Schedule 1 to the Licence shall be modified as follows:
[Note: Matters in bold below are particularly relevant to the question of what sort of dispute resolution procedure should replace the present system of determinations by the Director General. Consultation on this issue will be undertaken by Oftel shortly.]
1. With effect from 1 August 1997, to provide for a new regulatory framework within which the Licensee will charge for Standard Services:
(a) in Condition 13.1, before the words "if the Operator requires it" shall be inserted the words "or agree to amend such an agreement, [within a reasonable period (which shall not, unless the Director otherwise consents, exceed six months)]";
(b) in Condition 13.1(c), the words "the Director determines" shall be deleted;
(c) in Condition 13.2, following the word "agreement" shall be inserted the words "or agree to amend such an agreement";
(d) for Condition 13.3 shall be substituted the following Condition:
"13.3 An agreement entered into under paragraph 13.1 may be subject to such reasonable terms and conditions as are permitted in relation to that agreement in accordance with paragraphs 13.4 and 13.5.";
(e) in Condition 13.4:
(i) the words "are agreed between the Operator and the Licensee and" shall be deleted, and
(ii) the following sub-paragraph (jj) shall be inserted after sub-paragraph (j):
"(jj) arrangements for the mediation or arbitration of disputes;";
(f) without prejudice to the powers of the Director to determine Interim Charges and Final Charges for the financial years ending on 31 March 1997 and on 31 March 1998 (for the period from 1 April 1997 to 31 July 1997), to amend any Forecast with respect to the financial year ending on 31 March 1998 or to determine any matters with respect to which application for determination was made before 1 August 1997 (and related provisions):
(i) in Condition 13.5, for the words before sub-paragraph (b) shall be substituted the following words:
"The provisions of an agreement required under paragraph 13.1 shall secure:
(a) that the Operator pays to the Licensee the current costs of anything done pursuant to or in connection with the agreement [at a charge based on the amounts applied to the relevant Network Components or Network Parts (as defined in Condition 16B.10) which amount shall be set between the long-run incremental costs and the stand alone costs of the relevant Component or Part][plus a reasonable return] [definition?]] [need provision that the costs of establishing a connection be shared according to the proportions in which each party bills the customers originating calls?];",
(ii) for sub-paragraph (e) of Condition 13.5 shall be substituted the following sub-paragraph:
"(e) that, where one party has required connection under the agreement and subsequently cancels the order for connection, it shall reimburse the other party for the costs incurred by the other party in the provision of the connection up to the date of cancellation;" [13.5C.4],
(iii)for sub-paragraphs (f)(v) and (f)(vi) of Condition 13.5 shall be substituted the following sub-paragraph:
"(f)(v) that insofar as any freedom of choice is conferred upon persons running telecommunication systems connected to the Operator's system as to the extent to which Messages are conveyed by means of the Applicable Systems and in routing Messages so conveyed, a corresponding freedom of choice is conferred so far as reasonably practicable on persons running telecommunication systems connected to the Applicable Systems,", and
(iv) for Conditions 13.5A to 13.5F shall be substituted the following Condition:
"13.5A [If an Operator so requests, the Licensee shall include in an agreement made or amended under paragraph 13.1 provision that any terms or conditions applicable to connection with the Operator's Relevant Connectable System for the purpose of the provision of services by the Operator to the Licensee over that System and for the supply of such services shall be governed by the terms of the Operator's Licence].";
(g) Conditions 13.6 to 13.8B.5 shall be deleted;
(h) in Condition 13.9:
(i) the definition of "Competitive Standard Service" shall be deleted, and
(ii) after the definition of "Long Line Public Telecommunications Operator" shall be inserted the definitions ""Network Components" has the meaning given to it in Condition 16B.10;" and ""Network Parts" has the meaning given to it in Condition 16B.10;";
(i) Conditions 13.10 and 13A.6 shall be deleted;
(j) in Condition 16.1, for the words "which have been or could be determined" shall be substituted the words "in agreements";
(k) without affecting any right or obligation acquired, accrued or incurred under Conditions 13 or 16B before 1 August 1997, and without prejudice to the powers of the Director to determine Interim Charges and Final Charges for the financial years ending 31 March 1997 and 31 March 1998 (for the period from 1 April 1997 to 31 July 1997), for Conditions 16B.1, 16B.2 and 16B.3 shall be substituted the following Conditions:
"16B.1 The provisions of Condition 24A (except Condition 24A.1E) shall apply to:
(a) the the aggregate of Standard Services Prices for Call Origination, local tandem Conveyance Standard Services, access to Specially Tariffed Services and the use and Ordinary Maintenance of digital Private Circuits of a capacity less than or equal to 64 kbits;
(b) the aggregate of Standard Services Prices for Non-conveyance Standard Services (including access to the Number Information System, Interconnection Services and Data Management Amendments); and
(c) the aggregate of charges for Call Termination,
respectively as though each such category of Prices are General Prices except that the Controlling Percentage applicable to each such category shall be [ ].
