The Telecommunications (Licence Modification) (Kingston Communications (Hull) PLC) Regulations 1999

Amendments to Schedule 1 of the standard Schedules

7.  After condition 64 there shall be inserted the following—

“PART J ADDITIONAL CONDITIONS APPLICABLE TO KINGSTONCOMMUNICATIONS (HULL) PLC PROHIBITION ON CROSS-SUBSIDIES

65.1   Where it appears to the Director that the Licensee is unfairly cross-subsidising or unfairly subsidising:

(a) the Apparatus Supply Business under this Licence, insofar as that Business is carried on in the United Kingdom;

(b) the provision in the United Kingdom of Mobile Radio Tails Service;

(c) the Supplemental Services Business under this Licence:

it shall take such steps as the Director may direct for the purpose of remedying the situation.

65.2   The Licensee shall record, except where the Director agrees otherwise, at full cost in its accounting records, any material transfer between any part of the Licensee’s business and any of the businesses mentioned in paragraph 65.1.

65.3   For the purposes of this Condition:

(a) “supply” and “provision” include supply or provision in the course of one business of the Licensee for the purposes of another such business notwithstanding that there is no supply or provision to any other person;

(b) a transfer from one business to another business or a company takes place when any thing (including any service or money) produced or acquired by, normally used in, or otherwise at the disposal of, the first mentioned business is made available for the purposes of the other business or the company; and

(c) “full cost” in the case of money transferred includes the market rate of interest for that money.

65.4   This Condition shall apply with the omission of paragraph 65.1(a) if and for so long as the supply of telecommunication apparatus by the Licensee does not constitute a monopoly situation within the meaning of section 6 of the Fair Trading Act 1973, but with the substitution of the words “Licensed Area” for the words “United Kingdom” whenever they appear in that section.

65.5   In considering whether any cross-subsidy of the Supplemental Services Business under this Licence is unfair, the Director shall have regard to the extent to which the Licensee cross-subsidised that Business for the purpose of satisfying any obligation imposed on it by Condition 1, Part A or Part B.

CONTROL OF HARD-WIRED AND OTHER TELEPHONE RENTALS

66.1   The Licensee shall ensure that no periodic or other charge in respect of renting from the Licensee telephone apparatus to which paragraph 66.2 applies increases by more than the amount of the change in the retail prices index (as so defined) in each period of 12 months ending on 30 June.

66.2   This paragraph applies to telephones, other than telephones described in paragraph 66.3 below (“the excepted telephones”), which are not capable of being connected to the Licensee’s Applicable Systems at a Network Termination Point by means of a fitted plug which complies with British Standard number 6312: 1985 as published on 28 February 1985, for example, telephones which are only capable of being connected to those Systems by means of hard-wiring or round-pin plugs.

66.3   The excepted telephone are:

(a) ISDN telephones;

(b) telephones which are connected to the Applicable Systems by means of a single line PBX; and

(c) telephones which are connected by a means other than a plug of the kind described in paragraph 66.2 above for the purposes of ensuring safety in a hazardous environment.

SEPARATE ACCOUNTS FOR CERTAIN ACTIVITIES

67.1   The Licensee shall:

(a) maintain accounting records in such a form that the activities of the Supplemental Services Business, the Systems Business and the Apparatus Supply Business are separately identifiable or separately attributable in the books of the Licensee, being records sufficient to show and explain the transactions of each of those Businesses;

(b) prepare in respect of each complete financial year of the Licensee, or of such lesser periods as the Director may specify but not more frequently than quarterly, accounting statements setting out, and, in the case of yearly statements, fairly presenting, the costs (including capital costs), revenue and financial position of each of the Systems Business and the Apparatus Supply Business and including a reasonable assessment of the assets employed in and liabilities attributable to each of them and showing separately, in the case of yearly accounting statements, the amount of any material item of revenue, cost, asset or liability which has been either:

(i) charged from or to any other business of the Licensee together with a description of the basis of the value on which the charge was made; or

(ii) determined by apportionment or attribution from an activity common to the Business and any other business of the Licensee and, if not otherwise disclosed, the basis of the apportionment or attribution;

(c) procure in respect of each of those accounting statements prepared in respect of a complete financial year of the Licensee a report by the Licensee’s auditor for the time being appointed in accordance with the Companies Act 1985 which shall conform to Auditing Standards and in which the auditor shall state whether in his opinion that statement is adequate for the purposes of this Condition; and

(d) deliver to the Director a copy of each of the accounting statements and of the reports relating thereto required under sub-paragraphs (b) and (c) above as soon as reasonably practicable and in any event not later than six months after the end of the period to which they relate.

67.2   Accounting statements prepared under paragraph 67.1(b) in respect of each financial year shall, so far as reasonably practicable, be prepared in the formats and in accordance with the accounting principles and rules which apply to the annual accounts of the Licensee and shall state the accounting policies used.

67.3   For the purposes of this Condition the Licensee shall be free to treat the Apparatus Supply Business as not including any business relating to the supply of apparatus outside the United Kingdom, but when it does so it shall inform the Director.

67.4   Subject to paragraph 67.3, in this Condition:

(a) “the Applicable Systems” is as defined in Annex A; and

(b) references to the costs of any business do not include profits of that business.

SUPPLY OF DIRECTORIES AND DATABASES FOR PROVISION OF DIRECTORY SERVICES

68.1   The Licensee shall on request by any public telecommunications operator, subject to the obligations in Condition 2 above, make available to such operator, for the purpose of enabling such operator to comply with such obligations, such directories which the Licensee compiles, in a form approved by the Director.

68.2   If, following a written representation by the Licensee that the market for provision of any of the items in paragraph 68.1 is competitive, the Director determines that such market is competitive in any specified area of the United Kingdom, the obligation upon the Licensee under paragraph 68.1 will cease to apply with respect to the provision of such item in respect of that specified area.

68.3   The Licensee shall supply the items in paragraph 68.1 above at the reasonable request of the person requesting such items. Without prejudice to the generality of the foregoing, the Licensee may refuse to supply such items if the person requesting such items does not undertake to Process the data or information contained in them in accordance with any relevant Code of Practice, or the Licensee has reasonable grounds to believe that the person requesting such items will not comply with Relevant Data Protection Legislation.

68.4   Where the Licensee is requested to supply the items in paragraph 68.1 above, the Licensee shall do so on terms which are fair, cost oriented and not unduly discriminatory, and in a format which is agreed between the Licensee and the person requesting the information, or approved by the Director, where no such agreement is reached”.