The Telecommunications (Licence Modification)(Standard Schedules) Regulations 1999

• (ii) the location in the Licensee’s current standard Interconnection agreement of the terms and conditions associated with the provision of each Standard Service; and

• (b) a description of Interconnection services to be supplied in accordance with Condition 48 broken down into components according to market needs and the associated terms and conditions, including charges.

46.3

The Licensee shall secure that all offers made pursuant to Condition 45.1 and Condition 48.1 are at the same charges and associated terms and conditions as set out or referred to in the Licensee’s reference interconnection offer referred to in paragraph 46.2 above.

REQUIREMENTS RELATING TO INTERCONNECTION AGREEMENTS WITH SCHEDULE 2 PUBLIC OPERATORS

Cost Oriented Charges

47.1

Where the Licensee runs the systems or provides the services described in Parts I and II of Schedule 1 to the Interconnection Regulations (fixed public telephone network and leased lines services), the Licensee shall secure, and shall be able to demonstrate to the satisfaction of the Director at his request, that the charges offered, payable or proposed to be offered or payable by a Schedule 2 Public Operator to the Licensee for each Standard Service, including the amounts applied to each component within that Service, are reasonably derived from the costs of providing the Service based on a forward looking incremental cost approach (except to the extent the Director considers it appropriate that for a transitional period, or in any particular case, the Licensee apply another cost standard). The Licensee shall comply with any adjustment required by the Director in exceptional cases where justified to ensure effective competition or interoperability of services for users or both.

47.2

The Licensee shall ensure that the amount applied and incorporated in the Transfer Charge and other terms and conditions for any service which the Licensee provides to itself or any member of the Licensee’s Group which is a Schedule 2 Public Operator and which is the same as a Standard Service, are the same as those applied to Schedule 2 Public Operators for such Service.

47.3

An offer by the Licensee to a Schedule 2 Public Operator pursuant to Condition 45.1 shall not be conditional on the acceptance by such Operator of any other terms and conditions except for terms and conditions which are necessarily incidental to the provision of the Standard Service in question.

47.4

The Licensee may set different tariffs, terms and conditions for Interconnection for different categories of Schedule 2 Public Operators running telecommunication systems or providing telecommunication services, where such differences can be objectively justified on the basis of the type of Interconnection provided or on the basis of relevant Conditions of the Licence.

Network Charge Change Notice

47.5

The Licensee shall give notice in writing of any proposal to change any charge for a Standard Service or to introduce a charge for a proposed New Standard Service which identifies:

• (a)

• (i) the Standard Service, the current charge for, and the location in the Licensee’s current standard Interconnection agreement of the terms and conditions associated with the provision of the Service and the proposed charge; or

• (ii) the proposed charge and associated terms and conditions for the proposed New Standard Service; and

• (b) the date on which or the period for which the proposed new charge will take effect (“the effective date or period”).

The notice above shall be referred to in these Conditions as a “Network Charge Change Notice”.

47.6

The Licensee shall send the Network Charge Change Notice to the Director and to all Schedule 2 Public Operators with which it has entered into (or offered to enter into) an agreement pursuant to Condition 45.1:

• (a) in the case of a Competitive Standard Service, a Prospectively Competitive Standard Service, or a New Standard Service, not less than 28 days before the proposed change is to take effect; and

• (b) in the case of all other Standard Services, not less than 90 days before the proposed change is to take effect,

and the Licensee shall not apply any proposed new charge before the effective date or period.

47.7

When the Director decides to investigate a proposed charge for a Standard Service or a charge for a New Standard Service before the period of notice specified in paragraph 47.6 expires, on the basis that:

• (a) it is not independent of the type of application of the Service which Operators implement or may implement;

• (b) except in the case of a Competitive Standard Service, it will not differ by time of day in accordance with the Licensee’s retail time of day gradient; or

• (c) the unit of payment or method of charging is to be changed, for example, by the introduction of a minimum fee or a charge comprising a set up charge and an ongoing usage related charge, or to capacity based charging, or as a result of the repackaging of a Service,

the Director may direct that the Licensee:

• (d) change the effective date or the beginning of the period specified in accordance with paragraph 47.5(b) from which the New Standard Service will be offered, or as the case may be, the proposed charge will take effect, to a date specified in the direction; or

• (e) withdraw the Network Charge Change Notice and that, except to the extent that enforcement action is taken against the proposal, the proposal may not take effect except in accordance with a further Notice under paragraph 47.5 sent after a date specified in the direction.

47.8

Without prejudice to Condition 33, if, in the opinion of the Director, the information provided in a Network Charge Change Notice does not contain all the information specified in paragraph 47.5 or is inaccurate, then the Licensee shall provide to the Director, in the manner and at the times as the Director may request, such information or such further information as the Director may reasonably require to address the deficiency in the Notice. If the Director makes such a request, he may direct that the Licensee:

• (a) change the effective date or the beginning of the period specified in accordance with paragraph 47.5(b) from which the proposed charge will take effect, to a date specified in the direction; or

• (b) withdraw the Network Charge Change Notice and that, except to the extent that enforcement action is taken against the proposal, the proposal may not take effect except in accordance with a further Notice under paragraph 47.5 sent after a date specified in the direction.

47.9

If, before it comes into effect, the Licensee withdraws a Network Charge Change Notice, or changes the effective date or the beginning of the period, the Licensee shall send to the Director, to all Schedule 2 Public Operators with which it has entered into (or offered to enter into) an agreement or amendment pursuant to Condition 45.1, and to every person who on or before that date requested a copy of the Network Charge Change Notice which has been withdrawn or changed, written notice of the withdrawal or change forthwith.

Determination of Competitive Standard Services and Prospectively Competitive Standard Services

47.10

• (a) The Director shall, following a representation by the Licensee or by a Schedule 2 Public Operator that the market for a Standard Service is competitive, or prospectively competitive, determine whether or not that market is competitive or prospectively competitive. If the Director determines that the market is competitive or prospectively competitive, then that Standard Service shall be a Competitive Standard Service, or a Prospectively Competitive Standard Service, as the case may be.

• (b) The Director may, following a representation by the Licensee or a Schedule 2 Public Operator that the market for a Competitive Standard Service, a New Standard Service or a Prospectively Competitive Standard Service is not or has ceased to be competitive, or prospectively competitive, make any determination as follows:

• (i) the Director may determine that the market for a Competitive Standard Service is not competitive, and the Standard Service shall, accordingly, cease to be a Competitive Standard Service;

• (ii) the Director may determine that the market for a Prospectively Competitive Standard Service is not prospectively competitive, and the Prospectively Competitive Standard Service shall, accordingly, cease to be a Prospectively Competitive Standard Service; and

• (iii) the Director may determine that the market for a New Standard Service is not competitive or prospectively competitive, and the New Standard Service shall, accordingly, cease to be a New Standard Service.

Other Publication Requirements relating to the Standard List and Network Charge Change Notices

47.11

Except to the extent that the Director may otherwise consent, within 10 working days from the date on which a proposal to change a charge or to offer a New Standard Service comes into effect, the Licensee shall amend the Standard List to take account of the change and shall publish the amendment by sending it to the Director and to all Schedule 2 Public Operators with which it has entered into (or offered to enter into) an agreement pursuant to Condition 45.1.

47.12

Except to the extent that the Director may consent to an alternative location or to an alternative method of publication, the Licensee shall make available in a publicly accessible part of every Major Office, in such manner and in such place that it is readily available for inspection free of charge by members of the public, a notice of the address and telephone number of the person to whom any request may be made for any of the following:

• (a) a copy of the current Standard List, any amendments thereto or the standard Interconnection agreement;

• (b) copies of the Network Charge Change Notices; and

• (c) written notice of any withdrawal or change of a Network Charge Change Notice.

47.13

The Licensee shall send a copy of the current Standard List, any amendments not incorporated into the List or the current standard Interconnection agreement or any Interconnection agreement or amendment offered by the Licensee pursuant to Condition 45.1 to any person who may request such items upon payment of a reasonable charge. The Licensee shall send the copy within 7 working days after receipt of payment of that charge.

47.14

The Licensee shall send a copy of any notice to which paragraphs 47.12(b) and 47.12(c) apply to any person who makes a request for such a notice within a period of a year after it has been sent to the Director. The Licensee shall send such notice to such person within 7 working days of receipt of the request.

