House of Lords portcullis
House of Lords
Session 2002 - 03
Internet Publications
Other Bills before Parliament

Communications Bill


Communications Bill
Part 2 — Networks, services and the radio spectrum
Chapter 1 — Electronic communications networks and services

    80

 

     (5)    Where on such a review OFCOM conclude that the appropriate markets have

changed—

           (a)           they shall identify the markets they now consider to be the appropriate

ones; and

           (b)           those markets shall be the identified markets for the purposes of the

5

further analysis.

     (6)    Where on such a review OFCOM conclude that there is no person at all with

significant market power in relation to the identified market—

           (a)           they must so inform the Secretary of State; and

           (b)           the Secretary of State may by order remove or restrict OFCOM’s power

10

under this Chapter to set SMP apparatus conditions by reference to that

market.

     (7)    Sections 76, 77 and 78(1) apply—

           (a)           in relation to the identification of a apparatus market for the purposes

of reviewing a market power determination under this section, as they

15

apply in relation to the identification of such a market for the purpose

of making a market determination; and

           (b)           in relation to the review of such a determination, as they apply in

relation to the making of such a determination.

 83    Cases where review required

20

     (1)    OFCOM must not set an SMP services condition by a notification which does

not also make the market power determination by reference to which the

condition is set unless—

           (a)           the condition is set by reference to a market power determination

which has been reviewed under section 81 and, in consequence of that

25

review, is confirmed in the notification setting the condition; or

           (b)           the condition is set by reference to a market power determination made

in relation to a market in which OFCOM are satisfied there has been no

material change since the determination was made.

     (2)    OFCOM must not modify or revoke SMP services conditions applying to a

30

person except in a case falling within subsection (3) or (4).

     (3)    The first case is where, for the purpose of determining whether to make the

modification or revocation, OFCOM have—

           (a)           carried out a further analysis under section 81 of the market in question;

and

35

           (b)           reviewed the market power determination for the time being in force in

that person’s case.

     (4)    The second case is where OFCOM are satisfied that there has not—

           (a)           in the case of an unmodified condition, since the condition was set, or

           (b)           in any other case, since the condition was last modified,

40

            been a material change in the market identified or otherwise used for the

purposes of the market power determination by reference to which the

condition was set or last modified.

     (5)    OFCOM must not modify SMP apparatus conditions applying to a person

except where, for the purpose of determining whether to make the

45

modification or revocation, they have—

 

 

Communications Bill
Part 2 — Networks, services and the radio spectrum
Chapter 1 — Electronic communications networks and services

    81

 

           (a)           carried out a further analysis under section 82 of the market in question;

and

           (b)           reviewed the market power determination for the time being in force in

that person’s case.

     (6)    A change is a material change for the purposes of subsection (1) or (4) if it is one

5

that is material to—

           (a)           the setting of the condition in question; or

           (b)           the modification or revocation in question.

SMP services conditions: subject matter

 84    Conditions about network access etc.

10

     (1)    Where OFCOM have made a determination that a person to whom this section

applies (“the dominant provider”) has significant market power in an

identified services market, they shall—

           (a)           set such SMP conditions authorised by this section as they consider it

appropriate to apply to that person in respect of the relevant network

15

or relevant facilities; and

           (b)           apply those conditions to that person.

     (2)    This section applies to—

           (a)           a person who provides a public electronic communications network;

and

20

           (b)           a person who makes available facilities that are associated facilities by

reference to such a network.

     (3)    This section authorises SMP conditions requiring the dominant provider to

give such entitlements as OFCOM may from time to time direct as respects—

           (a)           the provision of network access to the relevant network;

25

           (b)           the use of the relevant network; and

           (c)           the availability of the relevant facilities.

     (4)    In determining what conditions authorised by subsection (3) to set in a

particular case, OFCOM must take into account, in particular, the following

factors—

30

           (a)           the technical and economic viability, having regard to the state of

market development, of installing and using facilities that would make

the proposed network access unnecessary;

           (b)           the feasibility of the provision of the proposed network access;

           (c)           the investment made by the person initially providing or making

35

available the network or other facility in respect of which an

entitlement to network access is proposed;

           (d)           the need to secure effective competition in the long term;

           (e)           any rights to intellectual property that are relevant to the proposal; and

           (f)           the desirability of securing that electronic communications services are

40

provided that are available throughout the member States.

