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Communications Act 2003

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Communications Act 2003, Cross Heading: SMP services conditions: subject-matter is up to date with all changes known to be in force on or before 19 July 2018. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

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SMP services conditions: subject-matterE+W+S+N.I.

87Conditions about network access etc.E+W+S+N.I.

(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 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

(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;

(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—

(a)the technical and economic viability [F1(including the viability of other network access products, whether provided by the dominant provider or another person)] , 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 available the network or other facility in respect of which an entitlement to network access is proposed [F2(taking account of any public investment made)] ;

(d)the need to secure effective competition [F3(including, where it appears to OFCOM to be appropriate, economically efficient infrastructure based 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 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

(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.

[F4(5A)The SMP conditions authorised by this section also include a condition which—

(a)is of a technical or operational nature; and

(b)appears to OFCOM to be appropriate for securing the proper operation of an electronic communications network in compliance with a condition under subsection (3).

(5B)A condition falling within subsection (5A) may provide that compliance with the condition is not required unless a person on whom an entitlement is or may be conferred in pursuance of a requirement imposed by a condition under subsection (3) fulfils such technical or operational requirements as may be specified by OFCOM.

(5C)It shall be the duty of OFCOM, when setting a condition falling within subsection (5A), to ensure that it contains all such provision as they consider appropriate for the purpose of taking account of the relevant international standards.]

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

(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 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 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 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 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 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 88) conditions imposing on the dominant provider—

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

(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.

(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

    (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

  • the relevant network”, in relation to such a person, means the public electronic communications network provided by him.

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Amendments (Textual)

Commencement Information

I1S. 87 in force at 25.7.2003 for specified purposes by S.I. 2003/1900, arts. 1(2), 2(1), Sch. 1 (with art. 3) (as amended by S.I. 2003/3142, art. 1(3))

I2S. 87 in force at 29.12.2003 in so far as not already in force by S.I. 2003/3142, art. 3(2) (with art. 11)

88Conditions about network access pricing etc.E+W+S+N.I.

(1)OFCOM are not to set an SMP condition falling within section 87(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 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

(iii)conferring the greatest possible benefits on the end-users of public electronic communications services.

(2)In setting an SMP condition falling within section 87(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.

(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,

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;

(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 87.

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Commencement Information

I3S. 88 in force at 25.7.2003 for specified purposes by S.I. 2003/1900, arts. 1(2), 2(1), Sch. 1 (with art. 3) (as amended by S.I. 2003/3142, art. 1(3))

I4S. 88 in force at 29.12.2003 in so far as not already in force by S.I. 2003/3142, art. 3(2) (with art. 11)

89Conditions about network access in exceptional casesE+W+S+N.I.

(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;

(b)that person is the provider of an electronic communications network or a person who makes associated facilities available; and

(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 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.

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Commencement Information

I5S. 89 in force at 25.7.2003 for specified purposes by S.I. 2003/1900, arts. 1(2), 2(1), Sch. 1 (with art. 3) (as amended by S.I. 2003/3142, art. 1(3))

I6S. 89 in force at 29.12.2003 in so far as not already in force by S.I. 2003/3142, art. 3(2) (with art. 11)

[F589A.Functional separationE+W+S+N.I.

(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;

(b)that person is the provider of a public electronic communications network or a person who makes available facilities that are associated facilities by reference to such a network;

(c)it appears to OFCOM that the setting of conditions applying to the dominant provider under section 87 (and, where OFCOM think it appropriate, section 88) has failed to address competition problems identified by OFCOM in carrying out a market analysis for the purpose of setting or modifying those conditions; and

(d)OFCOM have identified important and persisting competition problems or market failures in relation to the provision of network access.

(2)OFCOM may set an SMP services condition (referred to in this section and section 89B as a “functional separation condition”) requiring the dominant provider to transfer activities relating to the provision of network access to an independently operating business entity which is a part of the dominant provider.

(3)Where a functional separation condition is imposed on the dominant provider, the products or services specified in the condition must be given to the dominant provider and to other persons—

(a)on the same timescales, terms and conditions, including those relating to price and service levels, and

(b)by means of the same systems and processes.

(4)A functional separation condition must, where relevant, specify—

(a)the precise nature and level of separation, specifying in particular the legal status of the entity to which activities are transferred;

(b)an identification of the assets of that entity and the products or services to be supplied by it;

(c)the governance arrangements (including incentive structures) to ensure the independence of the staff employed in that entity;

(d)rules for ensuring compliance with the obligations imposed by the condition;

(e)rules for ensuring transparency of operational procedures, in particular towards persons, other than the dominant provider, who in OFCOM’s opinion are likely to be affected by the condition; and

(f)a monitoring programme to ensure compliance, including a requirement for the publication of an annual report.

