House of Lords - Explanatory Note
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Clause 53: The National Telephone Numbering Plan

142.     OFCOM are to publish a document (the National Telephone Numbering Plan) setting out the telephone numbers available for allocation and the restrictions on the adoption and use of telephone numbers allocated under the Plan. One way in which OFCOM might choose to set the numbers out could be as blocks or series of numbers. This implements Article 10.3 of the Framework Directive. OFCOM are under a duty to review and, if they think fit, to revise the Plan, but subject to the requirements of clause 57. OFCOM must also keep day-to-day records of the telephone numbers actually allocated by them under the National Telephone Numbering Plan.

*references to a

    telephone numbe
r are, under
    subsection (5
) references to any number used for identifying the origin, destination or route of an electronic communication. A
    telephone number
is also a number that may be used for selecting a service or for identifying by whose service or network a communication is to be sent.

    *adoption of a telephone number occurs, under subsection (6), where a communications provider allocates or transfers that number to a customer or piece of apparatus, or uses that number for identifying the origin, destination or route of an electronic communication, or designates that number for use in selecting a service, or authorises the use of that number by others for any of the purposes mentioned in subsection (5).

    *number is defined in subsection (10) as including data of any description; but under subsection (7), the Secretary of State may exclude any description of number from the numbers to be treated as telephone numbers.

Clause 54: Conditions to secure access to telephone numbers

143.     OFCOM may set general conditions to ensure that telephone users are able to communicate with every normal telephone number: this implements condition 4 of Part A of the Annex to the Authorisation Directive.

*a normal telephone number is defined in subsection (2) as a number allocated under the National Telephone Numbering Plan for the purpose of identifying the destination for, or the recipient of, communications which has been adopted by a communications provider as a number to be used for that purpose or which has been allocated in accordance with clause 56 and is used for that purpose by, a person other than a communications provider.

Clause 55: Conditions about allocation and adoption of numbers

144.     Subsections (1) and (2) allow OFCOM to set general conditions which provide for the matters listed, which broadly cover the requirements to be complied with by communications providers in respect of the adoption and use of telephone numbers; procedures for applying to OFCOM for numbers to be allocated; procedures for the adoption of numbers by communications providers; the circumstances in which numbers are required to be transferred from one provider to another; and payments to be made for allocation and transfer of numbers.

145.     Subsection (5) provides that OFCOM may allocate particular telephone numbers by means of an auction.

146.     Subsections (6) to (9) apply to any conditions set by OFCOM that enable them to determine the payments (including periodic payments) to be made to them in respect of the allocation or transfer of telephone numbers. OFCOM must stipulate in such conditions the principles in accordance with which they will determine the amounts of any such payments. For example, the amount may be determined by reference to bids at an auction, or to the costs incurred by OFCOM, or to any other factors OFCOM may think fit. OFCOM may require payments to be made by means of a lump sum or periodic payments or both. Conditions set subsequently may modify the amounts of (or the method of determining) periodic payments, except where the amount of these payments has been set by auction. Paragraph 14 of Schedule 18 (transitional provisions) provides that any telephone numbers allocated to a holder of a licence granted under section 7 of the Telecommunications Act 1984 shall be treated as if they were allocated to that person under clause 55. This clause implements most of Part C of the Annex to the Authorisation Directive. For more detailed information see the Table in Appendix 2.

Clause 56: Telephone numbering conditions binding non-providers

147.     OFCOM may set conditions to be complied with by persons who are not communications providers in respect of the allocation, transfer and use of telephone numbers. The duty will be enforceable by OFCOM in civil proceedings. OFCOM must comply with clauses 44 to 46 when setting, modifying or revoking any telephone numbering condition which applies to non-communications providers or giving, modifying or withdrawing any direction, approval or consent given by them for the purpose of any condition.