     (5)    The conditions authorised by subsection (3) may include provision—

           (a)           for securing fairness and reasonableness in the way in which requests

for network access are made and responded to; and

 

 

Communications Bill
Part 2 — Networks, services and the radio spectrum
Chapter 1 — Electronic communications networks and services

    82

 

           (b)           for securing that the obligations contained in the conditions are

complied with within the periods and at the times required by or under

the conditions.

     (6)    The SMP conditions authorised by this section also include one or more of the

following—

5

           (a)           a condition requiring the dominant provider not to discriminate

unduly against particular persons, or against a particular description of

persons, in relation to matters connected with network access to the

relevant network or with the availability of the relevant facilities;

           (b)           a condition requiring the dominant provider to publish, in such

10

manner as OFCOM may from time to time direct, all such information

as they may direct for the purpose of securing transparency in relation

to such matters;

           (c)           a condition requiring the dominant provider to publish, in such

manner as OFCOM may from time to time direct, the terms and

15

conditions on which he is willing to enter into an access contract;

           (d)           a condition requiring the terms and conditions on which the dominant

provider is willing to enter into an access contract to include such terms

and conditions as may be specified or described in the condition;

           (e)           a condition requiring the dominant provider to make such

20

modifications as OFCOM may direct of any offer by that provider

which sets out the terms and conditions on which he is willing to enter

into an access contract.

     (7)    The SMP conditions authorised by this section also include conditions

requiring the dominant provider to maintain a separation for accounting

25

purposes between such different matters relating—

           (a)           to network access to the relevant network, or

           (b)           to the availability of the relevant facilities,

            as OFCOM may from time to time direct.

     (8)    The SMP conditions authorised by subsection (7) include conditions imposing

30

requirements about the accounting methods to be used in maintaining the

separation.

     (9)    The SMP conditions authorised by this section also include (subject to section

85) conditions imposing on the dominant provider—

           (a)           such price controls as OFCOM may direct in relation to matters

35

connected with the provision of network access to the relevant

network, or with the availability of the relevant facilities;

           (b)           such rules as they may make in relation to those matters about the

recovery of costs and cost orientation;

           (c)           such rules as they may make for those purposes about the use of cost

40

accounting systems; and

           (d)           obligations to adjust prices in accordance with such directions given by

OFCOM as they may consider appropriate.

     (10)   The SMP conditions authorised by subsection (9) include conditions requiring

the application of presumptions in the fixing and determination of costs and

45

charges for the purposes of the price controls, rules and obligations imposed

by virtue of that subsection.

     (11)   Where OFCOM set a condition authorised by this section which imposes rules

on the dominant provider about the use of cost accounting systems, it shall be

 

 

Communications Bill
Part 2 — Networks, services and the radio spectrum
Chapter 1 — Electronic communications networks and services

    83

 

     (11)   their duty also to set, and to apply to him, an SMP condition which imposes on

him an obligation—

           (a)           to make arrangements for a description to be made available to the

public of the cost accounting system used in pursuance of that

condition; and

5

           (b)           to include in that description details of—

                  (i)                 the main categories under which costs are brought into account

for the purposes of that system; and

                  (ii)                the rules applied for the purposes of that system with respect to

the allocation of costs.

10

     (12)   In this section—

                    “access contract” means—

                  (a)                 a contract for the provision by a person to whom this section

applies to another person of network access to the relevant

network; or

15

                  (b)                 a contract under which the relevant facilities are made available

by a person to whom this section applies to another person;

                    “the relevant facilities”, in relation to a person to whom this section

applies, means the associated facilities made available by that person in

relation to a public electronic communications network; and

20

                    “the relevant network”, in relation to such a person, means the public

electronic communications network provided by him.

