Telecommunications

Notice Under Section 12(6a) of the Telecommunications Act 1984

MODIFICATIONS TO THE LICENCE OF

BRITISH TELECOMMUNICATIONS PLC

1.	On 22nd June 1984, the Secretary of State for Trade and Industry granted a licence (the “Licence”) to British Telecommunications plc (“BT”) under Section 7 of the Telecommunications Act 1984 (the “Act”) for the running of telecommunications systems specified in Annex A to the Licence;
2.	On 29th July 2002, the Director General of Telecommunications (the “Director”), in exercise of the powers conferred on him by Sections 12 and 12A of the Act, with effect from the data set out in the instrument of modification, inserted a new condition 69B, modified condition 70 and deleted conditions 72 and 74 in the Licence;
3.	The effect of the above-mentioned modifications to BT’s licence are therefore:
(a)	to set retail price controls (a control on a group of services - local, national and international calls, calls to mobiles, line rental, connection and operator assistance - focused on the bottom 80% of residential customers by expenditure set at the retail prices index less the retail prices index) for four years beginning on 1st August 2002 and ending on 31st July 2006;
(b)	to require BT to provide, or offer to provide, access to its public switched network so that service providers that wish to do so can offer basic telecommunications services to BT’s retail customers;
(c)	to set starting charges and price control them thereafter for specified services that service providers will need to offer services to BT’s retail customers;
(d)	to require BT to provide such services on non-discriminatory terms; and
(e)	to require BT to notify of proposed price changes to such services in advance of them actually taking place.
4.	In accordance with Section 12(6A) of the Act, the Director hereby give notice that his reasons for subjecting BT to price controls and requiring it to provide service providers with access to its public switched network is because BT has market power in the provision of basic services to retail customers and this is preventing full and effective competition to the detriment of retail competition.

David Albert Edmonds, Director General of Telecommunications

2nd August 2002