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

• (ii) afford such parties the possibility of eliminating competition in respect of a substantial part of the goods or services in question.

• (c) This Condition shall not apply to any provision of an agreement insofar as it is a provision by virtue of which the Restrictive Trade Practices Act 1976 applies to that agreement.

• (d) This Condition shall not apply to a merger situation qualifying for investigation under the Fair Trading Act 1973.

31.3

Whether any act or omission is prohibited by this Condition shall be determined:

• (a) with a view to securing that there is no inconsistency with the general principles having application to similar questions of directly applicable competition law, in particular those laid down by the Court of Justice of the European Communities on the scope of the competition rules contained in the EC Treaty and block exemptions adopted by the European Commission under Article 81(3) (ex Article 85(3)); and

• (b) having regard to:

• (i) any decision taken, or notice issued, by the European Commission in applying the competition rules contained in the EC Treaty and any relevant pronouncement of the Director General of Fair Trading or report of the Competition Commission; and

• (ii) any guidelines on the application of this Condition issued from time to time by the Director.

31.4

• (a) If it appears to the Director that an act or omission of the Licensee is or was prohibited by this Condition he may make an initial determination to that effect (an “Initial Determination”).

• (b) Before making an Initial Determination the Director shall give a notice to the Licensee:

• (i) stating that he is investigating a possible contravention of this Condition;

• (ii) setting out the reasons why it appears to him that this Condition may be being, or may have been, breached, including any matters of fact or law which he thinks relevant;

• (iii) requesting within a reasonable period laid down by the Director such further information as he may require from the Licensee in order to complete his Determination; and

• (iv) where appropriate, setting out the steps he believes the Licensee would have to take in order to remedy the alleged breach.

31.5

• (a) Within 28 days of the Director:

• (i) making an Initial Determination;

• (ii) making a provisional order; or

• (iii) giving notice of his proposal to make a final order under section 17(1) of the Act,

in respect of the contravention in question, the Licensee may notify the Director that it:

• (iv) requires him to make a final determination (a “Final Determination”) of the matter; and

• (v) requires that in making the Final Determination he takes into account a report of a body of experts appointed by him to consider the matter (“the Advisory Body”).

• (b) Before making a Final Determination the Director shall:

• (i) give a notice to the Licensee setting out the matters referred to in paragraph 31.4(b); and

• (ii) if the Licensee has given notice under sub-paragraph 31.5(a)(v) above, take into account the report of the Advisory Body on the matter.

• (c) The Director shall then determine whether he is satisfied that the act or omission in respect of which the Initial Determination was made is or was prohibited by this Condition.

31.6

• (a) Before making his Initial Determination or Final Determination the Director shall give the Licensee, and any other person whom he considers it appropriate to consult, such period within which to make representations (both orally and in writing) in response to the notice as he considers reasonable in all the circumstances.

• (b) The Director shall notify the Licensee and any other person whom he considers it appropriate to notify of every Initial Determination and Final Determination made by him and of his reasons for making it; and he shall, if so requested by the Licensee, publish any report of the Advisory Body on the matter, subject to such exclusions as he may consider it appropriate to make of matters of a kind mentioned in section 48(2) of the Act.

31.7

The Director shall publish a description of his office’s procedures for the enforcement of this Condition including the steps taken to ensure that he has access to appropriate independent advice in enforcing this Condition.

31.8

This Condition shall not limit or affect in any way the Licensee’s obligations arising under any other condition of this Licence nor limit the Director’s powers of enforcement under sections 16 to 18 of the Act.

31.9

• (a) On the coming into force of any Act or subordinate legislation which:

• (i) contains a prohibition enforceable by the Director, or gives to the Director the power to enforce an existing prohibition, of any behaviour prohibited under paragraph 31.1;

• (ii) gives to third parties in respect of a breach of that prohibition at least the rights they have under section 18 of the Act in respect of a breach of a provisional or final order; and

• (iii) permits the imposition on the Licensee of monetary penalties in respect of the breach of that prohibition,

this Condition shall cease to apply to the behaviour prohibited by or the prohibition enforceable by such Act or subordinate legislation.