 85    Conditions about network access pricing etc.

     (1)    OFCOM are not to set an SMP condition falling within section 84(9) except

where—

25

           (a)           it appears to them from the market analysis carried out for the purpose

of setting that condition that there is a relevant risk of adverse effects

arising from price distortion; and

           (b)           it also appears to them that the setting of the condition is appropriate

for the purposes of—

30

                  (i)                 promoting efficiency;

                  (ii)                promoting sustainable competition; and

                  (iii)               conferring the greatest possible benefits on the end-users of

public electronic communications services.

     (2)    In setting an SMP condition falling within section 84(9) OFCOM must take

35

account of the extent of the investment in the matters to which the condition

relates of the person to whom it is to apply.

     (3)    For the purposes of this section there is a relevant risk of adverse affects arising

from price distortion if the dominant provider might—

           (a)           so fix and maintain some or all of his prices at an excessively high level,

40

or

           (b)           so impose a price squeeze,

            as to have adverse consequences for end-users of public electronic

communications services.

     (4)    In considering the matters mentioned in subsection (1)(b) OFCOM may—

45

           (a)           have regard to the prices at which services are available in comparable

competitive markets;

 

 

Communications Bill
Part 2 — Networks, services and the radio spectrum
Chapter 1 — Electronic communications networks and services

    84

 

           (b)           determine what they consider to represent efficiency by using such cost

accounting methods as they think fit.

     (5)    In this section “the dominant provider” has the same meaning as in section 84.

 86    Conditions about network access in exceptional cases

     (1)    This section applies where—

5

           (a)           OFCOM have made a determination that a person (“the dominant

provider”) has significant market power in an identified services

market;

           (b)           that person is the provider of an electronic communications network or

a person who makes associated facilities available; and

10

           (c)           OFCOM consider that there are exceptional circumstances making it

appropriate for conditions with respect to the provision of network

access to be applied to the dominant provider in addition to those that

are required to be or may be applied to him apart from this section.

     (2)    OFCOM may set the additional SMP conditions and apply them to the

15

dominant provider if—

           (a)           they have submitted the additional conditions to the European

Commission for approval; and

           (b)           the Commission has approved the imposition on the dominant

provider of the obligations contained in those conditions.

20

 87    Conditions about carrier selection and pre-selection

     (1)    This section applies where—

           (a)           OFCOM have made a determination that a person (“the dominant

provider”) has significant market power in an identified services

market; and

25

           (b)           it appears to OFCOM that the market is a market relating to services for

the provision of public electronic communications networks for use by

means of connections at fixed locations.

     (2)    It shall be the duty of OFCOM to set, and to apply to the dominant provider,

such SMP conditions authorised by this section as they think fit.

30

     (3)    The SMP conditions authorised by this section are conditions requiring the

dominant provider to do one or both of the following—

           (a)           to make a relevant connection facility available to every person to

whom he provides a public electronic communications service;

           (b)           for the purpose of making such a connection facility available to such

35

persons, to make facilities for interconnection available to a person

providing an electronic communications service.

     (4)    Where OFCOM set a condition requiring the dominant provider to make a

relevant connection facility available, they shall also set such SMP conditions

as they consider appropriate—

40

           (a)           with respect to the relationship to costs of any prices fixed for the use

of the facility; and

           (b)           for the purpose of securing that prices and other charges imposed on

the persons to whom public electronic communications services are

provided by the dominant provider do not constitute a disincentive to

45

the use of the facility.

 

 

Communications Bill
Part 2 — Networks, services and the radio spectrum
Chapter 1 — Electronic communications networks and services

    85

 

     (5)    Where OFCOM set conditions authorised by this section, those conditions may

include provision imposing obligations as to the manner in which one or both

of the following are to be made available in accordance with the conditions—

           (a)           the relevant connection facility in question;

           (b)           the facilities for interconnection that are to be made available to a

5

person providing an electronic communications service.

     (6)    In this section “relevant connection facility” is a facility which—

           (a)           allows a person to whom a public electronic communications service is

provided by means of an electronic communications network to select

which public electronic communications service provided wholly or

10

partly by means of that network is the service that he wishes to use; and

           (b)           enables that selection to be made either—

                  (i)                 by the use of a telephone number on each separate occasion on

which a selection is made; or

                  (ii)                by designating in advance the selection that is to apply on every

15

occasion when no such selection as is mentioned in sub-

paragraph (i) is made.