Clause 57: Modification of documents referred to in numbering conditions

148.     This clause sets out the procedure that OFCOM must follow when revising or otherwise modifying the National Telephone Numbering Plan or any other document referred to in a numbering condition authorised by clause 54 or 55 or set by OFCOM under clause 56.

149.     Before revising or otherwise modifying a provision of the National Telephone Numbering Plan or other document referred to in a numbering condition (a "relevant provision"), OFCOM must publish a notification that explains the effect of and the reasons for the revisions or modifications. OFCOM must also give no less than one month for persons to comment on the proposal. OFCOM may modify the National Telephone Numbering Plan or other document if they have considered each comment made about the proposal within the period specified by them for comments and they have had regard to international obligations of the UK notified to them by the Secretary of State.

150.     Any modification of a relevant provision of the National Telephone Numbering Plan or other document must be objectively justifiable, non-discriminatory, proportionate and transparent. This clause implements, in part, Article 14.1 of the Authorisation Directive.

Clause 58: Withdrawal of telephone number allocations

151.     This clause sets out the circumstances in which OFCOM may withdraw an allocation of telephone numbers.

152.     Subsection (2)(a) and (b) provide that an allocation may be withdrawn by consent, or where this is necessary for a transfer of numbers. Subsection (2)(c) and clause 59 provide that an allocation may be withdrawn to facilitate a "numbering reorganisation" in respect of a particular series of numbers. Subsection (2)(d) provides that an allocation may be withdrawn in circumstances specified in numbering conditions and for the purpose of securing the best and most efficient use of telephone numbers (subsection (5) provides that subsection (2)(d) does not apply to a numbering reorganisation and that any circumstances specified in a numbering condition must not unduly discriminate between communications providers and users). Subsection (2)(e) and (f) provides that an allocation may be withdrawn where it consists of numbers, or part of a series of numbers, which have not been adopted by the communications providers concerned during the time period stipulated in the general conditions. Before withdrawing an allocation under subsection (2)(e) or (f), OFCOM must follow the procedures set out in subsections (6) and (7) with respect to notification and allowing for representations.

153.     An allocation may also be withdrawn where the person allocated the number has repeatedly and seriously contravened the numbering conditions and where no other remedy is likely to secure compliance. Any contraventions of numbering conditions may justify withdrawal of numbers from a non-provider (subsection (4)). This implements Article 10.2 and 10.5 of the Authorisation Directive so far as enforcement of numbering conditions is concerned.

Clause 59: Numbering reorganisations

154.     An allocation can only be withdrawn for the purposes of a numbering reorganisation if it does not unduly discriminate against particular communications providers, users of the allocated numbers or a particular description of providers or users, and if OFCOM make a replacement allocation of similar numbers to the person affected. OFCOM may not require a new payment to be made for a replacement allocation. However, in cases where periodic payments are still outstanding in respect of the allocation which has been withdrawn, OFCOM may require the balance of those payments to be made in respect of the replacement allocation, with such adjustments as OFCOM may think fit. This implements condition 2 of Part C of the Annex to the Authorisation Directive.

Clause 60: General duty as to telephone numbering functions

155.     This clause places OFCOM under a duty, in carrying out their functions under clauses 53 to 59, to ensure the best use of telephone numbers. OFCOM are also required to ensure that communication providers do not discriminate against other providers in relation to the adoption of telephone numbers: this implements Article 10.2 of the Framework Directive.

Clause 61: Must-carry obligations

156.     General conditions may include provision to ensure that services on the must-carry list are carried, by networks which are used by a significant number of end users as their principal means of receiving television.

157.     The must-carry list contains the following services: a service of television programmes provided by the BBC in digital form (where the service is one in relation to which OFCOM have functions), digital Channel 3, digital Channel 4, digital Channel 5, S4C Digital and the digital public teletext service.

158.     The requirement to carry a listed service will also apply to any ancillary services (such as subtitling or other assistance to disabled people) related to that service, and may be treated as consisting of such other services comprised in or provided with that service as may be determined by OFCOM.

