The Telecommunications (Interconnection) Regulations 1997

• Citation: S.I. 1997/2931
• Sections: 70

Section 1 Citation and commencement

These Regulations may be cited as the Telecommunications (Interconnection) Regulations 1997 and shall come into force on 31 December 1997.

Section 2 Interpretation

(1) In these Regulations—

(a) “the Interconnection Directive ” means Directive 97/33/ EC of the European Parliament and of the Council on Interconnection in Telecommunications with regard to ensuring Universal Service and Interoperability through Application of the Principles of Open Network Provision ( ONP ) ; and

(b) “the ONP Framework Directive ” means Council Directive 90/387/ EEC on the establishment of the internal market for telecommunications services through the implementation of Open Network Provision ;

and words and expressions used in the Regulations shall, unless the context otherwise requires, have the same meaning as in the Interconnection and the ONP Framework Directive.

(2) In these Regulations—

“ the Act ” means the Telecommunications Act 1984 ;

“an Operator having Significant Market Power” means a Public Operator which the Director has determined to be an organisation having Significant Market Power in accordance with Regulation 4(1)(a) below;

“ the Commission ” means the Commission of the European Communities;

“ ECU ” means European Currency Unit, calculated at the central rate set by the EC Commission on the Licensee’s accounting reference date, as defined in section 224 of the Companies Act 1985;

“European Public Operator” means a person authorised in another Member State to provide public telecommunications networks and publicly available telecommunications services and whose name has been notified to the Commission under Article 18 of the Directive as an organisation covered by Annex II of the Directive.

“fixed public telephone network” means the public switched telecommunications network which supports the transfer between network termination points at fixed locations of speech and 3, 1 kHz bandwidth audio information, to support inter alia:

voice telephony;

facsimile Group III communications, in accordance with ITU -T Recommendations in the “T-series”,

voice band data transmission via modems at a rate of at least 2,400 bit/s, in accordance with ITU-T Recommendations in the “V-series”, and

where access to the end-user’s network termination point is via a number or numbers in the national numbering plan;

“fixed public telephone service” means the provision to end-users at fixed locations via a number or numbers in the national numbering plan of a service for the originating and receiving of national and international calls, including access to emergency services, the provision of operator assistance, directory services, provision of public pay phones, provision of service under special terms or provision of special facilities for customers with disabilities or with special social needs or both such provisions.

“interconnection” means the physical and logical linking of telecommunications networks used by the same or a different organisation in order to allow the users of one organisation to communicate with users of the same or another organisation or to access services provided by another organisation. Services may be provided by the parties involved or other parties who have access to the network;

“licence” means a licence granted under section 7 of the Act.

“Public Operator” means a person to whom a licence has been granted authorising the running of publicly available telecommunication systems and the provision of publicly available telecommunication services.

“relevant licence” means a licence granted to a Public Operator falling within the categories set out in Schedule 2.

“special rights” means rights that are granted by a Member State to a limited number of undertakings through any legislative, regulatory or administrative instrument which, within a given geographical area, limits to two or more the number of such undertakings authorised to provide a service or undertake an activity, otherwise than according to objective, proportionate and non-discriminatory criteria, or designates, otherwise than according to such criteria, several competing undertakings as being authorised to provide a service or undertake an activity, or confers on any undertaking or undertakings, otherwise than according to such criteria, legal or regulatory advantages which substantially affect the ability of any other undertaking to provide the same service or to undertake the same activity in the same geographical area under substantially the same conditions.

“Universal service” means a defined minimum set of services of specified quality which is available to all users independent of their geographical location and, in the light of specific national conditions, at an affordable price.

“universal service obligations” means those obligations placed upon an operator of a fixed public telephone network by means of a relevant licence which concern the provision of such a network and a fixed public telephone service throughout a geographical area specified in the licence including, where required, averaged prices in that geographical area for the provision of that service;

“users” means individuals, including consumers, or organisations using or requesting publicly available telecommunications services;

Section 3 The Obligation to Interconnect

(1) A relevant licence shall include a provision imposing an obligation on the Licensee to negotiate interconnection when requested by another such Public Operator, or, where the relevant licence authorises connection to telecommunication systems or telecommunication apparatus outside the United Kingdom, by a European Public Operator.

(2) The relevant licence may include a condition enabling the Director to agree to limit this obligation:

(a) on a temporary basis where in his opinion there are technically and commercially viable alternatives to the interconnection requested; and

(b) the requested interconnection is in his opinion inappropriate in relation to the resources available to meet the request; and

any limitation imposed by the Director shall be fully reasoned and shall be published in accordance with regulation 8(3) below.

