The Telecommunications (Interconnection) Regulations 1997

SCHEDULE 1

PART I

(a) The fixed public telephone network

(b) The fixed public telephone service according to Directive 95/62/EC of the European Parliament and of the Council of 13 December 1995 on the application of Open Network Provision (ONP) to voice telephony(1)

PART II

The leased lines service

The telecommunications facilities which provide for transparent transmission capacity between network termination points, and which do not include on-demand switching (switching functions which the user can control as part of the leased line provision). They may include systems which allow flexible use of the leased line bandwidth, including certain routing and management capabilities.

PART III

Public mobile telephone networks

(a) Public telephone networks where the network termination points are not at fixed locations.

Public mobile telephone services

(b) Telephony services whose provision consists, wholly or partly, in the establishment of radiocommunications to one mobile user, and makes use wholly or partly of a public mobile telephone network.

SCHEDULE 2

Public Operators who are authorised to provide switched and unswitched bearer capabilities to users upon which other telecommunications services depend, and who

1.  provide (i) fixed or (ii) mobile public switched telecommunications networks or (iii) publicly available telecommunications services or any combination of (i), (ii) or (iii), and in so doing control the means of access to one or more network termination points identified by one or more unique numbers in the national numbering plan;

2.  provide leased lines to users' premises;

3.  are authorised in a Member State of the Community to provide international telecommunications circuits between the Community and third countries, for which purpose they have special or exclusive rights, or

4.  provide publicly available fixed or mobile telecommunications services or both and are authorised to connect their systems to other Public Operators as described above and fall within the class of Public Operators to which the Public Operator from which interconnection is sought is required by its relevant licence to provide such interconnection.

SCHEDULE 3

PART I

Non Discrimination and Information

1.  The Licensee shall adhere to the principle of non-discrimination with regard to interconnection offered to others. The Licensee shall apply similar conditions in similar circumstances to interconnecting organisations providing similar services. The Licensee shall provide interconnection facilities and information to others under the same conditions and of the same quality as the Licensee provides for its own services, or those of its subsidiaries or partners.

2.  The Licensee shall make available on request to organisations considering interconnection all information and specifications which are necessary to facilitate conclusion of an agreement; the information provided should include changes planned for implementation within the next six months, unless agreed otherwise by the Director.

3.  The Licensee shall provide to the Director copies of interconnection agreements which it has entered into. The Licensee shall make such copies available for inspection free of charge by interested parties at their request, in accordance with regulation 8(3), with the exception of parts of the agreement which, in the opinion of the Director, deal with the commercial strategy of the parties. In every case the Licensee shall make available to interested parties details of the interconnection charges, terms and conditions and, where relevant, any contributions to universal service obligations.

4.  Information received by the Licensee from an organisation seeking interconnection shall be used only for the purpose for which it was supplied. It shall not be passed on to other parts of the same business, subsidiaries or partners for whom such information could provide a competitive advantage.

PART II

Interconnection Charges and Cost Accounting Systems

1.  Charges made by the Licensee for interconnection shall follow the principles of transparency and cost orientation and the burden of proof that charges are derived from actual costs including a reasonable rate of return on investment shall lie with the Licensee. The Licensee shall comply with any request made by the Director to provide full justification for its interconnection charges and shall comply with any adjustment required by the Director.

2.  The Licensee shall publish in accordance with regulation 8 a reference interconnection offer. The reference interconnection offer shall include a description of the interconnection offerings broken down into components according to market needs and specify the charges and other terms and conditions on which they are offered. The Licensee may set different tariffs, terms and conditions for interconnection for different categories of organisations which are authorised to provide networks and services, where such differences can be objectively justified on the basis of the type of interconnection provided or the relevant national licensing conditions or both but such differences may not result in distortion of competition and, in particular, the Licensee shall apply the appropriate interconnection tariffs, terms and conditions when providing interconnection for its own services or those of its subsidiaries or partners in accordance with paragraph 1 of part I of this Schedule. The Licensee shall comply with a requirement by the Director to impose changes in the reference interconnection offer where justified. Where an organisation makes changes to the published reference interconnection offer, adjustments required by the Director may be retrospective in effect, from the date of introduction of the change.