159.     General conditions containing provisions authorised under clause 61 must comply with any order made by the Secretary of State under subsection (5) to set the minimum and maximum capacity that a listed service must or may use on a network.

160.     The Secretary of State, when setting the maximum or minimum capacity to be used by a listed service, must have regard (a) to the objective of securing that the services on the must-carry list, together with any others to which provisions authorised under clause 61 apply, are available for reception by as many members of the public in the United Kingdom as practicable, and (b) to the need to secure that the amount of capacity left available is reasonable and, accordingly, that the burden imposed on the cable operator under this clause is proportionate to the public benefit obtained.

161.     The Secretary of State can also make an order which sets the terms on which a service on the must-carry list is to be broadcast (or provides for OFCOM to set such terms). This can include a requirement that no payment is made by the service provider or the network provider.

162.      The Secretary of State must, from time to time, review the must-carry list and any requirements as to the terms on which services in that list must be broadcast. When carrying out a review the Secretary of State must consult OFCOM and other parties likely to be affected by a modification to the must-carry list. Following such a review, the Secretary of State may, by order, amend the must-carry list. When determining whether or not it is appropriate to amend the list, she must consider the public benefit in doing so, the extent to which a service would otherwise be made available even if not added to the list, the amount of spare network capacity of providers of electronic communications networks to whom the must-carry obligations apply and whether the burden of compliance is proportionate to the objective of securing that must-carry services are made available to the public.

163.     The Secretary of State may use her power to make an order setting terms under subsection (11) even when she has not carried out a full review of the list of must-carry services as under subsection (7).

164.     She must consult OFCOM and such persons who, in her opinion, are likely to be affected by an order, or who represent any of those persons, as she thinks fit:

    a)     before making an order under subsection (5) (to set minimum and maximum capacity); and

    b)     before making an order under subsection (11) (as to the terms of carriage). This does not apply when a review has been carried out under subsection (7), as a full consultation is already required under subsection (8).

165.     This clause implements Article 6(1) of, and condition 6 of Part A to the Annex to the Authorisation Directive and Article 31 of the Universal Service Directive.

Clause 62: Obligations to be secured by universal service conditions

166.     Clauses 62 to 69 describe OFCOM's and the Secretary of State's functions relating to universal service.

167.     Clauses 62 and 64 to 66 implement Articles 3 to 7 and 9 to 11 of, and Part A of Annex I to, the Universal Service Directive. Clause 63 implements Article 8 of the Universal Service Directive and Article 4(2) of the Authorisation Directive and clauses 67 to 69 implement Articles 12 to 14 of the Universal Service Directive.

168.     Under clause 62 the Secretary of State is required by order (which may be varied at any time) ("the universal service order") to set out the electronic communications networks, electronic communications services, associated facilities, directories and directory enquiry facilities, and particular methods of billing for services or of accepting payment for them that must be provided throughout the UK by universal service providers. Before making or varying the universal service order, the Secretary of State must consult OFCOM and other appropriate persons.

169.     The objective behind "universal service" obligations is to ensure that the basic communications services which are used by the majority, and which are essential to full social and economic inclusion, are made available to everyone who reasonably requests them at an affordable price.

Clause 63: Designation of universal service providers

170.     OFCOM have the power, by regulations, to provide for a procedure for designation of communications providers (or persons who are not communications providers, in the case of supplying directories or directory enquiry facilities) who will be subject to universal service conditions. Such regulations must establish an efficient, objective, transparent, and non-discriminatory procedure for designation. Regulations made under this clause are also to provide for a designation to cease to have effect where all the universal service conditions applying to a provider are revoked.

171.     Where OFCOM designate a person as a universal service provider, or where a designation ceases to have effect, they must notify this fact to the European Commission. This implements Article 36(1) of the Universal Service Directive.