(3) A licence granted to an Operator having Significant Market Power in a relevant market shall include a condition imposing an obligation to meet all reasonable requests for access to the network including access at points other than the network termination points offered to the majority of end-users.

Section 4 Significant Market Power

(1)

(a) The Director shall determine, on the coming into force of these regulations and from time to time, whether a Public Operator has Significant Market Power.

(b) In making such a determination, it shall be presumed that:

(i) a Public Operator which has 25% or more of the relevant market, in the geographical area within which it is licensed to operate has Significant Market Power; and

(ii) a Public Operator which has less than 25% of the relevant market in the geographical area within which it is licensed to operate does not have Significant Market Power;

unless having regard to the organisation’s ability to influence market conditions, its turnover relative to the size of the market, its control of the means of access to end-users, its access to financial resources and its experience in providing products and services in the market, the Director determines the contrary.

(2) The Director shall notify the Secretary of State of the determinations which he has made under paragraph (1) above and the Secretary of State shall notify such determinations to the Commission.

Section 5 The Interconnection Requirements

(1) In exercising their functions under sections 7 and 12 to 15 of the Act (granting of licences and modification of licence conditions) the Secretary of State and the Director shall ensure that conditions are imposed on the relevant licensees so that the following requirements are met—

(a) for interconnection to the telecommunication systems described in Schedule 1 run by Operators having Significant Market Power, the requirements set out in Part I of Schedule 3 (Non Discrimination and Information);

(b) for Operators having Significant Market Power running the telecommunication systems or providing the telecommunication services described in Parts I and II of Schedule 1,

(i) the requirements set out in Part II of Schedule 3 (Interconnection Charges and Cost Accounting Systems); and

(ii) the requirements in paragraph 2 of Part III of Schedule 3 (Accounting Separation);

(c) for Operators having Significant Market Power running the telecommunication systems or providing the telecommunication services described in Part III of Schedule 1 who have been notified to the Commission as having Significant Market Power on the national market for interconnection, the requirement in paragraph 1 of Part II of Schedule 3 (Interconnection Charges);

(d) for Public Operators which have special or exclusive rights for the provision of services in sectors other than telecommunications in the UK or in any other Member State of the Community, the requirements set out in paragraph 1 of Part III to Schedule 3 (Accounting Separation);

(e) for all Public Operators, the requirements in Part IV of Schedule 3 (Financial Information).

Section 6 General Responsibilities of the Secretary of State and of the Director

(1) In exercising their functions conferred by or under the Act, and these Regulations, the Secretary of State and the Director shall encourage and secure adequate interconnection in the interests of all users, exercising their responsibility in a way that provides maximum economic efficiency and gives the maximum benefit to end-users, and in doing so shall have regard to the following—

(a) the need to ensure satisfactory end-to-end communication for users;

(b) the need to stimulate a competitive market;

(c) the need to ensure the fair and proper development of a harmonised European telecommunication market;

(d) the need to co-operate with the regulatory authorities of other Member States;

(e) the need to promote the establishment and development of trans-European networks and services, and the interconnection of national networks and interoperability of services, as well as access to such networks and services;

(f) the principles of non-discrimination (including equal access) and proportionality;

(g) the need to maintain and develop a universal service.

(2) The Director may specify general conditions which must be included in interconnection agreements. The general conditions must be published in accordance with regulation 8. In particular, the Director in relation to interconnection between Public Operators described in Schedule 2 and between such a Public Operator and a European Public Operator—

(a) may set ex ante conditions in the areas listed in Part 1 of Schedule 4; and

(b) shall encourage coverage in an interconnection agreement of the issues listed in Part II of Schedule 4.

(3) In pursuit of the aims stated in paragraph (1) above the Director may intervene at any time, and shall do so on the request of either party, in order to make a direction specifying issues which must be covered in an interconnection agreement, or to make a direction that specific conditions be observed by one or more parties to such an agreement. The Director may in exceptional circumstances make a direction that changes be made to interconnection agreements already concluded where it is justified to ensure effective competition or interoperability of services for users or both.

(4) The Director may on his own initiative at any time or if requested by either party, by direction set time limits within which negotiations on interconnection are to be completed. Any such direction shall also set out the steps to be taken if agreement is not reached within these time limits. If the Director appoints a conciliator, the direction shall include provisions as to the payment of the conciliator’s reasonable costs and expenses and the procedures to be adopted by the conciliator. The procedures for the purposes of bringing about agreement shall be open to the public in accordance with regulation 8(3).