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Amendments (Textual)

89B.Functional separation conditions: consultation and notificationE+W+S+N.I.

(1)Where OFCOM propose to apply a functional separation condition to a person, they must submit their proposal, including the draft functional separation condition, to the European Commission.

(2)The proposal must set out—

(a)evidence justifying the conclusions mentioned in section 89A(1)(c) and (d);

(b)a reasoned assessment that there is little or no prospect of effective and sustainable infrastructure based competition within a reasonable time frame;

(c)an analysis of the expected impact of the condition on—

(i)OFCOM;

(ii)the person on whom the condition is to be imposed;

(iii)the staff of the entity to which activities are to be transferred;

(iv)the electronic communications sector as a whole;

(v)incentives to invest in the electronic communications sector, particularly with regard to the need to ensure social and territorial cohesion;

(vi)competition in the services market affected by the condition; and

(vii)other persons who in OFCOM’s opinion are likely to be affected by the condition, including, in particular, consumers; and

(d)an analysis of the reasons why a functional separation condition would be the most effective means of addressing important and persisting competition problems or market failures identified by OFCOM.

(3)OFCOM may set the functional separation condition and apply it to a person if—

(a)the Commission has approved the imposition on the person of the obligations contained in the condition, and

(b)OFCOM have considered the impact that the obligations contained in the condition and approved by the Commission are likely to have on SMP services conditions set in relation to the services markets which, in OFCOM’s opinion, will be affected by the proposed condition.

(4)A proposal for a functional separation condition is to be submitted to the European Commission under this section before OFCOM carry out a consultation under section 48A in relation to the condition.

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Amendments (Textual)

89C.Obligation to notify OFCOM of voluntary separationE+W+S+N.I.

(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;

(b)the dominant provider is the provider of a public electronic communications network or a person who makes associated facilities available; and

(c)the dominant provider decides to transfer a substantial part or all of the dominant provider’s local access network assets to an independently operating business entity (which may be a part of the dominant provider or another person) for the purpose specified in subsection (2).

(2)That purpose is to use the assets to provide products or services to the dominant provider and to other persons—

(a)on the same timescales, terms and conditions, including those relating to price and service levels; and

(b)by means of the same systems and processes.

(3)The dominant provider must notify OFCOM of—

(a)the decision to transfer the assets;

(b)any changes to its intentions; and

(c)the taking effect of the transfer.

(4)Where OFCOM receive a notification under this section, they must, as soon as reasonably practicable, consider the impact that the transfer is likely to have on SMP services conditions set in relation to the services markets which, in OFCOM’s opinion, will be affected by the proposed transfer.]

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Amendments (Textual)

F690Conditions about carrier selection and pre-selectionE+W+S+N.I.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Amendments (Textual)

Commencement Information

I7S. 90 in force at 25.7.2003 for specified purposes by S.I. 2003/1900, arts. 1(2), 2(1), Sch. 1 (with art. 3) (as amended by S.I. 2003/3142, art. 1(3))

I8S. 90 in force at 29.12.2003 in so far as not already in force by S.I. 2003/3142, art. 3(2) (with art. 11)

91Conditions about regulation of services etc. for end-usersE+W+S+N.I.

(1)Where—

(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

(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 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 87 to [F789] .

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

F8(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F9(8)In this section “qualified auditor” means a person who—

(a)is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006, and

(b)if the appointment to carry out such auditing as is mentioned in subsection (6)(b) were an appointment as a statutory auditor, would not be prohibited from acting by section 1214 of that Act (independence requirement).]

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

Commencement Information

I9S. 91 in force at 25.7.2003 for specified purposes by S.I. 2003/1900, arts. 1(2), 2(1), Sch. 1 (with art. 3) (as amended by S.I. 2003/3142, art. 1(3))

I10S. 91 in force at 29.12.2003 in so far as not already in force by S.I. 2003/3142, art. 3(2) (with art. 11)

F1092Conditions about leased linesE+W+S+N.I.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations: Help about Annotation
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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

Commencement Information

I11S. 92 in force at 25.7.2003 for specified purposes by S.I. 2003/1900, arts. 1(2), 2(1), Sch. 1 (with art. 3) (as amended by S.I. 2003/3142, art. 1(3))

I12S. 92 in force at 29.12.2003 in so far as not already in force by S.I. 2003/3142, art. 3(2) (with art. 11)

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