Ofcom has today published its long-anticipated key conclusions and proposals resulting from Phase 2 of the Strategic Review.
The 'Telecommunications Statement' relates only to the fixed telecommunications markets, and is a mere 8 pages long. It will be followed by detailed documents, to be published on 30 June 2005.
Today's Statement confirms that Ofcom is pursuing the so-called 'Option 3', i.e. 'real equivalence' and that the board of directors of BT Plc has agreed to provide legally binding 'undertakings', which will be published in full on 30 June 2005.
Key among BT's 'undertakings' is the creation of a separate 'Access Services Division' (ASD), which will have 30 000 staff, and will manage the local loop (and underlying civil infrastructure including ducts) and the local exchanges. The ASD will, in 2006, adopt a different brand name (also for uniforms and vehicles of its personnel) and will deliver:
- unbundled metallic local loops and sub-loops and shared access;
- backhaul for LLU and SA (SDH and Ethernet)
- partial private circuits (leased line interconnection);
- fibre access including wholesale Ethernet services.
BT has also made commitments relation to its Next Generation Network initiative 21cn. These include in particular:
- assurance that the 21CN design supports competition, by allowing other operators unbundled access to key bottlenecks;
- design of 21CN in a way which will support Equivalence of Input;
- charges to reflect a network that is efficiently designed for the above purposes;
- BT to launch retail products only when equivalent wholesale products are available;
- participation of BT in a new adjudication process to address disputes.
If any of the above commitments are breached by BT, Ofcom will be entitled to take BT to the High Court to obtain a court enforcement order. Third parties affected by non-compliance will be able to apply for monetary damages to the High Court.
On 30 June 2005, Ofcom will issue the following documents:
- Consultation on a set of revised guidelines on the application of the principle of non-discrimination for operators with Significant Market Power;
- Statement on Next Generation Networks;
- Statement on broadband regulation (which will kick-start a new review of the Wholesale Broadband Access market);
- Statement on Universal Service;
- The full detail of BT's 'undertakings'.
In the coming months, Ofcom will also review the leased lines markets and the market for telecommunications services provided to large corporate customers, and it will examine in particular the extent to which these markets can be deregulated.