(5) Where a Public Operator described in Schedule 2 enters into interconnection agreements with others, the Director may inspect all such interconnection agreements in their entirety.

(6) Where there is a dispute concerning interconnection between organisations the Director shall, at the request of either party, take steps to resolve the dispute within six months of the date of the request. The direction which the Director makes to resolve the dispute shall represent a fair balance between the legitimate interests of both parties. The direction shall be notified to the parties and published in accordance with regulation 8(3). The parties concerned shall be given a full statement of the reasons on which it is based.

(7) Where a complaint concerning interconnection is brought by a European Public Operator against an organisation authorised in the United Kingdom, the Director shall take steps to resolve the dispute within six months of the date of the complaint. The direction which the Director makes to resolve the dispute shall represent a fair balance between the legitimate interests of the European Public Operator and the organisation authorised in the United Kingdom. The direction shall be notified to the parties and published in accordance with regulation 8(3). The parties concerned shall be given a full statement of the reasons on which it is based.

(8) In exercising his duties under paragraphs (6) and (7) above, the Director shall take into account inter alia—

(a) the interests of users;

(b) regulatory obligations or constraints imposed on any of the parties;

(c) the desirability of stimulating innovative market offerings, and of providing users with a wide range of telecommunications services both at national and Community level;

(d) the availability of technically and commercially viable alternatives to the interconnection requested;

(e) the desirability of ensuring equal access arrangements;

(f) the need to maintain the integrity of the public telecommunications network and the interoperability of services;

(g) the nature of the request in relation to the resources available to meet the request;

(h) the relative market positions of the parties;

(i) the public interest;

(j) the promotion of competition;

(k) the need to maintain a universal service.

(9) Where there are concurrent disputes between the same two organisations the Director shall, on request of either party to the disputes, make every effort to co-ordinate with the national regulatory authorities in any other Member State concerned in order to bring about a resolution of the disputes in accordance with the principle set out in paragraph (1)(a) to (g) above, within six months of referral. The resolution of the disputes shall represent a fair balance between the legitimate interests of both parties and be consistent with the interconnection rules in the United Kingdom and in the other Member States, in conformity with the law of the European Community.

(10) Where Public Operators described in Schedule 2 have not interconnected their facilities the Director may, in accordance with the principle of proportionality and in the interests of users, make a direction that the Public Operators concerned shall interconnect their facilities. Any such direction shall be made only as a last resort in order to protect essential public interests. The direction may, where appropriate, set the terms of interconnection.

(11) The Director may publish such financial information provided to him in accordance with regulation 5(f) as would contribute to an open and competitive market, taking into account considerations of commercial confidentiality.

(12) In exercising their functions under section 7 of the Act, the Secretary of State and the Director shall ensure that a description of the cost accounting system used by Operators having Significant Market Power in accordance with paragraph 4 of Part II in Schedule 3 showing the main categories under which costs are grouped and the rules used for the allocation of costs to interconnection, is made available on request to interested parties. The Director, or an independent body approved by the Director, shall verify compliance by organisations with the cost accounting system and the Director shall publish an annual statement concerning compliance.

Section 7 Essential Requirements

(1) The Director may specify conditions based on essential requirements to be included in any interconnection agreement. These conditions shall be published in accordance with regulation 8.

(2) In exercising their functions under section 7 of the Act, the Secretary of State and the Director shall take all necessary steps to ensure that insofar as is practicable in all the circumstances the availability of telecommunication systems run by Public Operators is maintained in the event of catastrophic network breakdown or in exceptional cases of force majeure, such as extreme weather, earthquakes, flood, lightning or fire.

(3) In specifying conditions under regulation 7(1) above, the Director shall ensure that any conditions for interconnection related to the availability in the event of accidents, or the integrity, of telecommunication systems run by Public Operators shall be proportionate and non-discriminatory and based on objective criteria identified in advance.

(4) In specifying conditions under regulation 7(1) above, the Director may specify conditions in order to ensure interoperability of services, including conditions designed to ensure satisfactory end-to-end quality. The conditions may impose specific technical standards, specifications, or codes of practice agreed by the parties who, in the Director’s opinion, are directly concerned.

(5) In specifying conditions under regulation 7(1) above, the Director may specify conditions in order to ensure the protection of data, to the extent necessary to ensure compliance with relevant regulatory provisions on the protection of data including protection of personal data, the confidentiality of information processed, transmitted or stored, and the protection of privacy.

