlikely that a specific condition is required.
4. Condition 25 :Charges for maintenance for certain exchange lines
B.5 This condition requires BT to publish its charges for the maintenance of certain exchange lines and to ensure that any charging differential is based on a different quality requirement. The proposed anti-competitive practices condition will cover any competition issues which might arise in relation to the maintenance of such exchange lines.
5. Condition 28 :Arbitration of disputes with consumers.
B.6 All significant operators now have a Code of Practice and standard contract terms providing for inexpensive arbitration procedures in the event of disputes. The Consumer Representation Section at Oftel works closely with operators to ensure this process works satisfactorily. The primary need for the condition at the time of privatisation has been achieved and most operators now recognise the commercial benefits of having effective customer service procedures. It is not considered appropriate or necessary to continue to impose an obligation on BT in these terms.
6. Condition 29 : Bodies recognised to be representing consumers
B.7 In an increasingly competitive market, operators are already going further, in their relationships with these bodies, than is required by the licence condition. This suggests that the obligation in licences may no longer be necessary. Oftel would welcome, in particular, the views of the Advisory Committees on this proposal.
7. Condition 35 :Prohibition of linked sales
B.8 This condition prohibits linked sales other than in certain specific circumstances. It is expected that the proposed anti-competitive practices condition will enable the Director General to take action on anti-competitive linked sales. The proposed condition is wider in scope (for example it deals with rental as well as sales) and is therefore considered a more effective instrument to deal with anti-competitive linked sales. The continuing need for this specific condition is questionable.
8. Condition 36 :Prohibition of certain exclusive dealing arrangements
B.9 Similarly this condition and its objective of preventing exclusive dealership arrangements, except in certain defined areas, can be dealt with by the anti-competitive practices condition.
9. Condition 37 :Requirement to provide itemised information
B.10 Most operators see the provision of itemised billing as a necessary and valuable commercial aspect of their service offering. Oftel intends to keep access to free itemised billing within its definition of universal service. There is therefore no longer a need for a specific condition.
10. Condition 40 :Prohibition of non-statutory testing requirements
B.11 The proposed anti-competitive practices condition will enable the Director General to take action on any attempt by a dominant operator to impose non-statutory testing requirement as a condition of interconnection or the provision of any other service. It is not considered necessary to retain a specific condition.
11. Condition 40A: Requirement to provide means of access to the Applicable Systems
B.12 This condition imposes an obligation on BT to provide access to its applicable systems in conformity with certain OSI standards. These standards have now been superceded by the standards set by the Network Interfaces Co-ordination Committee (NICC).
12. Condition 41: Statutory testing
B.13 BT is no longer in the business of statutory testing and the condition is therefore no longer required. Disclosure of information, aspects of which are covered by this condition, is discussed below and the issues arising and the necessary licence conditions are the subject of review in any event.
13. Condition 42 :Limitations on integrated wiring situated on Served Premises;
and
14. Condition 43 :Wiring etc. not forming part of the Applicable Systems
B.14 The issues dealt with by these two conditions are set out in and covered by the Oftel Wiring Code. Oftel does not believe that there is a continuing need for specific licence conditions but the anti-competitive elements of these conditions would be caught by the proposed general condition. In particular, unreasonable departure by dominant operators from the Wiring Code is likely to be prima facie evidence of an anti-competitive practice and thus is likely to be the subject of enforcement action under the proposed condition.
15. Condition 44: Limitations on certain maintenance arrangements
B.15 The purpose of this condition is to prevent BT from offering discriminatory maintenance terms to purchasers of its equipment. These practices will be covered by the proposed general condition.
16. Condition 49: Pre-notification of joint ventures
B.17 This condition merely requires BT to notify the Director General of certain agreements or arrangements. The Director General has other methods of obtaining such information both under the Telecommunications Act and under Condition 52 of BT's licence. The condition is not considered to be necessary.
17. Condition 46: Private Circuits
B.17 This condition is proposed for deletion to the same timescale as the others listed above. Oftel will however review the timetable in the light of the responses to this consultation.
B.18 This condition provides that BT will provide private circuits to operators, who are themselves licenced to provide such circuits, broadly at retail tariffs rather than at Condition 13 (interconnection) terms. The Condition includes provision for the retail tariffs to be determined by the Director General in specific circumstances.
B.19 The aim of the Condition was to ensure that BT was obliged to supply other operators with leased circuits on retail terms so they would be encouraged to build their own networks and not be unduly reliant on leasing BT's private circuits. Condition 46 does not apply to international leased private circuits (IPLCs) except in the case of Mercury, because only BT and Mercury are licenced to provide IPLC facilities. Again in Oftel's view, Condition 13 rates apply to IPLCs.
B.20 If Condition 46 were deleted from the licence, provision of Inland circuits for competing operators would in Oftel's view also fall under Condition 13 of BT's licence.
B.21 Oftel is consulting on deletion of this Condition for two reasons:
(a) Condition 16B.6 of BT's licence already provides a procedure whereby if particular markets for interconnect services are determined by the Director General to be competitive, BT would be entitled to set the interconnection charges for the services in question.
(b) the determination powers in the Condition sit uncomfortably with the proposals that Oftel has made for extricating itself from determinations for network interconnection charges from 1997.
B.22 Deletion of Condition 46 would be deregulatory in removing one of the determination roles of the Director General and in using existing procedures under the licence to establish the appropriate tariffs for private circuits for competing operators.
B.23 The Director General proposes to review the application of certain other conditions currently in BT's licence. This review may result in revisions to or proposed deletions of these licence conditions. Proposals are likely to be published before mid 1996.The conditions at issue are:-
B.1 Information conditions
1. Condition 38 :Code of practice on the confidentiality of customer information.
2. Condition 38A:Code of practice on the confidentiality of customer information relating to Supplemental Service Business.
3. Condition 41A:Confidential information.
It is intended to examine whether it is possible to simplify these conditions into one composite condition.
B.2 Service providers
4. Condition 15: Provision by others of services by means of the Applicable systems
5. Condition 18: Prohibition on cross-subsidies,
Conditions 15 and 18 are to be reviewed in the context of the review of policy on service providers. A consultation document is about to be issued.
B.3 Interfaces and connect of systems
6. Condition 13B: Essential interfaces.
7. Condition 14 : Connection of systems providing Connection Services.
8. Condition 23 : Alterations to the Applicable System.
9.Condition 45 : Connection Arrangements.
The Director General proposes that these conditions be subject to review. Consideration of policy on Customer Interfaces is ongoing. Further consultation on customer interfaces will be published in March 1996.
B.4 Other conditions which are to be reviewed and on which comments are invited
10. Condition 19: Access charges,
11. Condition 21: Apparatus production.
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