A consultation issued by the Director General of Telecommunications on the draft general conditions of entitlement to provide electronic communciations networks and electronic communications services

Contents

Summary

Chapter 1 Introduction

Chapter 2 Approach to drafting the general conditions

Chapter 3 Explanation of the draft general conditions

Condition 1 General access and interconnection obligations

Condition 2 Standardisation and specified interfaces

Condition 3 Proper and effective functioning of the network

Condition 4 Emergency call numbers

Condition 5 Use during disasters

Condition 6 Public pay telephones

Condition 7 Must-carry obligations

Condition 8 Operator assistance, directories and directory enquiry facilities

Condition 9 Requirement to offer contracts

Condition 10 Transparency and publication of information

Condition 11 Quality of service

Condition 12 Metering and billing

Condition 13 Itemised bills

Condition 14 Non-payment of bills

Condition 15 Codes of Practice and dispute resolution

Condition 16 Controlled Premium Rate Services

Condition 17 Use of automatic calling equipment

Condition 18 Special measures for end users with disabilities

Condition 19 Provision of additional facilities

Condition 20 Allocation and adoption of telephone numbers

Condition 21 Number portability

Condition 22 Provision of directory information

Condition 23 Non-geographic numbers

Annex 1 The Annex to the Authorisation Directive

Annex 2 Cross-reference table

Annex 3 Definitions and the draft general conditions

Summary

S.1 This consultation document concerns the replacement of the current licensing regime for telecommunications companies with a new approach based on a general authorisation to offer electronic communications networks and services. This change is required to implement the new EC Directives. Comments are requested by 13 September 2002. The implementation date for the new regime is 25 July 2003.

S.2 The four new EC Communications Directives entered into force on 24 April 2002 and require the repeal of the current licensing regime for telecommunications systems in the UK under the Telecommunications Act 1984. The key change is that the need to obtain a licence prior to operating a telecommunication system is to be replaced by a general authorisation to provide electronic communications networks and services.

S.3 It is not intended that this change of approach should by itself lessen the obligations placed on providers of networks and services under existing licences. Licence conditions are thus to be replaced by a combination of general conditions applicable to all communications providers (or all communications providers of a particular type) and specific conditions to be set and applied to specific communications providers, for example where they have significant market power or have universal service obligations.

S.4 The types of general and specific conditions which may be imposed on communications providers are strictly limited by the terms of the new Directives. The Annex to the new Authorisation Directive (at Annex 1 to this document) in particular provides a maximum list of general conditions which may be attached to a general authorisation (part A), the right to use radio frequencies (part B) and the right to use numbers (part C). This consultation document sets out Oftel’s initial draft of the general conditions to be imposed upon providers of electronic communications networks and electronic communications services under parts A and C of the Annex to the Authorisation Directive. Conditions under part B of the Annex will be addressed by the Radiocommunications Agency.

S.5 The new regime required by the EC Directives is intended to be implemented in the UK by the draft Communications Bill, which was published jointly by the Departments for Trade & Industry and Culture, Media and Sport on 7 May 2002 (see www.communicationsbill.gov.uk). This Oftel consultation document should be read in conjunction with the draft Communications Bill and the Policy Narrative which accompanies it, as the Bill sets out the framework within which the proposed general conditions will apply. While Oftel is carrying out this consultation, it is intended that the new Office of Communications (OFCOM) will be the relevant national regulatory authority for the regulation of electronic communications networks and services once the Communications Bill has entered into force. Part 2 Chapter 1 of the Communications Bill permits OFCOM to set conditions which are binding on communications providers in line with the requirements of the new Directives.

S.6 Given that the EC Directives are required to be implemented so as to come into force on 25 July 2003, it may not be practical to rely solely on the Communications Bill achieving Royal Assent before that date. It may therefore be necessary to carry out the implementation to some degree through regulations made under the European Communities Act (ECA). The Government will make known its intended approach to this issue as soon as possible. There will be full consultation on any ECA regulations proposed for this purpose. However the draft Communications Bill as now published contains all the provisions necessary for the transposition into UK law of the four Directives already in force, excepting only resolution of disputes between communications providers. Oftel understands that provisions with respect to dispute resolution will appear in the next draft of the Communications Bill.

S.7 The proposed general conditions at Annex 3 to this consultation document have been drafted to apply appropriate regulation reflecting the obligations required by the new EC Directives as closely as possible. The language used in the Communications Bill has been incorporated into the definitions of terms. While there are similarities between many of the proposed general conditions and current standard licence conditions, all existing licence conditions have been reviewed and reassessed in light of the new framework. Unless otherwise required by the new Directives or the Communications Bill, Oftel has attempted to reflect current policy in the general conditions.

S.8 Consistent with the objective of appropriate regulation, it is clear that the general authorisation coupled with one set of general rules represents a major clarification and simplification of the existing regime for the benefit of both communication providers and consumers.

S.9 While general comments on the proposed general conditions are welcomed, Oftel has attempted, throughout this document, to draw attention to where there is flexibility under the new regime in relation to a particular obligation, or where Oftel is proposing a change from current practices. Oftel would find comments on these provisions particularly helpful. Details for how to respond to this document can be found at page 21.

Chapter 1

Introduction

1.1 Under the current regulatory regime, anyone running a telecommunications system in the UK must have a licence to do so. The licence sets out the rules, or ‘conditions’, which apply. The requirement to have a licence comes from the Telecommunications Act 1984.

