Contents 
Direction
Explanatory Memorandum
Chapter
1 Summary
Chapter
2 Background
Chapter
3 History of the dispute
Chapter
4 Responses to the draft direction
Chapter
5 The Director’s decision and reasons
Annex
A Schedule of operators in the Telewest Group of companies
Direction
under the provisions of regulation 6(6) of the Telecommunications (Interconnection)
Regulations 1997 of a dispute between Telewest Communications PLC and
other operators in the Telewest group of companies as set out in annex
A to this Direction ("Telewest" and British Telecommunications
PLC ("BT") over interconnect charges for origination of calls
to freephone numbers
WHEREAS:
A. The Secretary
of State granted to British Telecommunications on 22 June 1984 a licence
(the "BT licence") under section 7 of the Telecommunications
Act 1984 ("the Act") for the running of telecommunications
systems specified in that Licence;
B. By virtue of
section 109 of paragraph 20 of Schedule 5 of the Act the BT licence
has effect as if granted to British Telecommunications plc ("BT");
C. The Secretary
of State has granted to Telewest Communications plc and the other operators
in the Telewest group of companies as set out in Annex A to the direction
on 14 January 1997 licences under Section 7 of the Act for the running
of a telecommunications system as specified in the licence;
D. On 1 January
1998 the Interconnection Directive came into force and was implemented
in the UK through the Telecommunications (Interconnection) Regulations
1997 (the "Regulations") and conditions in the licences of
operators;
E. Regulation 6(6)
of the Regulations provides that where there is a dispute concerning
interconnection between organisations, the Director General of Telecommunications
("the Director") shall, at the request of either party, take steps to
resolve the dispute within six months of the date of the request. The
Determination which the Director makes to resolve the dispute must represent
a fair balance between the legitimate interests of the parties, and
must be notified to the parties in accordance with Regulation 8(3).
The parties are entitled to a full statement of the reasons on which
the Determination is based;
F. Telewest entered
into an Interconnect Agreement with BT on 20 October 1997;
G. On 23 November
2001, Telewest issued an Operator Charge Change Notice ("OCCN")
to BT. The OCCN sought an increase in the call origination charges payable
to Telewest by BT for freephone traffic terminating on the BT network;
H. On 3 December
2001, BT rejected Telewest’s OCCN on the basis that it did not conform
to the current NTS formula as determined by Oftel. Telewest and BT are
unable to agree on this matter and are therefore in dispute;
I. On 14 February
2002, in accordance with the provisions of Regulation 6(6) of the Regulations,
Telewest referred this dispute to the Director for determination;
J. The Director
has a duty to encourage and secure adequate interconnection in the interests
of all users in a way which provides maximum economic efficiency and
gives maximum benefit to end-users;
K. The Director
has considered, inter alia, the information provided by the parties
and the matters set out in Regulation 6(8) of the Regulations. The principal
points are summarised in the Explanatory Memorandum which accompanies,
and is published with, this direction;
L. A draft of this
direction and the Explanatory Memorandum was issued to interested parties
on 26 June 2002. Comments were invited by 24 July 2002;
NOW,
THEREFORE:
PURSUANT TO REGULATION
6(6) OF THE INTERCONNECTION REGULATIONS, AND HAVING CONSIDERED THE VIEWS
OF THE PARTIES AND THOSE MATTERS SET OUT IN REGULATION 6(8) OF THOSE
REGULATIONS, THE DIRECTOR MAKES THE FOLLOWING DIRECTION TO RESOLVE THE
DISPUTE BETWEEN TELEWEST AND BT:
1. Telewest may
propose its own price for the charge of originating a freephone call
that originates on Telewest’s network and terminates on BT’s network.
2. The terms defined
in this direction shall have the meaning so defined or described. All
other words or expressions used in this direction shall have the same
meaning as in the Directive, the Regulations, the Act or the Licence
as appropriate.
3. This direction
shall take effect on the date it is published.
Chris
Kenny
Director of Compliance
A person authorised
under paragraph 8 of Schedule 1 of the Telecommunications Act 1984
13 August 2002

Explanatory
memorandum
Chapter 1
Summary
1.1 The Director
General of Telecommunications (the ‘Director’) has issued a direction
in accordance with the provisions of Regulation 6(6) of the Telecommunications
(Interconnection) Regulations 1997 (the ‘Regulations’) for the resolution
of a dispute between Telewest plc and the other operators in the Telewest
group of companies as set out in Annex A to this direction (‘Telewest’)
and British Telecommunications PLC (‘BT’).
