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SummaryBT consentKingston consentExplanatory memorandumBT consent – list of excluded products/servicesKingston consent – list of excluded products/servicesSummaryS.1 In its Statement BT’s regulatory obligations to provide advance notification of price changes and to maintain a published price list of 26 March 2002 (the March 2002 Statement), Oftel concluded that it would, for a trial period, reduce the notification period in conditions 54, 55 and 58 of British Telecommunications plc’s (BT) licence from 28 days to one day, except for certain products and services where the wholesale market was not yet effectively competitive. S.2 Oftel also concluded that the reductions in the notification periods would best be achieved by means of a time-limited consent granted under BT’s licence conditions, and that the excluded products and services would be listed on Oftel's website. A similar consent would apply to Kingston Communications (Hull) plc (Kingston). The March 2002 Statement invited comments on the form of the consents. S.3 Oftel has now consulted on the form of the consents, and this document publishes them, together with an explanatory memorandum and the lists of excluded products and services. The lists may be amended from time to time, as appropriate, following a 28 day consultation period during which BT, Kingston and other interested parties will have an opportunity to submit comments to Oftel. The consents will apply, unless earlier revoked, until 30 November 2003, during which period Oftel will evaluate the effects of the trial.
BT consentTelecommunications Act 1984 British Telecommunications Plc Consent under Conditions 54, 55 and 58 Whereas: 1. on 22 June 1984, the Secretary of State granted a licence (the "Licence") to British Telecommunications under section 7 of the Telecommunications Act 1984 (the "Act") for the running of the telecommunications systems specified in Annex A to the Licence; 2. by virtue of section 109 of and paragraph 20 of schedule 5 to the Act, the Licence has effect as if granted to British Telecommunications plc ("BT"); 3. on 23 December 1997, in accordance with regulation 4(1) of the Telecommunications (Interconnection) Regulations 1997 (S.I. 1997/2931), the Director General of Telecommunications (the "Director") determined that BT has significant market power in the market for fixed public telephone networks and fixed public telephone services and in the market for leased lines; 4. on 20 July 1998, in accordance with regulation 6 of the Telecommunications (Open Network Provision) (Voice Telephony) Regulations 1998 (S.I. 1998/1580), the Director determined that BT has significant market power in the markets for fixed public telephone systems and voice telephony services; 5. Condition 54.5 of the Licence provides that BT shall only implement changes to its tariffs referred to in Condition 54 28 days after publication of such changes, except where the Director has consented in writing to a shorter notice period; 6. Condition 55.4 of the Licence provides that BT shall only implement new charges, or changes to its charges, terms and conditions referred to in Condition 55, 28 days after notifying the Director of such introduction or changes, except in so far as the Director may otherwise consent in writing; 7. Condition 58.2 of the Licence requires BT to send to the Director a notice specifying, or specifying the method to be adopted for determining, the charges, terms and conditions on which it offers to provide each description of telecommunication service which the Licensee is obliged to provide for the purposes of parts A or B of the Licence, or in the market determined by the Director for the purposes of part F of the Licence; 8. Condition 58.4 of the Licence requires BT to send to the Director a notice of any amendment to charges, terms and conditions (or the method of determining the same) referred to in the notice described in Condition 58.2 of the Licence not less than 28 days before such amendment comes into effect; 9. Condition 58.1 of the Licence provides that, for the purposes of Parts A and B of the Licence, BT shall publish prices and act in the manner set out in Conditions 58.2 to 58.6 of the Licence, except in so far as the Director may otherwise consent in writing; 10. in November 2000, BT requested that the Director review its price publication and notification obligations with a view to reducing these obligations. The request related primarily to Conditions 54, 55 and 58 of BT’s Licence; 11. in June 2001 the Director issued a consultation document "BT’s Regulatory obligations to provide advance notification of price changes and to maintain a published price list" seeking views on whether those obligations ought to be reduced; 12.taking account of the responses to the June 2001 consultation document, the Director is minded to grant his consent under Conditions 54,55 and 58 of the Licence to a reduction in the advance notification period for tariff changes from 28 days to one day, save for those wholesale products and services in markets which the Director has reason to believe are not yet effectively competitive. A list of such products and services will appear on the website of the Office of Telecommunications (www.oftel.gov.uk). The consent will expire on 30 November 2003; 13. the Director has