Select Committee on Joint Committee on Statutory Instruments Forty-Third Report



APPENDIX II


Memorandum by the Department of Trade and Industry

TELECOMMUNICATIONS (OPEN NETWORK PROVISION) (VOICE TELEPHONY) REGULATIONS 1998 (S.I. 1998/1580)

1.  The Committee requested the Department to submit a memorandum on the following points. The Department sets out below the questions raised by the Committee with the Department's response after each question.

  (1)  Regulation 21 paragraph (2) lays down that "the parties shall abide by a decision taken in accordance with" the procedures provided for in paragraph (1). Explain why paragraph (1) contains no reference to decisions or any description of the nature of the procedures which it stipulates are to be put in place.

2.  The requirement to establish procedures, and the decisions referred to, in regulation 21 are to be read against the background of what is already provided for in the Telecommunications Act 1984 as regards public operators with significant market power and other public operators on the one hand and systemless service providers on the other hand.

Public operators

  Public operators are divided into those with significant market power in the voice telephony market and other public operators. The Director determined on 20 July 1998 that the operators with significant market power are (i) British Telecommunications plc ("BT") and (ii) Kingston upon Hull City Council and Kingston Communications (Hull) plc ("Kingston") jointly. The minimum requirement of the regulations is that procedures be established in respect of these.

  These procedures will establish a consistent framework for the steps that are already taken by the Director in dealing with complaints under section 49 of the Telecommunications Act 1984 in respect of the situations described in the regulation. All of these situations are covered by licence conditions in the licences of these two operators and by Condition RVTD9 in the Schedule to these Regulations. The variety of decisions that may require to be taken both under the relevant licence conditions and the requirements of the Directive is very wide. An example would be were one of these organisations to reduce the bandwidth available from say 2Mbit/s to say 56 Kbit/s in respect of a particular customer that customer could seek to enforce its contract for the service at 2 Mbit/s through the courts or it could complain to the Director that the operator was in breach of the relevant condition in its licence. The Director on receipt of the complaint would investigate and having done so reach a decision as to whether the variation was covered by any of the exceptions or limitations in the licence of the operator concerned or was a breach of the licence condition, and inform the parties accordingly. If the complaint is substantiated, he can either seek an undertaking from BT or Kingston to remedy the situation or, if he thinks the breach may be repeated, make a final or provisional order under sections 16 to 18 of the 1984 Act. The procedures will establish a consistent framework for the steps that the Director takes in dealing with such complaints.

  In the case of other public operators the Director may but need not provide procedures in respect of them and the obligations that arise under their licences and the provisions of these regulations with regard to the availability of their services.

Systemless service providers

  There are no systemless service providers with significant market power and it is not likely that there will be any for the foreseeable future but it is necessary to have the reserve power in order to comply with the Directive. The only regulation of them is that which appears in these Regulations.

  It is therefore to be left to the Director to establish a consistent framework for the exercise of those powers of regulation as he sees fit within the limits set by regulation 21(3).

 As regards procedures in respect of other public operators and systemless service providers the possibility of making further Regulations has not been ruled out.

  (2)  As regards the requirement that the subscriber shall be warned before a service is discontinued for non-payment by the subscriber of the charges for it, regulation 35 requires measures to be taken by the Director General of Telecommunications to ensure that warning is given by the providers of the service and imposes a duty on service providers to comply with the measures the Director specifies. Explain why regulation 34 does not impose a like duty on the public operators to give a like warning (but merely speaks of the authorisation of measures).

3.  Regulation 34(1) imposes a duty on the Secretary of State and the Director when exercising their functions under Part II and sections 47 to 49 of the Telecommunications Act 1984 to authorise measures to ensure that due warning of any consequent service interruption or disconnection is given to the subscriber. Licence Condition RVTD16.1(d), contained in Schedule V to the Regulations, inserts into all existing relevant licences a duty on public operators, in the event of non-payment, to give due warning in advance of any consequent service interruption or disconnection to the subscriber.

  (3)  Regulation 40(1) extends the charge on the public revenues of expenditure of the Director under the Telecommunications Act 1984 to expenditure in consequence of his functions under these Regulations. Will that expenditure be significant in amount?

4.  The purpose of this provision is to extend the charge on the public revenues of the Director to cover expenditure in consequence of his obligations in respect of systemless service providers which are not regulated under the Telecommunications Act 1984. OFTEL has indicated that up to £300,000 may be required in respect of additional work in connection with systemless service providers in the first twelve months of operation of the Regulations.

21st July 1998


 
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