Clause 64: Subject matter of universal service conditions

172.     This clause enables OFCOM to set universal service conditions for securing the provision of the networks, services and facilities etc. set out in the universal service order published by the Secretary of State under clause 62. In setting such conditions OFCOM must have regard to any guidance about matters relating to pricing that is contained in the universal service order.

173.     Persons who are subject to universal service conditions will be required to publish up-to-date information demonstrating how successful they are in complying with their obligations. The information is to be framed in accordance with the quality of service parameters, definitions and measurement methods set out in Annex III to the Universal Service Directive. The person may also be required to finance the independent auditing - for accuracy and usefulness - of such information. OFCOM may also impose performance targets.

Clause 65: Tariffs etc. for universal services

174.     This clause requires OFCOM to keep under review universal service tariffs. Universal service conditions can require a common tariff (which includes any pricing structure) or, in specified cases, a special tariff for provision of the networks, services, apparatus, associated facilities, directories and directory enquiry facilities set out in the universal service order. At no time should the customer of a universal services provider be cross-subsidising non-universal services by means of their payment for universal services.

Clause 66: Directories and directory enquiry facilities

175.     This clause provides that where the universal service conditions require the provision of directories or directory enquiry services, the provider must not excessively discriminate against any provider who provides information for use in that directory, or against any information so provided.

Clause 67: Review of compliance costs

176.     This clause enables OFCOM periodically to analyse the financial cost to a designated provider of complying with universal service conditions applied to him. OFCOM must then have these costs audited by an independent auditor, or must themselves audit those figures. OFCOM are under a duty to publish their conclusions, alongside a summary of the audit report.

Clause 68: Sharing of burden of universal service obligations

177.     If, following a study of costs pursuant to clause 67, OFCOM conclude that a financial burden is imposed on the provider of universal services, OFCOM must assess whether it would be unfair for that provider to shoulder the entire burden. If OFCOM determine that it would be unfair, and if the provider applies to OFCOM, OFCOM may determine that contributions from other communications providers, who themselves are subject to general conditions, are to be made. Subsection (4) provides that all this should be carried out in accordance with regulations made by OFCOM. These regulations should ensure that the calculation, collection and distribution of such contributions is to be done in an objective, transparent, and non-discriminatory way, and in a manner that avoids or minimises any distortion to competition or demand.

178.     Clause 48(1)(d) enables OFCOM to set general conditions giving effect to determinations or regulations made under this clause. This implements condition 1 of Part A of the Annex to the Authorisation Directive.

Clause 69: Report on sharing mechanism

179.     This clause provides that where regulations that provide for the sharing of the financial burden of providing universal services are in place under clause 68, OFCOM must prepare and publish an annual report. However, OFCOM are not obliged to publish any confidential material.

*material is confidential if it falls within subsections (7) or (8), if it relates specifically to the affairs of a particular body, or the private affairs of an individual, in each case where publication could seriously prejudice that body's or person's interests.

Clause 70: Permitted subject matter of access-related conditions

180.     This clause governs OFCOM's power to set access-related conditions. OFCOM may set access-related conditions only in relation to one or more of the matters listed in subsections (2) to (5).

181.     Subsection (2) allows OFCOM to set access-related conditions for the purpose of ensuring a level of network access and interoperability which will secure efficiency, sustainable competition and the greatest possible benefit to end-users. These access-related conditions include, but are not limited to, the specific type of access-related conditions set out in clause 71. This provision, together with clause 73, implements Article 5(1) of the Access Directive and Article 2(p) of the Framework Directive.

182.     Subsection (3) allows OFCOM to set access-related conditions to secure the sharing of apparatus and the division of the costs incurred by those to whom the electronic communications code applies, in cases where there is no viable alternative. This implements Article 12(2) of the Framework Directive.

