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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     73
73    Modification and revocation of conditions imposed under s. 72
(1)    This section applies in the case of conditions falling within section 72(2) which
have been set by OFCOM in relation to a particular person (“the system
provider”).
(2)    OFCOM must not give effect to a proposal to modify or revoke any of the	5
conditions unless—
(a)           they have carried out an analysis for the purpose of determining in
accordance with this Chapter whether that person is or remains a
person on whom SMP services conditions are capable of being
imposed;	10
(b)           they have determined in consequence of that analysis that he is not; and
(c)           they are satisfied that the modification or revocation will not have an
adverse effect on any or all of the matters mentioned in subsection (3).
(3)    Those matters are—
(a)           the accessibility to any persons of services that are for the time being	15
included in the list of must-carry services in section 61;
(b)           the prospects for effective competition in the market for programme
services provided by being broadcast or otherwise transmitted in
digital form; and
(c)           the prospects for effective competition in the markets for conditional	20
access systems and other associated facilities.
(4)    In this section “conditional access system” has the same meaning as in section
72.
Privileged supplier conditions
74    Imposition of privileged supplier conditions	25
(1)    It shall be the duty of OFCOM to secure that privileged supplier conditions
containing all such provision falling within subsection (3) as they consider
appropriate are applied to every public communications provider to whom
this section applies.
(2)    This section applies to every public communications provider who—	30
(a)           enjoys special or exclusive rights in relation to the provision of any non-
communications services; and
(b)           is not such a provider in respect only of associated facilities.
(3)    The provision that may be contained in a condition set under section 42 as a
privileged supplier condition is any provision that OFCOM consider	35
appropriate for any one or more of the following purposes—
(a)           requiring the provider to whom it applies to keep separate accounts in
relation to his public electronic communications network or public
electronic communications service and other matters;
(b)           requiring that provider to submit the accounts of the different parts of	40
his undertaking, and any financial report relating to a part of that
undertaking, to a qualified auditor for auditing;
(c)           requiring the accounts of the different parts of his undertaking to be
published;
Communications Bill Part 2 — Networks, services and the radio spectrum Chapter 1 — Electronic communications networks and services     74
(d)           securing, by means other than the keeping of separate accounts, the
structural separation of the different parts of his undertaking.
(4)    OFCOM is not required under this section to apply a condition to a person
where they are satisfied that that person has an annual turnover in relation to
all his communications activities that is less than €50 million.	5
(5)    Where in a case falling within subsection (4) OFCOM are not required to apply
a privileged supplier condition to a person, they may apply such a condition to
him if they think fit.
(6)    The reference in subsection (4) to a person’s communications activities is a
reference to any activities of his that consist in, or are connected with, either or	10
both of the following—
(a)           the provision of any one or more electronic communications networks;
(b)           the provision of any one or more electronic communications services.
(7)    The making, for the purposes of subsection (4), of—
(a)           a determination of the period in respect of which a person’s annual	15
turnover in relation to any activities is computed, and
(b)           a determination of the amount in Euros of that turnover for any period,
must be in accordance with such rules as OFCOM consider to be reasonable.
(8)    OFCOM must publish any rules made by them for the purposes of subsection
(7) in such manner as they consider appropriate for bringing them to the	20
attention of the persons who, in their opinion, are likely to be affected by them.
(9)    In this section—
“non-communications services”, in relation to a person, means services
other than those consisting in, or connected with, the provision by him
of—	25
(a)                 an electronic communications network; or
(b)                 an electronic communications service;
“qualified auditor” means a person eligible, in accordance with Part 2 of
the Companies Act 1989 (c. 40), for appointment as a company auditor;
“special or exclusive rights” has the same meaning as in Article 86 of the	30
Treaty establishing the European Community.
SMP conditions: procedure
75    Circumstances required for the setting of SMP conditions
(1)    For the purposes of this Chapter a person shall be taken to have significant
market power in relation to a market if he enjoys a position which amounts to	35
or is equivalent to dominance of the market.
(2)    References in this section to dominance of a market must be construed in
accordance with any applicable provisions of Article 14 of the Framework
Directive.
(3)    A person is to be taken to enjoy a position of dominance of a market if he is one	40
of a number of persons who enjoy such a position in combination with each
other.
(4)    A person or combination of persons may also be taken to enjoy a position of
dominance of a market by reason wholly or partly of his or their position in a
Communications Bill Part 2 — Networks, services and the radio spectrum Chapter 1 — Electronic communications networks and services     75
closely related market if the links between the two markets allow the market
power held in the closely related market to be used in a way that influences the
other market so as to strengthen the position in the other market of that person
or combination of persons.
(5)    The matters that must be taken into account in determining whether a	5
combination of persons enjoys a position of dominance of a services market
include, in particular, the matters set out in Annex II to the Framework
Directive.