consulted BT and interested parties on this consent and has taken into consideration all responses to that consultation, and the matters set out in Chapter 4 of the statement "BT’s regulatory obligations to provide advance notification of price changes and to maintain a published price list" of 26 March 2002; and NOW THEREFORE THE DIRECTOR CONSENTS AS FOLLOWS: 1. pursuant to Condition 54.5 of the Licence, the Director hereby consents to the reduction of the notice period referred to in Condition 54.5 from 28 days to one day in respect of BT’s tariffs referred to in Condition 54; 2. pursuant to Condition 55.4 of the Licence, the Director hereby consents to the reduction of the notice period referred to in Condition 55.4 from 28 days to one day in respect of BT’s charges, terms and conditions referred to in Condition 55; and 3. pursuant to Condition 58.1 of the Licence, the Director hereby consents to the reduction of the notice period referred to in Condition 58.4 from 28 days to one day in respect of BT’s charges, terms and conditions for the services referred to in Condition 58.2; 4. this Consent shall not apply in respect of wholesale products and services in markets which the Director has reason to believe are not yet effectively competitive; and 5. unless the context otherwise requires, words and phrases in this consent shall have the meanings ascribed to them in the Licence or the Act, as appropriate. 6. This Consent shall remain in force until 30 November 2003 unless earlier revoked by the Director. Chris Kenny DIRECTOR OF COMPLIANCE A person authorised under Paragraph 8 of Schedule 1 to the Telecommunications Act 1984 30 May 2002
Kingston consentTelecommunications Act 1984 Kingston Communications (Hull) plc Consent under Conditions 54, 55 and 58 Whereas: 1. on 30 November 1987, the Secretary of State granted a licence (the "Licence") to Kingston upon Hull City Council and Kingston Communications (Hull) Plc ("Kingston") under section 7 of the Telecommunications Act 1984 (the "Act") for the running of the telecommunications systems specified in Annex A to the Licence; 2. on 27 September 1999, Kingston Upon Hull City Council’s interest in respect of the Licence was revoked; 3. on 23 December 1997, in accordance with regulation 4(1) of the Telecommunications (Interconnection) Regulations 1997 (S.I. 1997/2931), the Director General of Telecommunications (the "Director") determined that Kingston has significant market power in the market for fixed public telephone networks and fixed public telephone services and in the market for leased lines; 4. on 20 July 1998, in accordance with regulation 6 of the Telecommunications (Open Network Provision) (Voice Telephony) Regulations 1998 (S.I. 1998/1580), the Director determined that Kingston has significant market power in the markets for fixed public telephone systems and voice telephony services; 5. on 15 July 1997, the Director granted a consent (the "existing consent") under Condition 15 of the Licence, so that the period of twenty-eight days was reduced to fourteen days for purposes of the obligation on Kingston under that condition to notify the Director of an amendment to any of its charges and other terms and conditions before they are due to become effective, where the amendments proposed are a direct consequence of amendments to the charges payable by Kingston to certain operators specified in that consent; 6. the Licence was modified with effect from 27 September 1999 by the Telecommunications (Licence Modification) (Kingston Communications (Hull) PLC) Regulations, S.I. 1999 No. 2455, as subsequently amended by the Telecommunications (Licence Modifications) (Amendment No. 2) Regulations 2000, S.I. 2000 No. 2998 (the "Regulations"), so that new price and tariff publication requirements were specified in Condition 58 of Part G of, Condition 55 of Part E of, and in Condition 54 of Part D of, Schedule 1 to the Licence and thereby replacing inter alia the above-mentioned Condition 15 of the Licence; 7. pursuant to regulation 4(1) of the Regulations, the existing consent under the said Condition 15 is, however, to be treated for all purposes as made and having effect under the corresponding provisions of the Licence, as modified; 8. Condition 54.5 of the Licence provides that Kingston shall only implement changes to its tariffs referred to in Condition 54 28 days after publication of such changes, except where the Director has consented in writing to a shorter notice period; 9. Condition 55.4 of the Licence provides that Kingston shall only implement new charges, or changes to its charges, terms and conditions referred to in Condition 55, 28 days after notifying the Director of such introduction or changes, except in so far as the Director may otherwise consent in writing; 10. Condition 58.2 of the Licence requires Kingston to send to the Director a notice specifying, or specifying the method to be adopted for determining, the charges, terms and conditions on which it offers to provide each description of telecommunication service which the Licensee is obliged to provide for the purposes of parts A or B of the Licence, or in the market determined by the Director for the purposes of part F of the Licence; 11. Condition 58.4 of the Licence requires Kingston to send to the Director a notice of any amendment to charges, terms and conditions (or the method