183.     Subsection (4) allows OFCOM to set access-related conditions of a technical or operational nature to ensure the proper operation of an electronic communications network in compliance with any SMP services conditions falling within clause 84(3). Clause 84(3) allows OFCOM to set SMP conditions requiring the dominant provider to give entitlements in relation to network access, use of relevant networks and availability of relevant facilities. This provision, together with clause 72(1), implements Article 5(2) of the Access Directive.

184.     Finally, subsection (5) provides that OFCOM may set access-related conditions in respect of conditional access systems in accordance with clause 72(2). This provision, together with clauses 72(2) and 73, implements Article 6 of, and Part I of Annex I to, the Access Directive and Article 2(f) of the Framework Directive.

*conditional access system is defined in clause 72 (see below).

Clause 71: Specific types of access-related conditions

185.     Clause 70(2) allows OFCOM to set access-related conditions for the purpose of ensuring a level of network access and interoperability which will promote efficiency and sustainable competition and the greatest possible benefit end-users. Clause 71 provides that such conditions include those designed to ensure end-to-end connectivity. It also provides that conditions can be set for securing that the use of Application Programme Interfaces (APIs) and Electronic Programme Guides (EPGs) is provided on a fair, reasonable and non-discriminatory basis.

*end-to-end connectivity is defined in subsection (3) as the ability for two parties to communicate with each other whether they are using the same or different public electronic communications services.

*the meaning of application programme interface is given in subsection (3) as a facility for allowing software to use facilities in other software in order to allow someone to access a programme service or become the ultimate user of any network or service by means of which any programme service is broadcast or otherwise transmitted.

*electronic programme guide is defined in subsection (3) as any facility by means of which a person may ascertain what programmes are included in a service, and may access that service.

Clause 72: Conditional access systems and access to digital services

186.     Subsection (1) provides that OFCOM must ensure, when setting an access-related condition of a technical or operational nature for providers with significant market power (SMP), that they take account of all relevant international standards.

187.     Subsection (2) provides that OFCOM are under a duty to ensure that access-related conditions are applied to every person who provides a conditional access system in relation to a protected programme service, and that such conditions comply with Part I of Annex I of the Access Directive.

*conditional access system is defined in subsection (3) as any arrangements by means of which access to a programme service requires either subscription or authorisation.

*protected programme service is defined in subsection (3) as a service which is encrypted such that the programmes on it can only be viewed or listened to in an intelligible form by the use of a conditional access system.

Clause 73: Modification and revocation of conditions imposed under s.72

188.     This clause provides that OFCOM may not modify or revoke any access-related conditions that they have set falling within clause 72(2) unless they have carried out a market analysis from which they have concluded that the provider of conditional access systems to whom the condition applies does not have SMP. They must ensure that the proposed modification or revocation will not adversely affect the accessibility to persons of must-carry services or the prospects for effective competition.

Clause 74: Imposition of privileged supplier conditions

189.     Where a public electronic communications provider enjoys special or exclusive rights in relation to the provision of services in other sectors (other than the provision of associated facilities), OFCOM must set such privileged supplier conditions as they think fit (unless that provider has an annual turnover in relation to all of his communications activities of less than _50 million, in which case OFCOM are not obliged to impose a condition, but may do so if they wish). Such conditions can require such providers to keep separate accounts (all of which should be audited and published), or to have structural separation between different activities. This implements Article 13 of the Framework Directive.

*special or exclusive rights has the same meaning as in Article 86 of the Treaty establishing the European Community. Although the Treaty does not itself define them, guidance is given in Article 2(1)(f) and (g) of the Commission Transparency Directive OJ [1980] L 195/35. These rights are often, but need not be, given to public undertakings. Exclusive rights are largely self-explanatory but should be analysed in a functional rather than formalistic manner. Case law indicates that special rights are rights granted by a Member State to a limited number of undertakings where this limits - otherwise than according to objective, proportionate and non-discriminatory criteria - the number of undertakings authorised to provide a service in a particular area.

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Prepared: 6 March 2003