British Telecommunications plc (“BT”)

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

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

1. The Director General of Telecommunications (“the Director”), in accordance with section 12(2) of the Telecommuncations Act 1984, as amended by the Electronic Communications Act 2000 (the “Act”), hereby gives notice that he proposes to make modifications to the licence granted to British Telecommunications plc (“BT”) on 22 June 1984. 2. The effect of the proposed modifications to BT’s licence would be to set starting charges for and bring under regulatory control the charges for flat rate internet access call origination (FRIACO) at the tandem exchange, by incorporating the charge for FRIACO at the tandem exchange into the network charge controls from 1 October 2001. The proposed modifications take the form of changes to Condition 69 of BT’s Licence. Condition 69 was last modified on 27 March 2001. Some of the changes introduced in March are not to take effect until 1 October 2001. Some of the modifications proposed by this notice have the effect of making changes to the March modifications. 3. The Director is making these proposals because competition is not effective in the provision of flat rate internet access call origination either at the local exchange or the tandem exchange. 4. The proposed modifications and their effects are set out in full in Statutory Consultation on Proposed Modifications to BT’s Licence to give effect to Charge Controls for Single Tandem FRIACO, which was published on 17 August 2001. The document is available via Oftel’s website (www.oftel.gov.uk). The Director is seeking comments on the proposed modifications to the licence of BT. Interested parties have 28 days from the day after publication of this notice to make representations on the proposed modifications. In accordance with section 12(6D) of the Act, representations made against the proposed modifications shall be taken to constitute an objection only if a written statement that they are to be so taken accompanies them. 5. The proposed modifications are also available from Mike Galvin at Oftel, 50 Ludgate Hill, London EC4M 7JJ, telephone (00 44 (0)20) 7634 8869, facsimile (00 44 (0)20) 7634 8924, e-mail mike.galvin@oftel.gov.uk. 6. The Director is required by section 12(2) of the Act to consider any representations or objections on the proposed modifications duly made and not withdrawn. Subject to such consideration, and to the consent of BT for the respective modifications, the Director proposes to make the modifications as soon as practicable after the statutory consultation is completed. 7. Representations on the proposed modifications can be made to Mike Galvin by 17 September 2001. 8. 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. D A Edmonds, Director General of Telecommunications 17 August 2001.