 88    Conditions about regulation of services etc. for end-users

     (1)    Where—

           (a)           OFCOM have made a determination that a person (“the dominant

20

provider”) has significant market power in an identified services

market (“the relevant market”),

           (b)           the relevant market is one for the end-users of public electronic

communications services that are available in that market, and

           (c)           it appears to OFCOM that the test in subsection (2) is satisfied in the

25

case of that provider,

            they shall set, and apply to that provider, such SMP conditions authorised by

this section as they consider appropriate.

     (2)    That test is that OFCOM are unable, by the setting of conditions of the sorts

specified in subsection (3), to perform, or fully to perform, their duties under

30

section 4 in relation to the market situation in the relevant market.

     (3)    The sorts of conditions referred to in subsection (2) are—

           (a)           access-related conditions; and

           (b)           SMP conditions authorised or required by sections 84 to 87.

     (4)    The reference in subsection (2) to the market situation in the relevant market is

35

a reference to the situation revealed by such market analyses of that market as

may have been carried out for the purposes of this Chapter.

     (5)    The SMP conditions authorised by this section are conditions imposing on the

dominant provider such regulatory controls as OFCOM may from time to time

direct in relation to the provision by that provider of any public electronic

40

communications service to the end-users of that service.

     (6)    Where OFCOM set a condition which is authorised by this section and imposes

regulatory control on tariffs or other matters to which costs are relevant, they

shall also set, and apply to the dominant provider, an SMP condition which

requires him, to the extent that they consider it appropriate—

45

           (a)           to use such cost accounting systems as may be determined by them;

 

 

Communications Bill
Part 2 — Networks, services and the radio spectrum
Chapter 1 — Electronic communications networks and services

    86

 

           (b)           to have the use of those systems audited annually by a qualified

auditor; and

           (c)           to publish an annual statement about compliance by the dominant

provider with the obligations imposed by virtue of paragraph (a).

     (7)    It shall be the duty of OFCOM to provide the European Commission with all

5

such information as the Commission requires them to provide about—

           (a)           conditions authorised by this section that are set by OFCOM; and

           (b)           the cost accounting systems used, by the persons to whom those

conditions apply, in relation to the services regulated in accordance

with the conditions.

10

     (8)    In this section “qualified auditor” means a person eligible, in accordance with

Part 2 of the Companies Act 1989 (c. 40), for appointment as a company

auditor.

 89    Conditions about leased lines

     (1)    This section applies where—

15

           (a)           OFCOM have made a determination that a person (“the dominant

provider”) has significant market power in an identified services

market; and

           (b)           it appears to OFCOM that the market in relation to which that market

power determination has been made is a market relating to the

20

provision of any such leased lines as are for the time being identified by

the European Commission in the List of Standards published in the

Official Journal of the European Communities.

     (2)    It shall be the duty of OFCOM to set, and to apply to the dominant provider,

such SMP conditions authorised by this section as they consider appropriate.

25

     (3)    The SMP conditions authorised by this section are conditions for applying, so

far as required by the provisions for the time being contained in Annex VII of

Universal Service Directive, the principles of non-discrimination, cost

orientation and transparency in relation to the leased lines identified as

mentioned in subsection (1).

30

     (4)    In this section “leased line” means an electronic communications service the

provision of which consists in the reservation of a fixed amount of transmission

capacity between fixed points on the same or different electronic

communications networks.

SMP apparatus conditions: subject matter

35

 90    Conditions about apparatus supply

     (1)    Where OFCOM have made a determination that a person (“the dominant

supplier”) has significant market power in an identified apparatus market,

they may—

           (a)           set such SMP conditions authorised by this section as they consider it

40

appropriate to apply to that person in respect of the supply of electronic

communications apparatus; and

           (b)           apply those conditions to that person.

 

 

 
previous section contents continue
 
House of Lords home page Houses of Parliament home page House of Commons home page search page enquiries

© Parliamentary copyright 2003
Revised 7 March 2003