1.2 This consultation is on the new set of rules, the ‘general conditions of entitlement’, that will apply to all providers of electronic communication networks and electronic communication services upon entry into force of the draft Communications Bill, which was published on 7 May 2002. The Communications Bill, which will implement the new European Community (EC) Communications Directives in the UK, is currently subject to a consultation being conducted jointly by the Department of Trade & Industry and the Department for Media, Culture & Sport (see www.communicationsbill.gov.uk). Oftel is carrying out this separate consultation because these general conditions will replace, for the most part, the licence conditions under which organisations currently operate under a Telecommunications Act 1984 licence. However, once the Communications Bill enters into force, the regulation of electronic communications networks and services will fall to a new regulator, OFCOM. Its role (amongst other things) will be to set, administer and enforce the general conditions.

Why is this consultation required?

1.3 New rules are required due to the entry into force of the four new EC Communications Directives on 24 April 2002 which seek to further converge and harmonise communication regulation throughout the Community. These Directives require the UK to change the way electronic communications networks and services are currently regulated from 25 July 2003. The new Directives are:

• Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive)
• Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (Authorisation Directive)
• Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive)
• Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive)

This document focuses mainly on the changes required by the Authorisation Directive, but the general conditions do implement provisions in the other Directives and where this is the case this is indicated below.

Scope of the new EC Directives

1.4. The new Directives are broader in scope than previous EC legislation in that they apply to ‘electronic communications’ as opposed to ‘telecommunications’. The obligations contained in the new Directives are intended to apply to the provision of an electronic communications network, or an electronic communications service, or an associated facility (see clause 22 of the Communications Bill for definitions of these terms). This broader approach means that traditional distinctions between, for example, licensed network operators and unlicensed resellers (or ‘systemless service providers’) no longer apply. Resellers will, in general, be providing electronic communication services, and therefore will be subject to the same regulatory regime as those existing network operators who are also providing electronic communication services. Further, providers of electronic communication networks and services which go beyond voice telephony (eg internet service providers) will all be subject to the same framework. All providers of communications networks or services will be known as ‘communications providers’ in the UK.

The ‘general authorisation’

1.5. The Authorisation Directive requires Member States to put in place a ‘general authorisation’ to provide electronic communication networks and services by 25 July 2003. To say that a person is generally authorised to provide networks and services means that they may provide those networks or services without requiring any explicit decision from the Member State. This requires a fundamental change from the existing regime which prohibits the running of a telecommunication system without a licence.

1.6 The current Telecommunications Act 1984 system of individual and class licences is inconsistent with the notion of general authorisation because it requires a specific legal entitlement to be granted (in the form of a licence) prior to the provision of a network or service. Hence the current licensing regime has to be repealed and replaced with a new regime on 25 July 2003. From this date, all licences will be revoked. Neither individual or class licences granted under the Telecommunications Act 1984 will be allowable or enforceable. The abolition of telecommunication licences has many implications, not least of which are:

• distinctions between different classes of licence (eg ‘public telecommunication operator’ or ‘PTO’ as opposed to ‘telecommunications services licence’ or ‘TSL’) will no longer apply;
• it is no longer necessary to link the authorisation to provide a communication service to an ‘Applicable System’ – a communication service can be provided over any electronic communication network (be it fixed, mobile, cable etc.); and
• all conditions which have been imposed on network and service providers to date via their licences will be repealed.

1.7 In the UK, the general authorisation is intended to be implemented by the absence of a specific prohibition on the ability to provide networks or services. The Communications Bill will repeal the Telecommunications Act 1984 to the extent that the Telecommunications Act 1984 creates the offence of providing a telecommunications system without a licence. Licence conditions will be replaced by the general conditions (to which this consultation relates) and additional specific obligations directed at individual undertakings. Consistent with the objective of appropriate regulation, it is clear that the general authorisation coupled with one set of general rules represents a major deregulatory step for the benefit of both communication providers and consumers.

Limited regulation of networks and services

1.8 The Authorisation Directive acknowledges a need for the protection of consumers through the continued application of regulation to the provision of electronic communication networks and services. However, any such regulation must be objectively justified, proportionate and non-discriminatory. Under the Authorisation Directive, those authorised to provide networks and services may only be subject to the specific or general obligations allowable under and provided for in each of the Directives. Specific conditions can be imposed on individual communications providers as a result of:

1) a significant market power (SMP) designation following market review;

2) a universal service designation; or

3) the provision of conditional access services, or the provider’s control of access to end users (these are called ‘access-related conditions’ in the Communications Bill).

These specific obligations will be imposed separately and in addition to the general conditions. They are not addressed by this consultation, and will be consulted on later as part of the process of implementing the new Directives.

1.9 Unlike individual specific conditions, the general conditions will apply to ALL communications providers, or all communications providers of a particular type, depending on the nature of the obligation (eg a condition may specifically apply only to providers of publicly available telephone services). The Annex to the Authorisation Directive (Annex 1 to this consultation document) sets out a "maximum list" of conditions which may be attached to a general authorisation (Part A), the right to use radio frequencies (Part B) and the right to use numbers (Part C). The general conditions must therefore be imposed in accordance with the Annex and the relevant provisions of the Directives. This consultation sets out proposed general conditions under Parts A and C of the Annex. Conditions to be attached to the right to use radio frequencies (Part A(17) and Part B) will be addressed by the Radiocommunications Agency (see paragraph 1.11 below).

1.10 OFCOM is given the power to set general conditions in accordance with Parts A and C of the Annex to the Authorisation Directive in clauses 35 to 49 of the Communications Bill. These clauses limit the subject matter of the general conditions which may be imposed, and also allow conditions to be set which require compliance with directions, are conditional upon consent or approval, or provide for a determination to be made (clause 35(9)).

Authorisation of use of radio frequencies under the new Directives and Communications Bill

1.11 The Authorisation Directive requires national regulatory authorities to make the grant of rights of use of radio frequencies subject to general authorisation wherever the risk of harmful interference is negligible. However, individual licences may still be issued where necessary.