REQUIREMENT TO MEET REQUESTS FOR ACCESS OTHER THAN FROM SCHEDULE 2 PUBLIC OPERATORS

48.1

Except in relation to agreements with Schedule 2 Public Operators where Condition 45 applies and subject to paragraph 48.3 below, the Licensee shall offer to provide Interconnection to the Applicable Systems to any person running a telecommunication system under a Licence reasonably requesting it in accordance with an agreement to which this Condition applies.

48.2

An agreement to provide Interconnection to the Applicable Systems shall provide for:

• (a) the connection to the Applicable Systems at such points, including points other than Network Termination Points on Served Premises, of telecommunication systems or telecommunication apparatus run by the person making the request; and

• (b) the provision by means of the connection so made of such telecommunication services (including the conveyance of Messages which have been or are to be transmitted or received thereby), information and other services,

as may reasonably be requested.

48.3

The Licensee shall provide such Interconnection on charges, terms and conditions set out in the reference interconnection offer and referred to in Condition 46.2(b), and in setting the charges, terms and conditions shall secure that:

• (a) charges shall be transparent and cost oriented;

• (b) different charges, terms and conditions for different circumstances shall be objectively justified on the basis of the services or service elements provided to the person concerned; and

• (c) charges shall be sufficiently unbundled to ensure that there is no requirement to pay for anything not strictly related to the services requested,

and shall ensure that it is able to demonstrate the same to the Director at his request.

48.4

Where the Licensee or a member of the Licensee’s Group which is not a Schedule 2 Public Operator uses services or facilities equivalent to services provided by means of the Applicable Systems and to which paragraph 48.2 above applies, it shall ensure that the quality of and the terms and conditions applying to services provided to others in accordance with that paragraph shall be the same as for those provided to or used by the Licensee or a member of the Licensee’s Group.

48.5

The Licensee or the person requesting Interconnection may at any time request the Director to make a direction in order:

• (a) to specify the issues which must be covered in the Interconnection agreement; or

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

and a direction under this paragraph operates as an exercise by the Director of the power of direction conferred by regulation 6(3) of the Interconnection Regulations.

48.6

The Licensee shall:

• (a) comply with the requirements of any direction given to the Licensee under paragraph 48.5 above or under regulation 6(3) or 6(4) of the Interconnection Regulations in relation to any negotiations or agreement to which it is or is intended to be a party;

• (b) comply with the requirements of any direction given to the Licensee under regulation 6(6) or 6(7) of the Interconnection Regulations in relation to any dispute over the terms of any agreement or amendment made under paragraph 48.2 above;

• (c) where the Director specifies conditions based on essential requirements pursuant to regulation 7(1) of the Interconnection Regulations for inclusion in an Interconnection agreement to which the Licensee is a party, forthwith secure the incorporation of those terms and conditions in such an agreement;

• (d) comply with any requirement made by the Director as a last resort under regulation 6(10) of the Interconnection Regulations to interconnect in order to protect essential public interests, and comply with any terms set by the Director for such purpose;

• (e) comply with any decision by the Director under regulation 10(2) of the Interconnection Regulations; and

• (f) comply with any facility or property sharing arrangements, or both, specified by the Director in accordance with regulation 10(3) of the Interconnection Regulations.

REQUIREMENT TO SEND INDIVIDUAL AGREEMENTS TO THE DIRECTOR AND TO PUBLISH THEM

49.1

On entering into an Interconnection agreement (including amendments), pursuant to Condition 45 or 48, the Licensee shall send a copy of such agreement (including amendments), to the Director.

49.2

Either party to an agreement or amendment referred to in Condition 45.1 or 48.1 above may, within 14 days of entering into such agreement or amendment make a representation to the Director that any part of such agreement or amendment deals with its commercial strategy and require the Director to make a determination to that effect.

49.3

A determination made in response to a requirement under paragraph 49.2 above shall specify any exclusions to be made from the agreement or amendment before it is published under paragraph 49.4 below. However, details of Interconnection charges, terms and conditions and any contributions to a universal service fund cannot be excluded from publication of the agreement or amendment.

49.4

The Licensee shall:

• (a) where no request has been made under paragraph 49.2 above, as soon as reasonably practicable and in any event not earlier than 14 days and not later than 28 days after entering into an agreement or amendment pursuant to Condition 45.1 or 48.1; or

• (b) where a request has been made under paragraph 49.2 above, as soon as reasonably practicable and in any event not before receipt of a determination and not later than 14 days thereafter,

publish the agreement or amendment in the following manner. Except to the extent that the Director may consent to an alternative location or method of publication, the Licensee shall make available in a publicly accessible part of every Major Office, in such manner and in such place that it is readily available for inspection free of charge by members of the general public during such hours as the Secretary of State may by order prescribe that the register of Licences and final and provisional orders is to be open for public inspection under section 19(4) of the Act, or in the absence of any such order having been made by the Secretary of State during the normal office hours, a list of all such agreements and amendments together with a notice of the address and telephone number of the person to whom any request for a copy of any or all of such list, agreements or amendments, or any part of them, may be made.

49.5

The Licensee shall send a copy of the list referred to in paragraph 49.4 above, or (following publication) any agreement or amendment or part of them to any person who may request it within 7 working days of receipt of the request.

49.6

The Licensee shall, within a reasonable period following a request, send to any person requesting Interconnection all necessary information and specifications, in order to facilitate the conclusion of an agreement, including, except to the extent that the Director may otherwise consent, information on changes planned for implementation within the next six months.

49.7

Any information received by a Licensee from any person for the purposes of any provision in Part C shall be used only for the purposes for which it was supplied. The Licensee shall not pass such information on to other departments within the Licensee’s organisation, subsidiaries or partners for which such information could provide a competitive advantage.

49.8

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

REQUIREMENT TO HAVE COST ACCOUNTING SYSTEMS AND ACCOUNTING SEPARATION FOR INTERCONNECTION PURPOSES

50.1

The Licensee shall maintain a cost accounting system which, having regard to the Licensee’s obligations under Condition 47.1 above:

• (a) in the opinion of the Director is suitable to demonstrate that its charges for Interconnection have been fairly and properly calculated; and

• (b) provides the information for the time being required to be provided by virtue of Article 7.5 of, and Annex V to, the Interconnection Directive.

50.2

The Licensee shall make available to any person on request a description of its cost accounting system showing the main categories under which costs are grouped and the rules used for the allocation of costs to Interconnection.

50.3

The Licensee shall be deemed to be complying with the requirements of paragraph 50.1 and 50.4A to 50.6 at any time within the period of two years from the designation of the Licensee as an Operator having Significant Market Power if it is at that time complying with directions then in force which have been given to it by the Director for the purpose of ensuring that its cost accounting system enables it to demonstrate that its charges have been fairly and properly calculated.

50.4

Where the annual turnover of the Licensee in telecommunications activities in the UK is more than 20 million euros the Licensee shall keep separate accounts for, on the one hand, activities related to Interconnection—covering both Interconnection services provided to or used by itself and any organisation within its Group and Interconnection services provided to others—and, on the other hand, other activities so as to identify all elements of costs and revenue, with the basis of their calculation and the detailed attribution methods used, related to its Interconnection activity, including an itemised breakdown of fixed assets.

50.4A

The Licensee shall also prepare in respect of each financial year a statement (the “Standard Service Statement”) of costs of and charges for Standard Services, to the extent that disaggregation of such Standard Services is necessary for the purposes of paragraph 50.1.

50.5

For each financial year ending on or after 1 January in the year in which the Licensee is determined by the Director to be an Operator having Significant Market Power pursuant to regulation 4(1)(b)(i) of the Interconnection Regulations, the Licensee shall procure in respect of each of the separate accounts described in paragraph 50.4 above an audit report by the Licensee’s Auditor which shall conform to Auditing Standards and in which the Auditor shall state whether in its opinion the accounts in question fairly present, in accordance with the description of cost accounting systems:

• (a) in the case of the profit and loss account, the results; and

• (b) in the case of the statement of mean capital employed, the mean capital employed.

