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Communications Act 2003

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This is the original version (as it was originally enacted).

SMP services conditions: subject-matter

87Conditions about network access etc.

(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, 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;

(d)the need to secure effective 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.

(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.

88Conditions about network access pricing etc.

(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.

89Conditions about network access in exceptional cases

(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.

90Conditions 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

(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.

(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 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—

(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 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;

(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 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

(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.

91Conditions about regulation of services etc. for end-users

(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 90.

(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).

(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 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.

92Conditions 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

(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.

(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 to the Universal Service Directive, the principles of non-discrimination, cost 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 communications networks.

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