1.12 The Wireless Telegraphy Act 1949 already contains a provision for regulations exempting radio spectrum uses from requiring a licence, and the Communications Bill will compel exemption regulations to be made if the spectrum uses in questions are not likely to involve ‘undue’ (ie harmful) interference. The conditions to which such exemption may be subjected fall within condition 17 of Part A of the Annex to the Authorisation Directive and would appear to meet the requirements of that Directive. Where individual licences for the use of radio frequencies are issued, the conditions attached to the licence shall conform to the list of conditions in Part B of the Annex to the Authorisation Directive.

1.13 Entitlement to use radio frequencies will remain within the remit of the Radiocommunications Agency until the creation of OFCOM, whereupon relevant powers and duties will be transferred to the new regulator. The Radiocommunications Agency will separately be issuing further guidance about implementation of the European package for radio frequency matters on its website www.radio.gov.uk. This consultation document does not otherwise address general conditions for the use of radio frequencies.

Possible need for an interim regime

1.14 Given the strict timing limitations for implementation set out in the new Directives (15 months from their publication ie by 25 July 2003), it is not yet clear whether the Communications Bill will enter into force before the Directives have to be transposed into UK law. It may therefore be necessary to carry out the implementation to some degree through regulations made under the European Communities Act (ECA). Such regulations would create an interim regime prior to OFCOM assuming responsibility, via the Communications Bill, as the national regulatory authority for the purposes of the Directives. While the detail of any interim regime has not yet been decided, it is anticipated that Oftel will be responsible for the setting and administration of the general conditions under Parts A (except conditions under condition 17 of Part A, and Part B entirely, which will be the responsibility of the Radiocommunications Agency) and C of the Annex to the Authorisation Directive should an interim regime be required. Accordingly, this consultation sets out Oftel’s initial views on the general conditions. The Government will make known its intended approach to this issue as soon as possible. There will be full consultation on any ECA regulations proposed for this purpose.

Chapter 2

Approach to drafting the general conditions

2.1 The starting point for drafting the new general conditions has been Oftel’s objectives, in particular appropriate regulation, as applied to the requirements of the relevant Articles of the Directives themselves and in particular the constraints of the Annex to the Authorisation Directive. The wording used in the Directives has provided a basis for the draft general conditions, and where certain terms have been defined in the Communications Bill, these definitions have been incorporated into the draft conditions.

Removal of existing obligations

2.2 All current individual and class licences have been reviewed to determine which existing obligations are appropriate to be carried forward into general conditions and which must fall away. The constraints of the Authorisation Directive have required the complete removal of many existing obligations on all communications providers, in that many licence conditions will not be replaced by similar general conditions of entitlement. Wherever possible, unnecessary obligations have been removed.

Correlation between existing and new obligations

2.3 Many obligations required by the new Directives are similar to obligations which applied under previous Directives. Similar wording and structure to current licence conditions has been used where appropriate for the purposes of continuity and where this complies with the new framework.

2.4 To assist in understanding the move from the current regime to the new obligations, a cross-reference table has been created (Annex 2). The first column lists the current obligations contained in the standard fixed and mobile public telecommunication operator licence. The second column identifies whether the requirement continues to apply or has been removed. If it remains applicable, it lists the new general condition most similar to the current condition. Where no general condition exists, a similar obligation may be featured elsewhere in the new regime (eg it may be a specific condition or exist on the face of the Communications Bill). It should be noted that these are the Director’s initial views issued for consultation. It must also be stressed that the existence of a new general condition next to a current licence condition does not necessarily represent an ‘exact fit’. No general condition is exactly the same as a previous licence condition. This is because all the general conditions, whether new or similar to existing obligations, have been drafted in an attempt to remove any unnecessary wording and complicated structure in order to make them easier to understand without losing legal certainty.

2.5 The Authorisation Directive requires that the general conditions shall not duplicate any obligation which applies by virtue of existing national legislation. Oftel believes that the general conditions proposed by this consultation document comply with this requirement, however we would invite any comments on this.

Chapter 3

The draft general conditions

3.1 The remainder of this document provides a brief commentary on each proposed general condition, including how the condition fits within the terms of the Annex to the Authorisation Directive and the Communications Bill. The proposed draft general conditions are at Annex 3 of this consultation document (with relevant definitions of terms either at Part 1 of the Schedule at Annex 3, if used more than once, or where only used once, at the end of the condition to which they relate).

Condition 1: General access and interconnection obligations

3.2. This condition obliges providers of public electronic communications networks to negotiate interconnection agreements with each other. It also imposes restrictions on the use or passing on of confidential information obtained by a communications provider during access or interconnection negotiations.

3.3 Article 4(1) of the Access Directive requires all operators of a public electronic communications network to be given the right and the obligation to negotiate interconnection with each other. Currently, those communications providers who have been granted ‘Annex II’ status are able and obliged to negotiate interconnection with each other, however, under the new regime, Annex II status will no longer exist. In practice, it could be said that the category of ‘providers of a public electronic communications network’ replaces Annex II status. However, ‘provision of a public electronic communications network’ is a wider concept than that envisioned by the restrictive Annex II criteria currently in place. Later this year, Oftel will publish some initial guidance on who will qualify as a ‘provider of a public electronic communications network’, and the transition from the present Annex II regime. Oftel understands that the next publication of the Communications Bill will address procedures for the resolution of disputes relating to access and interconnection between communications providers.

3.4 This condition is required to implement the obligations contained in Articles 4(1) and (3) of the Access Directive, and falls within conditions 3 and 14 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(b) of the Communications Bill.