50.5A

The Licensee shall procure in respect of each Standard Service Statement an audit report by the Licensee’s Auditor, which shall conform to Auditing Standards in which the Auditor shall state whether in his opinion the costs of and the charges for, the Standard Service are properly prepared in accordance with the description of cost accounting systems, unless the Licensee can demonstrate, to the reasonable saisfaction of the Director, in respect of which the Licensee shall be afforded a reasonable opportunity to present its case, that the requirement to procure an audit opinion on a specific Standard Service Statement is not proportionate.

50.6

For each financial year ending on or after 1 January in the year in which the Licensee is determined by the Director to be an Operator having Significant Market Power pursuant to regulation 4(1)(b)(i) of the Interconnection Regulations, the Licensee shall publish:

• (a) the separate financial accounts and the report of the Auditor thereon; and

• (b) the Standard Service Statement and the report of the Auditor thereon,

within two months after the date on which the Licensee’s annual statutory financial statements are published and, in any event, within four months after the end of the period to which they relate, or such other period as the Director shall determine and which is objectively justified.

50.7

Any requirement to which the Licensee would otherwise be subject under paragraph 50.4A shall not apply if, or to the extent that, the Licensee can demonstrate to the reasonable satisfaction of the Director, in respect of which the Licensee shall be afforded a reasonable opportunity to present its case, that the requirement is not proportionate.

PART D: — OPERATORS WITH SIGNIFICANT MARKET POWER FOR THE PURPOSES OF THE REVISED VOICE TELEPHONY DIRECTIVE AND OPERATORS WHICH HAVE BEEN RUNNING A FIXED PUBLIC TELEPHONE SERVICE FOR MORE THAN 18 MONTHS

51.1

Part D applies to the Licensee where the Director has determined the Licensee to be an Operator having Significant Market Power pursuant to regulation 6 of the Revised Voice Telephony Regulations. Such determination shall be made in accordance with the procedure set out in paragraph 6 of Part 1 of Schedule 1 of this Licence, if such determination is made after that paragraph has come into force.

51.2

Where a direction is made by the Director pursuant to regulation 19(3) of the Revised Voice Telephony Regulations in respect of Public Operators which have been running a Fixed Public Telephone System for more than 18 months, and the direction applies to the Licensee, this Part applies to the Licensee to the extent of the direction made.

QUALITY OF SERVICE AND PROVISION OF ADDITIONAL FACILITIES

52.1

The Licensee shall keep up-to-date information concerning its performance based on the parameters, definitions and measurement methods laid down in Schedule III to the Revised Voice Telephony Regulations. The Licensee shall provide this information to the Director at his request.

52.2

Where the Director has set quality of service standards or performance targets or both pursuant to regulation 19 of the Revised Voice Telephony Regulations in respect of the Licensee, the Licensee shall meet such standards or targets or both, and shall, if requested by the Director, publish data on its performance in accordance with paragraph 52.3 below.

52.3

The Licensee shall:

• (a) place a copy of such data in a publicly accessible part of every Major Office of the Licensee in such manner and in such place that it is readily available for inspection free of charge by members of the general public during such hours as the Secretary of State may by order prescribe that the register of Licences and final and provisional orders is to be open for public inspection under section 19(4) of the Act or in the absence of any such order having been made by the Secretary of State during normal office hours; and

• (b) send a copy of such information or such part or parts thereof as are appropriate to any Consumer who may request such a copy.

52.4

Where, pursuant to regulation 19(3)(c) of the Revised Voice Telephony Regulations, the Director calls for an independent audit of the performance data kept by the Licensee pursuant to paragraph 52.1, the Licensee shall furnish to the Director, in such manner and at such times as the Director may reasonably request, such documents, accounts, estimates, returns or other information and such reports as he may reasonably require for the purpose of ensuring the accuracy and comparability of the data made available by Licensees to whom this Condition applies.

52.5

The Licensee shall, subject to technical feasibility and economic viability, make available to users the facilities listed in Part 2 of Schedule I to the Revised Voice Telephony Regulations, that is to say:

• (a) Calling-Line identification

i.e. the calling party’s number is presented to the called party prior to the call being established;

• (b) Direct dialling-in (or facilities offering equivalent functionality)

i.e. users on a private branch exchange (PBX) or similar private system can be called directly from the Public Switched Network, without the intervention of the PBX attendant; and

• (c) Call forwarding

i.e. incoming calls sent to another destination in the same or another Member State (for example, on no reply, on busy, or unconditionally).

52.6

Where the Licensee provides any of the facilities described in paragraphs (a) and (c) of Part 2 of Schedule I and in paragraphs (d) and (f) of Part 3 of Schedule I of the Revised Voice Telephony Regulations, it shall do so in accordance with Relevant Data Protection Legislation.

SPECIAL NETWORK ACCESS

53.1

This Condition applies where the Licensee receives a request from an organisation providing telecommunication services for access to its Fixed Public Telephone System at Network Termination Points other than the commonly provided Network Termination Points referred to in Schedule II to the Revised Voice Telephony Regulations (and for the purposes of this Condition the foregoing shall be referred to as “special network access”).

53.2

The Licensee shall deal with reasonable requests for special network access except where the Director has determined pursuant to regulation 26(2) of the Revised Voice Telephony Regulations that this obligation does not apply on a case by case basis and on the grounds that there are technically and commercially viable alternatives to the special network access requested and that the requested access is inappropriate in relation to the resources available to meet the request.

53.3

The Licensee shall grant the organisation making the request an opportunity to put its case to the Director before a final decision is taken to restrict or deny access in response to a particular request.

53.4

Where the Licensee denies a request for special network access, the Licensee shall give the organisation making the request a prompt and fully reasoned explanation of why the request has been refused.

53.5

Subject to intervention by the Director pursuant to regulations 26(1)(b), 26(3) and 26(4) of the Revised Voice Telephony Regulations, technical and commercial arrangements for special network access shall be a matter for agreement between the parties involved. Where the agreement provides for reimbursement to the Licensee of the costs incurred among other things in providing the special network access requested, those charges shall fully respect the principles of cost orientation set out in Schedule IV to the Regulations.

53.6

Where the Director makes a direction pursuant to regulation 26(3) or 26(4) of the Revised Voice Telephony Regulations or both, the Licensee shall comply with the provisions of any such direction including securing incorporation of any conditions specified by the Director in any agreement entered into by the Licensee to which such direction applies.

53.7

The Licensee shall make available to the Director, at his request, details of the agreements on special network access to which it is a party.

53.8

The Licensee shall provide special network access facilities and information to others under the same conditions and of the same quality as it provides for its own service or those of its subsidiaries or partners.

TARIFFS, COST ACCOUNTING PRINCIPLES, AND DISCOUNT SCHEMES

54.1

Paragraphs 54.2 to 54.5 below do not apply in any geographical area which the Director has specified pursuant to regulation 27(2) of the Revised Voice Telephony Regulations.

54.2

The Licensee shall ensure that tariffs for the provision of its Fixed Public Telephone Services follow the basic principles of cost orientation set out in Schedule IV to the Revised Voice Telephony Regulations.

54.3

Without prejudice to Conditions 47.4 and 47.6, the Licensee shall ensure that tariffs for the Fixed Public Telephone System and Fixed Publicly Available Telephone Services provided by the Licensee shall be independent of the type of application which its Subscribers use, except to the extent that such Subscribers require different services or facilities.

54.4

The Licensee shall ensure that tariffs for facilities additional to the provision of connection to the Licensee’s Fixed Public Telephone System and provision of Fixed Publicly Available Telephone Services are sufficiently unbundled so that each of the Licensee’s Subscribers is not required to pay for facilities which are not necessary for the service requested from the Licensee.

54.5

The Licensee shall only implement changes to its tariffs referred to in this Condition 28 days after publication of such changes in accordance with paragraph 54.6 below, except where the Director has consented in writing to a shorter notice period.

54.6

The Licensee shall:

• (a) place a copy of such changes in a publicly accessible part of every Major Office of the Licensee in such manner and in such place that it is readily available for inspection free of charge by members of the general public during such hours as the Secretary of State may by order prescribe that the register of Licences and final and provisional orders is to be open for public inspection under section 19(4) of the Act, or in the absence of any such order having been made by the Secretary of State, during normal office hours; and

• (b) send a copy of such information or such part or parts thereof as are appropriate to any Consumer who may request such a copy.