1.2 Telewest referred
this dispute to the Director on 14 February 2002. Telewest requested
a determination from the Director that:
- Telewest should
be able to set its own price for the charge of a freephone call which
originates on Telewest’s network and terminates on BT’s network; and
- any such charge
should be derived from a reasonable Telewest specific-cost estimate.
1.3 Therefore Telewest
requested a determination by the Director on an issue of principle.
The principle in question is whether Telewest should, in the context
of the current NTS regime and the Standard Interconnect Agreement (‘SIA’),
be allowed to issue an OCCN on BT which proposes Telewest’s own call
origination charges.
1.4 Following this
referral, the Director sought the views of the parties to the dispute
and considered the submissions made by Telewest and BT. The Director
issued a draft direction in respect of this dispute on 26 June 2002
to the industry as a whole for consultation. This draft direction stated
that Telewest may propose its own price for the charge of originating
a freephone call that originates on Telewest’s network and terminates
on BT’s network. Comments were requested and have been taken into account
in making a final direction.
1.5 The details
of the submissions made in response to the draft direction, together
with the Director’s reasons for making his decision, are set out in
Chapters 4
and 5.
1.6 In summary,
the Director concludes that Telewest should be able to propose its own
price, via an OCCN, for the charge of a freephone call which originates
on its network and terminates on BT’s network. The OCCN process is set
out in paragraph 2.13. The Director does not consider that Telewest
is in a position to enforce an unreasonable charge. As neither party
to the dispute holds a position of market power in the relevant market,
a reasonable charge will be achieved via negotiations between the parties.
Therefore the Director is resolving this dispute by allowing Telewest
to propose its own charge, as any charge consequently negotiated will
be reasonable.
1.7 Furthermore,
the Director considers that Telewest, and originating operators other
than BT, should be able to set in place their own arrangements for originating
freephone calls that terminate on all other networks, not just BT’s.
Without fettering the Director’s discretion to take a different view
in the light of circumstances, if a similar dispute were referred to
Oftel in the future, the Director’s current view is that the outcome
would be similar to the one that has been reached in the present dispute.
1.8 Having considered
the facts specific to this dispute and the matters set out in Regulation
6(8) of the Telecommunications (Interconnection) Regulations 1997, this
direction, in the opinion of the Director, represents a fair balance
between the interests of the parties in each case, having regard to
the Director’s wider duties to the development of the telecommunications
industry in the UK and the encouragement of adequate interconnection
in a way that provides maximum economic efficiency and gives the maximum
benefit to end users.

Chapter
2
Background Call
origination
2.1 The originating
network is the network with access to the customer who makes a call.
Call
termination
2.2 The terminating
network is the network to which a customer who receives a call is directly
connected.
2.3 Call termination
of a geographic call has particular characteristics that arise from
the call termination externality. An externality may be said to exist
where the actions of an individual or organisation cause costs to be
incurred by others (or benefits to be gained by others), but that the
individual or organisation has no incentive to take such effects into
account.
2.4 The externality
in the termination of geographic calls arises because the retail price
of a call is paid by the caller, not the call recipient. This is known
as the ‘calling party pays’ principle. The price of call termination
depends on the network that the receiving party resides on and the caller
has no control over this. Consequently there is likely to be market
power in call termination of a geographic call.
Description
of number translation services
2.5 The term number
translation services (‘NTS’) describes a range of specially non-geographic
tariffed services, primarily used for telemarketing, which include freephone
calls, 0845 Access (LCFA) and 0870 (NCFA). NTS calls are different from
geographic calls, because the caller is generally accessing a service
at the other end of the call.
New
NTS
2.6 In December
1999, Oftel published its Statement
on the Relationship between Interconnection Charges and Retail Prices
for Number Translation Services (the ‘NTS Statement’). The NTS Statement
followed a lengthy discussion and consultation exercise in response
to a general industry view that the then existing NTS formula constrained
the ability of terminating operators to exercise sufficient control
over their NTS revenues.
2.7 The new regime
was intended to give terminating operators sufficient flexibility in
order that they could establish the price at which they would be remunerated
for NTS calls. This price would then be added to BT's regulated call
origination charge plus any transit charges to establish the retail
price for their service.