• (b) If this Condition still has effect on 31 July 2001, it shall cease to have effect after that date.

31.10

The prohibition in paragraph 31.1(b) shall not apply to acts or omissions done prior to the expiry of the three months from the date of this Licence in pursuance of agreements entered into prior to the date of this Licence.

CONCILIATION AND RESOLUTION OF DISPUTES

32.1

The Licensee, to the extent that the Applicable Systems constitute a Fixed Public Telephone System by means of which the Licensee provides Fixed Publicly Available Telephone Services shall, where it is involved in a dispute concerning an alleged infringement of any right or obligation created by or under the Revised Voice Telephony Regulations, follow the procedures set up by the Director pursuant to regulation 37 of the Revised Voice Telephony Regulations in order to resolve such dispute in a fair, transparent and timely manner and shall take such steps as are required by the Director or other independent body or both to do so.

REQUIREMENT TO FURNISH INFORMATION TO THE DIRECTOR

33.1

Without prejudice to any other provision in this Licence relating to the provision of information, the Licensee shall furnish to the Director, in such manner and at such times as the Director may reasonably request, such information in the form of documents, accounts, estimates, returns and without prejudice to the generality of the foregoing, such other information as he may reasonably require for the purpose of verifying that the Licensee is complying with these Conditions and for statistical purposes.

33.2

In making any such request the Director shall ensure that no undue burden is imposed on the Licensee in procuring and furnishing such information and, in particular, that the Licensee is not required to procure or furnish information which would not normally be available to it unless the Director considers that the particular information is essential for the purposes referred to in paragraph 33.1.

33.3

Without prejudice to the generality of paragraph 33.1 and notwithstanding paragraph 33.2, the Licensee shall in such manner and at such times as he may reasonably request, furnish to the Director:

• (a) accounts which show separately the annual turnover of the Systems Business; and

• (b) particulars of a sample of retail call revenues disaggregated by categories of call.

33.4

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 Interconnection Regulations.

33.5

Where the Licensee is running a Fixed Public Telephone System by means of which it provides Fixed Publicly Available Telephone Services the Licensee shall make available to the Director at his request, in confidence, detailed accounting information in order to ensure compliance with the Revised Voice Telephony Regulations, and any condition which is required to be in this Licence by virtue of those Regulations.

33.6

In this Condition “documents” includes, without prejudice to the generality thereof, drawings, designs, plans, or specifications.

NOTIFICATION OF CHANGES IN SHAREHOLDINGS

34.1

The Licensee shall notify the Secretary of State if an undertaking becomes a Parent Undertaking in relation to the Licensee.

34.2

Subject to paragraph 34.3, the Licensee shall notify the Secretary of State of:

• (a) any change in the proportion of the Shares held in a Relevant Company by any person; and

• (b) the acquisition of any Shares in a Relevant Company by a person not already holding any such Shares, and the proportion of any such Shares held by that person immediately after that acquisition.

34.3

The Licensee shall be obliged to notify the Secretary of State of any acquisition of Shares or change in the Shareholding of a Relevant Company by any person only if, by reason of that acquisition or change, the total number of Shares in that Relevant Company held by that person otherwise than as trustee or nominee for another person together with any Shares held by any nominee or trustee for that person immediately after that change or acquisition:

• (a) exceeds 15 per cent of the total number of Shares in that company (where it did not exceed 15 per cent prior to that change or acquisition);

• (b) exceeds 30 per cent of the total number of Shares in that company (where it did not exceed 30 per cent prior to that change or acquisition); or

• (c) exceeds 50 per cent of the total number of Shares in that company (where it did not exceed 50 per cent prior to that change or acquisition),

provided that where a Relevant Company is a public company as defined in section 1 of the Companies Act 1985, the obligation shall be discharged by forwarding to the Secretary of State as soon as practicable all information in respect of that acquisition or that change as is entered on or received for entry on the register required to be maintained by that Relevant Company under section 211 of the Companies Act 1985.