54.7

The Licensee shall operate a cost accounting system suitable for the implementation of this Condition and shall ensure that compliance with such a system is verified by a competent body which is independent of the Licensee. The Licensee shall publish annually a statement concerning compliance.

54.8

The Licensee shall make available to the Director at his request a description of the cost accounting system referred to in paragraph 54.7 showing the main categories under which costs are compiled and the rules used for the allocation of costs to voice telephony services.

54.9

The Licensee shall ensure that discount schemes offered by the Licensee to its Subscribers, including Consumers, are fully transparent and shall be published in the same manner set out in paragraph 54.6 above.

54.10

The Licensee shall ensure that, with respect to the application of the discount schemes referred to paragraph 54.9, the Licensee does not show undue preference to, or exercise undue discrimination against, particular persons or persons of any class or description.

54.11

The Licensee shall modify or withdraw such scheme as the Director may direct in accordance with regulation 31(2) of the Revised Voice Telephony Regulations.

PART E: — LEASED LINES DIRECTIVE CONDITION

This Part applies to the Licensee only to the extent that it runs a Fixed Public Telephone System.

LEASED LINES

55.1

This Condition shall apply to the Licensee:

• (a) where the Director has determined in accordance with regulation 8 of the Leased Lines Regulations and in accordance with the procedure set out in paragraph 6 of Part 1 of this Licence if a determination is made after that paragraph has come into force, that the Licensee is an organisation having significant market power in respect of a Relevant Private Circuit market; or

• (b) where no holder of a licence to which section 8 of the Act applies is an organisation having significant market power in respect of that market.

55.2

This Condition applies to the Licensee only to the extent that the Director directs the Licensee to comply with all or some of the paragraphs in this Condition in respect of any relevant private circuit market specified by the Director.

Availability of Information

55.3

The Licensee shall publish by notice in accordance with the presentation given in paragraphs A to C of Schedule 2 to the Leased Lines Regulations information on offerings, technical characteristics, tariffs and supply and usage conditions in respect of Relevant Private Circuits.

55.4

The Licensee shall publish the notice in paragraph 55.3 by:

• (a) sending a copy thereof to the Director to arrive not more than one month after this Condition first applies to the Licensee and thereafter not less than 28 days before any proposal to introduce any new charge, or to amend any existing charge, term or condition or the method of determining the same is to become effective;

• (b) placing as soon as practicable thereafter a copy of the notice in a publicly accessible part of every Major Office of the Licensee in such manner and in such place that it is readily available for inspection free of charge by members of the general public during such hours as the Secretary of State may by order prescribe that the register of Licences and final and provisional orders is to be open for public inspection under section 19(4) of the Act or in the absence of any such order having been made by the Secretary of State during normal office hours; and

• (c) sending a copy of the notice to any consumer who may request such a copy.

55.5

The Licensee shall publish the supply conditions published in accordance with paragraph 55.4 above by including at least the elements defined in paragraph C of Schedule 2 to the Leased Lines Regulations.

Conditions for the Termination of Offerings

55.6

The Licensee shall not terminate an existing offering of a Relevant Private Circuit unless:

• (a) the offering has continued for a reasonable period of time; and

• (b) the Licensee has consulted with the users affected.

55.7

Without prejudice to any other remedy or right of appeal which the user may have in law or in accordance with contract or this Condition, where the user does not agree with the termination date as envisaged by the Licensee, he may bring the case before the Director.

Access, Usage and Essential Requirements

55.8

The Licensee shall not restrict access to and usage of Relevant Private Circuits save as permitted by the Director.

55.9

No technical restrictions shall be introduced or maintained for the interconnection of Relevant Private Circuits to each other or to public telecommunication systems.

55.10

In relation to Relevant Private Circuits, the Licensee shall not be held to have failed to comply with this Condition if the Licensee takes the following measures in order to safeguard the security of network operations during the period when an emergency situation prevails:

• (a) the interruption of the service;

• (b) the limitation of service features; or

• (c) the denial of access to the service,

provided that the following conditions are satisfied:

• (i) the Licensee makes every reasonable endeavour to ensure that service is maintained to all users; and

• (ii) the Licensee takes as soon as reasonably possible all reasonable steps to notify the users and the Director of the beginning and the end of the emergency as well as the nature and extent of temporary service restrictions,

and in this paragraph, an emergency situation means an exceptional case of force majeure, which, without prejudice to the generality thereof, includes extreme weather, earthquake, flood, lightning or fire.

55.11

Where a user’s Terminal Equipment no longer complies with the approval conditions laid down in accordance with Council Directive 91/263/EEC or Council Directive 93/97/EEC for its connection to the Network Termination Point of the type of Relevant Private Circuit concerned, the Licensee may, notwithstanding any obligation under this Licence to provide to users access to and usage of Relevant Private Circuits, interrupt the provision of the Relevant Private Circuit concerned until the Terminal Equipment is disconnected from the Network Termination Point provided that the Licensee:

• (a) immediately informs the user about the interruption giving reasons for it; and

• (b) restores the provision of the Relevant Private Circuit concerned as soon as the user has ensured that the Terminal Equipment is disconnected from the Network Termination Point.

Provision of a Minimum Set of Relevant Private Circuits

55.12

The Licensee shall provide such of the minimum set of Relevant Private Circuits with harmonised technical characteristics specified in Schedule 3 to the Leased Lines Regulations as may be specified by the Director in any direction referred to in paragraph 55.2. The Licensee shall ensure, if it provides other Relevant Private Circuits beyond the minimum set, that such provision does not impede the provision of the minimum set.

Control by Director

55.13

The Licensee shall not take, for reasons of the alleged failure of the user of a Relevant Private Circuit to comply with the usage conditions, any measure (including, without prejudice to the generality of the foregoing, the refusal to provide a Relevant Private Circuit, the interruption of the provision of Relevant Private Circuits or the reduction of the availability of Relevant Private Circuit features) unless:

• (a) the measure is a specified measure authorised by the Director in the case of a defined infringement of usage conditions; or

• (b) the Licensee has been notified in accordance with regulation 10 of the Leased Lines Regulations that the Director consents to the taking of the measure.

55.14

Nothing in this Condition shall prevent the Licensee, where it considers it unreasonable to provide a Relevant Private Circuit in response to a particular request under its tariffs and supply conditions published in accordance with paragraph 55.4 above, from varying those conditions in that case with the consent of the Director.

Tariff Principles and Cost Accounting

55.15

The Licensee shall ensure that tariffs for Relevant Private Circuits follow the basic principles of cost orientation and transparency in accordance with the following rules:

• (a) tariffs for Relevant Private Circuits shall be independent of the type of application which the users of the Relevant Private Circuits implement without prejudice to the principle of non-discrimination set out in Part E;

• (b) tariffs for Relevant Private Circuits shall normally contain the following elements:

• (i) an initial connection charge; and

• (ii) a periodic rental charge, that is to say, a flat-rate element,

and when other tariff elements are applied, these shall be transparent and based on objective criteria; and

• (c) tariffs for Relevant Private Circuits apply to the facilities provided between Network Termination Points at which the user has access to the Relevant Private Circuits. For Relevant Private Circuits provided by more than one telecommunications organisation notified in accordance with regulation 12(1) of the Leased Lines Regulations, half-circuit tariffs, that is to say, from one Network Termination Point to a hypothetical mid-circuit point, can be applied.

55.16

The Licensee shall formulate and put in practice a cost accounting system suitable for the implementation of paragraph 55.15. Without prejudice to the generality of the foregoing, the system shall including the following elements:

• (a) the costs of the Relevant Private Circuits shall in particular include the direct costs incurred by the Licensee for setting up, operating and maintaining Relevant Private Circuits, and for marketing and billing them; and

• (b) common costs, that is to say, costs which can neither be directly assigned to Relevant Private Circuits nor to other activities, shall be allocated as follows:

• (i) whenever possible, common cost categories shall be allocated based upon direct analysis of the origin of costs themselves;

• (ii) when direct analysis is not possible, common cost categories shall be allocated based upon an indirect linkage to another cost category or group of cost categories for which a direct assignment or allocation is possible and such indirect linkage shall be based on comparable cost structures; and

• (iii) when neither direct nor indirect measures of cost allocation can be found, the cost category shall be allocated on the basis of a general allocation computed by using the ratio of all expenses directly or indirectly assigned or allocated, on the one hand, to Relevant Private Circuits and, on the other hand, to other services.