3.  The Licensee’s charges shall, in accordance with European Community law, be sufficiently unbundled to ensure that the organisation requesting interconnection is not required to pay for anything not strictly related to the service requested. Any charges imposed by the Licensee which are related to the sharing of the cost of universal service obligations, as described in regulation 12(3) shall be unbundled and identified separately.

4.  The Licensee shall have a cost accounting system which in the opinion of the Director is suitable to demonstrate that the Licensee has complied with the requirements set out in this Part of Schedule 3 (covering such matters as indicated in Annex V of the Directive).

PART III

Accounting Separation

1.  The Licensee shall draw up, submit to independent audit and publish separate accounts as if the telecommunications activities in question were carried out by legally independent companies, so as to identify all elements of cost and revenue, with the basis of their calculation and the detailed attribution methods used, related to their telecommunications activities including an itemised breakdown of fixed asset and structural costs, or have structural separation for the telecommunications activities.

This requirement shall apply in any financial year in which the turnover of the Licensee from its telecommunications activities in the Community is more than 50 million ECU.

2.  The Licensee shall keep separate accounts, drawn up, submitted to independent audit and published, for, on the one hand, their activities related to interconnection—covering both interconnection services provided internally and interconnection services provided to others—and, on the other hand, other activities, so as to identify all elements of cost and revenue, with the basis of their calculation and the detailed attribution methods used, related to their interconnection activity, including an itemised breakdown of fixed asset and structural costs.

This requirement shall apply in any financial year in which the turnover of the Licensee from its telecommunications activities in the Community is more than 20 million ECU.

PART IV

Financial Information

The Licensee shall provide financial information to the Director promptly on request and to the level of detail required by the Director.

SCHEDULE 4 Framework for Negotiation of Interconnection Agreements

PART I

Areas where ex ante conditions may be set—

(a) dispute resolution procedure;

(b) requirements for publication/access to interconnection agreements and other periodic publication duties;

(c) requirements for the provision of equal access and number portability;

(d) requirements to provide facility sharing, including collocation;

(e) requirements to ensure the maintenance of essential requirements;

(f) requirements for allocation and use of numbering resources (including access to directory services, emergency services and pan-European numbers);

(g) requirements concerning the maintenance of end-to-end quality of service;

(h) where applicable, determination of the unbundled part of the interconnection charge which represents a contribution to the net cost of universal service obligations.

PART II

Other issues the coverage of which is to be encouraged in interconnection agreements—

(a) description of interconnection services to be provided;

(b) terms of payment, including billing procedures;

(c) locations of the points of interconnection;

(d) technical standards for interconnection;

(e) interoperability tests;

(f) measures to comply with essential requirements;

(g) intellectual property rights;

(h) definition and limitation of liability and indemnity;

(i) definition of interconnection charges and their evolution over time;

(j) dispute resolution procedure between parties before requesting national regulatory authority intervention;

(k) duration and renegotiation of agreements;

(l) procedures in the event of alterations being proposed to the network or service offerings of one of the parties;

(m) achievement of equal access;

(n) provision of facility sharing;

(o) access to ancillary, supplementary and advanced services;

(p) traffic/network management;

(q) maintenance and quality of interconnection services;

(r) confidentiality of non-public parts of the agreement;

(s) training of staff.

SCHEDULE 5

The cost of universal service obligations shall be calculated as the difference between the net cost for an organisation of operating with the universal service obligations and operating without the universal service obligations. The calculation shall be based upon the costs attributable to—

(i) elements of the service which can only be provided at a loss or provided under cost conditions falling outside normal commercial standards; and

(ii) end-users or groups of end-users who, taking into account the cost of providing the network and service, the revenue generated and any geographical averaging of prices imposed by the licence, can only be served at a loss or under cost conditions falling outside normal commercial standards.

Revenues shall be taken into account in calculating the net costs. Costs and revenues should be forward-looking.