34.4

In any case referred to in paragraph 34.1 or 34.2, notification shall be given by a date which is 30 days prior to the taking effect of such change or acquisition as the case may be, or as soon as practicable after that date.

LICENSEE'S GROUP

35.1

Without prejudice to the Licensee’s obligations under these Conditions in respect, in particular, of anything done on its behalf, where:

• (a) the Director determines either:

• (i) that a member of the Licensee’s Group has done something which would, if it had been done by the Licensee, be prohibited or not be authorised under these Conditions; or

• (ii) that a member of the Licensee’s Group has done something which would, if it had been done by the Licensee, require the Licensee to take or refrain from taking a particular action under these Conditions and that neither the Licensee nor the member has met that further requirement; and

• (b) the Director is not satisfied that the Licensee has taken all reasonable steps to prevent any member acting in that way,

then the Director may direct the Licensee to take such steps as the Director deems appropriate for the purpose of remedying the matter, including refraining from carrying on with that member such commercial activities connected with telecommunications as the Director may determine.

35.2

Where these Conditions apply in respect of the Applicable Systems they do not apply in respect of any other telecommunication system, whether run by the Licensee or another.

35.3

Where any person becomes a member of the Licensee’s Group then the Licensee shall not be subject to paragraph 35.1 before that is reasonably practicable but shall be so not later than one year after that person becomes such a member or such later date as the Director may determine.

35.4

This Condition shall not apply to any particular member of the Licensee’s Group if and to the extent that the Director so determines.

PAYMENT OF FEES

36.1

Subject to paragraph 36.2 below, the Licensee shall pay the following amounts to the Secretary of State at the times stated:

• (a) on the grant of this Licence the sum of £40,000;

• (b) on 1 April 1999 and annually thereafter a renewal fee of (at the option of the Director) either £3,000 (the subsequent renewal fees being adjusted to take account of any fall or increase in the value of money since that date) or such amount which shall represent a fair proportion, to be determined each year by the Director according to a method that has been disclosed to the Licensee in a written statement, of the estimated costs to be incurred in that fiscal year by the Director in the regulation and enforcement of telecommunication licences and in the exercise of his other relevant functions under the Act. The first renewal fee shall be increased by the proportion which the period from the date of granting of this Licence until the next following 1 April bears to the period of one year; and

• (c) when the Director so determines, on 1 January 2000 and annually thereafter, a special fee which shall represent a fair proportion, to be determined by the Director according to a method that has been disclosed to the Licensee in a written statement of the amount, if any, by which the aggregate of:

• (i) the costs estimated to have been incurred already in that fiscal year by the Director in the regulation and enforcement of telecommunication licences and in the exercise of his other relevant functions under the Act;

• (ii) the costs estimated to have been incurred already in that fiscal year by the Competition Commission following licence modification references under section 13 of the Act; and

• (iii) the estimated costs to be incurred in the remainder of that fiscal year:

• (A) by the Director in the regulation and enforcement of telecommunication licences and in the exercise of his relevant other functions under the Act; and

• (B) by the Competition Commission following licence modification references under section 13 of the Act,

exceeds the renewal fee for that year.

36.2

The aggregate of the renewal fee and the special fee for any fiscal year shall not exceed:

• (a) 0.08% of the relevant annual turnover attributable to the licensable activities of the Licensee in the United Kingdom (as described in a written statement given to the Licensee by the Director) in the financial year before the last complete financial year of the Licensee before the renewal fee is payable (the “relevant turnover”); or

• (b) £3,000 (adjusted in the manner described in paragraph 36.1(b)),

whichever is the greater (the “normal aggregate fee”), unless the Director determines that the costs incurred in any fiscal year by him and the Competition Commission in respect of the Licensee’s activities exceed the normal aggregate fee, by virtue of the costs of licence modification references under section 13 of the Act, in which case the aggregate of the renewal fee and the special fee for the following year shall be such amount (not exceeding 0.4% of the relevant turnover) as the Director determines is sufficient to take account of that excess as well as the normal aggregate fee.