55.17

Other cost accounting systems may be applied only if they are suitable for the implementation of paragraph 55.15 and have as such been approved by the Director for application by the Licensee.

PART F: — MARKET INFLUENCE

56.1

The Director may, in accordance with the procedure set out in paragraph 6 of Part 1 of this Licence, determine the Licensee to be an Operator having market influence in relation to any particular telecommunications market specified by him where the Licensee has the ability to raise prices above the competitive level in that market for a non-transitory period without losing sales to such a degree as to make this unprofitable. In making such a determination, the Director may, in addition to any other factors which appear relevant to him, take into account all or any of the following factors:

• level of entry barriers;

• vertical integration;

• number of active competitors;

• market share;

• extent of countervailing power among buyers;

• the extent of any recent market entry or exit;

• trends in market share and concentration;

• pricing behaviour;

• the level of profits; and

• the influence of other members of the Licensee’s Group operating in the same or similar markets which the Director is minded to specify for the purpose of this Condition.

PART G: — UNDUE DISCRIMINATION AND PRICE PUBLICATION REQUIREMENTS WHICH APPLY TO PARTS A, B, C, D, E AND F

57.1

Where a determination has been made which applies to the Licensee for the purposes of Part A, B, C, D, E or F of this Licence, the Licensee shall not unduly discriminate or show undue preference in the manner set out below:

• (a) the Licensee shall not (whether in respect of the charges or other terms or conditions applied or otherwise) show undue preference to, or exercise undue discrimination against, particular persons or persons of any class or description (in any market) as respects:

• (i) the provision by means of the Applicable Systems of any telecommunication service provided by the Licensee (including offers of terms on which such services are to be provided):

• (A) which the Licensee is obliged to provide for the purposes of Part A or Part B; or

• (B) in the market determined by the Director for the purposes of Part F;

• (ii) Interconnection of any description which the Licensee provides pursuant to Part C;

• (iii) any Publicly Available Telephone Service, or any access to the Fixed Public Telephone System run by it, which the Licensee is obliged to provide pursuant to Part D;

• (iv) the provision of Relevant Private Circuits where Part E applies to the Licensee; and

• (v) the maintenance, adjustment, repair or replacement of any apparatus comprised in the Applicable Systems which is used for the provision of any telecommunication service in the market determined by the Director for the purposes of Part F of this Licence;

• (b) the Licensee may be deemed to have shown such undue preference or to have exercised such undue discrimination if it unfairly favours to a material extent a business carried on by it in relation to the provision of any telecommunication service referred to in paragraph 57.1(a) above so as to place at a significant competitive disadvantage persons competing with that business; and

• (c) any question relating to whether any act done or course of conduct pursued by the Licensee amounts to such undue preference or such undue discrimination shall be determined by the Director, but nothing done in any manner by the Licensee shall be regarded as undue preference or undue discrimination if and to the extent that the Licensee is required or expressly permitted to do such thing in that manner by or under any provision of this Licence.

PUBLICATION OF CHARGES, TERMS AND CONDITIONS

58.1

Where a determination has been made which applies to the Licensee for the purposes of Part A, B or F of this Licence, the Licensee shall, except in so far as the Director may otherwise consent in writing, publish prices and act in the manner set out below.

58.2

Within 28 days after the date the Director has made a determination which applies to the Licensee for the purposes of Part A, B or F above, the Licensee shall send to the Director a notice specifying, or specifying the method that is to be adopted for determining, the charges, terms and conditions on which it offers to:

• (a) provide each description of telecommunication service:

• (i) which the Licensee is obliged to provide for the purposes of Part A or B; or

• (ii) in the market determined by the Director for the purposes of Part F; and

• (b) maintain, adjust, repair or replace any apparatus comprised in the Applicable Systems which is used for the provision of any telecommunication service in the market specified by the Director pursuant to Part F of this Licence where that Part applies to the Licensee.

58.3

The Licensee shall provide the services referred to in paragraph 58.2 above at the charges, terms and conditions so published, and shall not depart therefrom except in the circumstances set out in paragraph 58.4 below.

58.4

The Licensee shall send to the Director:

• (a) a notice of any amendment to any charge, term or condition, or method of determining the same, referred to in the notice described in paragraph 58.2 above; and

• (b) a notice specifying, or specifying the method that is to be adopted for determining, the charges, terms and conditions on which it offers to provide each description of telecommunication service for the purposes of Part A or B or in the market specified by the Director for the purposes of Part F, which is materially different from any telecommunication service to which the notice under paragraph 58.2 above refers,

not less than 1 day (or 28 days where the Licensee is running a Fixed Public Telephone System by means of which it provides Fixed Publicly Available Telephone Services) before the amendment referred to in sub-paragraph 58.4(a) above is to come into effect, or the Licensee first provides the telecommunication service referred to in sub-paragraph 58.4(b) above.

58.5

The Licensee shall, as soon as practicable after sending to the Director each notice referred to in paragraphs 58.2 and 58.4 above, place a copy of such notice in a publicly accessible part of every Major Office of the Licensee in such manner and in such place that it is readily available for inspection free of charge by members of the general public during such hours as the Secretary of State may by order prescribe that the register of Licences and final and provisional orders is to be open for public inspection under section 19(4) of the Act, or in the absence of any such order having been made by the Secretary of State, during normal office hours.

58.6

The Licensee shall send a copy of any notice referred to in paragraphs 58.2 and 58.4 above to any person at that person’s request (or such parts which have been requested).

PART H: — REQUIREMENTS RELATING TO OPERATORS WITH AN INTERNATIONAL BUSINESS

59.1

This Condition applies where the Licensee acquires or has acquired an International Simple Resale Bearer Circuit from another person holding a Licence and provides International Simple Voice Resale Services by means of it and, for the purposes of this Condition, the Licensee shall not be treated as acquiring or having acquired an International Simple Resale Bearer Circuit only as a consequence of having acquired a Private Leased Circuit between the Applicable Systems and a telecommunication system run by another person who has acquired an International Simple Resale Bearer Circuit.

59.2

This Condition shall apply only:

• (a) if it appears to the Director to be requisite or expedient for this Condition to apply in the interests of maintaining or promoting effective competition in the conveyance of Messages to or from one or more countries and territories where, for a calendar quarter, the percentage by volume of the Messages delivered to the United Kingdom from a country or territory, that were comprised in International Simple Voice Resale Services, was greater than the percentage by volume of the Messages sent from the UK to that country or territory, that were comprised in International Simple Voice Resale Services; and

• (b) if the Director has:

• (i) issued a notice informing the Licensee that this Condition shall apply in respect of such countries or territories and for such periods as he has specified in the notice from a date 28 days from the date of the notice; and

• (ii) has not, by a further notice given before expiry of the first notice, varied or cancelled that specification.

59.3

Any notice given under sub-paragraph 59.2(b)(i) or 59.2(b)(ii), shall appear in a list kept by the Director and made available by him for inspection by the general public.

59.4

In respect of each country or territory specified in a notice given under sub-paragraph 59.2(b)(i) as varied by a notice (if any) given under sub-paragraph 59.2(b)(ii), the Licensee shall ensure that in each such period specified the ratio between:

• (a) the volume of Messages comprised in International Simple Voice Resale Services which are conveyed by means of the Applicable Systems and are delivered to the United Kingdom from that country or territory; and

• (b) the volume of Messages comprised in International Simple Voice Resale Services which are conveyed by means of the Applicable Systems and are sent from the United Kingdom to that country or territory,

shall not be greater than the reference ratio for that country or territory specified in the notice.

PROPORTIONATE RETURN IN RESPECT OF INTERNATIONAL CONVEYANCE SERVICES

60.1

This Condition shall apply in respect of International Conveyance Services provided to any country and territory in the world outside the European Economic Area and other than as specified from time to time by the Director or Secretary of State.

60.2

Except insofar as the Director may otherwise consent in writing, the Licensee shall ensure (using the most up-to-date information available) that over each quarterly period for each Accounting Rate Service the First Ratio shall be no greater than the Second Ratio.