Section 8 Publication of information by the Director

(1) The Director shall from time to time publish or ensure that there is published adequate and up-to-date information on interconnection in accordance with paragraph 2 of Part II of Schedule 3, regulation 6(2), regulation 7 and regulation 11(2).

(2) The information referred to in paragraph (1) above shall be published in such a way as to provide easy access for users of that information; and the Director shall publish references to the publication of that information in the London, Edinburgh and Belfast Gazettes.

(3) The Director shall ensure that up-to-date and specific information in accordance with regulation 3(2), regulation 12(1), paragraph 3 of Part I of Schedule 3, regulation 6(4), regulation 6(6), regulation 6(7) and regulation 10(2) is made available on request to interested parties, free of charge, during normal working hours. Reference shall be made by the Director in the London, Edinburgh and Belfast Gazettes to the times and location at which the information is available.

Section 9 Technical standards

(1) In exercising his functions under the Act the Secretary of State and the Director shall ensure that Public Operators take full account of standards listed in the Official Journal of the European Communities in accordance with Article 5 of the ONP Framework Directive as being suitable for the purpose of interconnection.

(2) In the absence of such standards, the Director shall encourage the provision of technical interfaces for interconnection according to the standards below in order of priority:

(a) standards adopted by European standardisation bodies such as the European Telecommunications Standards Institute ( ETSI ), or the European Committee for Standardisation/European Committee for Electrotechnical Standardisation ( CEN /Cenelec); or in the absence of such standards,

(b) international standards or recommendations adopted by the International Telecommunications Union (ITU), the International Organisation for Standardisation ( ISO ) or the International Electrotechnical Commission ( IEC ); or in the absence of such standards,

(c) any standards or specifications determined by the Director.

Section 10 Collocation and facility sharing

(1) Where a Public Operator has the right under the Act to install facilities on, over or under public or private land, or may take advantage of a procedure for the expropriation or use of property, the Secretary of State and the Director in exercising their functions under the Act shall encourage the sharing of such facilities or property or both with other organisations providing telecommunication systems, in particular where essential requirements deprive other organisations of access to viable alternatives.

(2) The Director may intervene to resolve a dispute concerning collocation or facility sharing at the request of either party. The Director shall take into account the matters listed in regulation 6(8) above. Where the Director intervenes, he shall take steps to resolve the dispute within six months of the date of the request. The resolution of the dispute shall represent a fair balance between the legitimate interests of both parties. The decision of the Director shall be notified to the parties and published in accordance with regulation 8(3).

(3) The Director may specify facility or property sharing arrangements (including physical collocation) after an appropriate period of public consultation during which all interested parties must be given an opportunity to express their views. Such arrangements may include rules for apportioning the costs of facility or property sharing or both.

(4) Public Operators shall comply with any decision made under sub-paragraph (2) above or any arrangement specified under sub-paragraph (3) above and for the purposes of sections 16 to 18 of the Act any such decision or arrangement shall be deemed to be a condition included in a licence under section 7(5) of the Act.

Section 11 Numbering

(1) In exercising their functions under the Act the Secretary of State and the Director shall take into account the need to:

(a) ensure the provision of adequate numbers and numbering ranges for all publicly available telecommunications services;

(b) ensure that the procedures for allocating individual numbers or numbering ranges or both are transparent, equitable and timely and that the allocation is carried out in an objective, transparent and non-discriminatory manner. The Secretary of State and the Director may lay down conditions for the use of certain prefixes or certain short codes, in particular where these are used for services of general public interest;

(c) encourage the earliest possible introduction of the number portability facility whereby end-users who so request can retain their numbers on the fixed public telephone network at a specific location independent of the organisation providing service. In order to ensure that charges to consumers are reasonable the Director shall ensure that pricing for interconnection related to the provision of this facility is reasonable.

(d) ensure that numbering plans and procedures are applied in a manner that gives fair and equal treatment to all providers of public telecommunications services and, in particular, to ensure that an organisation allocated a range of numbers shall avoid undue discrimination in the number sequences used to give access to the services of other Public Operators.

(2) The Director shall ensure that the main elements of the national numbering plans, and all subsequent additions or amendments to them, are published in accordance with regulation 8(1), subject only to limitations imposed on grounds of national security.

Section 12 Universal Service contributions

(1) A licence imposing universal service obligations shall include a condition that the Licensee shall, at the request of the Director, calculate the net cost of such obligations in accordance with Schedule 5. The calculation of the net cost of universal service obligations shall be audited by an independent body approved by the Director. The results of the cost calculation and the conclusions of the audit shall be open to the public in accordance with regulation 8(3).