BODIES RECOGNISED TO BE REPRESENTING THE INTERESTS OF CONSUMERS

37.1

The Licensee shall give due consideration to any matter which relates to:

• (a) telecommunication services provided by means of or in relation to any of the Applicable Systems;

• (b) telecommunication apparatus supplied by the Licensee; or

• (c) the connection to any of the Applicable Systems:

• (i) of any telecommunication system run by any person other than the Licensee; or

• (ii) any telecommunication apparatus,

and which is the subject of a representation made to the Licensee by either:

• (aa) a body recognised by the Secretary of State under section 27 of the Act, after consultation with the Licensee, as representing the interests of consumers and other users of such telecommunication services or apparatus; or

• (bb) an advisory body established by the Secretary of State under section 54(1) of the Act.

37.2

The Licensee, shall, if requested by the Director or if it sees fit, furnish to the Director particulars of any matter considered by the Licensee under this Condition or a digest of activities undertaken in any period in pursuance of this Condition.

PART A: — UNIVERSAL SERVICES CONDITIONS

This Part shall apply to the Licensee only to the extent that it is running a Fixed Public Telephone System by means of which it provides Fixed Publicly Available Telephone Services.

DETERMINATION OF PROVIDER OF UNIVERSAL SERVICES

38.1

The Licensee may be determined to be a provider of universal services by the Director, whenever he thinks appropriate in accordance with the procedure set out in paragraph 6 of Part 1 of this Licence, for the purposes of complying with any or all of Conditions 40 to 42 below as specified by the Director. Such conditions shall be referred to in this Part as the “Specified Conditions”.

38.2

The Licensee shall comply with the Specified Conditions throughout or in any part of the area as specified by the Director within which the Licensee is authorised to run telecommunication systems under this Licence except to the extent that the Director is satisfied that any reasonable demand for any telecommunication services falling within the Specified Conditions is or is to be met by other means and that accordingly it would not be reasonable in the circumstances to require the Licensee to provide the services requested. Such specified area shall be referred to in this Part as the “Designated Area” and shall contain not less than 100,000 Served Premises.

38.3

In making a determination for the purposes of paragraph 38.1 above, the Director shall have regard to all the following factors:

• (a) the relative size of the Licensee’s business including the extent, density and resilience of the Applicable Systems in the provision of telephone services in any area which is being considered by the Director for the purposes of paragraph 38.2, in which the Licensee is authorised to provide such services, compared with other providers of such services in that area;

• (b) the relative capability of the Licensee to comply with any or all of Conditions 40 to 42 in the area referred to in sub-paragraph 38.3(a) above compared with other providers of telephone services in that area;

• (c) the likely net cost to the Licensee of complying with any or all of Conditions 40 to 42;

• (d) the financial stability of the Licensee; and

• (e) the willingness of the Licensee to comply with any or all of Conditions 40 to 42.

UNIVERSAL SERVICE FUND

39.1

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 complying with the Specified Conditions. The Licensee shall carry out such calculations in accordance with Schedule 5 to the Interconnection Regulations.

REQUIREMENT TO PROVIDE TELEPHONE SERVICES ON REQUEST

40.1

To the extent that this is a Specified Condition the Licensee shall provide, at the reasonable request of any person, telephony services to that person, including the ability to make and receive national and international calls and calls employing facsimile or voice band data up to 2400 bit/s, at any place in the Designated Area by means of the Applicable Systems, and the Licensee shall ensure that the Applicable Systems are installed, kept installed and run for those purposes.