SCHEDULE 6 Conditions Inserted in Schedule 1 to the Relevant Licence

“SCHEDULE 1

PART A: THE INTERCONNECTION CONDITIONS

Interpretation

ICD1   In this Part:

(a) “Interconnection Regulations” means the Telecommunications (Interconnection) Regulations 1997, and the word “Regulation” shall be construed accordingly;

• “Interconnection Directive” means Directive 97/33/EC on interconnection in Telecommunications with regard to ensuring universal service and interoperability through the application of the principles of Open Network Provision (ONP);

• “Licensee” except where stated otherwise, means a Schedule 2 Public Operator;

• “European Public Operator” means a person authorised in another Member State to provide public telecommunications networks and publicly available telecommunications services and whose name has been notified by that Member State to the Commission under Article 18 of the Directive as a person covered by Annex II of the Directive;

• “Schedule 2 Public Operator” means a Public Operator described in Schedule 2 to the Regulations;

• “Operator” means a Schedule 2 Public Operator and, insofar as the Licensee is authorised to connect the Applicable Systems or the Applicable Cabled Systems to telecommunication systems or telecommunication apparatus outside the United Kingdom, but no further, a European Public Operator;

• “Public Operator” means any person who is authorised or permitted to run publicly available telecommunication systems or provide publicly available telecommunication services or both.

• “Operator having Significant Market Power” means a Public Operator which the Director has determined under Regulation 4 for the time being to be an Operator having Significant Market Power.

  (b)

  words and expressions used shall unless the context otherwise requires have the same meaning as in the Interconnection Regulations;

  (c)

  the Interconnection Conditions are inserted for the purposes of the application of the Interconnection Directive to the Licensee and shall accordingly be construed in accordance with that Directive;

  (d)

  in the event of any conflict between any provision of the Interconnection Conditions and any provision of any other Condition of this Licence, the latter provision shall, to the extent of such conflict, be taken to be disapplied;

  (e)

  subject to paragraph (d) above, the Licensee is not required to give effect to any obligation in any Interconnection Condition in so far as the Licensee is required to give effect to such obligation under any other Condition of the Licence.

Interconnection

ICD2.1   Subject to ICD2.6 and ICD2.7 and any exercise by the Director of his functions under regulations 6(3) or 6(4), the Licensee shall offer to enter into an agreement with a Schedule 2 Public Operator or a European Public Operator or offer to amend such an agreement, as the case may be, within a reasonable period, if such Operator requires it to:

(a) connect, and keep connected, to any of the Applicable Systems, or to permit to be so connected and kept connected, the Operator’s telecommunication system and accordingly to establish and maintain such one or more points of connection as are reasonably required and are of sufficient capacity and in sufficient number to enable Messages to be conveyed or to be conveyed by means of any of the Applicable Systems in such a way as conveniently to meet all reasonable demands for the conveyance of Messages between the Operator’s system and the Applicable Systems, and

(b) to provide such other telecommunication services (including the conveyance of Messages which have been, or are to be, transmitted or received at such points of connection), information and other services which, to the extent the parties do not agree (or the Licensee is not in any event so required under or by virtue of another Condition), the Director may determine are reasonably required (but no more than reasonably required) to secure that points of connection are established and maintained and to enable the Operator effectively to provide the Connection Services which it provides or proposes to provide.

ICD2.2   The Licensee or the Operator may at any time request the Director to make a direction in order

(a) to specify issues which must be covered in an interconnection agreement; or

(b) to lay down specific conditions to be observed by one or more parties to the agreement; or

(c) if he thinks fit, to set time limits within which negotiations are to be completed;

and a direction under this paragraph operates as an exercise by the Director of the power of direction conferred by regulation 6(3) or 6(4) as the case may be.

ICD2.3   The Licensee shall secure that the agreement to be entered into, or an amendment under paragraph 2.1 above is offered on terms and conditions which are reasonable. To the extent that the terms and conditions of an agreement made under paragraph 2.1 (whether on or after the coming into force of this paragraph) cease to be reasonable, the Licensee shall, within a reasonable period, offer to the Operator, or agree with the Operator, as the case may be, to amend the agreement so that the terms and conditions of the agreement are reasonable.