Condition 2: Standardisation and specified interfaces

3.5 This condition requires all communications providers to take full account of any technical standards which are published in the Official Journal of the European Communities or, where no such standards have been published, other relevant international standards.

3.6 It is considered necessary to retain the ability for OFCOM to specify interconnection interface standards required for end to end interoperability. This obligation is currently contained in condition 16 of all public telecommunication operator licences. Although the Director has not yet had to make such a specification, Oftel wishes to encourage continued industry self-regulation with respect to standards for interconnection and sees this condition as important in providing such encouragement.

3.7 This condition is required to implement the obligations contained in Article 17 of the Framework Directive, and falls within conditions 3 and 18 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(b) and (h) of the Communications Bill.

Condition 3: Proper and effective functioning of the network

3.8 This condition requires communications providers to take all reasonably practicable steps to secure the proper and effective functioning of the public telephone network at fixed locations, including uninterrupted access to emergency organisations. Communications Providers operating a public telephone network may not unreasonably restrict access to the network on the basis of network integrity and network security.

3.9 This condition is required to implement the obligations contained in Article 23 of the Universal Service Directive, and falls within condition 15 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(c) of the Communications Bill.

Condition 4: Emergency call numbers

3.10 This condition requires all providers of publicly available telephone services to ensure that any end users of such services can access emergency organisations free of charge by dialling ‘999’ or ‘112’ (the latter being the ‘Europe-wide’ emergency number). It further requires providers of public telephone networks to ensure, where technically feasible, that caller location information is available to emergency organisations.

3.11 This condition is required to implement the obligations contained in Article 26 of the Universal Service Directive, and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 5: Use during disasters

3.12 This condition requires all communications providers who operate a public telephone network or provide publicly available telephone services to agree arrangements with emergency organisations and other authorities to ensure the provision or restoration of networks and services in the event of disaster.

3.13 This condition falls within condition 12 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(f) of the Communications Bill.

Condition 6: Public pay telephones

3.14 It is proposed that all rules specific to public pay telephones appear in this condition. This condition requires that operator assistance, directory enquiry facilities and access to emergency services are accessible from all public pay telephones, and also requires certain basic information, including call charges, payment options and the location of the telephone to be displayed on or around all public pay telephones.

3.15 It is settled Oftel policy that providers of pay telephones on public land should be subject to certain additional obligations for the protection of consumers. Communications providers supplying pay telephones on public land are subject to additional requirements not to remove such pay telephones from public land without warning, and to provide certain facilities for the benefit of users with disabilities in specified percentages of such pay telephones. Providers of public pay telephones on public land in the City of Hull are subject to a lower percentage requirement for wheelchair-accessible public pay telephones. This is proportionate because there is a higher density of public pay telephones in Hull than in the rest of the UK.

3.16 This condition is required to implement the obligations contained in Articles 5(1)(b), 6, 7 and 26 of the Universal Service Directive (in conjunction with other general and specific conditions), and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 7: ‘Must-carry’ obligations

3.17 ‘Must-carry’ obligations, or obligations requiring certain channels or programmes to be provided to the public, may be imposed on broadcasting network operators where those networks are the principle means for a significant number of end users to receive radio and television. This condition requires those network operators to broadcast the programmes and services set out in the ‘must-carry list’ under clause 49 of the Communications Bill. This list may be revised by the Secretary of State for Culture, Media and Sport from time to time, and the Secretary of State may also set the terms, or direct OFCOM to set the terms, on which these programmes and services are to be broadcast.

3.18 This condition is required to implement the obligations contained in Article 31 of the Universal Service Directive, and falls within condition 6 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 49 of the Communications Bill.

3.19 This condition requires all providers of publicly available telephone services to ensure that any end users of such services can access operator assistance services and directory enquiry facilities. This condition is also needed to comply with Article 5(1)(a) of the Universal Service Directive, which requires at least one comprehensive directory (whether printed or electronic) to be available to all end users. It would be disproportionate, impractical and unworkable to require every home to be supplied with directories which list every telephone number throughout the United Kingdom. Oftel proposes therefore to maintain the current system which requires every operator of a public telephone network who is also a provider of publicly available telephone services to ensure the supply to their own subscribers of a directory for telephone numbers in their local area, which must be updated yearly. It is not required that each provider of telephone services to the public produce their own directory or directories. However, directories for all other areas in the UK must be made available to a subscriber on request. Communications providers are entitled to charge for such additional directories.

3.20 Providers of public pay telephones are excluded from the application of this condition because they are subject to their own specific requirements in relation to access to directory enquiry facilities by way of Condition 6: Public Pay Telephones (see paragraphs 3.14 to 3.16).

3.21 This condition is required to implement the obligations contained in Articles 5(1) and 25(1) and (3) of the Universal Service Directive, and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 9: Requirement to offer contracts

3.22 This condition aims to protect end users by ensuring that they have a right to a contract for the provision of electronic communications services. Under the proposed condition, all communications providers offering electronic communication services to the public must, on the request of an end user, include a minimum set of terms in any contract for the provision of such services. Oftel proposes to apply the right to a contract containing a minimum set of terms to all end users (that is, both business and residential consumers) of all electronic communication services (eg access to internet services, not just access to the public telephone network), as allowed for in Articles 20(2) and (3) of the Universal Service Directive. Oftel is of the opinion that this is an appropriate measure to protect end users that should not place an additional burden on communication providers above what is currently being provided in practice. We would welcome comments on the application of this proposed obligation beyond communications providers of voice telephony services.

3.23 Article 20(4) of the Universal Service Directive requires that subscribers of communications services be allowed to withdraw from a contract for services without penalty where the communications provider proposes to modify the contract. Oftel proposes to limit this right of withdrawal to situations where the proposed modification is likely to detriment the subscriber. Oftel considers this to be an appropriate and proportionate interpretation and application of the Directive provision in the interests of end users, but would welcome comments.