60.3

Where it appears to the Director that in respect of any country or territory the obligation imposed by paragraph 60.2 is being breached, he may make a determination to that effect and the Licensee shall take such steps as the Director may direct for the purpose of remedying the situation. In particular, and without prejudice to the generality of the foregoing, any such direction may require the Licensee to cease to convey any Messages to that country or territory.

60.4

In this Condition:

• (a) “First Ratio” means the volume of Messages comprised in each Accounting Rate Service which are conveyed by the Applicable Systems and are delivered to the United Kingdom divided by the volume of all Messages comprised in each Accounting Rate Service which are delivered to the United Kingdom; and

• (b) “Second Ratio” means the volume of all Messages comprised in each Accounting Rate Service which are conveyed by the Applicable Systems and are sent from the United Kingdom divided by the volume of all Messages comprised in each Accounting Rate Service which are sent from the United Kingdom.

INFORMATION TO THE DIRECTOR ABOUT INTERNATIONAL ACCOUNTING RATES ETC

61.1

The Licensee shall not enter into or vary any agreement or arrangement (nor remain a party to any such agreement or arrangement, or agreement or arrangement so varied) with a person running a telecommunication system authorised in any country or territory outside the European Economic Area and other than as specified from time to time by the Director or Secretary of State for or with a view to the provision of International Conveyance Services being an agreement or arrangement establishing or relating to international accounting methods, rates and divisions unless it has first given the Director notice, before those rates are put into operation.

61.2

As soon as practicably possible after making any correspondent arrangement with an overseas operator, the Licensee shall inform the Director and all other holders of a Licence authorising the provision of International Conveyance Services in the United Kingdom and who are operating, or who have announced an intention to operate on that particular route, of the terms of that arrangement, in particular and without prejudice to the generality of the foregoing, details of any changes to existing accounting rates or methods of settlement or the division of the accounting rates.

61.3

Where, whether as a result of receiving notice under paragraph 61.1 or otherwise, the Director considers that any, or any variation of, such an agreement or arrangement would be or is liable to prejudice the interests of providers and users of International Conveyance Services in the United Kingdom, he may, after consulting the Licensee, make a direction to the Licensee not to enter into or vary the agreement or arrangement, as the case may be, and the Licensee shall comply with such direction.

ACCOUNTING SEPARATION FOR INTERNATIONAL BUSINESS

62.1

Without prejudice to any other provision in this Licence relating to the maintenance of accounting records, the Licensee shall maintain such accounting records dealing separately with its International Business carried on in the United Kingdom as will enable it to show and explain, in response to any request from the Director under paragraph 62.4, all the transactions to which paragraph 62.2 refers.

62.2

This paragraph refers to all transactions between that International Business and:

• (a) any other business carried on by the Licensee whether in the United Kingdom or elsewhere; or

• (b) the business of any Associated Person whether in the United Kingdom or elsewhere.

62.3

The Licensee shall update the accounting records referred to in paragraph 62.1 no less frequently than monthly and those records shall include in particular the costs (including capital costs), revenue and a reasonable assessment of assets employed in and liabilities attributable to that International Business and, separately, the amount of any material item of revenue, cost, asset or liability which has been either:

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

• (b) determined by apportionment or attribution from an activity common to the business and any other business of the Licensee or any Associated Person and, if not otherwise disclosed, the basis of the apportionment or attribution.

62.4

The Director may at any time request from the Licensee copies of any of the accounting records which the Licensee is obliged to maintain by this Condition, covering any period between:

• (a) the date on which the Licensee first carried on its International Business in the United Kingdom or, if later, the date of this Licence; and

• (b) the date on which such records were, or should have been, last updated in accordance with paragraph 62.3.

The Licensee shall provide any such records requested by the Director within 28 days of receiving such a request in writing.

62.5

Accounting records submitted to the Director shall 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 and where the Licensee is a body corporate incorporated outside the United Kingdom the preparation and adoption of those accounts shall comply with the requirements of sections 226 and 231 to 234A of the Companies Act 1985 as if that body corporate were incorporated in the United Kingdom.

62.6

Where it appears to the Director that to do so would be beneficial to the promotion or maintenance of competition he may direct the Licensee to publish the accounting statements submitted to the Director in such manner as he may specify. In so directing the Licensee the Director shall have regard to the need for excluding, so far as that is practicable, any matter where publication of that matter might, in the opinion of the Director, seriously and prejudicially affect the interests of the Licensee or any Associated Person.

MAINTENANCE OF EFFECTIVE COMPETITION

63.1

This Condition shall apply where the Licensee or any Associated Person is the operator of any telecommunication system or provides telecommunication services in a country or territory outside the United Kingdom.

63.2

Where it appears to the Director that as a result of any act or omission of the Licensee either by itself or with or through any Associated Person competition in the provision of any telecommunication service or any particular description of telecommunication services in the United Kingdom is being or is likely to be restricted, distorted or prevented he may make a determination to that effect.

63.3

Where the Director makes a determination under paragraph 63.2 the Licensee shall take such steps as the Director may direct for the purpose of remedying the situation. In particular (and without prejudice to the generality of the foregoing) any such direction may require compliance by the Licensee with any other Condition, as appropriate, including in particular any Condition providing for publication of charges, terms and conditions, or such direction may prohibit undue discrimination and undue preference, in relation to the provision of any telecommunication service within the United Kingdom notwithstanding that any condition precedent to the application of that Condition is not otherwise satisfied.

63.4

Without prejudice to any other provision in this Licence relating to the provision of information, and notwithstanding the provisions of Condition 33.2 the Licensee shall:

• (a) keep accurate records and copies of all agreements with any Associated Person and deliver copies of the same to the Director promptly in response to any request of the Director in respect of any agreement or arrangement; and

• (b) keep accurate records of all services, money and things transferred or supplied by the Licensee to any Associated Person or by an Associated Person to the Licensee, such records to include full details of the type and quantity, and the prices, charges and methodology of charging such prices.

PART I: — EXCEPTIONS AND LIMITATIONS ON OBLIGATIONS IN SCHEDULE 1

64.1

Unless the context otherwise requires and subject to paragraph 64.10, the Licensee’s obligations have effect subject to the following exceptions and limitations.

64.2

The Licensee is not obliged to do anything which is not practicable.

64.3

The Licensee shall not be held to have failed to comply with an obligation imposed upon it by or under these Conditions if and to the extent that the Licensee is prevented from complying with that obligation by any physical, topographical or other natural obstacle, by the malfunction or failure of any apparatus or equipment owing to circumstances beyond the control of the Licensee, by the act of any national authority, local authority or international organisation or as the result of fire, flood, explosion, accident, emergency, riot or war.

64.4

Subject to paragraph 64.10, the obligation to provide any service under Part A of this Licence shall not apply:

• (a) where there is no reasonable demand for it;

• (b) where the provision of the service requested would expose any person engaged in its provision to undue risk to health or safety;

• (c) where the Licensee is unable to obtain (either because it has not been developed or for some other reason beyond the Licensee’s control) anything necessary to provide a service of the quality or standard required by the person who requests the provision of the service and, in the event of dispute, the Director’s decision as to whether anything is necessary shall be final;

• (d) where the person to whom the Licensee would otherwise be under an obligation to provide any service requests a service at a place in which the apparatus necessary to provide that service in that area has not been installed (or in which the installation of such apparatus has not been completed) or as the case may be such apparatus has not been adapted or modified to make it capable of providing the service of the kind requested or the trained manpower necessary to provide the service is not available in that area, provided that in every case where the Licensee declines to provide a service to which this sub-paragraph relates it shall have published, or furnished to the Director, or within 28 days (or such longer period as the Director considers reasonable) following receipt by it of the request that service be provided shall have furnished to the Director, proposals for:

• (i) progressively installing or completing the installation or the adaptation or the modification of such apparatus; or

• (ii) the allocation of the trained manpower,

necessary for the provision of that service in that area and the Director has not determined that those proposals are unreasonable or are not being effectively carried out; or

• (e) where the Licensee notifies the Director that it is not reasonably practicable in all the circumstances for the Licensee to provide the service requested at the time or place demanded and the Director agrees.

