Proposal to give a direction applying the Electronic Communications Code to NewNet

NOTIFICATION UNDER SECTION 107(6) OF THE COMMUNICATIONS ACT 2003

1. The Office of Communications (“Ofcom”) propose to give a direction under section 106(3) of the Communications Act 2003 (the “Act”) applying the Electronic Communications Code (the “Code”) to NewNet.

2. The draft Direction and the accompanying explanatory statement setting out Ofcom’s reasons for the proposal are available on the Ofcom website. Hard copies of the draft Direction and the explanatory statement will be made available on request. Please contact Christina Spyrelli on 020 7783 4312 or by sending an e-mail to christina.spyrelli@ofcom.org.uk.

3. Representations on the proposal may be made to: Christina Spyrelli, Ofcom, Riverside House, 2a Southwark Bridge Road, London SE1 9HA (telephone: 020 7783 4312, e-mail: christina.spyrelli@ofcom.org.uk) by not later than 8 March 2004.

4. All confidential information should be clearly marked as such and separated out into a confidential annex. All representations received by Ofcom, with the exception of material marked confidential, will be published and made available for inspection in Ofcom’s Knowledge Centre. Please contact Jan Kacperek on 020 7981 3790 or by e-mail at jan.kacperek@ofcom.org.uk for further information with respect to public inspection.

5. In this Notification, unless the contrary intention appears, words and phrases shall have the same meaning as in the Act.

6. In this Notification, “NewNet” means NewNet plc (registered company number 3128506).

Neil Buckley
Head of Consumer Policy

6 February 2004

[Draft] Direction under section 106(3) of the Act applying the Electronic Communications Code in the case of NewNet

[A Notification of this proposal was published on 6 February 2004]

Whereas:

(A) on 8 December 2003 NewNet made an application for the electronic communications code (the “Code”) for the purposes of the provision of an electronic communications network in accordance with section 107(1) of the Act and the Notification published by the Director under section 107(2) of the Act setting out their requirements with respect to the content of an application for the electronic communications code and the manner in which such an application is to be made;

(B) By virtue of the Transitional Provisions, references to the Director in the Notification referred to in paragraph A above should be read as references to Ofcom;

(C) on 6 February 2004 Ofcom published a notification of their proposal to give a direction applying the Code to NewNet in accordance with section 107 of the Act;

(D) Ofcom have considered every representation made to them about the proposed Direction;

(E) for the reasons set out in the explanatory statement accompanying this Direction, Ofcom are satisfied that they have acted in accordance with the relevant duties set out in sections 4 and 107(4) of the Act;

NOW, therefore, pursuant to section 106(3) of the Act, Ofcom make the following direction-

1. The electronic communications code shall apply to NewNet for the purposes of the provision by NewNet of an electronic communications network to have effect in relation to the United Kingdom.

Definitions and Interpretation

2. In this Direction, unless the contrary intention appears-

“Act” means the Communications Act 2003;

“Director” means the Director General of Telecommunications appointed under section 1 of the Telecommunications Act 1984; and

“NewNet” means NewNet plc (registered company number 3128506)

“Transitional Provisions” means sections 408 and 411 of the Act, the Communications Act 2003 (Commencement No.1) Order 2003 and the Office of Communications Act 2002 (Commencement No.3) and Communications Act 2003 (Commencement No 2) Order 2003.

3. Except in so far as the context otherwise requires, words and phrases shall have the same meaning as in the Act, headings and titles shall be disregarded and expressions cognate with those referred to in this Direction shall be construed accordingly.

4. The Interpretation Act 1978 shall apply as if this Direction were an Act of Parliament.

5. This Direction shall take effect on the day it is published.

[name of person signing the Direction]

[date]

EXPLANATORY STATEMENT

On 8 December 2003 NewNet plc (“NewNet”) made an application for the electronic communications code (the “Code”) for the purposes of the provision of an electronic communications network. This was in accordance with section 107(1) of the Communications Act 2003 (the “Act”). In addition, NewNet’s application was made in accordance with the requirements with respect to the content of an application for a direction applying the Code and the manner in which such an application is to be made, as set out in a Notification published by the Director on 10th October 2003 under section 107(2) of the Act. Ofcom assumed its functions in relation to the Code on 29 December 2003, and by virtue of transitional provisions in the Act, references to the Director in the Notification referred to in this paragraph should be read as references to Ofcom.

