House of Commons portcullis
House of Commons
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

    81

 

 84    Conditions about network access pricing etc.

     (1)    OFCOM are not to set an SMP condition falling within section 83(9) except

where—

           (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

5

arising from price distortion; and

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

for the purposes of—

                  (i)                 promoting efficiency;

                  (ii)                promoting sustainable competition; and

10

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

public electronic communications services.

     (2)    In setting an SMP condition falling within section 83(9) OFCOM must take

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

relates of the person to whom it is to apply.

15

     (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,

or

           (b)           so impose a price squeeze,

20

            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—

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

competitive markets;

25

           (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 83.

 85    Conditions about network access in exceptional cases

     (1)    This section applies where—

30

           (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

35

           (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

40

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.

45

 

 

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

    82

 

 86    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

5

           (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.

10

     (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

15

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—

20

           (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

25

the use of the facility.

     (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;

30

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

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

35

which public electronic communications service provided wholly or

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

40

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

occasion when no such selection as is mentioned in sub-

paragraph (i) is made.

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

     (1)    Where—

45

 

 

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

    83

 

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

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

5

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

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

10

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

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 83 to 86.

15

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

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

20

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

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

25

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

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

           (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

30

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

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

35

conditions apply, in relation to the services regulated in accordance

with the conditions.

     (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.

40

 88    Conditions about leased lines

     (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

45

 

 

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

    84

 

           (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

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.

5

     (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.

     (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

10

orientation and transparency in relation to the leased lines identified as

mentioned in subsection (1).

     (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

15

communications networks.

SMP apparatus conditions: subject matter

 89    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,

20

they may—

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

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

communications apparatus; and

           (b)           apply those conditions to that person.

25

     (2)    The SMP conditions authorised by this section include conditions requiring the

dominant supplier to maintain such a separation for accounting purposes

between matters relating to the supply of electronic communications

apparatus and other matters as may be described in the conditions.

     (3)    The conditions so authorised also include conditions imposing price controls

30

in relation to the supply (whether by sale or hire) of telephones for hardwiring

to an electronic communications network.

     (4)    For the purposes of this section a telephone is hardwired to an electronic

communications network where, in order for it to be used with that network—

           (a)           it has to be physically attached to apparatus comprised in the network;

35

and

           (b)           the attachment has to be effected by a process that requires the use of a

tool.

Enforcement of conditions

 90    Notification of contravention of condition

40

     (1)    Where OFCOM determine that there are reasonable grounds for believing that

a person is contravening, or has contravened, a condition set under section 41,

they may give that person a notification under this section.

 

 

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

    85

 

     (2)    A notification under this section is one which—

           (a)           sets out the determination made by OFCOM;

           (b)           specifies the condition and contravention in respect of which that

determination has been made; and

           (c)           specifies the period during which the person notified has an

5

opportunity of doing the things specified in subsection (3).

     (3)    Those things are—

           (a)           making representations about the matters notified;

           (b)           complying with notified conditions of which he remains in

contravention; and

10

           (c)           remedying the consequences of notified contraventions.

     (4)    Subject to subsections (5) to (7) and section 94(3), the period for doing those

things must be the period of one month beginning with the day after the one

on which the notification was given.

     (5)    OFCOM may, if they think fit, allow a longer period for doing those things

15

either—

           (a)           by specifying a longer period in the notification; or

           (b)           by subsequently, on one or more occasions, extending the specified

period.

     (6)    The person notified shall have a shorter period for doing those things if a

20

shorter period is agreed between OFCOM and the person notified.

     (7)    The person notified shall also have a shorter period if—

           (a)           OFCOM have reasonable grounds for believing that the contravention

is a repeated contravention;

           (b)           they have determined that, in those circumstances, a shorter period

25

would be appropriate; and

           (c)           the shorter period has been specified in the notification.

     (8)    A notification under this section—

           (a)           may be given in respect of more than one contravention; and

           (b)           if it is given in respect of a continuing contravention, may be given in

30

respect of any period during which the contravention has continued.

     (9)    Where a notification under this section has been given to a person in respect of

a contravention of a condition, OFCOM may give a further notification in

respect of the same contravention of that condition if, and only if—

           (a)           the contravention is one occurring after the time of the giving of the

35

earlier notification;

           (b)           the contravention is a continuing contravention and the subsequent

notification is in respect of so much of a period as falls after a period to

which the earlier notification relates; or

           (c)           the earlier notification has been withdrawn without a penalty having

40

been imposed in respect of the notified contravention.