2.8 The NTS statement
confirmed that that these arrangements do not apply to originating operators
other than BT. Paragraph S.4 of the NTS Statement stated the following:
"These
arrangements do not apply to originating
operators other than BT. These operators are free to set their own originating
charges and it is up to them to negotiate with terminating operators
the payments required for access to their services".
Freephone
calls
2.9 As indicated
in paragraph 2.5, a freephone call is an NTS service. For freephone
calls, the called party pays the charge, including the charge for the
call origination service that is provided by the originating operator.
For other NTS calls, the calling party pays the charge for originating
the call.
2.10 In light of
the fact that the called party pays the charge for originating a freephone
call, it has to be considered whether the externality that exists in
the termination of a geographic call is present in the case of freephone
call origination. If the competitive conditions in freephone call origination
are sufficiently similar to those in call termination for a geographic
call, then the externality may also be present in freephone call origination,
and the operator originating freephone calls might possess market power.
However, if call origination for freephone calls has the same characteristics
as call origination generally, operators originating freephone calls
(apart from BT) would not possess market power.
Reciprocity
2.11 The reciprocity
principle states that for services that are provided reciprocally, charges
should also be reciprocal. The Director supports the principle of reciprocity
for the termination of geographic calls, as it is the calling party
and not the called party that pays for call termination, thus creating
diminishing incentives for terminating operators to reduce the cost
of terminating a call on their network. Higher costs are likely to be
passed on to retail customers. Therefore reciprocity minimises the distorting
effects of this externality.
2.12 As set out
in paragraph 2.10, if the origination of a freephone call is sufficiently
similar to the termination of a geographic call, this might place the
operator originating the freephone call in a position of market power.
If this was the case, the arguments for reciprocity that are relevant
in the context of geographic call termination might also apply to the
origination of freephone calls by originating operators other than BT.
The
OCCN process
2.13 Clause 13 of
BT’s SIA describes the process used by Operators, including BT, for
offering and amending charges in payment for access to another Operator’s
services. For example, where an originating operator proposes to change
the price paid to the terminating operator for terminating calls, it
issues an Operator Charge Change Notice ("OCCN") to the terminating
operator. The operator receiving the OCCN has 14 days to decide whether
to accept or reject the new charge and to notify the originator of the
OCCN. Failure to notify within 14 days signals a rejection of the proposal.
Where the proposal is rejected, both operators have a further 14 days
to settle the resultant dispute. If after this second period the dispute
remains unsettled, either operator may refer the dispute to the Director.

Chapter 3
History of the
dispute
3.1 On 23 November
2001 Telewest issued an OCCN to BT. The OCCN sought an increase in the
call origination charges payable to Telewest by BT for freephone traffic
terminating on the BT network.
3.2 For the purposes
of the OCCN, Telewest calculated that 18 per cent of Telewest originated
freephone calls involve a Tandem leg before delivery to BT. Thus a factor
of 18 per cent of Double Tandem Short was added to the existing BT Single
Tandem rate to produce a Telewest specific figure.
3.3 On 3 December
2001, BT rejected Telewest’s OCCN. The explanation given by BT for rejection
of this OCCN was that:
"BT
rejects this proposed charge change, which applies to a BT charge, because
it does not conform to the current NTS formula as determined by Oftel".
3.4 Telewest referred
this dispute to the Director in a letter of 14 February 2002. In this
letter, Telewest stated that the dispute with BT concerned Telewest’s
ability to set its own call origination charge under the SIA with BT,
with the aim of recovering its justifiable and reasonable costs in originating
freephone calls to BT.
3.5 Telewest further
stated that it should be able to set its own price for the charge of
originating a call on Telewest’s network, and that any such charge should
be derived from a reasonable Telewest specific-cost estimate.
3.6 Telewest sought
a determination from the Director on whether Telewest should, in the
context of the current NTS regime and the SIA, be allowed to issue an
OCCN on BT which sets Telewest’s own call origination charges.

Chapter
4
Responses to
the draft direction
BT
4.1 BT stated that
it has always maintained that an originating operator should be able
to recover its reasonable costs for call origination. BT stated that
any negotiations undertaken by the parties in this regard must be on
the basis of reaching an agreement on a charge which is premised on
a reasonable Telewest-specific cost estimate. However, BT did raise
certain issues which it argued the Director would need to consider further.
These issues will now be set out.