3.24 This condition is required to implement the obligations contained in Article 20 of the Universal Service Directive, and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 10: Transparency and publication of information

3.25 This condition aims to protect consumers by requiring all communications providers offering publicly available telephone services to publish clear and up to date information on those services and relevant prices. Providers of public pay telephones are excluded from the application of this condition because they are subject to transparency and publication requirements by way of Condition 6: Public Pay Telephones (see paragraph 3.14 to 3.16).

3.26 Article 21(2) of the Universal Service Directive requires national regulatory authorities to encourage the provision of information to enable end users to make an independent evaluation of the cost of alternative usage patterns. For this purpose, Oftel proposes to require communications providers to publish the relevant information on their own website, and to send a copy of the relevant information to any person who reasonably requests it. Oftel considers that a ‘reasonable request’ for the purposes of this condition would include a request for such information in order to create an interactive internet guide to prices for telephone services or to offer independent tariff comparison services to end users. The request must also be ‘reasonable’ to the extent that it does not place an onerous burden on the communications provider in providing the relevant information. For example, the requested format of the information, or the requested frequency of the provision of such information, must be reasonable. Comments on these proposals for publication are welcome.

3.27 This condition is required to implement the obligations contained in Article 21(1) and (2) of the Universal Service Directive, and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 11: Quality of service

3.28 This condition requires quality of service information to be published and provided to OFCOM by communications providers offering electronic communication services to the public, but only where requested by OFCOM. OFCOM may only make such a request where they have first sought the views of communications providers. Oftel proposes to limit the application of this condition to those communications providers who have been in operation for at least 18 months. The reason for this limitation is to reduce the regulatory burden on recent new entrants, and is intended to take into account the fact that a communications provider in operation for a shorter period is unlikely to have the relevant information available. Oftel would welcome comments on whether these limitations are appropriate and proportionate.

3.29 This condition is required to implement the obligations contained in Article 22 of the Universal Service Directive, and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 12: Metering and billing

3.30 This condition requires all providers of public electronic communication services to maintain their metering and billing systems so as to ensure the accuracy of bills to their end users. These providers are also required to retain any records which are used in the creation of end user bills for 15 months – this is a change from the previous public telecommunication operator licence condition which referred to 2 years. Oftel proposes that 15 months is sufficient for establishing accuracy over an appropriate period of time and the effective operation of its Metering and Billing Scheme. We welcome comments on this point given that this obligation will apply to all providers of public electronic communication services to end users, not just providers of voice telephony services.

3.31 The Oftel Metering and Billing Scheme protects consumers by ensuring, as far as possible, that bills are accurate. At present, this Scheme applies to all providers of public telephone networks or publicly available telephone services which generate in excess of £1 million annual revenue form voice telephony services. Oftel is not proposing to extend the application of the Metering and Billing Scheme beyond that which is currently in place, and will consult in future should any extension be anticipated. This condition incorporates the current Metering and Billing Scheme, in that failure to comply with that Scheme where required will result in a communications provider being in breach of this condition. Breach of a general condition may lead to an enforcement action being brought by OFCOM under clauses 74 to 81 of the Communications Bill. It is anticipated that the Metering and Billing Scheme will be continued by OFCOM. The draft condition attempts to more accurately reflect the operation of the Metering and Billing Scheme than the current equivalent telecommunication licence conditions.

3.32 This condition reflects current Oftel policy for protection of end users, and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 13: Itemised bills

3.33 Oftel considers that in order to protect end users, this obligation should apply as a general condition on all providers of publicly available telephone services. Oftel is of the opinion that the requirements of this condition reflect good practice and should not add any regulatory burden as they do not go beyond what is currently being offered by virtually all providers of publicly available telephone services (both fixed and mobile). Specific provision has been made for the exemption of pre-paid services and calls to helplines. Oftel welcomes comments on the proposed application of this general condition.

3.34 This condition falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 14: Non-payment of bills

3.35 This condition aims to protect end users by requiring providers of publicly available telephone services to end users at a fixed location to comply with specific requirements prior to disconnecting any such services or imposing any penalty payment due to the non-payment of a telephone bill. Oftel considers this obligation should apply beyond communications providers designated with universal service obligations, as allowed by Article 29(3) of the Universal Service Directive. Disconnection of a home telephone should be a last resort. This accords with current policy and practice.

3.36 The measures to be taken by a communications provider leading up to disconnection must also be published. Oftel proposes two methods of publication to satisfy this requirement: sending a copy of the information to a subscriber on request; and putting the information on the communications provider’s website. The final method goes beyond what is currently required in the equivalent PTO licence condition, but Oftel considers it to be an appropriate measure to protect end users and encourage transparency of information. Comments on this proposal are welcome.

3.37 This condition falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 15: Codes of practice and dispute resolution for relevant customers

3.38 This condition requires all providers of public electronic communication services to establish or comply with approved codes of practice and dispute resolution procedures for the benefit of ‘domestic and small business customers’ (see the definition at the end of the draft condition).

3.39 Article 34 of the Universal Service Directive requires that transparent, simple and inexpensive out-of-court dispute resolution procedures are available to consumers. This condition reflects current policy on consumer dispute resolution as set out in clauses 39 to 42 of the Communications Bill. Oftel’s policy is that communications providers should voluntarily establish or sign up to an approved consumer dispute resolution scheme. However, where no such schemes exist, Oftel has the ability to establish its own scheme where necessary. It is intended that the Telecommunications Ombudsman Scheme, recently established by an industry working group in consultation with consumer bodies, will provide an appropriate consumer dispute resolution mechanism for communications providers for the purposes of this condition.