(2) Where justified on the basis of the cost calculation referred to in paragraph (1) above, and taking into account the market benefit if any which accrues to an organisation that offers Universal service, the Director shall determine whether a mechanism for sharing the net cost of universal service obligations may be justified on the grounds that universal service obligations represent an unfair burden on an organisation and shall inform the Secretary of State of his determination.

(3) A licence imposing universal service obligations shall include a condition that any charges payable by an interconnected party which include or serve as a contribution to the cost of those obligations shall be notified, prior to their introduction, to the Director. It shall also be a condition of the licence that, where the Director finds on his own initiative, or after a substantiated request by an interested party, that such charges are excessive, the organisation concerned shall be required to reduce the relevant charges. Such reductions shall be applied retrospectively, from the date of introduction of the charges, but not before 1 January 1998.

Section 13 Modification of licences to include the interconnection conditions

(1) Subject to paragraph (2) below, relevant licences are hereby modified upon the coming into force of these Regulations by:

(a) the deletion from the condition in Part 2 of Schedule 1 under the heading “Requirement to Provide Connection Services” (or its equivalents) of the paragraphs referring to the terms and conditions that might be included in an agreement to provide connection services in accordance with that condition (excluding the obligation itself set out in the first paragraph of that condition) together with any power of the Director under that condition to make any determination in respect of the terms and conditions, or to impose any other requirement in respect of such obligation; and

(b) the insertion of the standard conditions set out in Schedule 6 as Part A to Schedule 1 to those licences, and the conditions inserted into each of the relevant licences pursuant to this regulation are, in relation to that licence, referred to for the purposes of these Regulations as “the Interconnection Conditions.”

(2) Paragraph (1)(a) shall not apply to:

(a) the licence granted to British Telecommunications dated 22 June 1984; and

(b) paragraphs within the condition which refer to Compliant Terminal Equipment or which refer to the reasonableness of the terms and conditions to which an agreement is subject.

(3) For the purposes of the Act, the modifications of the relevant licences by paragraph (1) above shall have effect as if they were made under section 12 of the Act by the Director.

Section 1

provide (i) fixed or (ii) mobile public switched telecommunications networks or (iii) publicly available telecommunications services or any combination of (i), (ii) or (iii), and in so doing control the means of access to one or more network termination points identified by one or more unique numbers in the national numbering plan;

Section 2

provide leased lines to users' premises;

Section 3

are authorised in a Member State of the Community to provide international telecommunications circuits between the Community and third countries, for which purpose they have special or exclusive rights, or

Section 4

provide publicly available fixed or mobile telecommunications services or both and are authorised to connect their systems to other Public Operators as described above and fall within the class of Public Operators to which the Public Operator from which interconnection is sought is required by its relevant licence to provide such interconnection.

Section 1 Non Discrimination and Information

The Licensee shall adhere to the principle of non-discrimination with regard to interconnection offered to others. The Licensee shall apply similar conditions in similar circumstances to interconnecting organisations providing similar services. The Licensee shall provide interconnection facilities and information to others under the same conditions and of the same quality as the Licensee provides for its own services, or those of its subsidiaries or partners.

Section 1 Interconnection Charges and Cost Accounting Systems

Charges made by the Licensee for interconnection shall follow the principles of transparency and cost orientation and the burden of proof that charges are derived from actual costs including a reasonable rate of return on investment shall lie with the Licensee. The Licensee shall comply with any request made by the Director to provide full justification for its interconnection charges and shall comply with any adjustment required by the Director.

Section 1 Accounting Separation

The Licensee shall draw up, submit to independent audit and publish separate accounts as if the telecommunications activities in question were carried out by legally independent companies, so as to identify all elements of cost and revenue, with the basis of their calculation and the detailed attribution methods used, related to their telecommunications activities including an itemised breakdown of fixed asset and structural costs, or have structural separation for the telecommunications activities.

This requirement shall apply in any financial year in which the turnover of the Licensee from its telecommunications activities in the Community is more than 50 million ECU.

Section 2 Non Discrimination and Information

The Licensee shall make available on request to organisations considering interconnection all information and specifications which are necessary to facilitate conclusion of an agreement; the information provided should include changes planned for implementation within the next six months, unless agreed otherwise by the Director.