of determining the same) referred to in the notice described in Condition 58.2 of the Licence at least 28 days before such amendment comes into effect; 12. Condition 58.1 of the Licence provides that, for the purposes of Parts A and B of the Licence, Kingston shall publish prices and act in the manner set out in Conditions 58.2 to 58.6 (both inclusive) of the Licence, except in so far as the Director may otherwise consent in writing; 13. in November 2000, BT requested that the Director review its price publication and notification obligations with a view to reducing these obligations. The request related primarily to Conditions 54, 55 and 58 of BT’s Licence; 14. in June 2001 the Director issued a consultation document "BT’s Regulatory obligations to provide advance notification of price changes and to maintain a published price list" seeking views on whether those obligations ought to be reduced; 15. on 30 May 2002, the Director granted a consent to BT to a reduction in the price publication notice period from 28 days to one day under Conditions 54.5, 55.4 and 58.1 of BT’s licence with respect to the services covered by those conditions; 16. it is the Director’s intention that no other licensed operator will be left in a position where it could potentially and without justification be subject to more onerous licence obligations than BT, and thus the Director is minded to grant his consent under Conditions 54, 55 and 58 of the Licence to a reduction in the advance notification period for tariff changes from 28 days to one day, save for those wholesale products and services in markets which the Director has reason to believe are not yet effectively competitive. A list of such products and services will appear on the website of the Office of Telecommunications (www.oftel.gov.uk) The consent will expire on 30 November 2003; 17. the Director has consulted Kingston and interested parties on the above issues and taken into consideration all responses to that consultation document, and the matters set out in Chapter 4 of the statement BT’s regulatory obligations to provide advance notification of price changes and to maintain a published price list of 26 March 2002; and NOW THEREFORE THE DIRECTOR CONSENTS AS FOLLOWS: 1. pursuant to Condition 54.5 of the Licence, the Director hereby consents to the reduction of the notice period referred to in Condition 54.5 from 28 days to one day in respect of Kingston’s tariffs referred to in Condition 54; 2. pursuant to Condition 55.4 of the Licence, the Director hereby consents to the reduction of the notice period referred to in Condition 55.4 from 28 days to one day in respect of Kingston’s tariffs referred to in Condition 55; 3. pursuant to Condition 58.1 of the Licence, the Director hereby consents to the reduction of the notice period referred to in Condition 58.4 from 28 days to one day in respect of Kingston’s charges, terms and conditions for the services referred to in Condition 58.2; 4. this Consent shall not apply in respect of wholesale products and services in markets which the Director has reason to believe are not yet effectively competitive; 5. the existing consent shall be revoked; and 6. unless the context otherwise requires, words and phrases in this consent shall have the meanings ascribed to them in the Licence or the Act, as appropriate. 7.This Consent shall remain in force until 30 November 2003 unless earlier revoked by the Director. Chris Kenny DIRECTOR OF COMPLIANCE A person authorised under Paragraph 8 of Schedule 1 to the Telecommunications Act 1984 30 May 2002
Explanatory memorandumBackground 1. In June 2001, Oftel issued a consultation document BT’s regulatory obligations to provide advance notification of price changes and to maintain a published price list. Oftel then published a Statement on 26 March 2002, in which it concluded that the notification periods in conditions 54, 55 and 58 of BT’s licence should be reduced from 28 days to one day for a trial period. Oftel stipulates that one day means 24 hours, and that Saturdays, Sundays and public holidays are specifically excluded. 2. A number of BT’s products and services which are covered by these licence conditions are sold to resellers either for incorporation into their own products or for sale to downstream customers. There is a lack of effective competition in the markets for some products and services, and Oftel concluded that in these cases it would be premature to reduce the notification period. 3. Oftel considered that the changes would best be achieved by means of a time-limited consent, granted under BT’s relevant licence conditions, but which would not apply to the products and services in markets which Oftel considered to be not yet effectively competitive. A list of these products and services would be published on Oftel’s website. In order that Kingston would not be subject to more onerous regulation than BT, a similar consent would be issued, together with an appropriate list of excluded products and services. A full explanation of Oftel’s reasons for granting the consents is given in Chapter 4 of the March 2002 Statement. In summary, Oftel is not persuaded that the benefits of 28 days’ advance notification outweigh the potential disadvantages. Oftel considers that the responses support the view that, even if there is little evidence of collusion between suppliers, the current regulatory controls may encourage price following and, by removing BT’s ability to exploit a first mover advantage, may have removed key incentives on BT to compete on the basis of price. 