Service
status
4.2 In response
to the draft direction, BT elaborated on its argument that a call to
a freephone number terminating on BT’s network is a Standard Service,
and as such should be set by BT. BT stated that calls from operators
to the BT 0800 service have been treated as Standard Services in interconnect
terms since 1997. BT argued that charges for Standard Services have
to be changed under Licence via BT issuing a Network Charge Change Notice
(‘NCCN’).
4.3 As the draft
direction stated that Telewest could issue an OCCN and propose a different
charge, BT argued that the Director must consider that a call to BT’s
0800 service is therefore not a Standard Service. BT further argued
that the Director should remove such a call from the list of Standard
Services, or else BT could potentially find itself in breach of the
obligation under Condition 69.1 of its licence which states that "charges
offered, payable or proposed to be offered or payable by an Operator
to the Licensee for each Standard Service are reasonably derived from
the costs of providing the Service based on a forward looking incremental
cost approach…".
Technical
issues and reciprocity
4.4 BT stated that
it would not expect a single tandem call to be equivalent to a BT double
tandem call of any description. Furthermore, BT argued that any principle
of "equal efficiency" has never been established or accepted.
As a result, BT argues that it would expect that any potential inefficiency
in Telewest’s network would need to be accounted for.
4.5 BT requested
that it must be allowed the ability to ensure as far as possible that
any calls are delivered to BT at the switch where the call originates
on the Telewest network. BT also stated that it is currently configuring
its interconnect arrangements so that BT interconnects at the Telewest
DLE, and that as a result would expect that in the vast majority of
cases calls would be charged by Telewest at its to be agreed equivalent
of a DLE call origination rate. BT concluded that it would not expect
to pay anything greater that a single tandem origination charge when
measured on a per call basis.
4.6 Finally, BT
argued that in light of these technical issues the Director should direct
that any new charge could not be implemented until either the aforementioned
work had been completed or following a six-month window, whichever is
earlier.
Implementation
4.7 BT considered
that there are issues surrounding the complexity of implementing the
proposals outlined in the draft direction. BT stated that although the
proposals apply only to Telewest sending a freephone call for BT to
terminate, the argument could be extended to other NTS calls and also
transit scenarios for all originating and terminating operators.
4.8 BT argued that
the consequent growth in the administrative burden for BT and the potential
growth in the volume of Carrier Price List entries would significantly
increase BT’s costs. BT further argued that for transited calls the
terminating operator would be unaware of the originator and so would
be unable to verify any settlements for transit traffic. BT also stated
that non-trivial changes to billing systems would also be required.
Telewest
4.9 Telewest welcomed
the Director’s draft direction that it should be able to set its own
price for a freephone call which originates on the Telewest network
and terminates on BT’s network. Telewest considered that the principle
that non-dominant operators should be able to set their own charges
has been previously set out in the Director’s 1999 Statement on The
Relationship between Interconnect Charges and Retail Prices for Number
Translation Services.
4.10 Telewest also
agreed that the Director need not mandate a particular approach to the
setting of actual origination charges, as Telewest intends to negotiate
appropriate charges with BT by issuing an OCCN on BT.
4.11 Telewest stated
that it may in the future consider the extent to which the general principles
outlined in the draft direction should be extended to the origination
of other types of NTS calls.
4.12 Telewest concluded
by stating that it strongly disagrees with the principal arguments made
by BT against Telewest’s views on this issue.
Cable
& Wireless
4.13
Cable & Wireless supported the Director’s draft direction, and stated
that it brought clarity to NTS issues involving non-dominant players
and should result in more successful commercial negotiations.
4.14 Cable &
Wireless stated that the underlying principles behind the draft direction
should apply to freephone traffic originating on any originator and
terminating on any terminator and any NTS traffic originating on any
originator and terminating on any terminator.
4.15 Cable &
Wireless stated that the draft direction is consistent with the Director’s
‘new’ NTS regime. Cable & Wireless argued that BT’s continued setting
of NTS termination rates for access to its NTS services, including freephone,
on the basis of BT’s own regulated origination charges is not acceptable.
Cable & Wireless stated that, most fundamentally, non-BT networks
are not regulated.

Chapter
5
The Director’s
decision and reasons
5.1 Before responding
to the points that were made in response to the draft direction, it
is necessary to set out exactly what the Director was asked to determine.
The matter in question is whether Telewest should be able to propose
a charge to BT for originating a freephone call which originates on
Telewest’s network and terminates on BT’s network. Arguments pertaining
to this matter that were submitted in response to the draft direction
will need to be considered for the purposes of issuing a final direction.