76    Market power determinations
(1)    Before making a market power determination, OFCOM must—	10
(a)           identify (by reference, in particular, to area and locality) the markets
which in their opinion are the ones which in the circumstances of the
United Kingdom are the markets in relation to which it is appropriate
to consider whether to make the determination; and
(b)           carry out an analysis of the identified markets.	15
(2)    In identifying or analysing any services market for the purposes of this
Chapter, OFCOM must take due account of all applicable guidelines and
recommendations which—
(a)           have been issued or made by the European Commission in pursuance
of the provisions of a Community instrument; and	20
(b)           relate to market identification and analysis.
(3)    In considering whether to make or revise a market power determination in
relation to a services market, OFCOM must take due account of all applicable
guidelines and recommendations which—
(a)           have been issued or made by the European Commission in pursuance	25
of the provisions of a Community instrument; and
(b)           relate to market analysis or the determination of what constitutes
significant market power.
(4)    The way in which—
(a)           a market is to be identified for the purposes of this section, or	30
(b)           a market power determination is to be made,
is by the publication of a notification containing the identification or
determination.
(5)    Notifications for the purposes of subsection (4)—
(a)           may be given separately;	35
(b)           may be contained in a single notification relating to both the
identification of a market and the making of a market determination in
relation to that market; or
(c)           may be contained in a single notification under section 45(1) with
respect to the setting or modification of an SMP condition and either—	40
(i)                 the making of the market power determination by reference to
which OFCOM set or modify that condition; or
(ii)                the making of that market power determination and the
identification of the market in relation to which they make that
determination.	45
(6)    The publication of a notification under this section must be in such manner as
appears to OFCOM to be appropriate for bringing the contents of the
Communications Bill Part 2 — Networks, services and the radio spectrum Chapter 1 — Electronic communications networks and services     76
notification to the attention of the persons who, in OFCOM’s opinion, are likely
to be affected by the matters notified.
(7)    References in this section to guidelines and recommendations issued by the
European Commission and to a Community instrument include references,
respectively, to guidelines and recommendations issued after the	5
commencement of this section and to a Community instrument made after the
commencement of this section.
77    Proposals for identifying markets and for market power determinations
(1)    Before OFCOM—
(a)           identify a market for the purposes of making a market power	10
determination, or
(b)           make a market power determination,
they must publish a notification of what they are proposing to do.
(2)    Notifications for the purposes of subsection (1)—
(a)           may be given separately;	15
(b)           may be contained in a single notification relating to both the
identification of a market and the making of a market determination in
relation to that market; or
(c)           may be contained in a single notification under section 45(2) with
respect to the setting or modification of an SMP condition and either—	20
(i)                 the making of the market power determination by reference to
which OFCOM are proposing to set or modify that condition; or
(ii)                the making of that market power determination and the
identification of the market in relation to which they are
proposing to make that determination.	25
(3)    A notification under this section relating to a proposal to identify a market or
to make a market power determination must—
(a)           state that OFCOM are proposing to identify that market or to make that
market power determination;
(b)           set out the effect of the proposal;	30
(c)           give their reasons for making the proposal; and
(d)           specify the period within which representations may be made to
OFCOM about their proposal.
(4)    That period must be a period of not less than one month after the day of the
publication of the notification.	35
(5)    The publication of a notification under this section must be in such manner as
appears to OFCOM to be appropriate for bringing the contents of the
notification to the attention of the persons who, in OFCOM’s opinion, are likely
to be affected by the matters notified.
(6)    OFCOM may give effect, with or without modifications, to a proposal with	40
respect to which they have given a notification under this section only if—
(a)           they have considered every representation about the proposal that is
made to them within the period specified in the notification; and
(b)           they have had regard to every international obligation of the United
Kingdom (if any) which has been notified to them for the purposes of	45
this paragraph by the Secretary of State.
Communications Bill Part 2 — Networks, services and the radio spectrum Chapter 1 — Electronic communications networks and services     77
(7)    The power of OFCOM to give effect to such a proposal is subject to sections 79
and 80.
78    Delivery of copies of notifications under ss. 76 and 77
(1)    OFCOM must send a copy of every notification published under section 76(4)
or 77 to the Secretary of State.	5
(2)    OFCOM must send to the European Commission a copy of every notification
published under section 76(4) with respect to a market power determination in
relation to a services market.
(3)    OFCOM must send a copy of every notification published under section 77
which—	10
(a)           relates to a proposal to identify a services market or to make a market
power determination in relation to such a market; and
(b)           in OFCOM’s opinion would affect trade between member States,
to the European Commission and to the regulatory authorities of every other
member State.	15
(4)    OFCOM must, in every other case in which it appears to them appropriate to
do so, send—
(a)           to the European Commission, and
(b)           to such of the regulatory authorities of the other member States as
OFCOM think fit,	20
a copy of a notification published under section 77 which relates to a proposal
to identify a services market or to make a market power determination in
relation to such a market.
79    European Commission’s powers in respect of proposals
(1)    This section applies, in the case of a notification under section 77 with respect	25
to a proposal—
(a)           to identify a particular market; or
(b)           to make a market power determination.