ICD2.4   The Licensee shall comply with:

(a) the requirements of any direction given to the Licensee under ICD2.2 or under regulations 6(3) and 6(4) in relation to any negotiations or agreement to which it is or is intended to be a party; and

(b) the requirements of any direction given to the Licensee under regulation 6(6) or regulation 6(7) in relation to any dispute over the terms of an agreement under paragraph 2.1 above.

ICD2.5   An agreement made pursuant to this Condition shall not contain any restrictive provision, unless, before the agreement is made, the Director has consented to the inclusion of such a provision. For the purposes of this paragraph, a provision in an agreement is a restrictive provision if by virtue of the existence of such a provision (taken alone or with other provisions) the agreement is one to which the Restrictive Trade Practices Act 1976 would apply but for paragraph 1(1) of Schedule 3 to that Act.

ICD2.6   If the Director is considering whether a determination or consent under this Condition is appropriate, he shall notify the Licensee and Interested Parties of his proposed decision or the options which he is considering, and his reasons, and give them a reasonable opportunity to make representations. On making or refusing a determination or direction or giving or refusing consent, he shall notify the Licensee and Interested Parties of the determination, consent or refusal, as the case may be, and his reasons.

ICD2.7   Paragraph ICD2.1 above does not apply to the extent that the Director has consented to limiting such obligation on a temporary basis and on the grounds that there are technically and commercially viable alternatives to the interconnection requested, and that the requested interconnection is inappropriate in relation to the resources available to meet the request.

ICD2.8   For the avoidance of doubt:

(i) any question as to whether any term or condition (including a charge) is reasonable shall be decided by the Director having regard to any guidelines on the application of this Condition issued from time to time by the Director; and

(ii) in considering whether a term or condition (including a charge) is reasonable, the Director may take into account, inter alia, the effective date of the term or condition and the period during which such term or condition may already have been in effect; the Director may conclude that a reasonable charge is one which is offered or agreed, as the case may be, on terms that it take effect in agreements made under paragraph 2.1 above from the date of a complaint or the date on which the term was first offered or accepted by the Licensee or an Operator or from any other date which is considered by the Director to be appropriate in the circumstances.

ICD2.9   The Licensee shall provide financial information to the Director promptly on request and to the level of detail required by the Director under Part IV of Schedule 3 to the Regulations.

ICD2.10   The Licensee shall comply with any request by the Director under regulation 6(5) to inspect any interconnection agreement entered into by the Licensee in its entirety.

ICD2.11   The Licensee shall comply with any requirement made by the Director as a last resort under regulation 6(10) to interconnect in order to protect essential public interests, and shall comply with any terms set by the Director for such purpose.

ICD2.12   In this Condition:

“Connection Service” means a telecommunicaton service consisting in the conveyance of any Message which has been, or is to be, conveyed by means of the Applicable Systems;

“Interested Parties” means those persons (if any), other than the Licensee, with whom, in any particular case, the Director considers it appropriate to consult.

Essential Requirements

ICD3   Where the Director specifies conditions based on essential requirements pursuant to Regulation 7(1) for inclusion in any interconnection agreement to which the Licensee is a party, the Licensee shall forthwith secure the incorporation of those terms and conditions in such an agreement.

Technical Standards

ICD4.1   The Licensee shall take full account of such standards, if any, as are listed in the Official Journal of the European Communities as being suitable for the purposes of interconnection.