4. In the March 2002 Statement, Oftel invited comments on the form of the consents which it proposed. It received one reply, from BT, which made no comment on the form of the consents but raised a number of other issues, which are addressed below (see paragraphs 8 to 11). BT agreed with Oftel that it would be appropriate to maintain a separate list of excluded products and services. 5. This document publishes the consents, together with the lists of excluded products and services. The consents will apply, unless earlier revoked, until 30 November 2003. This is a trial period, during which Oftel will evaluate the effects of the reduced notification period, and invites comments from operators and other interested parties on the impact of the reduction in the notification period. Oftel has identified some minor errors in the consents, and has changed them accordingly:
Paragraph 6 of Kingston’s consent – change "existing consents" to "existing consent". 6. During the period of the consents, Oftel may from time to time amend the lists of excluded products and services. Where it intends to do so it will provide 28 days’ advance notification of the proposed amendment on its website, and also inform BT, Kingston and other licensed operators by e-mail or other appropriate means, to enable them and any other interested parties to comment. 7. A set of Directives implementing a new European framework for telecommunications regulation came into force on 24 April 2002 and will be transposed into UK law on 24 July 2003. During this period Oftel will conduct effective competition reviews required by the Directives in the telecommunications markets as listed in the proposed EC Recommendation and these will take into account, where appropriate, the results of this trial. The consultation 8. As well as considering the consents, BT raised some other issues in its response to the Statement. In the context of European regulation, BT made a number of points. In particular it argued that on the basis of its comparative analysis of notification periods elsewhere in Europe, a period of 14 days would be more appropriate where a licensee had market power and more than one day was necessary. Separately, while BT welcomed the reduction in the notification period to one day, it believed that when Oftel implemented the new Directives it should not start with the assumption that 28 days was the appropriate notification period where there were SMP obligations. BT also reiterated its case, made in response to the consultation document, that the principles outlined in respect of retail services should be applied equally to wholesale services. Oftel does not address these points in this document but will, as appropriate, consider them as part of the market analyses referred to above. 9. In agreeing with the separate listing of excluded products and services, BT said that contractual arrangements with its customers safeguarded their interests. Responding to comments by BT about the process for amending the list, Oftel has concluded that the criterion already established for inclusion in the list (see paragraph 2 above) is satisfactory. Where Oftel or any interested party believes that the list should be amended, Oftel will consider this in the context of the level of competition in the relevant market. If Oftel concludes that an amendment should be made, it will provide 28 days’ notification of the proposal, to enable comments to be made. 10. BT questioned why Oftel proposed to differentiate between the treatment of its Surfport and Webport services. While Oftel was minded not to place Webport in the list, it has reassessed its preliminary conclusion and decided that both products should be included in the list, on the basis that they both provide Internet call termination, a market which Oftel has concluded is not yet effectively competitive. 11. BT also raised two clarificatory questions on the period of notification. In the first case BT asked for confirmation of its understanding that, as long as the public notification met the one day obligation, it would not matter if the notification to the Director General did not occur simultaneously, as long as it preceded the public notification. Secondly, BT asked for confirmation that while the one day notification period excluded Saturdays, Sundays and public holidays, these would count towards both the 28 day notification period, and one day for new products or services which are materially different from those already offered by BT. Oftel confirms to BT that the existing notification arrangements remain unchanged. Oftel understands that BT has never launched a new service when either the announcement day or the launch day fell on a weekend or public holiday.
BT consent – list of excluded products/services Surfport/Webport Any comments or questions on this list should addressed to: Emma McFadyen tel 020-7634 5373 email: emma.mcfadyen@oftel.gov.uk
Kingston consent – list of excluded products/services Analogue Leased
Lines Any comments or questions on this list should addressed to: Emma McFadyen tel 020-7634 5373 email: emma.mcfadyen@oftel.gov.uk
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