The Director’s response to these arguments can be found in paragraphs
5.4 – 5.19.
5.2 Certain other
arguments were submitted to the draft direction that concern issues
on which the Director was not asked to issue a determination. References
to these arguments can be found in paragraphs 5.20 – 5.25.
5.3 The draft direction
set out the Director’s proposed findings in relation to Telewest’s request
for a determination. The draft direction also outlined the points that
the Director made in support of this proposed finding. If respondents
did not submit argument in relation to a point made in the draft direction,
the Director’s position on this point remains as set out in the draft
direction.
Service
status
5.4 BT argued that
this service is a Standard Service, the charge for which should therefore
be set by BT. The Director’s provisional opinion on this argument was
set out in the draft direction, which stated that Telewest should be
able to issue an OCCN in order to seek a change in the price that it
is seeking to charge to BT for originating a freephone call. BT provided
an amplified version of its argument in response to the draft direction.
5.5 The Director
does not dispute that a freephone call terminating on BT’s network is
a Standard Service. As such it is governed by Condition 69 of BT’s licence,
which requires that charges for this service should be cost orientated
on a Long Run Incremental Cost basis.
5.6 Section 13 of
the SIA provides a contractual mechanism for an Operator to request
from BT a variation to a charge for an Operator service or facility.
This contractual mechanism is an OCCN (see paragraph 2.13).
5.7 Although, among
other things, Condition 69 of BT’s licence outlines the requirement
for BT to issue an NCCN, the Director does not consider that Condition
69 prevents an operator from issuing an OCCN in respect of a Standard
Service.
5.8 Therefore the
only remaining issue to be considered is whether, as a result of Telewest
proposing its own charge, there is any reason why BT should not be in
a position to comply with the requirement in Condition 69 of its licence
to ensure that the amount that it pays Telewest is reasonably derived
from the costs of providing this service based on a forward looking
incremental cost approach. The Director’s draft direction analysed the
respective market positions of the parties to this dispute, and found
that neither Telewest nor BT held a position of market power. In light
of this finding, the Director considers that this decision does not
prevent BT from complying with Condition 69 of its licence, as the parties
should be able to agree a reasonable charge. The Director’s market analysis
will now be set out.
Market
analysis
5.9 Telewest is
originating freephone calls, and if the origination of freephone calls
were analogous to call termination for a geographic call, Telewest would
hold a position of market power. However, if call origination for freephone
calls has the same characteristics as call origination generally, Telewest
would be operating in the wider call origination market, and Telewest
would not hold a position of market power. These two potential markets
will now be considered further.
5.10 For freephone
calls, the call recipient pays the charge, including the charge for
the call origination service provided by the originating network. It
could be argued that this scenario is analogous to the situation for
call termination of a geographic call. In geographic call termination,
the terminating operator has market power because the caller would have
no choice but to pay whatever is charged by the terminating operator.
5.11 If this argument
was accepted, the rationale for regulatory intervention in call termination
of a geographic call might also apply to the origination of a freephone
call, as an excessive charge set by originating operator (in this case
Telewest) would have to be paid by the terminating operator (in this
case BT).
5.12 However, the
Director does not consider that call origination for a freephone call
is equivalent to call termination for a geographic call. For a normal
call, the caller is wishing to contact a particular person, and the
caller has no choice about which network to use. The caller is obliged
to use the network chosen by the call recipient, or not make the call
at all. The caller would not have sufficient knowledge to identify the
network that the recipient was on, and the charges for calling that
network.
5.13 In the case
of freephone calls, recipients are seeking to receive calls from a number
of callers unknown to them. If an originating operator (which does not
hold a position of market power in call origination) attempts to propose
an unreasonable charge, recipients could identify the originating network
that is charging excessively, and choose not to receive calls from that
network. This would prevent customers on that originating network from
making freephone calls, which would, in turn, induce that network to
reduce the charges to the competitive level. As a result, the externality
that is present in call termination is not considered to be present
in the case of freephone call origination.
5.14 Therefore the
Director considers that call origination for a freephone call is not
sufficiently similar to call termination for a geographic call. Instead,
freephone call origination has the same characteristics as call origination
for a geographic call. Given that this is the case, Telewest’s market
share in wholesale call origination (the relevant economic market) can
be proxied by its market share by volume of calls, which gives a figure
of 6.5 per cent (source: Oftel Market Information) for 2001/02 Q3. Telewest
is not dominant in this market. BT has a market share of 24.8 per cent
(source: Oftel Market Information) in the NTS call termination market
for 2001/2 Q3, so it is unlikely to be dominant in this market. In addition,
Oftel’s statement on effective
competition in the NTS market confirmed that the market for retail
voice NTS is effectively competitive.