3.40 Compliance with approved codes of practice is a new policy initiative by Oftel which stems from proposals set out in the Communications White Paper. Similar to dispute resolution procedures, it is intended that communications providers should establish their own codes of practice for the handling of their relationship with and complaints received from their customers, which will then be submitted to OFCOM for approval. However, where no such code exists, OFCOM retains the ability to require communications providers to comply with the provisions of a code approved or established by OFCOM. Codes of practice for dealing with complaints received from domestic and small business customers are specifically provided for in clause 39(4) of the Communications Bill. Oftel proposes, in line with the recommendations of the Communications White Paper, to extend the potential application of approved codes of practice to all aspects of the delivery of communications services to domestic and small business customers. Any code of practice would be subject to standard consultation procedures prior to its application.

3.41 This condition is required to implement the obligations contained in Article 34 of the Universal Service Directive, as well as current Oftel policy, and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 16: Controlled Premium Rate Services

3.42 This condition is intended to provide regulatory underpinning to the work currently carried out by the Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS). ICSTIS is a self-regulatory body, funded by the premium rate industry, and its role is to supervise the promotion and content of Premium Rate Services (PRS). It exercises this role through requiring compliance with a code of practice. This condition requires communications providers who provide, or allow (via their network or services) the provision of, Controlled Premium Rate Services (CPRS) to abide by the ICSTIS Code.

3.43 CPRS are more narrowly defined than PRS and, in particular, do not include services which cost up to and including a certain amount which is determined by Oftel (currently 10 pence), other than Chatline Services which are automatically included. It is intended that OFCOM will retain the ability to make such a determination from time to time, subject to standard consultation procedures. (The draft general condition, unlike the current CPRS licence condition, does not include detailed provisions regarding the procedures to be followed on consultation, as it is Oftel’s view that these procedures are in fact no different from what would be followed in a standard consultation.) Oftel considers that those services that meet the characteristics of CPRS have the potential to cause significant harm given that they are charged at a high price, and that subscribers therefore run the risk of inadvertently running up high telephone bills and being disconnected. This condition aims to protect end users from potential misleading practices on the part of unscrupulous communications providers or other persons.

3.44 It is intended that OFCOM will make a direction requiring compliance with the ICSTIS code of practice for the purposes of paragraph 16.1 of the condition prior to it coming into effect on 25 July 2003. Where a communications provider provides, or provides access to, CPRS after that date and not in accordance with the code they will be subject to the enforcement mechanisms set out in clauses 74 to 81 of the Communications Bill.

3.45 This condition reflects current Oftel policy for protection of end users, and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 17: Automatic calling equipment

3.46 This condition aims to protect consumers from the nuisance and harassment of unwanted ‘silent’ calls or recorded messages being sent to their telephone using autodiallers, by requiring that a consumer’s consent to receive such calls is given prior to the call being made. Following Oftel’s recent consultation on the current Use of Automatic Calling Equipment licence condition, Oftel has decided to include a provision in the condition requiring that recorded messages sent using automatic calling equipment must include certain information about the person or organisation initiating the call. This provision also complements the obligation in section 27 of the Telecommunication (Data Protection and Privacy) Regulations 1999 with respect to the use of automatic calling equipment for direct marketing purposes.

3.47 This proposed condition will only apply to the use of automatic calling equipment as part of the provision of an electronic communications network or electronic communications service. The new regulatory framework for electronic communications networks does not extend beyond the ‘network termination point’, which is the physical point at which a person is provided access to a public communication network. Hence it is not possible for the general conditions (which can only apply to communication providers) to impose obligations that have affect beyond the network termination point. Oftel is currently considering how the improper use of electronic communications networks and services by end users may be regulated under the new regime. The Telecommunication (Data Protection and Privacy) Regulations 1999 will continue to have a broader application.

3.48 This condition reflects current Oftel policy for protection of consumers, and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 18: Special measures for end users with disabilities

3.49 This condition aims to protect end users with disabilities by ensuring equivalent access for them to publicly available telephone services. It is intended that the current obligations on communications providers contained in telecommunication licence conditions for the benefit of users with disabilities are to be maintained through this general condition.

3.50 This condition is required to implement the obligations contained in Article 7 of the Universal Service Directive (in conjunction with other specific universal service conditions), and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 19: Provision of additional facilities

3.51 This condition requires providers of a public telephone network to provide tone dialling and calling-line identification facilities over their networks, subject to technical feasibility and economic viability. Calling line identification facilities, in particular, provide benefits for law-enforcement agencies as well as consumers. Oftel consider that this condition needs to be imposed unless it is concluded, after taking into account the views of interested parties, that there is already sufficient access to these facilities. Oftel would appreciate comments from the industry as to whether these facilities are already widely available throughout the UK. If so, it may not be necessary to impose this condition.

3.52 This condition is required to implement the obligations contained in Article 29 of the Universal Service Directive, and falls within condition 8 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 38(1)(a) of the Communications Bill.

Condition 20: Allocation and adoption of telephone numbers

3.53 This condition sets out the terms under which a communications provider may apply for, be allocated and adopt telephone numbers. ‘Telephone numbers’ are given a broad definition within the Communications Bill (see the general definitions at Annex 3) , and ‘adoption’ is a new term which covers:

• allocation or transferral of a number to a particular customer or piece of equipment;
• use of a number for identifying any service or route;
• use of a number for identifying a communication as one to be transmitted by a particular communications provider;
• designation of a number for use in selecting a service or any elements or characteristics of a service; and
• authorising the use of a number by other persons.