Section 2 Interconnection Charges and Cost Accounting Systems

The Licensee shall publish in accordance with regulation 8 a reference interconnection offer. The reference interconnection offer shall include a description of the interconnection offerings broken down into components according to market needs and specify the charges and other terms and conditions on which they are offered. The Licensee may set different tariffs, terms and conditions for interconnection for different categories of organisations which are authorised to provide networks and services, where such differences can be objectively justified on the basis of the type of interconnection provided or the relevant national licensing conditions or both but such differences may not result in distortion of competition and, in particular, the Licensee shall apply the appropriate interconnection tariffs, terms and conditions when providing interconnection for its own services or those of its subsidiaries or partners in accordance with paragraph 1 of part I of this Schedule. The Licensee shall comply with a requirement by the Director to impose changes in the reference interconnection offer where justified. Where an organisation makes changes to the published reference interconnection offer, adjustments required by the Director may be retrospective in effect, from the date of introduction of the change.

Section 2 Accounting Separation

The Licensee shall keep separate accounts, drawn up, submitted to independent audit and published, for, on the one hand, their activities related to interconnection—covering both interconnection services provided internally and interconnection services provided to others—and, on the other hand, other activities, so as to identify all elements of cost and revenue, with the basis of their calculation and the detailed attribution methods used, related to their interconnection activity, including an itemised breakdown of fixed asset and structural costs.

This requirement shall apply in any financial year in which the turnover of the Licensee from its telecommunications activities in the Community is more than 20 million ECU.

Section 3 Non Discrimination and Information

The Licensee shall provide to the Director copies of interconnection agreements which it has entered into. The Licensee shall make such copies available for inspection free of charge by interested parties at their request, in accordance with regulation 8(3), with the exception of parts of the agreement which, in the opinion of the Director, deal with the commercial strategy of the parties. In every case the Licensee shall make available to interested parties details of the interconnection charges, terms and conditions and, where relevant, any contributions to universal service obligations.

Section 3 Interconnection Charges and Cost Accounting Systems

The Licensee’s charges shall, in accordance with European Community law, be sufficiently unbundled to ensure that the organisation requesting interconnection is not required to pay for anything not strictly related to the service requested. Any charges imposed by the Licensee which are related to the sharing of the cost of universal service obligations, as described in regulation 12(3) shall be unbundled and identified separately.

Section 4 Non Discrimination and Information

Information received by the Licensee from an organisation seeking interconnection shall be used only for the purpose for which it was supplied. It shall not be passed on to other parts of the same business, subsidiaries or partners for whom such information could provide a competitive advantage.

Section 4 Interconnection Charges and Cost Accounting Systems

The Licensee shall have a cost accounting system which in the opinion of the Director is suitable to demonstrate that the Licensee has complied with the requirements set out in this Part of Schedule 3 (covering such matters as indicated in Annex V of the Directive).

ICD1 Interpretation

In this Part:

(a) “ Interconnection Regulations ” means the Telecommunications (Interconnection) Regulations 1997, and the word “Regulation” shall be construed accordingly;

“ Interconnection Directive ” means Directive 97/33/EC on interconnection in Telecommunications with regard to ensuring universal service and interoperability through the application of the principles of Open Network Provision (ONP);

“ Licensee ” except where stated otherwise, means a Schedule 2 Public Operator;

“ European Public Operator ” means a person authorised in another Member State to provide public telecommunications networks and publicly available telecommunications services and whose name has been notified by that Member State to the Commission under Article 18 of the Directive as a person covered by Annex II of the Directive;

“ Schedule 2 Public Operator ” means a Public Operator described in Schedule 2 to the Regulations;

“ Operator ” means a Schedule 2 Public Operator and, insofar as the Licensee is authorised to connect the Applicable Systems or the Applicable Cabled Systems to telecommunication systems or telecommunication apparatus outside the United Kingdom, but no further, a European Public Operator;

“ Public Operator ” means any person who is authorised or permitted to run publicly available telecommunication systems or provide publicly available telecommunication services or both.

“ Operator having Significant Market Power ” means a Public Operator which the Director has determined under Regulation 4 for the time being to be an Operator having Significant Market Power.

words and expressions used shall unless the context otherwise requires have the same meaning as in the Interconnection Regulations;

the Interconnection Conditions are inserted for the purposes of the application of the Interconnection Directive to the Licensee and shall accordingly be construed in accordance with that Directive;

in the event of any conflict between any provision of the Interconnection Conditions and any provision of any other Condition of this Licence, the latter provision shall, to the extent of such conflict, be taken to be disapplied;

subject to paragraph (d) above, the Licensee is not required to give effect to any obligation in any Interconnection Condition in so far as the Licensee is required to give effect to such obligation under any other Condition of the Licence.