ICD4.2   Where the Licence includes the condition “Essential Interfaces”—

(a) The definition of “Relevant Standard” for the purposes of the condition shall be replaced by the following:

• ““Relevant Standard” means:

  (i)

  standards listed in the Official Journal of the European Communities, if any, as being suitable for the purposes of interconnection, or in the absence of such standards,

  (ii)

  standards adopted by European standardisation bodies such as the European Telecommunications Standards Institute (ETSI) or the European Committee for Standardisation/European Committee for Electrotechnical Standardisation (CEN/CENELEC), or in the absence of such standards,

  (iii)

  international standards or recommendations adopted by the International Telecommunications Union (ITU), the International Organisation for Standardisation (ISO) or the International Electrotechnical Committee (IEC), or in the absence of such standards,

  (iv)

  any other standard specified by the Director after notifying the Licensee of his proposal and allowing the Licensee adequate time, being not less than 28 days, in which to make representations, provided that the Director shall not specify a standard if an appropriate European or other international standard is expected to be promulgated within a reasonable time, including, by way of example, if the European Telecommunications Standards Institutue have published a work programme for the development of such a standard.

  to the extent that such a standard is necessary to ensure interoperability.”

(b) The definition of “technical specification” for the purposes of that condition shall be replaced by the following new definition:

• “Where possible, “technical specification” shall be a specification defined by reference to:

  (i)

  standards listed in the Official Journal of the European Communities, if any, as being suitable for the purposes of interconnection, or in the absence of such standards,

  (ii)

  standards adopted by European standardisation bodies such as the European Telecommunications Standards Institute (ETSI) or the European Committee for Standardisation/European Committee for Electrotechnical Standardisation (CEN/CENELEC), or in the absence of such standards,

  (iii)

  international standards or recommendations adopted by the International Telecommunications (ITU), the International Organisation for Standardisation (ISO) or the International Electrotechnical Committee (IEC).”

Collocation and Facility Sharing

ICD5.1   The Licensee shall comply with any decision by the Director under regulation 10(2).

ICD5.2   The Licensee shall comply with any facility or property sharing arrangement, or both, specified by the Director in accordance with regulation 10(3).

Special or Exclusive rights

ICD6   Where the Licensee has special or exclusive rights for the provision of services in sectors other than telecommunications, within the meaning of Article 8(1) of the Directive, and the Licensee’s annual turnover from its telecommunication activities in the Community exceeds 50 million ECU, the Licensee shall keep, draw up, submit to independent audit and publish separate accounts for telecommunications activities, to the extent that would be required if the telecommunications activities in question were carried out by legally independent companies, so as to identify all elements of cost and revenue, with the basis of their calculation and the detailed attribution methods used, related to their telecommunications activities including an itemised breakdown of fixed assets or have structural separation for the telecommunications activities.

Universal Service

ICD7.1   This condition applies where the Licensee is an operator of a fixed public telephone network and where the licence confers a condition imposing universal service obligations on that Licensee.

ICD7.2   The Licensee shall, at the request of the Director and within such period as may be determined by him, calculate the net costs incurred by the Licensee in carrying out universal service obligations as defined in regulation 2(2). Such calculations shall be carried out in accordance with the requirements of Schedule 5 to the Regulations.

Significant Market Power

ICD8.1   Except as otherwise specified, paragraphs ICD8.2 to ICD8.22 apply to Operators having Significant Market Power and in respect of the relevant market or markets in which the Operator has such power.

ICD8.2   The Licensee shall meet all reasonable requests for access to its Applicable Systems including access at points other than the network termination points offered to the majority of end users.

ICD8.3— (a) This paragraph applies where the Licensee is an Operator having Significant Market Power running the systems or providing the services described in Parts I and II of Schedule 1 to the Regulations, or, as described in Part III of Schedule 1 which has been notified as having Significant Market Power on the national market for interconnection.

(b) The Licensee shall secure, and shall demonstrate to the satisfaction of the Director at his request, that the charges offered, payable or proposed to be offered or payable by an Operator to the Licensee for each Standard Service are reasonably derived from the costs of providing the Service based on a forward looking incremental cost approach (except to the extent the Director considers it appropriate that for a transitional period, or in any particular case, the Licensee apply another cost standard). The Licensee shall comply with any adjustment required by the Director.

