Office of Public Sector Information
PART 2 continued CHAPTER 1 continued
(1) This section applies where a services market is for the time being identified by 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—
(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.
(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 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 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 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
“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.
(1) This section applies where OFCOM have identified and analysed a services 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;
(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 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 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 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
(b) those markets shall be the identified markets for the purposes of the further analysis.
(7) Sections 79 to 83 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 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.
(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 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 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 to consider for the purpose of carrying out any earlier analysis.
(5) Where on such a review OFCOM conclude that the appropriate markets have changed—
(a) they shall identify the markets they now consider to be the appropriate ones; and
(b) those markets shall be the identified markets for the purposes of the further analysis.
(6) Where on such a review OFCOM conclude that there is no person at all with significant market power in relation to the identified market—
(a) they must so inform the Secretary of State; and
(b) the Secretary of State may by order remove or restrict OFCOM’s power under this Chapter to set SMP apparatus conditions by reference to that market.
(7) Sections 79, 80 and 81(1) apply—
(a) in relation to the identification of a apparatus market for the purposes of reviewing a market power determination under this section, as they 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.
(1) OFCOM must not set an SMP services condition by a notification which does not also make the market power determination by reference to which the condition is set unless—
(a) the condition is set by reference to a market power determination which has been reviewed under section 84 and, in consequence of that review, is confirmed in the notification setting the condition; or
(b) the condition is set by reference to a market power determination made in relation to a market in which OFCOM are satisfied there has been no material change since the determination was made.
(2) OFCOM must not modify or revoke SMP services conditions applying to a person except in a case falling within subsection (3) or (4).
(3) The first case is where, for the purpose of determining whether to make the modification or revocation, OFCOM have—
(a) carried out a further analysis under section 84 of the market in question; and
(b) reviewed the market power determination for the time being in force in that person’s case.
(4) The second case is where OFCOM are satisfied that there has not—
(a) in the case of an unmodified condition, since the condition was set, or
(b) in any other case, since the condition was last modified,
been a material change in the market identified or otherwise used for the purposes of the market power determination by reference to which the condition was set or last modified.
(5) OFCOM must not modify SMP apparatus conditions applying to a person except where, for the purpose of determining whether to make the modification or revocation, they have—
(a) carried out a further analysis under section 85 of the market in question; and
(b) reviewed the market power determination for the time being in force in that person’s case.
(6) A change is a material change for the purposes of subsection (1) or (4) if it is one that is material to—
(a) the setting of the condition in question; or
(b) the modification or revocation in question.
(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 contract for the provision by a person to whom this section applies to another person of network access to the relevant network; or
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.
(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.
(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.
(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.
(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.
(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.
(1) Where OFCOM have made a determination that a person (“the dominant supplier”) has significant market power in an identified apparatus market, they may—
(a) set such SMP conditions authorised by this section as they consider it appropriate to apply to that person in respect of the supply of electronic communications apparatus; and
(b) apply those conditions to that person.
(2) This section authorises the setting of SMP conditions of each of the following descriptions—
(a) conditions requiring the dominant supplier to maintain such a separation for accounting purposes between matters relating to the supply of electronic communications apparatus and other matters as may be described in the conditions;
(b) conditions imposing requirements about the accounting methods to be used in maintaining the separation; and
(c) conditions imposing such rules as OFCOM may make, for the purpose of securing the maintenance of the separation, about the use of cost accounting systems.
(3) This section also authorises the setting of SMP conditions imposing price controls in relation to the hiring of telephones which are hardwired to an electronic communications network.
(4) Conditions set under this section must not make provision in relation to the supply of electronic communications apparatus unless the apparatus is of a description of apparatus as respects the supply of which the dominant supplier has been found to have significant market power.
(5) For the purposes of this section a telephone is hardwired to an electronic communications network where, in order for it to be used with that network—
(a) it has to be physically attached to apparatus comprised in the network; and
(b) the attachment has to be effected by a process that requires the use of a tool.
(1) Where OFCOM determine that there are reasonable grounds for believing that a person is contravening, or has contravened, a condition set under section 45, they may give that person a notification under this section.
(2) A notification under this section is one which—
(a) sets out the determination made by OFCOM;
(b) specifies the condition and contravention in respect of which that determination has been made; and
(c) specifies the period during which the person notified has an opportunity of doing the things specified in subsection (3).
(3) Those things are—
(a) making representations about the matters notified;
(b) complying with notified conditions of which he remains in contravention; and
(c) remedying the consequences of notified contraventions.
(4) Subject to subsections (5) to (7) and section 98(3), the period for doing those things must be the period of one month beginning with the day after the one on which the notification was given.
(5) OFCOM may, if they think fit, allow a longer period for doing those things either—
(a) by specifying a longer period in the notification; or
(b) by subsequently, on one or more occasions, extending the specified period.
(6) The person notified shall have a shorter period for doing those things if a shorter period is agreed between OFCOM and the person notified.
(7) The person notified shall also have a shorter period if—
(a) OFCOM have reasonable grounds for believing that the contravention is a repeated contravention;
(b) they have determined that, in those circumstances, a shorter period would be appropriate; and
(c) the shorter period has been specified in the notification.
(8) A notification under this section—
(a) may be given in respect of more than one contravention; and
(b) if it is given in respect of a continuing contravention, may be given in respect of any period during which the contravention has continued.
Communications Act 2003