CONTENTS

Summary

Determination under condition 11.1 of the COLT Telecommunications licence, the Energis licence, the Global Crossing licence, the Thus PLC licence, the MCI Worldcom licence and the Your Communications licence

Explanatory Memorandum

SUMMARY

This document contains a determination under Condition 11.1 of the licences of COLT, Energis, Global Crossing, Thus, WorldCom and Your Communications. The effect of the determination will be to provide for the latest date by which each of the affected licensees shall apply for Approval as regards the description of Meter specified by the Director General of Telecommunications (the ‘Director’) which is in use on the date of that specification.

DETERMINATION UNDER CONDITION 11.1 OF THE COLT TELECOMMUNICATIONS LICENCE, THE ENERGIS LICENCE, THE GLOBAL CROSSING LICENCE, THE THUS PLC LICENCE, THE MCI WORLDCOM LICENCE AND THE YOUR COMMUNICATIONS LICENCE

WHEREAS:

A. the Secretary of State has granted under section 7 of the Telecommunications Act 1984 (the 'Act') the following licences (the 'Relevant Licences'):

B. Condition 11.1 of each of the Relevant Licences provides that as regards any description of Meter in use on a date specified by the Director in connection with the Applicable Systems and which has been specified by the Director, the Licensee shall apply for Approval as soon as is practicable, and in any case not later than such date as the Director may determine in relation to that description of Meter;

C. this Determination relates to the meters, as specified by the Director in Designation Number Oftel/2001/1 of 21^st December 2001 and remade without change 26 June 2002, in use by the holders of the Relevant Licences on the date of that Designation (the ‘Meters’); and

D. in making this Determination, the Director is satisfied that it is reasonable to determine that the latest date by which the holders of the Relevant Licences shall apply for approval for the Meters shall be 2 January 2003. The Director is further satisfied that it is justified to specify a different, later date for other holders of licences granted under section 7 of the Act in a separate determination;

E. in making this Determination, the Director has taken into account representations and observations received as part of the consultation process that concluded 16^th August 2002, and the matters described in the Explanatory Memorandum to this Determination; and

NOW, THEREFORE, THE DIRECTOR , PURSUANT TO CONDITION 11.1 OF THE RELEVANT LICENCES, HEREBY DETERMINES THAT:

the latest date by which the holders of the Relevant Licences shall apply for approval for the Meters pursuant to Condition 11.1 of the Relevant Licences shall be 2^nd January 2003.

Signed:………………………………………..

David Albert Edmonds

Director General of Telecommunications

10 September 2002

Explanatory Memorandum

1. In February 2000, Oftel published the Statement "Ensuring telephone bills are accurate" which set out plans for a revised Metering and Billing scheme. The scheme is intended to improve consumers’ confidence in the integrity and accuracy of the bills they receive from communications service providers. The main features of the revised scheme are:

• a revised standard which covers fixed charges (such as line rental and discount schemes) and which focuses on the accuracy of the individual customer’s bill as well as the aggregate accuracy of metering and billing systems;
• an increase in the number of approval bodies accredited to operate the scheme;
• the progressive extension of the scheme to all major operators and service providers.

2. Because of its complexity and the decision to proceed on a co-regulatory and hence consensual basis, the revised scheme has taken longer to develop than was originally envisaged. However the key elements have now been set in place:

• the revised standard, OTR 003 : 2001, was designated on 21 December 2001 and re-designated without change on 26 June 2002;
• the first issue of the Metering Systems and Billing Systems Approval Scheme Guide was published on 9 January 2002;
• three Approval Bodies (BABT, BSI, NQA) were formally appointed by the Secretary of State at the Department of Trade and Industry to approve meters against the designated standard, on 25 March 2002.

3. The only providers included in the original scheme were BT, Kingston, Cable & Wireless (Mercury), BT Cellnet and Vodafone, which will migrate to the revised scheme. However the intention is that the revised scheme will be progressively extended to apply to all providers with an annual turnover in excess of £1m.

4. In the February 2000 Statement, the following providers were identified as being the first to be brought in to the revised scheme: One 2 One and Orange (tranche 1); all cable companies i.e. Ntl and Telewest (tranche 2); COLT and Energis (tranche 3); Global Crossing, Torch, Thus, World Com and Your Communications (tranche 4). The identity of these providers was subsequently confirmed in a series of communications from Oftel: the December 2000 open letter to the industry and the October 2001 Statement which introduced the consultation on the revised standard. That October 2001 Statement indicated Oftel’s intention to merge the first two tranches and to invite the relevant providers to apply for approval within six months of the revised standard’s designation.

5. More recently, in February 2002, Oftel wrote to all the providers in the first four tranches setting out the dates by which they would be expected to apply to an approval body and seek approval for their metering and billing systems within a suitable time frame. The dates were 30^th June 2002 for tranches 1 and 2, and 30^th September 2002 for tranches 3 and 4. These dates were staggered so that the three approval bodies have the capacity and time to handle applications for approval in an orderly way. A first Determination applying to the providers in tranches 1 and 2 was made on 26 June 2002. It is intended that further Determinations in respect of other providers not included in tranches 1 to 4 will be made, subject to consultation, in due course. However, there is nothing to prevent any provider seeking approval for its meters in advance of a Determination being made.

6. Under Condition 11.1 Metering Arrangements) of the standard PTO licence, the Director was minded to determine that the latest date by which the holders of the Relevant Licences i.e. COLT, Energis, Global Crossing, Thus, WorldCom and Your Communications should have applied for approval of their meters was 30^th September 2002 and issued a consultation to that effect on 19^th July 2002.

7. Representations were received from COLT, Energis, Global Crossing, Worldcom, and Your Communications that the proposed date by which the licensees should apply for approval of their meters was unrealistic and that the date should be deferred for 12 months, to 30 September 2003. The Director is unwilling to accept a year’s postponement on the grounds that:

(i) licensees have had a long period of preparation running up to the proposed Determination

(ii) a year-long postponement might be destabilising to the Approval Bodies which have already made substantial investments in developing the Metering and Billing Scheme; and

(iii) the date Determined only requires licensees to initiate the approval process for their Metering and Billing systems, not complete it.

However some modest delay would be acceptable and, hence, the Director has now determined that the latest date by which the holders of the Relevant Licences i.e. COLT, Energis, Global Crossing, Thus, WorldCom and Your Communications shall have applied for approval of their meters shall be 2 January 2003.

8. In this instance no representations in electronic form were received. However paper copies of the representations that were received are publicly available in Oftel's Research and Intelligence Unit. Appointments to view written comment in this way, which must be made in advance, may be arranged by phoning: 020 7634 8761 (fax: 020 7634 8946).