64.5

The obligation to provide any telecommunication service other than a service to which paragraph 64.4 applies shall not apply:

• (a) where any of the circumstances described in paragraph 64.4 apply;

• (b) where the person to whom the Licensee would otherwise be under an obligation to provide any service requests a service at a place in an area in which the demand or the prospective demand for the service is not sufficient, having regard to the revenue likely to be earned from the provision of the service in that area, to meet all the costs reasonably to be incurred by the Licensee in providing the service, including:

• (i) the cost of apparatus necessary for the provision of the service there;

• (ii) the cost of installing, maintaining and operating such apparatus for the purpose of providing the service there; and

• (iii) the cost of the trained manpower necessary to provide the service there; or

• (c) where the Licensee notifies the Director that it is not reasonably practicable in all the circumstances for the Licensee to provide the service requested at the time or place demanded and the Director agrees.

64.6

The Licensee shall not be obliged to connect, or to keep connected to the Applicable Systems, or to permit to be so connected or kept connected any telecommunication system or telecommunication apparatus or to provide any telecommunication services or to permit the provision of any service if the person to or for whom that is done or is to be done:

• (a) has not entered or will not enter into a contract for the purpose with the Licensee for reasons other than the unreasonable refusal of the Licensee to agree terms for the purpose but this paragraph does not apply in a case where the Director is satisfied that:

• (i) the Licensee has not published standard terms and conditions which it proposes to apply for the purpose in question, or the transaction is not fit to be governed by such terms and conditions; and

• (ii) the Licensee has unreasonably refused to agree terms and conditions for this purpose;

• (b) is, or in the Director’s opinion has given reasonable cause to believe that he may become:

• (i) in breach of a contract with the Licensee for the provision of telecommunication services by the Licensee; or

• (ii) in default in regard to any debt or liability owed to the Licensee in respect of any such contract;

• (c) is using, or permitting the use of, apparatus so connected for any illegal purpose or has done so in the past and is likely to do so again; or

• (d) has obtained, or attempted to obtain any telecommunication service from the Licensee by corrupt, dishonest or illegal means at any time.

64.7

Nothing in these Conditions shall prevent the Licensee from withdrawing from, or declining to provide to, any person any telecommunication service which the Licensee has notified the Director that it is providing in a limited area, or to a limited class of customers, for the purpose of evaluating the technical feasibility of, or the commercial prospects for, that service.

64.8

Nothing in these Conditions shall require the Licensee to provide any telecommunication service, or to provide any telecommunication service of any particular class or description, if it provides instead a service, or a service of a class or description, which satisfies the purposes of that requirement at least to the same extent.

64.9

This Condition shall apply without prejudice to any limitation or qualification of the requirements imposed by or under any other Condition.

64.10

This Condition does not apply to:

• Condition 2.1, 2.2, 2.3, 2.4, 2.5, 2.6 and 2.7 (Directory Services);

• Condition 4 (Access to Emergency Call Services and Operator Assistance);

• Condition 7.1 (Publication of Charges, Terms and Conditions);

• Condition 8 (Prohibition on Undue Preference and Undue Discrimination);

• Condition 9 (Requirement to provide Connection Services);

• Condition 10 (Requirement to offer contracts for Telephone Services);

• Condition 11.1 (Metering Arrangements);

• Condition 13 (Itemised Bills);

• Condition 14 (Non-payment of Bills);

• Condition 15 (Publication of Interfaces), but only so far as it relates to interfaces identified in Annex II part 1 of the Revised Voice Telephony Directive;

• Condition 20 (Essential Requirements and Essential Public Interests);

• Condition 21 (Standards for ISDN Network Termination Points);

• Condition 28.7 (Number Portability);

• Condition 29 (Obligation to Supply Numbering Information on Request);

• Condition 30 (Accounting Separation for Special or Exclusive Rights in Non-Telecommunication sectors);

• Condition 31 (Fair Trading);

• Condition 32 (Conciliation and Resolution of Disputes);

• Condition 33.4 and 33.5 (Requirement to Furnish Information to the Director);

• Part A (Universal Service Conditions), except Conditions 41 (Schemes for Users with special social needs) and 42 (Provision of Public Call Box Services);

• Part C (Operators with Significant Market Power for the purposes of the Interconnection Directive);

• Part D (Operators with Significant Market Power for the purposes of the Revised Voice Telephony Directive and Operators which have been running a Fixed Public Telephone System for more than 18 months);

• Part E (Leased Lines Directive Conditions); or

• Part G (in relation to Part A, C, D, and E services).

64.11

Only paragraphs 64.1, 64.2, 64.3 and 64.9 apply to:

• Condition 7.2; Condition 7.5(a) and 7.5(b) (Publication of Charges, Terms and Conditions);

• Condition 11.2 and 11.3 (Metering Arrangements);

• Condition 25 (Supply and Connection of Apparatus for Disabled People);

• Condition 33.1, 33.2 and 33.3 (Requirement to Furnish Information to the Director);

• Condition 35 (Licensee’s Group); and

• Condition 36 (Payment of fees).

64.12

Only paragraphs 64.1, 64.6(a) and 64.9 apply to Condition 19.2 (Consultation with Emergency Organisations and Provision of Services to Emergency Organisations).

64.13

Only paragraphs 64.1, 64.2, 64.3, 64.6 and 64.9 apply to Condition 26 (Numbering Arrangements).

64.14

Only paragraphs 64.1, 64.2, 64.3, 64.5(b) and 64.9 apply to Condition 24 (Public Call Box Services).

64.15

Only paragraphs 64.1, 64.2, 64.3, 64.5, 64.7 and 64.9 apply to Condition 19.1 (Consultation with Emergency Organisations and Provision of Services to Emergency Organisations).

64.16

Paragraph 64.2 does not apply to Condition 62 (Accounting Separation for International Business) or Condition 63 (Maintenance of Effective Competition).

SCHEDULE 2 — REVOCATION

1

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2

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3

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4

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SCHEDULE 3 — AUTHORISATION TO CONNECT OTHER TELECOMMUNICATION SYSTEMS AND APPARATUS TO THE APPLICABLE SYSTEMS AND TO PROVIDE TELECOMMUNICATION SERVICES BY MEANS OF THE APPLICABLE SYSTEMS

1

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Connection Authorisation

2

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Service Authorisation

3

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Definitions and interpretation

4

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5

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SCHEDULE 4 — EXCEPTIONS AND CONDITIONS RELATING TO THE APPLICATION OF THE TELECOMMUNICATIONS CODE

PART 1: — DEFINITIONS AND INTERPRETATION RELATING TO THE CONDITIONS IN SCHEDULE 4

1

In this Schedule unless the context otherwise requires:

• “Agricultural” has the meaning given to it by paragraph 1 of Schedule 2 to the Act;

• “Appropriate Authority” means a public authority of a type described in subsection 49(6) or, in Scotland, subsection 108(6) of the New Roads and Street Works Act 1991 or, in Northern Ireland, Article 7(5) of the Street Works (Northern Ireland) Order 1995;

• “Area of Outstanding Natural Beauty” means an area in England or Wales designated and confirmed as such under section 5 or section 87 of the National Parks and Access to the Countryside Act 1949 or in Northern Ireland any area established in accordance with Section 10 of the Amenity Lands Act (Northern Ireland) 1965 or designated under Article 14(1) of the Nature Conservation and Amenity Lands (Northern Ireland) Order 1985 (S.I. 1985/170 (NI 1));

• “Area of Special Scientific Interest” means an area designated under Article 24(1) of the Nature Conservation and Amenity Lands (Northern Ireland) Order 1985 (S.I. 1985/170 (NI 1)) as amended by Article 10 of the Nature Conservation and Amenity Lands (Amendment) (Northern Ireland) Order 1989 (S.I. 1989/492 (NI 3));

• “the Broads” means the area in which the Broads Authority exercises power of development control;

• “Carriageway” and “Footway” have the meanings given to them in England and Wales by section 329 of the Highways Act 1980, in Scotland by section 151 of the Roads (Scotland) Act 1984 and in Northern Ireland by Article 2(2) of the Roads (Northern Ireland) Order 1993;

• “Condition” means a Condition in this Schedule;

