Oftel

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 Telecommunications 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 under section 7 of the Act to British Telecommunications plc (“BT”) on 22 June 1984. 2. The effect of the proposed modifications to BT’s licence would be: (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—focussed on the bottom 80 per cent of residential customers by expenditure set at the retail prices index less the retail prices index) for 4 years beginning on 1 August 2002 and ending on 31 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; (e) to require BT to notify of proposed price changes to such services in advance of them actually taking place; and (f) the proposed modifications also involve the deletion of Conditions 72 and 74 of BT’s Licence. 3. The reason that the Director General proposes to subject BT to price controls and require 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 customers. 4. The text of the proposed modifications and their effects are set out in full in Protecting consumers by promoting competition: Oftel’s conclusions, which was published on 20 June 2002. 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 beginning 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 (0044(0)20) 7634 8869, facsimile (0044 (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 BT not objecting to 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 19 July 2002. 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 21 June 2002.