[Note: Relevant Years would extend from 1 August 1997 to 31 July 2001.]
16B.2 For the purposes of this Condition, references to accrued revenue in Condition 24A are references to the amount of revenue which would be produced before the application of any discounts to the relevant Standard Services Prices.
16B.3 The Licensee shall take all reasonable steps to secure that each discrete charge for any Prospectively Competitive Services (namely the Standard Services listed in this paragraph and the Standard Services determined by the Director to be prospectively competitive under paragraph 16B.6) (other than Competitive Standard Services) does not increase during any Relevant Year by more than [RPI]:
(a) the use and Ordinary Maintenance of Private Circuits of a capacity greater than 64 kbits (or part thereof);
(b) the use and Ordinary Maintenance of the parts of International Private Circuits [or Relevant Private Circuits] provided by means of the Applicable Systems;
(c) inter-tandem and international direct dialled Conveyance Standard Services;
(d) access to directory information services; and
(e) access to Operator Assistance."
(l) in Condition 16B.4, for the words "paragraph 16B.3" shall be substituted the words "paragraphs 16B.1 to 16B.3" and in sub-paragraph (a) the words "(whether or not that charge has been determined by the Director)" shall be deleted;
(m) in Condition 16B.5(a), for the words from "the charge payable" to "Condition 13" shall be substituted the words "long-run incremental cost [plus a reasonable rate of return]";
(n) for Condition 16B.6 shall be substituted the following Condition:
"16B.6(a) The Director shall, following a representation by the Licensee or an Operator that the market for a Standard Service is prospectively competitive or that the market for a Prospectively Competitive Service is competitive, determine whether or not that market is prospectively competitive or competitive (as the case may be).
(b) If the Director determines that the market is prospectively competitive or competitive (whether before or after the date on which this paragraph comes into effect), then that Standard Service shall be a Prospectively Competitive Service or a Competitive Standard Service (as the case may be).";
(o) in Condition 16B.8(a):
(i) in sub-paragraph (i) the words "determined by the Director pursuant to Condition 13",
(ii) sub-paragraph (ii),
(iii) in sub-paragraph (iii) the words "or (ii)", and
(iv) sub-paragraph (vi),
shall be deleted;
(p) [replace Cond 16B.8(b) with a provision similar to Cond 16];
(q) at the end of Condition 16B.8(d) shall be added the words "and a copy of that List for inspection by Interested Parties";
(r) in Condition 16B.9(a), for the words following "obligation on the Licensee" shall be substituted the words "to offer to provide that Standard Service at the charge published from time to time under Condition 16B.8.";
(s) In Condition 16B.1O(a):
(i) the following definitions shall be added:
""Call Origination" means ...;
"Call Termination" means [Conveyance Standard Services between a local exchange and [an Exchange Line] and, where an Operator so requests (on the grounds that such Services are not competitive) and the Licensee agrees with the request, Conveyance Standard Services between a local exchange and a [DMSU]; if, following a reasonable period of time after such a request, the Licensee fails to agree, then the Director General may determine on those grounds that such Conveyance Standard Services are Call Termination Services];
"Number Information System" means ...;
"Interconnection Services" means ...;
"Data Management Amendments" means ...;
"Prospectively Competitive Service" means a Standard Service the market for which is determined by the Director to be prospectively competitive pursuant to paragraph 16B.6 or which is listed in paragraph 16B.3;
"Standard Services Prices" means (being in all cases the prices charged or offered by the Licensee, whether in combination with another price or not, for Standard Services) charges for Conveyance Standard Services and Non-conveyance Standard Services other than charges for Prospectively Competitive Services or Competitive Standard Services (and each discrete charge of any such description shall be treated as a separate Standard Services Price);
"Operator Assistance" means the facility of transferring, with assistance from a human operator, charges for the conveyance of voice telephony Messages; and
"Ordinary Maintenance" has the meaning given to it in Condition 24B.3;", and
(ii) for the definition of "Conveyance Standard Service" shall be substituted ["means a Standard Service which largely comprises the conveyance of Messages (including Call Origination, Call Termination, inter tandem conveyance, local tandem conveyance, international direct dialled conveyance, access to Specially Tariffed Services, access to directory information services, access to Operator Assistance, and the use and Ordinary Maintenance of Private Circuits and those parts of International Private Circuits provided by means of the Applicable Systems"]; and
["Network Components", "Network Parts"]
(t) Following Condition 16B.10 shall be added the following Condition 16B.11:
"16B.11 Following consultation with the Licensee and Interested Parties, until 31 July 1998, the Director General may by determination make such consequential provision consistent with this Licence as appears to him to be necessary or expedient in order to allow for the effective transition to this new framework for control of Standard Service charges.".
[Consequential modifications will be required to Conditions 17B, 17C and 20B.]