ICD2.1 Interconnection

Subject to ICD2.6 and ICD2.7 and any exercise by the Director of his functions under regulations 6(3) or 6(4), the Licensee shall offer to enter into an agreement with a Schedule 2 Public Operator or a European Public Operator or offer to amend such an agreement, as the case may be, within a reasonable period, if such Operator requires it to:

(a) connect, and keep connected, to any of the Applicable Systems, or to permit to be so connected and kept connected, the Operator’s telecommunication system and accordingly to establish and maintain such one or more points of connection as are reasonably required and are of sufficient capacity and in sufficient number to enable Messages to be conveyed or to be conveyed by means of any of the Applicable Systems in such a way as conveniently to meet all reasonable demands for the conveyance of Messages between the Operator’s system and the Applicable Systems, and

(b) to provide such other telecommunication services (including the conveyance of Messages which have been, or are to be, transmitted or received at such points of connection), information and other services which, to the extent the parties do not agree (or the Licensee is not in any event so required under or by virtue of another Condition), the Director may determine are reasonably required (but no more than reasonably required) to secure that points of connection are established and maintained and to enable the Operator effectively to provide the Connection Services which it provides or proposes to provide.

ICD2.2 Interconnection

The Licensee or the Operator may at any time request the Director to make a direction in order

(a) to specify issues which must be covered in an interconnection agreement; or

(b) to lay down specific conditions to be observed by one or more parties to the agreement; or

(c) if he thinks fit, to set time limits within which negotiations are to be completed;

and a direction under this paragraph operates as an exercise by the Director of the power of direction conferred by regulation 6(3) or 6(4) as the case may be.

ICD2.3 Interconnection

The Licensee shall secure that the agreement to be entered into, or an amendment under paragraph 2.1 above is offered on terms and conditions which are reasonable. To the extent that the terms and conditions of an agreement made under paragraph 2.1 (whether on or after the coming into force of this paragraph) cease to be reasonable, the Licensee shall, within a reasonable period, offer to the Operator, or agree with the Operator, as the case may be, to amend the agreement so that the terms and conditions of the agreement are reasonable.

ICD2.4 Interconnection

The Licensee shall comply with:

(a) the requirements of any direction given to the Licensee under ICD2.2 or under regulations 6(3) and 6(4) in relation to any negotiations or agreement to which it is or is intended to be a party; and

(b) the requirements of any direction given to the Licensee under regulation 6(6) or regulation 6(7) in relation to any dispute over the terms of an agreement under paragraph 2.1 above.

ICD2.5 Interconnection

An agreement made pursuant to this Condition shall not contain any restrictive provision, unless, before the agreement is made, the Director has consented to the inclusion of such a provision. For the purposes of this paragraph, a provision in an agreement is a restrictive provision if by virtue of the existence of such a provision (taken alone or with other provisions) the agreement is one to which the Restrictive Trade Practices Act 1976 would apply but for paragraph 1(1) of Schedule 3 to that Act.

ICD2.6 Interconnection

If the Director is considering whether a determination or consent under this Condition is appropriate, he shall notify the Licensee and Interested Parties of his proposed decision or the options which he is considering, and his reasons, and give them a reasonable opportunity to make representations. On making or refusing a determination or direction or giving or refusing consent, he shall notify the Licensee and Interested Parties of the determination, consent or refusal, as the case may be, and his reasons.

ICD2.7 Interconnection

Paragraph ICD2.1 above does not apply to the extent that the Director has consented to limiting such obligation on a temporary basis and on the grounds that there are technically and commercially viable alternatives to the interconnection requested, and that the requested interconnection is inappropriate in relation to the resources available to meet the request.

ICD2.8 Interconnection

For the avoidance of doubt:

(i) any question as to whether any term or condition (including a charge) is reasonable shall be decided by the Director having regard to any guidelines on the application of this Condition issued from time to time by the Director; and

(ii) in considering whether a term or condition (including a charge) is reasonable, the Director may take into account, inter alia, the effective date of the term or condition and the period during which such term or condition may already have been in effect; the Director may conclude that a reasonable charge is one which is offered or agreed, as the case may be, on terms that it take effect in agreements made under paragraph 2.1 above from the date of a complaint or the date on which the term was first offered or accepted by the Licensee or an Operator or from any other date which is considered by the Director to be appropriate in the circumstances.

ICD2.9 Interconnection

The Licensee shall provide financial information to the Director promptly on request and to the level of detail required by the Director under Part IV of Schedule 3 to the Regulations.

ICD2.10 Interconnection

The Licensee shall comply with any request by the Director under regulation 6(5) to inspect any interconnection agreement entered into by the Licensee in its entirety.