ICD8.4   Subject to paragraphs ICD2.2 and ICD2.3, the Licensee shall, subject to the ability of an Operator to whom an offer is made pursuant to paragraph ICD8.5 to decline that offer, secure that:

(a) Standard Services are offered to Operators at the same charges and associated terms and conditions referred to in paragraph ICD8.13(b), and

(b) where the Licensee uses a service or provides it to itself, or it is used by or provided to any body corporate controlled by it, which service is the same as a Standard Service, the amount applied and incorporated in the Transfer Charge in respect of that use or provision is equal to the amount and applied to that service in that charge payable by an Operator to the Licensee for that Standard Service.

ICD8.5— (a) This paragraph applies only to Operators having Significant Market Power running the systems or providing the services described in Parts I and II of Schedule 1 to the Regulations.

(b) An offer between the Licensee and an operator under paragraph ICD2.1 to provide a Standard Service shall not be conditional on the acceptance by the Operator or the inclusion in the agreement of any other terms and conditions except for terms and conditions which are necessarily incidental to the provision of the Standard Service in question.

ICD8.6— (a) This paragraph applies only to Operators having Significant Market Power running the systems or providing the services described in Parts I and II of Schedule 1 to the Regulations.

(b) The Licensee may set different tariffs, terms and conditions for interconnection for different categories of organisations which are authorised to provide telecommunication systems or telecommunication services, where such differences can be objectively justified on the basis of the type of interconnection provided or on the basis of relevant conditions of the licence.

Publication and Notification requirements

ICD8.7   On entering into an agreement or amendment under Condition ICD2.1 the Licensee shall send to the Director and the Operator a copy of the agreement or amendment.

ICD8.8— (a) Subject to sub-paragraph (b), the Licensee or the Operator may within 14 days from entering into the agreement or amendment make a representation to the Director that any part of the agreement or amendment deals with its commercial strategy and require the Director to make a determination to that effect.

(b) Details of interconnection charges, terms and conditions and any contributions to universal service obligations cannot be excluded from the agreement or amendment.

ICD8.9   A determination made in response to a requirement under ICD8.8 shall specify any exclusions to be made from the agreement or modification before it is published under Condition ICD8.10

ICD8.10   The Licensee not earlier than 14 days after entering into the agreement or, if a request has been made under ICD8.8(a), receipt of a determination made under ICD8.9, whichever is the later, shall publish the agreement or amendment as soon as reasonably practicable. Publication shall be effected by the Licensee, except to the extent that the Director may consent to an alternative location or to an alternative method of publication, making available in a publicly accessible part of every Major Office, in such manner and in such place that it is readily available for inspection free of charge by members of the public a list of all such agreements and amendments together with a notice of the address and telephone number of the person to whom any request for a copy of any or all of such list, agreements or amendments or any part of them may be made.

ICD8.11   The Licensee shall send a copy of such list or (following publication) any agreement or amendment or part of them to any person who may request it within 7 working days of receiving the request.

ICD8.12— (a) The Licensee shall, within a reasonable period following its request, send to any Operator which informs the Licensee it is considering requiring the Licensee to offer to enter into an agreement or to amend such an agreement under paragraph ICD2.1, all necessary information and specifications, in order to facilitate the conclusion of an agreement, including, except to the extent that the Director may otherwise consent, information on changes planned for implementation within the next six months.

(b) Information received by the Licensee from an Operator shall be used only for the purpose for which it was supplied. The Licensee shall not pass such information on to other departments, subsidiaries or partners for which such information could provide a competitive advantage.

ICD8.13— (a) This paragraph and paragraphs 14 to 16 apply where the Licensee is an Operator having Significant Market Power running the systems or providing the services described in Parts I and II of Schedule 1 to the Regulations.

(b) Except to the extent that the Director may otherwise consent, on 1 January 1998 (if a list has not previously been published), or within three months of being determined by the Director as having Significant Market Power (whichever is the later), and every six months from the date of the previous publication, the Licensee shall, in accordance with sub-paragraphs (c),(d) and (e) publish a reference interconnection offer comprising a full list of Standard Services (“the Standard List”) specifying:

(i) the charge offered to Operators requiring the Licensee to offer to enter into an agreement under Condition ICD2.1 for each Standard Service and the amounts applied to each component within that service; and

(ii) the location in the Licensee’s current standard interconnection agreement of the terms and conditions associated with the provision of each Standard Service.