3.54 It is Oftel’s intention that this condition will maintain the current structure in the regulation of numbering by being supplemented by additional provisions in a secondary document (as is currently the case with the National Numbering Conventions (the Conventions), which supplement the current licence condition). However, Oftel has attempted in drafting this condition to make numbering regulation more transparent. The draft general condition contains obligations which derive from the current Numbering Arrangements licence condition and the Conventions, as well as obligations which are to be imposed pursuant to the terms of the new Directives and the Communications Bill. It is anticipated that the secondary document (to be called the National Telephone Numbering Plan (the Plan)) will contain the numbers available for allocation as telephone numbers, as well as restrictions relating to the adoption and use of those numbers, as contemplated by clause 43 of the Communications Bill.

3.55 Oftel will consult separately on the detail of that new Plan. However, it is intended that this document will comprise elements of the current Conventions, the National Numbering Code (the Code), and the Specified Numbering Scheme (the Scheme) which are required for the efficient management of numbering resources in the new regime. These documents are subject to constant review and frequent amendments. Oftel is therefore of the view that to draft and consult upon a new National Telephone Numbering Plan based on the current form of these documents would be misleading. Any Plan coming into effect on 25 July 2003 will need to reflect developments in the Conventions, the Code and the Scheme which have occurred between now and then. Oftel therefore proposes to consult on a draft Plan in the first half of 2003 so as to ensure that it reflects the latest policy and practice with respect to number allocation and management. The Conventions, the Code and the SNS List will continue to be amended through the normal consultation processes in the meantime.

3.56 OFCOM will have a duty under clause 48(1)(a) of the Communications Bill to ensure that best use is made of numbers. To fulfil this duty, Oftel proposes to require all communications providers, via condition 20.4, to secure that any numbers allocated to them are used and managed efficiently and effectively. Condition 20.4 has been drafted so as to enable OFCOM, in verifying compliance with that condition, to request such information as is proportionate and justified to ensure that communications providers are making effective and efficient use of the numbers allocated to them. It is intended that what Oftel considers to be ‘effective and efficient use’ in this context will be covered in greater depth in the proposed consultation on the new National Telephone Numbering Plan.

3.57 This condition is required to implement the obligations contained in Article 9 of the Framework Directive, and falls within conditions 1, 2, 6 and 9 of Part C of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 44(1)(a) and (c) of the Communications Bill.

Condition 21: Number portability

3.58 This condition requires communications providers to ensure that their subscribers are able to transfer their telephone numbers from one provider to another at a reasonable cost. This condition applies to both fixed and mobile public telephone communications providers, and combines appropriate elements of the current fixed and mobile PTO licence conditions. The detailed technical requirements on operators to facilitate the provision of portability continue to sit within a separate document, the Functional Specification. It is not intended to amend the Functional Specification from its current form, hence it does not form part of this consultation document. Oftel has decided to omit the requirement that a request from a subscriber for number portability is to be in writing, on the basis that this imposes an unnecessary barrier to the provision of number portability to end users. We would welcome any comments from both industry and consumer groups on the likely impact of this change.

3.59 This condition is required to implement the obligations contained in Article 30 of the Universal Service Directive, and falls within condition 3 of Part C of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 44(1)(e) of the Communications Bill.

Condition 22: Provision of subscriber directory information

3.60 This condition requires all communication providers with a numbering allocation to pass on their subscriber directory information to any other provider of publicly available telephone services. Its purpose is to ensure the provision of the most comprehensive directory database(s) from which directory products and services can be provided.

3.61 This condition is required to implement the obligations contained in Article 25(2) of the Universal Service Directive, and falls within condition 4 of Part C of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 44(1)(d) and (3) of the Communications Bill.

Condition 23: Non-geographic numbers

3.62 The USD aims to ensure that callers from any Member State can access services provided in every other Member State over non-geographic telephone numbers (which include mobile, freephone and premium rate numbers). This condition requires communications providers who assign such numbers to their subscribers to ensure the accessibility of those numbers and services from other Member States. However, as provided for in the condition, ‘economic and technical feasibility’ may, in practice, mean operators are unable to provide widespread access to non-geographic numbers in the UK by overseas callers. Similarly, those persons who offer services over non-geographic numbers may choose to limit access to their services from overseas callers.

3.63 This condition is required to implement the obligations contained in Article 28 of the Universal Service Directive, and falls within condition 4 of Part A of the Annex to the Authorisation Directive. OFCOM will be entitled to set this condition under clause 43(3) of the Communications Bill.

Chapter 4

How to make comments on this consultation document

4.1 Oftel welcomes comments from interested parties on the issues outlined in this paper. The closing date for submitting comments is 13 September 2002.

4.2 Where possible, comments and any comments-on-comments should be made in writing and sent by e-mail to the address given below. However, copies may also be posted or faxed to the address below. If any interested parties are unable to respond in one of these ways, they should discuss alternatives with the Oftel manager named below:

Further copies of this document

4.3 Paper copies of this document, and alternative formats such as large print, Braille, disc and audio cassette can be made available on request. Please contact Oftel's Research and Information Unit by phoning 020 7634 8761 or by sending an e-mail to infocent@oftel.gov.uk.

Publication of comments made by stakeholders

4.4 On this occasion, Oftel is not programming a formal period during which interested parties may comment on the responses made by others. Nevertheless, in the interests of transparency, all non confidential comments and comments-on-comments, will be published. Respondents should separate out any confidential material into a confidential annex which is clearly identified as containing confidential material. Oftel will take steps to protect the confidentiality of all such material from the moment that it is received at Oftel’s offices. However, in the interests of transparency, respondents should avoid applying confidential markings wherever possible.