In considering Newnet’s application Ofcom has acted in accordance with its relevant duties set out in sections 3 and 4 of the Act, in particular the duty in section 3 to further the interests of consumers in relevant markets, where appropriate by promoting competition, and the Community requirements to promote competition in the provision of electronic communications networks and services, and to promote the interests of European citizens. The direction applying the code helps to promote competition by assisting NewNet in building out infrastructure to provide a wider range of electronic communications,services, to the benefit of consumers. In considering NewNet’s application Ofcom has also had regard to the factors set out below, in accordance with its duties under section 107(4) of the Act.

The benefit to the public of the electronic communications network by reference to which the code is to be applied to NewNet

1. NewNet intends to provide an electronic communications network in the Portsmouth, Fareham and Southampton urban areas using fibre as the means of access in order to offer Internet Protocol (IP)-based communications solutions, such as broadband Internet connections and services.

2. Ofcom is of the view that the provision of such an electronic communications network may accelerate broadband service penetration in the United Kingdom and has the potential to enhance competition both at service and network level and maximize the use of existing fibre within the United Kingdom.

3. Therefore, Ofcom considers that such an electronic communications network will have the least possible environmental effects; it will facilitate a broader coverage of broadband access in the United Kingdom, and thus a wider choice of services at competitive prices. Ofcom considers that any disruption will be likely to be of short term duration.

The practicability of the provision of the network without the application of the code

4. Ofcom considers that it will not be practicable for NewNet to provide its electronic communications network without the application of the Code. This is demonstrated in its application, where the outcome of NewNet’s research in relation to the benefits that the application of the Code will bring to NewNet is set out.

5. Ofcom is of the view that a lack of code powers for NewNet would cause significant delays in terms of deploying its network at a competitive level, even though sharing of infrastructure is one of NewNet’s intentions.

6. Such a delay can have a negative impact on the development of competition in the market and most importantly on consumer choice.

The need to encourage the sharing of the use of electronic communications apparatus

7. NewNet has provided evidence to Ofcom of its ability and willingness to share apparatus.

8. Based on the information provided, NewNet is willing to exercise diligence when installing apparatus. NewNet has stated that it intends to roll out its network wherever possible and practicable through sharing infrastructure and it set out specific measures and initiatives of doing so.

9. In addition, Ofcom believes that NewNet is fully aware of the environmental issues with respect to electronic communications apparatus. NewNet is willing to work closely with the relevant departments of the local authorities to present its network plan and discuss the processes for maintaining public highways and pedestrian access routes when street works take place. Ofcom believes that such an approach is not only a good example of co-operation at a local level but also a good means of exploring alternative ways of, and arrangements for, providing services.

10. Based on the information provided, NewNet is willing to put in place procedures for responsible use of the Code before undertaking any network operations, which will cover issues such as responding to street works notices, customer connections and planned and emergency maintenance.

Whether NewNet in whose case it is proposed to apply the code will be able to meet liabilities arising as a consequence of-
(i) the application of the code in his case; and
(ii) any conduct of his in relation to the matters with which the code deals

11. Ofcom is of the view that NewNet in whose case it is proposed to apply the code has provided sufficient evidence of its ability and willingness to meet potential liabilities.In particular, NewNet submitted a letter signed by a director certifying that it is going to put sufficient funds for liabilities in place before exercising code powers.

Timetable and consultation process:

12.In accordance with sections 107(6)(b), 107(7)(c) and 107(9) of the Act Ofcom must consider any representations about this proposal that are made to them within a specified period, which must end no less that one month after the day of the publication of the notification.

13.Representations may be made to: Christina Spyrelli, Ofcom, Riverside House, 2a Southwark Bridge Road, London SE1 9HA (telephone: 020 7783 4312, e-mail: christina.spyrelli@ofcom.org.uk) by not later than 8 March 2004.

14. All confidential information should be clearly marked as such and separated out into a confidential annex. All representations received by Ofcom, with the exception of material marked confidential, will be published and made available for inspection in Ofcom’s Knowledge Centre. Please contact Jan Kacperek on 020 79813790 or by e-mail at jan.kacperek@ofcom.org.uk for further information with respect to public inspection.