(c) Except to the extent that the Director may otherwise consent, within 10 working days from the date on which a proposal to change a charge or to offer a new Standard Service comes into effect, the Licensee shall amend the Standard List to take account of the change and shall publish the amendment by sending it to the Director and to all Operators with which it has entered into (or offered to enter into) an agreement under paragraph ICD2.1.

(d) The Licensee shall send a copy of the current Standard List, any amendments not incorporated into the List or the current standard interconnection agreement offered to Operators requiring the Licensee to offer to enter into an agreement under Condition ICD2.1 to any person who may request it on payment of a reasonable charge. The Licensee shall send the copy within 7 working days after receiving payment of that charge.

(e) Except to the extent that the Director may consent to an alternative location or to an alternative method of publication, the Licensee shall make available in a publicly accessible part of every Major Office, in such manner and in such place that it is readily available for inspection free of charge by members of the public, a notice of the address and telephone number of the person to whom any request for a copy of the current Standard List, any amendments or the standard interconnection agreement may be made.

ICD8.14— (a) Subject to sub-paragraph (c), and except to the extent that enforcement action is taken by the Director:

(i) in the case of a Competitive Standard Service, not less than 28 days, and

(ii) in the case of all other Standard Services, not less than 90 days;

before any change to a charge for a Standard Service, or any offer of a new Standard Service, is to come into effect, the Licensee shall send to the Director and all Operators with which it has entered into (or offered to enter into) an agreement under Condition ICD2.1 written notice of a proposal (a “Network Charge Change Notice”) which identifies:

(iii) the Standard Service, the current charge offered for, and the location in the Licensee’s current standard interconnection agreement of the terms and conditions associated with, the provision of the Service and the proposed charge, or the proposed new Standard Service, new charge and associated terms and conditions, as the case may be; and

(iv) the proposed effective date or period;

and the Licensee shall not offer or apply any such proposed charge or new Standard Service to any Operator before the expiry of the relevant notice period or the proposed effective date, whichever is later.

(b) Except to the extent that the Director may consent to an alternative location or to an alternative method of publication, the Licensee shall make available in a publicly accessible part of every Major Office, in such manner and in such place that it is readily available for inspection free of charge by members of the public, a notice of the address and telephone number of the person to whom any request for a copy of a Network Charge Change Notice may be made, and for a period of one year after it has been sent to the Director, the Licensee shall send a copy of a Notice to any person who may request it, within 7 working days of receipt of the request.

(c) If, before it comes into effect, the Licensee withdraws a Network Charge Change Notice, or extends or changes the effective date or period, then the Licensee shall send to the Director, to all Operators with which it has entered into (or offered to enter into) an agreement under Condition ICD2.1 and to every person who on or before that date requested a copy of the Network Charge Change Notice which has been withdrawn or extended, written notice of the withdrawal, extension or change forthwith. Except to the extent that the Director may consent to an alternative location or to an alternative method of publication, the Licensee shall make available in a publicly accessible part of every Major Office, in the manner and place specified in sub-paragraph (b), a notice of the address and telephone number of the person to whom any request for a copy of a notice may be made, and for a period of one year after it has been sent to the Director, the Licensee shall send a copy of a notice to any person who may request it (or the Network Charge Change Notice to which it relates), within 7 working days of receipt of the request.

ICD8.15— (a) The Director shall, following a representation by the Licensee or an Operator that the market for a Standard Service is competitive, determine whether or not that market is competitive.

(b) If the Director determines that the market is competitive, then that Standard Service shall be a Competitive Standard Service.

(c) The Director may, following a representation by the Licensee or an Operator that the market for a Competitive Standard Service is not or has ceased to be competitive, determine that the market is not competitive. When the Director determines that the market for a Competitive Standard Service is not competitive, that Standard Service shall cease to be a Competitive Standard Service.