SCHEMES FOR USERS WITH SPECIAL SOCIAL NEEDS

41.1

To the extent that this Condition is a Specified Condition, the Licensee shall make available and thereafter continue to make available to Users within the Designated Area who request telephony services, one or more schemes (a “Scheme”) the effect of which would be to assist Users who have difficulty affording telephone services, including, in particular Users with limited financial resources.

41.2

Each such Scheme shall comply with guidelines to be agreed between the Director and the Licensee. The guidelines shall be agreed within 3 months of the Director providing a draft of the guidelines to the Licensee. The guidelines shall be published in accordance with paragraph 41.4 below.

41.3

Those guidelines:

• (a) shall specify the requirements to be met by the Scheme including the criteria to be applied by the Licensee in deciding which of its residential customers are entitled to the benefits of the Scheme;

• (b) shall specify the date of the introduction of the Scheme; and

• (c) may not be revoked or varied save with the prior written agreement of the Licensee.

41.4

The Licensee shall publish the guidelines referred to in paragraph 41.3 above by:

• (a) sending a copy of them to the Director within three months of the guidelines being agreed with the Director;

• (b) placing as soon as practicable thereafter a copy of them in a publicly accessible part of every Major Office of the Licensee in such a manner and in such place that they are 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 thereof or such part or parts thereof to any person who may request such a copy.

PROVISION OF PUBLIC CALL BOX SERVICES

42.1

To the extent that this Condition is a Specified Condition the Licensee shall, after consultation with the Director, from time to time publish guidelines for determining when:

• (a) Public Call Boxes should be installed in new locations; and

• (b) the Licensee shall be entitled to cease to provide Call Box Services at a Public Call Box.

42.2

The Licensee shall:

• (a) in the case of paragraph 42.1(a), install Call Boxes on request in accordance with the guidelines unless there are special circumstances which make it unreasonable to require the Licensee to do so; and

• (b) in the case of paragraph 42.1(b), be entitled to cease to provide Call Box Services in accordance with the guidelines.

42.3

Publication of the guidelines shall be effected by:

• (a) sending a copy thereof (including any changes) to the Director;

• (b) placing as soon as practicable thereafter a copy thereof in a publicly accessible part of every Major Office of the Licensee in such a manner and in such a 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 thereof or such part or parts thereof to any person who may request such a copy.

PART B: — OBLIGATION TO PROVIDE SERVICES OTHER THAN VOICE TELEPHONY ON REQUEST

This Part shall apply to the Licensee only to the extent that it is running a Fixed Public Telephone System by means of which it provides Fixed Publicly Available Telephone Services.

REQUIREMENT TO PROVIDE TELECOMMUNICATION SERVICES, OTHERTHAN VOICE TELEPHONY SERVICES, ON REQUEST

43.1

This Condition shall apply to the Licensee where the Director has made a determination whenever he thinks appropriate for the purposes of this Condition, in accordance with the procedure set out in paragraph 6 of Part 1 of this Licence.

43.2

• (a) Subject to sub-paragraph (b) below, the Licensee shall provide such telecommunication services consisting in the conveyance of Messages as may be specified by the Director, other than those specified in Part A, to every person who reasonably requests such services at any place throughout or in any part of the area as specified by the Director within which the Licensee is authorised to run telecommunication systems under this Licence and which contains not less than 100,000 Served Premises. The Director may specify such services generally, or with reference to services of a particular description.

• (b) The Licensee shall not be required to provide such services to the extent that the Director is satisfied that any reasonable demand for such services is or is to be met by other means and that accordingly it would not be reasonable in the circumstances to require the Licensee to provide the services requested.

43.3

The Licensee shall ensure that the Applicable Systems are installed, kept installed and run for the purposes specified in paragraph 43.2 above.

