Communication to the Commission and Other National Regulatory Authorities (Nras) of Intended

Communication to the Commission and other National Regulatory Authorities (NRAs) of intended measures under Article 7(3) of Directive 2002/21/EC

1. OFCOM are proposing to impose more detailed transparency obligations (in the form of key performance indicator (‘KPI’)publication obligations) on British Telecommunications plc (‘BT’). The proposals will apply in respect of various markets where BT has previously been found to have significant market power in accordance with Article 16 of Directive 2002/21/EC

2. These proposals are supplementary to the market analysis procedure undertaken by OFCOM (or, previously, Director General of Telecommunications) in accordance with Article 16 of Directive 2002/21/EC, and concern the setting of more detailed remedies based on the results of such procedures in relation to various markets.

3. In particular the more detail remedies relate to the transparency obligation previously imposed on BT to publish such information as required by Ofcom in relation to the quality of service provided by BT in relevant markets.

4. OFCOM are satisfied there has been no material change to the relevant markets since the relevant market power determinations were proposed or made.

5. OFCOM hereby notify the Commission and other NRAs of their intended measures in accordance with Article 7(3) of Directive 2002/21/EC. OFCOM’s proposed findings and measures are as set out in the attached Summary Notification form and full details are set out in the attached Explanatory Memorandum.

6. OFCOM are also conducting a national consultation under Art 6 of Directive 2002/21/EC at the same time. The Director General of Telecommunications has already conducted a preliminary consultation which commenced on 11 July 2003 and ended on 19 September2003. The preliminary conclusions and proposed measures have taken account of the responses to that consultation.

7. Responses to this consultation are invited and may be sent to Sheira Hamilton, International Policy Advisor, Ofcom at by 6 August 2004.

Annex A

Summary Notification Form

1.Market definition

Please state where applicable:-

1.1 The affected relevant product/service market. Is this market mentioned in the Recommendation on relevant markets? / This notification relates to the implementation of quality of service remedies across a range of markets based on market definitions and market power designations previously consulted upon and notified to the Commission and other NRAs. In particular this notification relates to more detailed obligations under transparency obligation already imposed on BT in relation to quality of service provided by BT in relevant markets.
The relevant market review documents are:

Review of the fixed narrowband wholesale exchange line, call origination, conveyance and transit markets (‘Fixed Narrowband Review’); (excluding the market for wholesale business ISDN2 exchange line services) condition AA7 – (Final Explanatory Statement and Notification published on 28 November 2003)

Review of the wholesale broadband access market – (‘Broadband Review’); condition EA5 (Final Explanatory Statement and Notification – published on 13 May 2004)

1.2 The affected relevant geographic market / The UK excluding the Hull area
1.3 A brief summary of the opinion of the National Competition Authority where provided. / N/A
1.4 A brief overview of the results of the public consultation to date on the proposed market definition (for example, how many comments were received, which respondents agreed with the proposed market definition, which respondents disagreed with it) / Oftel/Ofcom consulted upon the market definitions etc, in the reviews identified at 1.1 above.
Ofcom consulted on the proposals for Key Performance Indicators from 11 July 2003 to 19 September 2003. Oftel received six responses to this consultation from:
ACSP
BT
Bulldog
Centrica
Kingston
SPC
In summary, there was general consensus with the Director’s proposal that BT should publish a set of KPIs, but that it would not be proportionate to require BT to provide transparency of quality of service in the form of a full set of data for products where volumes tend to be low eg Interconnect circuits, FRIACO and ATM Interconnect circuits. Throughout the consultation, stakeholders have made clear to Oftel/Ofcom that the key areas for potential discrimination (which the transparency obligations are seeking to support) are service provision and fault repairs.
1.5 Where the defined relevant market is different from those listed in the Recommendation on relevant markets, a summary of the main reasons which justified the proposed market definition by reference to Section 2 of the Commission’s Guidelines on the definition of the relevant market and the assessment of significant market power[1], and the three main criteria mentioned in Recitals (9) to (16) of the Recommendation on relevant markets and Section 3.2 of the accompanying Explanatory Memorandum[2]. / N/A

Designation of undertakings with SMP

Please state where applicable:-

2.1 The name(s) of the undertaking(s) designated as having individually or jointly significant market power.
Where applicable, the name(s) of the undertaking(s) which is (are) considered to no longer have significant market power. / As noted above, the designation of SMP was performed by the market reviews listed at 1.1. The proposals for KPIs will apply to BT as in the above stated market reviews it was decided that the Quality of Service condition would not apply to Kingston Communications. This is because there is insufficient demand for the wholesale services in question for the data provided to be statistically meaningful.
2.2 The criteria relied upon for deciding to designate or not an undertaking as having individually or jointly with others significant market power / N/A
2.3 The name of the main undertakings (competitors) present / active in the relevant market / N/A
2.4 The market shares of the undertakings mentioned above and the basis of their calculation (e.g., turnover, number of subscribers) / N/A

Please provide a brief summary of:-

2.5 The opinion of the national competition authority where provided. / N/A
2.6 The results of the public consultation to date on the proposed designation(s) as undertaking(s) having significant market power (e.g., total number of comments received, numbers agreeing/disagreeing) / N/A

Regulatory obligations

Please state where applicable (for 3.2. and 3.3, it is sufficient to refer to the relevant section of the full notification):-

3.1 The legal basis for the obligations to be imposed, maintained, amended or withdrawn (Articles 9 to 13 of Directive 2002/19/EC (Access Directive)) / Article 9 of Directive 2002/19/EC.
3.2 The reasons for which the imposition, maintenance or amendment of obligations on undertakings is considered proportional and justified in the light of the objectives laid down in Article 8 of Directive 2002/21/EC (Framework Directive). Alternatively, indicate the paragraphs, sections or pages of the draft measure where such information is to be found / The market reviews referred to at 1.1 above assessed whether a quality of service condition was an appropriate and proportionate remedy in respect of each relevant market.
Chapter 4 of Oftel’s initial consultation, Proposed requirement on dominant providers to publish Key Performance Indicators considers the regulatory options available
Chapters 5 and 6 In the attached explanatory memorandum and draft directions on the proposed requirement on BT to publish Key Performance Indicators set out the rationale for the selection of specific KPIs.
3.3 If the remedies proposed are other than those set out in Articles 9 to 13 of Directive 2002/19/EC (Access Directive), please indicate which are the «exceptional circumstances» within the meaning of Article 8 (3) of thereof which justify the imposition of such remedies. Alternatively, indicate the paragraphs, sections or pages of the draft measure where such information is to be found / N/A

Compliance with international obligations

In relation to the third intend of the first subparagraph of paragraph 3 of Article 8 of Directive 2002/19/EC (Access Directive), please state where applicable:-

4.1 Whether the proposed draft measure intends to impose, amend or withdraw obligations on market players as provided for in Article 8(5) of Directive 2002/19/EC (Access Directive) / N/A
4.2 The name(s) of the undertaking(s) concerned / N/A
4.3 Which are the international commitments entered by the Community and its Member States that need to be respected / N/A

Steve Unger

Head of Telecoms Technology

OFCOM

27 May 2004

[1]Commission guidelines on market analysis and the assessment of significant market power under the Community regulatory framework for electronic communications and services, OJ C 165, 11.7.2002, p.6

[2]Commission Recommendation of 11.2.2003 on Relevant Product and Service Markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communication networks and services, C (2003)497