5.15 Given this
market analysis, the Director considers that Telewest should be able
to propose its own charge for the cost of originating freephone calls,
as the conditions of competition are such that neither party is in a
position to enforce an unreasonable charge. Therefore appropriate charges
will be achieved via commercial negotiation between originating operators
(other than BT) and terminating operators.
Resolution
of disputes between non-dominant operators
5.16 The analysis
set out in paragraphs 5.9 – 5.15 has shown that neither party to this
dispute holds a position of dominance in the relevant economic market.
In this case, and as demonstrated above, the parties have a commercial
incentive to reach agreement on the matter in dispute. BT has, however,
rejected Telewest’s proposed charge on the basis that the proposal does
not accord with the NTS regime. As a result, the parties are in dispute,
and Telewest has referred the matter to the Director for resolution.
The Director is therefore required to issue a direction as to whether
Telewest can propose its own charge under the NTS regime.
5.17 On 24 April
2002 a number of new EC Directives came into force, and these must be
implemented into UK law by 25 July 2003. The way the Director resolves
disputes between operators will be amended, in line with the provisions
of Article 20 of Directive 2000/21/EC on a common regulatory framework
for electronic communications networks and services ("Framework
Directive"). Article 20 of the Framework Directive sets out the
obligations of Member States in relation to dispute resolution between
undertakings. The Director is currently considering how disputes and
casework will be handled following the implementation of the new EC
Directives.
5.18 It is the Director’s
intention to ensure that disputes between non-dominant operators can
be resolved as efficiently as possible. He does not believe that the
resolution of such disputes should be a priority in terms of resource
allocation within Oftel and considers that non-statutory dispute resolution
is likely to be a more appropriate means of resolving the issue. The
Director is seeking to ensure that if there is a commercial incentive
for operators to reach agreement on a particular issue, the dispute
resolution procedure that is adopted should reflect this. The Director
will be consulting on dispute resolution in the context of the new EU
framework, including the use of mediation and other forms of alternative
dispute resolution in relation to cases involving non-dominant operators.
Technical
issues and reciprocity
5.19 The Director
set out certain technical differences between Telewest’s network and
BT’s network in the draft direction on this issue. The Director undertook
this analysis in order to ensure that due regard had been given to the
legitimate interests of both parties when considering the matter before
him. The Director’s positions on these factors remain the same.
5.20 In its response
to the draft direction, BT reconciled its arguments regarding the configuration
of Telewest’s network with what it considered might be a reasonable
Telewest charge. The Director does not propose to comment on these arguments,
as Telewest did not ask for a determination as to what constitutes a
reasonable charge.
Implementation
5.21 In response
to the draft direction, BT stated that the principles espoused in the
draft direction raise concerns for BT regarding the implications that
this would have for firstly, other originating operators and secondly,
other types of NTS traffic. Telewest and Cable & Wireless also commented
on these issues in their responses to the draft direction.
5.22 As with BT’s
comments regarding what might constitute a reasonable Telewest charge,
the Director will not formally direct on these issues for the purposes
of the current determination request. However, the Director’s position
on these issues, as set out in the explanatory document to the draft
direction, remain the same.
5.23 The Director
considers that Telewest, and originating operators other than BT, should
be able to set in place their own arrangements for originating freephone
calls that terminate on all other networks, not just BT’s. Without fettering
the discretion of the Director to take a different view in the light
of circumstances, if a similar dispute was referred to the Director
in the future, the Director’s current view is that the outcome would
be similar to the one that has been reached in the current dispute.
5.24 In the absence
of direct interconnection between originating operators and terminating
operators, freephone traffic will need to be transited between each
operator’s network. The Director is aware of technical issues associated
with billing for transit calls, but believes that the appropriate mechanisms
are being discussed that will enable the costs of originating freephone
calls to be recovered.
5.25 If in the future
a dispute were referred to the Director regarding the ability of an
originating operator (other than BT) to propose its own charge for the
origination of non-freephone NTS traffic, the Director’s discretion
to take a different view in light of circumstances could not be fettered.
