British Telecommunications plc

NOTICE UNDER SECTION 12(6A) OF THE TELECOMMUNICATIONS ACT 1984

MODIFICATIONS TO THE LICENCE OF BRITISH TELECOMMUNICATIONS PLC

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. On 27th March 2001, 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 dates specified in the instrument of modification, modified certain definitions set out in Schedule 1 to the Licence; modified Condition 69 of the Licence; modified Condition 72 of the Licence; modified Condition 73 of the Licence; replaced Condition 74A with a new Condition 74A and a new Condition 74B in the Licence. In accordance with section 12(6A) of the Act, the Director hereby gives notice that his reasons for making the modifications are because the current retail price controls and controls on analogue Private Leased Circuits were due to end on 31st July 2001; the current interconnection charge controls were due to end on 30th September 2001; and to align the controls on BT’s retention for calls to BTCellnet and Vodafone with the retail price controls. Furthermore, BT has market power in the provision of the relevant services. The effect of the above-mentioned modifications will therefore be as follows: (a) to extend the present retail price controls (a control on a group of services—local, national and international calls, line rental, connection and operator assistance—focussed on the bottom 80 per cent of the BT’s customers by expenditure set at the retail prices index less 4.5 per cent) for one year beginning on 1st August 2001 and ending on 31st July 2002; (b) to further control the interconnection charges of “non-competitive” and “prospectively competitive” interconnection services for four years beginning on 1st October 2001 and ending on 30th September 2005; (c) to extend controls on the prices for analogue Private Leased Circuits for four years beginning on 1st August 2001 and ending on 31st July 2005; (d) to extend the controls on BT’s retention for calls to BTCellnet and Vodafone for four months beginning on 1st April 2002 and ending on 31st July 2002; and (e) to bring under regulatory control the charges for flat rate internet access call origination (“FRIACO”) at the digital local exchange, by incorporating the charge for FRIACO at the digital local exchange into the network charge controls from October 2001. D. A. Edmonds, Director General of Telecommunications 27th March 2001.