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Introduction

On 22nd September 2005 Ofcom decided, instead of making a reference to the Competition Commission, to accept undertakings from BT to address a number of competition concerns in the telecoms markets. This report, the first in a series of quarterly reports, provides information on BT’s progress toward implementation of its undertakings.

In each area, this report describes:

• relevant sections in the undertakings and the primary owner within BT;
• progress BT has made towards delivering on its commitments (and where relevant, relevant activity by Ofcom and others);
• future commitments in the undertakings that need to be delivered and dates/milestones where these are specified; and
• any issues or risks that have been identified to date.

This report is based primarily on information in the public domain or made available to Ofcom by BT. As such it is not comprehensive. This report has been prepared just over one month after the undertakings have been accepted. Therefore the depth of information is in some areas relatively limited. We expect future reports to provide more depth and we should be able to better identify issues. Ofcom plans to publish the next implementation report in January 2006.

In future reports we also plan to include measures of success of the undertakings. As Ofcom outlined in its statement on 22 September, we and many stakeholders believe it is important to lay out the measures by which success can be judged and then to monitor performance against these measures. These measures should cover:

• whether BT is meeting the letter and spirit of the undertakings;
• intermediate industry outcomes: the immediate and medium-term benefits to communications providers. The indicators might include, for example, the amount of investment in unbundled exchanges and the take-up of products such as Wholesale Line Rental; and
• business and consumer outcomes: the medium and long term benefits to consumers and businesses. The indicators may include retail prices, service quality and choice of services to assess how the market is developing.

Ofcom is currently in discussion with stakeholders on what these metrics should be and how they can be effectively measured and plans to hold a workshop to allow stakeholders to give their views. Ofcom plans to make a statement in December on the proposed measures. If you would like to contribute to this discussion, please contact William Hayter at william.hayter@ofcom.org.uk

For the first two categories (letter/spirit of undertakings and intermediate industry outcomes), we expect to include these measures with relevant commentary in future implementation reports. The results of the measures of benefits to consumers and businesses will be published at the same time as Ofcom’s Communications Market Report (every summer). These results will be accompanied by an assessment of trends and changes in the data.

This report and its contents should not be presumed to constitute Ofcom’s view of BT’s compliance, or otherwise, with the undertakings. Where reference is made to the content of the undertakings, particularly in relation to future commitments/deliverables, in the event of any difference the text of the undertakings takes precedence.

More information on progress on implementation of the undertakings is available on the Ofcom website at: http://www.ofcom.org.uk/telecoms/btundertakings/

Should you wish to discuss this report, or have comments on it, please contact Graeme Hodgson on 020 7783 4417 or at graeme.hodgson@ofcom.org.uk

The full document is available below:

• Report on the implementation of BT Undertakings [pdf]
  First quarterly report

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