ICD8.16   If the Director is considering whether a determination, direction or consent under this condition is appropriate, he shall notify the Licensee and Interested Parties of his proposed decision or the options which he is considering, and his reasons, and give them a reasonable opportunity to make representations. On making or refusing a determination or direction or giving or refusing consent, he shall notify the Licensee and Interested Parties of the determination, direction or consent or refusal, as the case may be, and his reasons.

Cost Accounting Systems and Accounting Separation

ICD8.17   Paragraphs ICD8.18 to 8.21 apply where the Licensee is an Operator having Significant Market Power running the systems or providing the services described in Parts I and II of Schedule 1 to the Regulations.

ICD8.18— (a) Subject to sub-paragraph (b), the Licensee shall maintain a cost accounting system which—

(i) in the opinion of the Director is suitable to demonstrate that its charges have been fairly and properly calculated; and

(ii) provides the information for the time being required to be provided by virtue of Article 7.5 of, and Annex V to, the Interconnection Directive.

(b) The Licensee shall be deemed to be complying with the requirements of sub-paragraph (a) at any time within the period of two years from the designation of the Licensee as an Operator having Significant Market Power if it is at that time complying with directions then in force which have been given to it by the Director for the purpose of ensuring that its cost accounting system enables it to demonstrate that its charges have been fairly and properly calculated.

ICD8.19   The Licensee shall make available to any person on request a description of its cost accounting system showing the main categories under which costs are grouped and the rules used for the allocation of costs to interconnection.

ICD8.20   Where the annual turnover of the Licensee in telecommunications activities in the UK is more than 20 million ECU the Licensee shall keep separate accounts for, on the one hand, activities related to interconnection—covering both interconnection services provided to or used by itself or any body corporate controlled by it and interconnection services provided to others—and, on the other hand, other activities, so as to identify all elements of cost and revenue, with the basis of their calculation and the detailed attribution methods used, related to its interconnection activity, including an itemised breakdown of fixed assets.

ICD8.21— (a) For each financial year ending on or after 1 January 1998, the Licensee shall procure in respect of the separate accounts described in paragraph ICD8.20 an audit report by the Licensee’s auditor for the time being appointed in accordance with the Companies Act 1985 which shall conform to Auditing Standards and in which the Auditor shall state whether in its opinion the accounts fairly present in accordance with the cost accounting systems the results of the relevant activities and the costs incurred for the relevant financial year.

(b) For each financial year ending on or after 1 January 1998, the Licensee shall publish the separate accounts and the report of the auditor within two months after the date on which the Licensee’s annual statutory financial statements are published and, in any event, within four months after the end of the period to which they relate.

Interpretation

ICD8.22   In this Condition:

(a) “Auditing Standards” means United Kingdom auditing standards and guidelines issued from time to time by the Auditing Practices Board or its predecessor body;

“Competitive Standard Service” means a Standard Service, the market for which has been determined by the Director to be competitive and a new Standard Service offered in accordance with paragraph ICD8.15 and which in either case has not ceased to be a Competitive Standard Service pursuant to paragraph ICD8.15(c).

“Connection Service” means a telecommunication service consisting in the conveyance of any message which has been, or is to be, conveyed by means of any of the applicable systems;

“Network Charge Change Notice” has the meaning given to it in paragraph ICD8.14(a);

“Standard Service” means a service including a Competitive Standard Service which an Operator has required from the Licensee and which the Licensee is obliged to provide, or to offer to enter into an agreement to provide, under Condition ICD2.1; and

“Transfer Charge” means the charge which is applied by the Licensee to itself or to any body corporate controlled by it for the use or provision of a service which is the same as a Standard Service;

(b) references to a charge for a Standard Service shall include the means of calculating that charge;

(c) references to a charge being payable are references to a charge being payable in accordance with an agreement made in pursuance of this Condition;

(d) for the avoidance of doubt any question as to whether any charge is reasonably derived from costs shall be decided by the Director having regard to any guidelines on the application of this Condition issued from time to time by the Director;

(e) any reference to “service” (or “Standard Service”) shall be taken to include a reference to goods or information.”

(1)

OJ No. L 321, 30.12.1.1995, p. 6.