4.5 Non confidential responses can be viewed on Oftel’s website in the Publications section under Responses to Oftel consultations. They can also be viewed at Oftel’s Research and Information Unit. Appointments must be made in advance by phoning 020 7634 8761 or sending an e-mail to infocent@oftel.gov.uk.

e-mail notifications

4.6 Oftel has a free e-mail based mailing list to help people stay informed about the work that Oftel is doing. Each time an Oftel document is published and placed on Oftel’s website at www.oftel.gov.uk, subscribers to the list receive an e-mail alert. To register, please go to the What’s New section of the website and access the electronic form.

Annex 1

The Annex to the Authorisation Directive

The conditions listed in this Annex provide the maximum list of conditions which may be attached to general authorisations (Part A), rights to use radio frequencies (Part B) and rights to use numbers (Part C) as referred to in Article 6(1) and Article 11(1)(a).

A. Conditions which may be attached to a general authorisation

1. Financial contributions to the funding of universal service in conformity with Directive 2002/22/EC (Universal Service Directive).

2. Administrative charges in accordance with Article 12 of this Directive.

3. Interoperability of services and interconnection of networks in conformity with Directive 2002/19/EC (Access Directive).

4. Accessibility of numbers from the national numbering plan to end users including conditions in conformity with Directive 2002/22/EC (Universal Service Directive).

5. Environmental and town and country planning requirements, as well as requirements and conditions linked to the granting of access to or use of public or private land and conditions linked to co-location and facility sharing in conformity with Directive 2002/22/EC (Framework Directive) and including, where applicable, any financial or technical guarantees necessary to ensure the proper execution of infrastructure works.

6. "Must carry" obligations in conformity with Directive 2002/22/EC (Universal Service Directive).

7. Personal data and privacy protection specific to the electronic communications sector in conformity with Directive 97/66/EC of the European Parliament and of the Council of 15 December 1997 concerning the processing of personal data and the protection of privacy in the telecommunications sector (1).

8. Consumer protection rules specific to the electronic communications sector including conditions in conformity with Directive 2002/22/EC (Universal Service Directive).

9. Restrictions in relation to the transmission of illegal content, in accordance with Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the internal market (2) and restrictions in relation to the transmission of harmful content in accordance with Article 2a(2) of Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (3).

10. Information to be provided under a notification procedure in accordance with Article 3(3) of this Directive and for other purposes as included in Article 11 of this Directive.

11. Enabling of legal interception by competent national authorities in conformity with Directive 97/66/EC and Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (4).

12. Terms of use during major disasters to ensure communications between emergency services and authorities and broadcasts to the general public.

13. Measures regarding the limitation of exposure of the general public to electromagnetic fields caused by electronic communications networks in accordance with Community law.

14. Access obligations other than those provided for in Article 6(2) of this Directive applying to undertakings providing electronic communications networks or services, in conformity with Directive 2002/19/EC (Access Directive).

15. Maintenance of the integrity of public communications networks in accordance with Directive 2002/19/EC (Access Directive) and Directive 2002/22/EC (Universal Service Directive) including by conditions to prevent electromagnetic interference between electronic communications networks and/or services in accordance with Council Directive 89/336/EEC of 3 May 1989 on the approximation of the laws of the Member States relating to electromagnetic compatibility (1).

16. Security of public networks against unauthorised access according to Directive 97/66/EC.

17. Conditions for the use of radio frequencies, in conformity with Article 7(2) of Directive 1999/5/EC, where such use is not made subject to the granting of individual rights of use in accordance with Article 5(1) of this Directive.

18. Measures designed to ensure compliance with the standards and/or specifications referred to in Article 17 of Directive 2002/21/EC (Framework Directive).

B. Conditions which may be attached to rights of use for radio frequencies

1. Designation of service or type of network or technology for which the rights of use for the frequency has been granted, including, where applicable, the exclusive use of a frequency for the transmission of specific content or specific audiovisual services.

2. Effective and efficient use of frequencies in conformity with Directive 2002/21/EC (Framework Directive), including, where appropriate, coverage requirements.

3. Technical and operational conditions necessary for the avoidance of harmful interference and for the limitation of exposure of the general public to electromagnetic fields, where such conditions are different from those included in the general authorisation.

4. Maximum duration in conformity with Article 5 of this Directive, subject to any changes in the national frequency plan.

5. Transfer of rights at the initiative of the right holder and conditions for such transfer in conformity with Directive 2002/21/EC (Framework Directive).

6. Usage fees in accordance with Article 13 of this Directive.

7. Any commitments which the undertaking obtaining the usage right has made in the course of a competitive or comparative selection procedure.

8. Obligations under relevant international agreements relating to the use of frequencies.

C. Conditions which may be attached to rights of use for numbers

1. Designation of service for which the number shall be used, including any requirements linked to the provision of that service.

2. Effective and efficient use of numbers in conformity with Directive 2002/21/EC (Framework Directive).

3. Number portability requirements in conformity with Directive 2002/22/EC (Universal Service Directive).

4. Obligation to provide public directory subscriber information for the purposes of Articles 5 and 25 of Directive 2002/22/EC (Universal Service Directive).

5. Maximum duration in conformity with Article 5 of this Directive, subject to any changes in the national numbering plan.

6. Transfer of rights at the initiative of the right holder and conditions for such transfer in conformity with Directive 2002/21/EC (Framework Directive).

7. Usage fees in accordance with Article 13 of this Directive.

8. Any commitments which the undertaking obtaining the usage right has made in the course of a competitive or comparative selection procedure.

9. Obligations under relevant international agreements relating to the use of numbers.

Annex 2

Cross-reference table for standard fixed and mobile Public Telecommunication Operator (PTO) Licences granted under the Telecommunications Act 1984