NOTICE UNDER SECTION 12(2) OF THE TELECOMMUNICATIONS ACT 1984

PROPOSED MODIFICATIONS OF THE LICENCE OF BRITISH TELECOMMUNICATIONS (BT) PLC

The Director General of Telecommunications (“the Director”), in accordance with Section 12(2) of the Telecommunications Act 1984 (“the Act”), hereby gives notice that he proposes to make modifications to the licence granted to British Telecommunications (“BT”) Plc on 22nd June 1984 (“the Licence”). The Director proposes to make the modifications, described in the Schedule below (“the Schedule”) and the effect of which is to remove Condition 71.13 from the Licence and to amend Condition 71.3d and the definition of “Special Offer” laid out in Schedule 1 of the Licence. The reason for the proposed modification is as a result of a change in the regulation of BT’s pricing of individual retail services. The proposed modification of the BT Licence is available from Lawrence Knight at OFTEL, 50 Ludgate Hill, London EC4M 7JJ, (telephone 0171 634 8747). The Director is required by section 12(2) of the Act to consider any representations or objections which are duly made and not withdrawn. Subject to such consideration and to the consent of the Licensee, the Director proposes to make the modifications as soon as practicable after the statutory consultation is completed. The consultation procedure comprises of two stages. In the first stage, representations on or objections to the proposed modifications may be made to Dilbinder Dhillon, OFTEL, 50 Ludgate Hill, London EC4M 7JJ, (telephone 0171 634 8838, fax 0171 634 8847) by no later than 3rd December 1999. Any confidential material should be clearly marked as such and separated out into a confidential annex. All representations and objections received by OFTEL, with the exception of material marked confidential, will be made available for inspection in OFTEL’s Research and Intelligence Unit. Comments on this document (if they are relatively short) can also be sent electronically to OFTEL at “press.office@oftel.gov.uk”. In the second stage of consultation, interested parties are invited to send comments to OFTEL no later than 17th December 1999 on representations and objections received during the first stage. Schedule Proposed modifications of the BT Licence It is proposed to modify the licence through the removal of Condition 71.13, the text of which reads: The Licensee shall not be entitled to introduce a Special Offer which the Director determines to be the same as or similar to a previous Special Offer in relation to the same Retail Service unless a period of 3 months has elapsed from the expiry of that previous Special Offer in relation to that Retail Service. Condition 71.13 (formally C.24F.16) acted to prevent BT circumventing the application of retail sub-caps to individual BT retail prices, by repeating Special Offers (Special Offers not being subject to the usual sub-capping) and creating market instability. With the introduction of new retail price control, on 1st August 1997, OFTEL removed the price sub-caps. Following the abolition of individual retail price caps, OFTEL does not consider that the retention of C.71.13 is now necessary and proposes its removal from BT’s Licence. It is also proposed that the licence is to be additionally modified through the removal of the words “not exceeding 3 months” from Condition 71.3(d) (formally C.24F.3) and from the definition of “Special Offer” within the Additional Definitions Relating to Schedule 1 (formally C.24F.1).