In resolving an interconnection dispute the Director must take into
account the criteria set out in Regulation 6(8) of the Regulations,
inter alia, the interests of users, and the desirability of stimulating
innovative market offerings and of providing users with a wide range
of telecommunications services.
The
Director’s decision
5.26 Having considered
the arguments for and against Telewest’s request, the Director directs
that Telewest may propose its own price for the charge of originating
a freephone call that originates on Telewest’s network and terminates
on BT’s network.

Annex
A to the direction
Schedule of
Operators in the Telewest Group of companies
|
Operator
|
Franchise
|
Date of
Agreement
|
|
|
|
|
Telewest
Communications plc
|
National Licence
- No Franchises
|
15 Jan 1998
|
|
|
|
|
Various
Operators Telewest
|
Telewest Communications
(Central Lancashire) Ltd
|
26 Sep 1996
|
|
Telewest Communications
(Cotswolds) Ltd
|
26 July 1996
|
|
Telewest Communications
(Cumbernauld) Ltd
|
22 Aug 1996
|
|
Telewest Communications
(Dumbarton) Ltd
|
22 Aug 1996
|
|
Telewest Communications
(Dundee & Perth) Ltd (Dundee Franchise)
|
22 Aug 1996
|
|
Telewest Communications
(Dundee & Perth) Ltd (Perth Franchise)
|
22 Aug 1996
|
|
Telewest Communications
(Falkirk) Ltd
|
22 Aug 1996
|
|
Telewest Communications
(Glenrothes) Ltd
|
22 Aug 1996
|
|
Telewest Communications
(Liverpool) Ltd (North Liverpool & Sefton Franchise)
|
26 Sep 1996
|
|
Telewest Communications
(Liverpool) Ltd (Merseyside Franchise)
|
26 Sep 1996
|
|
Telewest Communications
(London South) Ltd (Kingston & Richmond Franchise)
|
26 Sep 1996
|
|
Telewest Communications
(London South) Ltd (Merton & Sutton Franchise)
|
26 Sep 1996
|
|
Telewest Communications
(London South) Ltd (Croydon Franchise)
|
26 Sep 1996
|
|
Telewest Communications
(Midlands) Ltd
|
26 Sep 1996
|
|
Telewest Communications
(Motherwell) Ltd
|
22 Aug 1996
|
|
Telewest Communications
(North East) Ltd (Newcastle & Gateshead Franchise)
|
1 Sep 1996
|
|
Telewest Communications
(St Helens & Knowsley) Ltd
|
26 Sep 1996
|
|
Telewest Communications
(Scotland) Ltd (Edinburgh Franchise)
|
22 Aug 1996
|
|
Telewest Communications
(South East) Ltd
|
26 Sep 1996
|
|
Telewest Communications
(South Thames Estuary) Ltd
|
26 Sep 1996
|
|
Telewest Communications
(South West) Ltd
|
26 July 1996
|
|
Telewest Communications
(Telford) Ltd
|
26 Sep 1996
|
|
Telewest Communications
(Wigan) Ltd
|
26 Sep 1996
|
|
|
|
|
Various
Operators General Cable (TCC)
|
Windsor Television
Limited (Windsor)
|
11 Sep 1996
|
|
Windsor Television
Limited (Iver)
|
11 Sep 1996
|
|
Middlesex
Cable Limited
|
11 Sep 1996
|
|
|
|
|
Various
Operators General Cable (YCC)
|
Barnsley Cable
Communications Ltd
|
11 Sep 1996
|
|
Doncaster
Cable Communications Ltd
|
11 Sep 1996
|
|
Halifax Cable
Communications Ltd
|
11 Sep 1996
|
|
Sheffield
Cable Communications Ltd
|
11 Sep 1996
|
|
Yorkshire
Cable Communications Ltd
|
11 Sep 1996
|
|
Wakefield
Cable Communications Ltd
|
11 Sep 1996
|
|
|
|
|
Birmingham
Cable Limited
|
No individual
Franchise areas - contract applies to whole Birmingham Cable Franchise
|
24 Oct 1996
|
|
|
|
|
Various
Operators (Cable London)
|
Cable Camden
Limited
|
30 Sep 1996
|
|
Cable Enfield
Limited
|
30 Sep 1996
|
|
Cable Hackney
& Islington Limited
|
30 Sep 1996
|
|
Cable Haringey
Limited
|
30 Sep 1996
|
|
|
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