• “Conservation Area” means: in relation to England and Wales, any area designated as a conservation area under sections 69 and 70 of the Planning (Listed Buildings and Conservation Areas) Act 1990; in relation to Scotland, any area designated as a conservation area under section 61 of the Planning (Listed Buildings and Conservation Areas)(Scotland) Act 1997; and in relation to Northern Ireland, any area designated as a conservation area under Article 50 of the Planning (Northern Ireland) Order 1991;

• “Cost Price” means the cost of any item of Telecommunication Apparatus, including the full cost of its Installation, calculated before any charges for depreciation by the Licensee and modified to take account of any alteration in the CSO Price Index for Buildings and Works since it was installed;

• “Duct” means a structure or apparatus (with appropriate entry points) installed underground in such a way that Lines can be installed in it without having to break up the surface of the highway;

• “Emergency” means an emergency of any kind, including any circumstances whatever resulting from major accidents, natural disasters and incidents involving toxic or radio-active materials;

• “Emergency Organisations” means in respect of any locality: the relevant public police, fire, ambulance and coastguard services for that locality; and any other similar organisation in respect of which any public telecommunications operator licensed to operate in the locality in question is providing a Public Emergency Call Service on the day on which this Licence enters into force;

• “Emergency Works” has the meaning given to it by section 52 or, in Scotland, section 111 of the New Roads and Street Works Act 1991 or, in Northern Ireland, Article 6 of the Street Works (Northern Ireland) Order 1995;

• “Highway Authority” means, in England and Wales, the highway authority as defined in section 1 of the Highways Act 1980 and, in Northern Ireland, the Department of the Environment for Northern Ireland;

• “Installation” includes “alteration” within the meaning of paragraph 1(2) of the Telecommunications Code;

• “Limestone Pavement Area” means an area designated by the Secretary of State or relevant authority under section 34 of the Wildlife and Countryside Act 1981;

• “Line” has the same meaning as in paragraph (a) of the definition of “Telecommunication Apparatus” in paragraph 1 of Schedule 2 to the Act;

• “Local Nature Reserve” means an area designated as such under section 21 of the National Parks and Access to the Countryside Act 1949;

• “Maintainable Highway” has the meaning given to it by paragraph 1 of Schedule 2 to the Act as amended by paragraph 113(1) of Schedule 8 to the New Roads and Street Works Act 1991, and in Northern Ireland has the meaning given to it by paragraph 1 of Schedule 2 to the Act as amended by paragraph 9(a)(i) of Schedule 3 to the Street Works (Northern Ireland) Order 1995;

• “Major Office” means the Licensee’s registered office and such other offices as the Director, having consulted the Licensee, may direct;

• “Marine Nature Reserve” means, in England, Wales and Scotland, an area designated by the Secretary of State under section 36 of the Wildlife and Countryside Act 1981 and in Northern Ireland, an area designated under Article 20(1) of the Nature Conservation and Amenity Lands (Northern Ireland) Order 1985 (S.I. 1985/170 (NI 1));

• “Natural Heritage Area” means any area in Scotland designated as such under the Natural Heritage (Scotland) Act 1991;

• “National Nature Reserve” means any land in England, Wales and Scotland declared to be a national nature reserve under section 35 of the Wildlife and Countryside Act 1981 by: in England, English Nature, established under the Environmental Protection Act 1990; in Scotland, Scottish Natural Heritage, established under the Natural Heritage (Scotland) Act 1991; and in Wales, the Countryside Council for Wales, established under the Environmental Protection Act 1990, and in relation to Northern Ireland means any land declared to be a national nature reserve under Article 18(1) of the Nature Conservation and Amenity Lands Northern Ireland) Order 1985 (S.I. 1985/170 (NI 1));

• “National Park” means any area in England and Wales designated and confirmed as such under section 5 of the National Parks and Access to the Countryside Act 1949 or any area in Northern Ireland designated as such under Article 12(1) of the Nature Conservation and Amenity Lands (Northern Ireland) Order 1985 (S.I. 1985/170 (NI 1));

• “National Scenic Area” means any area in Scotland designated as such under the Town and Country Planning (Scotland) Act 1997;

• “the New Forest” means the area defined in the New Forest Act 1964;

• “Planning Authority” means: in relation to England and Wales, the local planning authority for the area in question within the meaning of section 1 of the Town and Country Planning Act 1990; in relation to Scotland, a planning authority within the meaning of section 1 of the Town and Country Planning (Scotland) Act 1997; and in relation to Northern Ireland, the Department of the Environment for Northern Ireland;

• “Public Emergency Call Service” means a telecommunication service by means of which any member of the public may, at any time communicate as swiftly as practicable with any of the Emergency Organisations for the purpose of notifying them of an Emergency;

• “Public Road” has the same meaning as in paragraph 1(1) of Schedule 2 to the Act, as amended by the Roads (Scotland) Act 1984 and the New Roads and Street Works Act 1991;

• “Relevant Authority” means: in relation to the Broads, the New Forest, a National Park, an Area of Outstanding Natural Beauty, or a Limestone Pavement Area, the Planning Authority; in relation to a National Nature Reserve, a Site of Special Scientific Interest or a Marine Nature Reserve; in England, English Nature, established under the Environmental Protection Act 1990; in Scotland, Scottish Natural Heritage, established under the Natural Heritage (Scotland) Act 1991; in Wales, the Countryside Council for Wales, established under the Environmental Protection Act 1990; and in Northern Ireland, in relation to a National Nature Reserve or a Marine Nature Reserve, the Planning Authority; in relation to an Area of Special Scientific Interest, the Department of Environment for Northern Ireland; and in relation to a Natural Heritage Area or a National Scenic Area, Scottish Natural Heritage, established under the Natural Heritage (Scotland) Act 1991;

• “Relevant Event” means: the revocation of this Licence; where the Licensee is not immediately granted another similar licence to run the Applicable Systems, the expiry of this Licence; or any of the events specified in paragraph 1(e) to (i) of Schedule 2 to this Licence, provided that paragraph 2 of that Schedule shall have effect for the purposes of this definition as it has for the purposes of paragraph 1 of that Schedule;

• “Relevant Owner” means any person who owns or operates electric lines for the transport of electricity;

• “Relevant Supplier” means in relation to an area in which the Licensee has installed or proposes to install any apparatus the person who is authorised by a licence granted under paragraph (b) or (c) of section 6(1) of the Electricity Act 1989, or in the case of Northern Ireland, under Article 10(1) of the Electricity (Northern Ireland) Order 1992 to transmit or supply electricity;

• “Relevant Undertaker” has the meaning given to it by paragraph 23(10) of Schedule 2 to the Act, and includes persons mentioned in paragraph 23(10)(b) in respect of services and apparatus for the supply of water, or disposal of sewage, and additionally includes any undertaking for the supply of heat;

• “Road” has the meaning given to it in section 107(1) of the New Roads and Street Works Act 1991;

• “Road Works Authority” has the meaning given to it in section 108(1) of the New Roads and Street Works Act 1991;

• “Road Works Register” means a register of the kind kept by a Road Works Authority under section 112 of the New Roads and Street Works Act 1991;

• “Roads Authority” has the same meaning as in section 151 of the Roads (Scotland) Act 1984;

• “Service Line” means any Line placed or intended to be placed for the purpose of providing any telecommunication service to the occupier from time to time of any land, as distinct from a Line placed or intended to be placed for the general purposes of any telecommunication system;

• “Service Line Distribution Point” means the point at which any Line placed or intended to be placed for the general purposes of any telecommunication system is connected to any Service Line;

• “Site of Special Scientific Interest” means an area designated as such under section 28 of the Wildlife and Countryside Act 1981 or an area in respect of which the Secretary of State has made an order under section 29 of that Act;

• “Statutory List of Buildings” means the list of buildings of special architectural or historic interest compiled by the Secretary of State under section 1(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990 or under section 1(1) of the Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997 or in the case of Northern Ireland, compiled by the Department of the Environment for Northern Ireland under Article 42 of the Planning (Northern Ireland) Order 1991;

• “Street” has the meaning given to it by paragraph 1 of Schedule 2 to the Act, as amended by paragraph 113(1) of Schedule 8 to the New Roads and Street Works Act 1991, or in the case of Northern Ireland, as amended by paragraph 9(a)(ii) of Schedule 3 to the Street Works (Northern Ireland) Order 1995;