43.4

In making a determination for the purposes of paragraph 43.1 above, the Director shall have regard to all the following factors, and any other factors, which appear to him to be relevant:

• (a) the relative size of the Licensee’s business including the extent, density and resilience of the Applicable Systems in the provision of the telecommunication services, of a description specified by the Director, in any area which is being considered by the Director for the purposes of paragraph 43.2 in which the Licensee is authorised to provide such services compared with other providers of such services in that area;

• (b) the relative capability of the Licensee to provide telecommunication services of a description specified by the Director in the area referred to in sub-paragraph 43.4 (a) compared with other providers of such services in that area;

• (c) the likely net cost to the Licensee of providing such services;

• (d) the financial stability of the Licensee; and

• (e) the willingness of the Licensee to provide such services.

PART C: — OPERATORS WITH SIGNIFICANT MARKET POWER FOR THE PURPOSES OF THE INTERCONNECTION DIRECTIVE

DETERMINATION OF SIGNIFICANT MARKET POWER

44.1

Part C applies to the Licensee where the Director has determined the Licensee to be an Operator having Significant Market Power pursuant to regulation 4(1) of the Interconnection 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.

44.2

Where this Part applies, Condition 9 shall no longer apply to the Licensee.

44.3

The Conditions in this Part apply to the Licensee only in respect of the relevant market or markets in which the Director has determined the Licensee to be an Operator having Significant Market Power.

INTERCONNECTION AGREEMENTS WITH SCHEDULE 2 PUBLIC OPERATORS INCLUDING CO-LOCATION AND FACILITY SHARING

45.1

Subject to paragraphs 45.6 and 45.7 and any exercise by the Director of his functions under regulations 6(3) or 6(4) of the Interconnection Regulations, the Licensee shall offer to enter into an agreement with an Operator which is a Schedule 2 Public Operator, or offer to amend such an agreement, as the case may be, within a reasonable period, if such Operator requires it:

• (a) to 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 conveyed or to be conveyed by means of any of the Applicable Systems to be conveyed 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.

45.2

The Licensee or the Schedule 2 Public 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;

• (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) of the Interconnection Regulations, as the case may be.

45.3

The Licensee shall secure that the agreement or amendment referred to in paragraph 45.1 above is offered on terms and conditions which are reasonable.

45.4

To the extent that the terms and conditions of any agreement or amendment made under paragraph 45.1 cease to be reasonable, the Licensee shall, within a reasonable period, offer to the Schedule 2 Public Operator, or agree with such Operator, as the case may be, to amend the agreement so that its terms and conditions are reasonable.

45.5

The Licensee shall:

• (a) comply with the requirements of any directions given to the Licensee under paragraph 45.2 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 an agreement or amendment made under paragraph 45.1 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.

45.6

So long as section 11 of the Restrictive Trade Practices Act 1976 is still in force 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.

45.7

Paragraph 45.1 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.

45.8

For the avoidance of doubt:

• (a) 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

• (b) 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 or amendments made under paragraph 45.1 above from the date of a complaint or the date on which the term was first offered by the Licensee or accepted by a Schedule 2 Public Operator or from any other date which is considered by the Director to be appropriate in the circumstances.

45.9

Where the Director so directs, the Crown shall be treated for the purposes of this Condition as a Schedule 2 Public Operator.

REQUIREMENT TO PUBLISH A REFERENCE INTERCONNECTION OFFER

46.1

The Licensee shall publish a reference interconnection offer within 3 months of having been determined by the Director as having Significant Market Power, and every 6 months from the date of the previous publication. Publication shall be effected by:

• (a) sending a copy thereof to the Director;

• (b) except to the extent that the Director may consent to an alternative location or to an alternative method of publication, placing as soon as practicable thereafter a copy thereof in a publicly accessible part of every Major Office of the Licensee in such a manner and in such a 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 thereof to any person who may request such a copy.

46.2

The Licensee’s reference interconnection offer shall include:

• (a) a full list of the Standard Services to be supplied to Schedule 2 Public Operators in accordance with an agreement or amendment to an agreement required under Condition 45.1 and shall specify:

• (i) the charges for each Standard Service (the Standard List) and the amounts applied to each component within that Service; and

• (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;