ICD2.11 Interconnection

The Licensee shall comply with any requirement made by the Director as a last resort under regulation 6(10) to interconnect in order to protect essential public interests, and shall comply with any terms set by the Director for such purpose.

ICD2.12 Interconnection

In this Condition:

“Connection Service” means a telecommunicaton service consisting in the conveyance of any Message which has been, or is to be, conveyed by means of the Applicable Systems;

“Interested Parties” means those persons (if any), other than the Licensee, with whom, in any particular case, the Director considers it appropriate to consult.

ICD3 Essential Requirements

Where the Director specifies conditions based on essential requirements pursuant to Regulation 7(1) for inclusion in any interconnection agreement to which the Licensee is a party, the Licensee shall forthwith secure the incorporation of those terms and conditions in such an agreement.

ICD4.1 Technical Standards

The Licensee shall take full account of such standards, if any, as are listed in the Official Journal of the European Communities as being suitable for the purposes of interconnection.

ICD4.2 Technical Standards

Where the Licence includes the condition “Essential Interfaces”—

(a) The definition of “Relevant Standard” for the purposes of the condition shall be replaced by the following:

“Relevant Standard” means:

standards listed in the Official Journal of the European Communities, if any, as being suitable for the purposes of interconnection, or in the absence of such standards,

standards adopted by European standardisation bodies such as the European Telecommunications Standards Institute (ETSI) or the European Committee for Standardisation/European Committee for Electrotechnical Standardisation (CEN/ CENELEC ), or in the absence of such standards,

international standards or recommendations adopted by the International Telecommunications Union (ITU), the International Organisation for Standardisation (ISO) or the International Electrotechnical Committee (IEC), or in the absence of such standards,

any other standard specified by the Director after notifying the Licensee of his proposal and allowing the Licensee adequate time, being not less than 28 days, in which to make representations, provided that the Director shall not specify a standard if an appropriate European or other international standard is expected to be promulgated within a reasonable time, including, by way of example, if the European Telecommunications Standards Institutue have published a work programme for the development of such a standard.

to the extent that such a standard is necessary to ensure interoperability.

(b) The definition of “technical specification” for the purposes of that condition shall be replaced by the following new definition:

Where possible, “technical specification” shall be a specification defined by reference to:

standards listed in the Official Journal of the European Communities, if any, as being suitable for the purposes of interconnection, or in the absence of such standards,

standards adopted by European standardisation bodies such as the European Telecommunications Standards Institute (ETSI) or the European Committee for Standardisation/European Committee for Electrotechnical Standardisation (CEN/CENELEC), or in the absence of such standards,

international standards or recommendations adopted by the International Telecommunications (ITU), the International Organisation for Standardisation (ISO) or the International Electrotechnical Committee (IEC).

ICD5.1 Collocation and Facility Sharing

The Licensee shall comply with any decision by the Director under regulation 10(2).

ICD5.2 Collocation and Facility Sharing

The Licensee shall comply with any facility or property sharing arrangement, or both, specified by the Director in accordance with regulation 10(3).

ICD6 Special or Exclusive rights

Where the Licensee has special or exclusive rights for the provision of services in sectors other than telecommunications, within the meaning of Article 8(1) of the Directive, and the Licensee’s annual turnover from its telecommunication activities in the Community exceeds 50 million ECU, the Licensee shall keep, draw up, submit to independent audit and publish separate accounts for telecommunications activities, to the extent that would be required if the telecommunications activities in question were carried out by legally independent companies, so as to identify all elements of cost and revenue, with the basis of their calculation and the detailed attribution methods used, related to their telecommunications activities including an itemised breakdown of fixed assets or have structural separation for the telecommunications activities.

ICD7.1 Universal Service

This condition applies where the Licensee is an operator of a fixed public telephone network and where the licence confers a condition imposing universal service obligations on that Licensee.

ICD7.2 Universal Service

The Licensee shall, at the request of the Director and within such period as may be determined by him, calculate the net costs incurred by the Licensee in carrying out universal service obligations as defined in regulation 2(2). Such calculations shall be carried out in accordance with the requirements of Schedule 5 to the Regulations.

ICD8.1 Significant Market Power

Except as otherwise specified, paragraphs ICD8.2 to ICD8.22 apply to Operators having Significant Market Power and in respect of the relevant market or markets in which the Operator has such power.

ICD8.2 Significant Market Power

The Licensee shall meet all reasonable requests for access to its Applicable Systems including access at points other than the network termination points offered to the majority of end users.