(2)    If, within the representations period, OFCOM are notified by the European
Commission for the purposes of Article 7(4) of the Framework Directive	30
(market identifications that do not conform to Commission recommendations
and determinations that affect trade between member States)—
(a)           that the Commission considers that giving effect to the proposal would
create a barrier in relation to the single European market, or
(b)           that the Commission has serious doubts as to whether giving effect to	35
the proposal would be compatible with the requirements of any
Community obligations,
OFCOM are not to give effect to the proposal before the end of a further two
months beginning with the end of the representations period.
(3)    Where, before the end of that two month period, the European Commission	40
makes a decision in accordance with Article 7(4) of the Framework Directive
that the proposal should be withdrawn, OFCOM—
(a)           must withdraw it; and
(b)           shall not be entitled to give effect to it.
Communications Bill Part 2 — Networks, services and the radio spectrum Chapter 1 — Electronic communications networks and services     78
(4)    In this section “the representations period”, in relation to a notification under
section 77, means the period specified in that notification for the making of
representations about the proposals contained in it.
80    Special rules for transnational markets
(1)    This section applies where a services market is for the time being identified by	5
a decision of the European Commission under Article 15(4) of the Framework
Directive as a transnational market.
(2)    Where the market area includes the whole or a part of the United Kingdom,
OFCOM must enter into and maintain arrangements with the other relevant
regulatory authorities about—	10
(a)           the extent to which the agreement of all the relevant regulatory
authorities is required for the doing of any of the things mentioned in
subsection (3); and
(b)           the procedures to be followed for securing that agreement where it is
required.	15
(3)    Those things are—
(a)           the identification of the whole or a part of the market as a market in
relation to which it is appropriate to determine whether a person has
significant market power;
(b)           the making of such a determination in relation to the whole or a part of	20
the market;
(c)           the setting of a condition the setting of which requires such a
determination to have been made;
(d)           the modification or revocation of such a condition.
(4)    OFCOM must not do any of the things mentioned in subsection (3) except in	25
accordance with arrangements maintained under that subsection.
(5)    Those arrangements may include arrangements requiring OFCOM, when
doing any of those things, to comply with—
(a)           a decision made, by one or more other regulatory authorities; or
(b)           a decision made by a person appointed under the arrangements to act	30
on behalf of some or all of the relevant regulatory authorities.
(6)    In this section—
“market area”, in relation to a services market identified by the European
Commission as a transnational market, means the area identified by
that Commission as the area for which the market operates; and	35
“relevant regulatory authorities”, in relation to such a market, means the
regulatory authorities for each member State the whole or a part of
which is comprised in the market area.
81    Review of services market identifications and determinations
(1)    This section applies where OFCOM have identified and analysed a services	40
market for the purposes of making a market power determination.
(2)    OFCOM must, at such intervals as they consider appropriate, carry out further
analyses of the identified market for one or both of the following purposes—
(a)           reviewing market power determinations made on the basis of an earlier
analysis;	45
Communications Bill Part 2 — Networks, services and the radio spectrum Chapter 1 — Electronic communications networks and services     79
(b)           deciding whether to make proposals for the modification of SMP
conditions set by reference to a market power determination made on
such a basis.
(3)    It shall be the duty of OFCOM to carry out such a further analysis of a services
market as soon as reasonably practicable after recommendations are made by	5
the European Commission that affect the matters that were taken into account,
or could have been taken into account, in the case of the last analysis by
OFCOM of that market.
(4)    Where on, or in consequence of, a further analysis under this section, OFCOM
determine that a person to whom any SMP conditions apply is no longer a	10
person with significant market power in that market, they must revoke every
SMP services condition applied to that person by reference to the market
power determination made on the basis of the earlier analysis.
(5)    Before carrying out a further analysis under subsection (2), OFCOM may
review any decision of theirs identifying the markets which it was appropriate	15
to consider for the purpose of carrying out an earlier analysis.
(6)    Where, on such a review, OFCOM conclude that the appropriate markets have
changed—
(a)           they must identify the markets they now consider to be the appropriate
ones; and	20
(b)           those markets shall be the identified markets for the purposes of the
further analysis.
(7)    Sections 76 to 80 apply—
(a)           in relation to the identification of a services market for the purposes of
reviewing a market power determination under this section, as they	25
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.
82    Review of apparatus market identifications and determinations	30
(1)    This section applies where OFCOM have identified and analysed an apparatus
market for the purposes of making a market power determination.
(2)    OFCOM must, at such intervals as they consider appropriate, carry out further
analyses of the identified market for one or both of the following purposes—
(a)           reviewing market power determinations made on the basis of an earlier	35
analysis;
(b)           deciding whether to make proposals for the modification of SMP
conditions set by reference to any such market power determination.
(3)    Where on, or in consequence of, a further analysis under this section, OFCOM
determine that a person to whom any SMP conditions apply is no longer a	40
person with significant market power in that market, they shall revoke every
SMP apparatus condition applied to that person by reference to the market
power determination made on the basis of the earlier analysis.
(4)    Before carrying out any further analysis under subsection (2), OFCOM may
review any decision of theirs identifying the markets which it was appropriate	45
to consider for the purpose of carrying out any earlier analysis.

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