     (10)   OFCOM must not give a notification under this section in a case in which—

           (a)           they decide that the most appropriate way of proceeding in relation to

the contravention in question would be under the Competition Act

1998 (c. 41); and

45

 

 

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

    86

 

           (b)           they publish a statement to that effect in such manner as they consider

appropriate for bringing their decision to the attention of the persons

who, in their opinion, are likely to be affected by it.

     (11)   For the purposes of this section a contravention is a repeated contravention, in

relation to a notification with respect to that contravention, if—

5

           (a)           a previous notification under this section has been given in respect of

the same contravention or in respect of another contravention of the

same condition; and

           (b)           the subsequent notification is given no more than twelve months after

the day of the making by OFCOM of a determination for the purposes

10

of section 91(2) or 92(2) that the contravention to which the previous

notification related did occur.

 91    Enforcement notification for contravention of conditions

     (1)    This section applies where—

           (a)           a person (“the notified provider”) has been given a notification under

15

section 90;

           (b)           OFCOM have allowed the notified provider an opportunity of making

representations about the matters notified; and

           (c)           the period allowed for the making of the representations has expired.

     (2)    OFCOM may give the notified provider an enforcement notification if they are

20

satisfied—

           (a)           that he has, in one or more of the respects notified, been in

contravention of a condition specified in the notification under section

90; and

           (b)           that he has not, during the period allowed under that section, taken all

25

such steps as they consider appropriate—

                  (i)                 for complying with that condition; and

                  (ii)                for remedying the consequences of the notified contravention of

that condition.

     (3)    An enforcement notification is a notification which imposes one or both of the

30

following requirements on the notified provider—

           (a)           a requirement to take such steps for complying with the notified

condition as may be specified in the notification;

           (b)           a requirement to take such steps for remedying the consequences of the

notified contravention as may be so specified.

35

     (4)    A decision of OFCOM to give an enforcement notification to a person—

           (a)           must be notified by them to that person, together with the reasons for

the decision, no later than one week after the day on which it is taken;

and

           (b)           must fix a reasonable period for the taking of the steps required by the

40

notification.

     (5)    It shall be the duty of a person to whom an enforcement notification has been

given to comply with it.

     (6)    That duty shall be enforceable in civil proceedings by OFCOM—

           (a)           for an injunction;

45

 

 

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

    87

 

           (b)           for specific performance of a statutory duty under section 45 of the

Court of Session Act 1988 (c. 36); or

           (c)           for any other appropriate remedy or relief.

 92    Penalties for contravention of conditions

     (1)    This section applies (in addition to section 91) where—

5

           (a)           a person (“the notified provider”) has been given a notification under

section 90;

           (b)           OFCOM have allowed the notified provider an opportunity of making

representations about the matters notified; and

           (c)           the period allowed for the making of the representations has expired.

10

     (2)    OFCOM may impose a penalty on the notified provider if he—

           (a)           has, in one or more of the respects notified, been in contravention of a

condition specified in the notification under section 90; and

           (b)           has not, during the period allowed under that section, taken the steps

OFCOM consider appropriate—

15

                  (i)                 for complying with the notified condition; and

                  (ii)                for remedying the consequences of the notified contravention of

that condition.

     (3)    Where a notification under section 90 relates to more than one contravention,

a separate penalty may be imposed in respect of each contravention.

20

     (4)    Where such a notification relates to a continuing contravention, no more than

one penalty may be imposed in respect of the period of contravention specified

in the notification.

     (5)    OFCOM may also impose a penalty on the notified provider if he has

contravened, or is contravening, a requirement of an enforcement notification

25

given under section 91 in respect of the notified contravention.

     (6)    Where OFCOM impose a penalty on a person under this section, they shall—

           (a)           within one week of making their decision to impose the penalty, notify

that person of that decision and of their reasons for that decision; and

           (b)           in that notification, fix a reasonable period after it is given as the period

30

within which the penalty is to be paid.

     (7)    A penalty imposed under this section—

           (a)           must be paid to OFCOM; and

           (b)           if not paid within the period fixed by them, is to be recoverable by them

accordingly.

35

 93    Amount of penalty under s. 92

     (1)    The amount of a penalty imposed under section 92 is to be such amount not

exceeding ten per cent. of the turnover of the notified provider’s relevant

business for the relevant period as OFCOM determine to be—

           (a)           appropriate; and

40

           (b)           proportionate to the contravention in respect of which it is imposed.

     (2)    In making that determination OFCOM must have regard to—

           (a)           any representations made to them by the notified provider;

 

 

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

© Parliamentary copyright 2003
Revised 10 February 2003