Communications Act 2003 (c. 21)

(The document as of February, 2008)

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(d) obligations to adjust prices in accordance with such directions given by OFCOM as they may consider appropriate.

(10) The SMP conditions authorised by subsection (9) include conditions requiring the application of presumptions in the fixing and determination of costs and charges for the purposes of the price controls, rules and obligations imposed by virtue of that subsection.

(11) Where OFCOM set a condition authorised by this section which imposes rules on the dominant provider about the use of cost accounting systems, it shall be their duty also to set, and to apply to him, an SMP condition which imposes on him an obligation--

(a) to make arrangements for a description to be made available to the public of the cost accounting system used in pursuance of that condition; and

(b) to include in that description details of--

(i) the main categories under which costs are brought into account for the purposes of that system; and

(ii) the rules applied for the purposes of that system with respect to the allocation of costs.

(12) In this section--

"access contract" means--
(a)
a contract for the provision by a person to whom this section applies to another person of network access to the relevant network; or
(b)
a contract under which the relevant facilities are made available by a person to whom this section applies to another person;
"the relevant facilities", in relation to a person to whom this section applies, means the associated facilities made available by that person in relation to a public electronic communications network; and
"the relevant network", in relation to such a person, means the public electronic communications network provided by him.

88 Conditions about network access pricing etc.

(1) OFCOM are not to set an SMP condition falling within section 87(9) except where--

(a) it appears to them from the market analysis carried out for the purpose of setting that condition that there is a relevant risk of adverse effects arising from price distortion; and

(b) it also appears to them that the setting of the condition is appropriate for the purposes of--

(i) promoting efficiency;

(ii) promoting sustainable competition; and

(iii) conferring the greatest possible benefits on the end-users of public electronic communications services.

(2) In setting an SMP condition falling within section 87(9) OFCOM must take account of the extent of the investment in the matters to which the condition relates of the person to whom it is to apply.

(3) For the purposes of this section there is a relevant risk of adverse affects arising from price distortion if the dominant provider might--

(a) so fix and maintain some or all of his prices at an excessively high level, or

(b) so impose a price squeeze,

as to have adverse consequences for end-users of public electronic communications services.

(4) In considering the matters mentioned in subsection (1)(b) OFCOM may--

(a) have regard to the prices at which services are available in comparable competitive markets;

(b) determine what they consider to represent efficiency by using such cost accounting methods as they think fit.

(5) In this section "the dominant provider" has the same meaning as in section 87.

89 Conditions about network access in exceptional cases

(1) This section applies where--

(a) OFCOM have made a determination that a person ("the dominant provider") has significant market power in an identified services market;

(b) that person is the provider of an electronic communications network or a person who makes associated facilities available; and

(c) OFCOM consider that there are exceptional circumstances making it appropriate for conditions with respect to the provision of network access to be applied to the dominant provider in addition to those that are required to be or may be applied to him apart from this section.

(2) OFCOM may set the additional SMP conditions and apply them to the dominant provider if--

(a) they have submitted the additional conditions to the European Commission for approval; and

(b) the Commission has approved the imposition on the dominant provider of the obligations contained in those conditions.

90 Conditions about carrier selection and pre-selection

(1) This section applies where--

(a) OFCOM have made a determination that a person ("the dominant provider") has significant market power in an identified services market; and

(b) it appears to OFCOM that the market is a market relating to services for the provision of public electronic communications networks for use by means of connections at fixed locations.

(2) It shall be the duty of OFCOM to set, and to apply to the dominant provider, such SMP conditions authorised by this section as they think fit.

(3) The SMP conditions authorised by this section are conditions requiring the dominant provider to do one or both of the following--

(a) to make a relevant connection facility available to every person to whom he provides a public electronic communications service;

(b) for the purpose of making such a connection facility available to such persons, to make facilities for interconnection available to a person providing an electronic communications service.

(4) Where OFCOM set a condition requiring the dominant provider to make a relevant connection facility available, they shall also set such SMP conditions as they consider appropriate--

(a) with respect to the relationship to costs of any prices fixed for the use of the facility; and

(b) for the purpose of securing that prices and other charges imposed on the persons to whom public electronic communications services are provided by the dominant provider do not constitute a disincentive to the use of the facility.

(5) Where OFCOM set conditions authorised by this section, those conditions may include provision imposing obligations as to the manner in which one or both of the following are to be made available in accordance with the conditions--

(a) the relevant connection facility in question;

(b) the facilities for interconnection that are to be made available to a person providing an electronic communications service.

(6) In this section "relevant connection facility" is a facility which--

(a) allows a person to whom a public electronic communications service is provided by means of an electronic communications network to select which public electronic communications service provided wholly or partly by means of that network is the service that he wishes to use; and

(b) enables that selection to be made either--

(i) by the use of a telephone number on each separate occasion on which a selection is made; or

(ii) by designating in advance the selection that is to apply on every occasion when no such selection as is mentioned in sub-paragraph (i) is made.

91 Conditions about regulation of services etc. for end-users

(1) Where--

(a) OFCOM have made a determination that a person ("the dominant provider") has significant market power in an identified services market ("the relevant market"),

(b) the relevant market is one for the end-users of public electronic communications services that are available in that market, and

they shall set, and apply to that provider, such SMP conditions authorised by this section as they consider appropriate.

(2) That test is that OFCOM are unable, by the setting of conditions of the sorts specified in subsection (3), to perform, or fully to perform, their duties under section 4 in relation to the market situation in the relevant market.

(3) The sorts of conditions referred to in subsection (2) are--

(a) access-related conditions; and

(b) SMP conditions authorised or required by sections 87 to 90.

(4) The reference in subsection (2) to the market situation in the relevant market is a reference to the situation revealed by such market analyses of that market as may have been carried out for the purposes of this Chapter.

(5) The SMP conditions authorised by this section are conditions imposing on the dominant provider such regulatory controls as OFCOM may from time to time direct in relation to the provision by that provider of any public electronic communications service to the end-users of that service.

(6) Where OFCOM set a condition which is authorised by this section and imposes regulatory control on tariffs or other matters to which costs are relevant, they shall also set, and apply to the dominant provider, an SMP condition which requires him, to the extent that they consider it appropriate--

(a) to use such cost accounting systems as may be determined by them;

(b) to have the use of those systems audited annually by a qualified auditor; and

(c) to publish an annual statement about compliance by the dominant provider with the obligations imposed by virtue of paragraph (a).

(7) It shall be the duty of OFCOM to provide the European Commission with all such information as the Commission requires them to provide about--

(a) conditions authorised by this section that are set by OFCOM; and

(b) the cost accounting systems used, by the persons to whom those conditions apply, in relation to the services regulated in accordance with the conditions.

(8) In this section "qualified auditor" means a person eligible, in accordance with Part 2 of the Companies Act 1989 (c. 40), for appointment as a company auditor.

92 Conditions about leased lines

(1) This section applies where--

(a) OFCOM have made a determination that a person ("the dominant provider") has significant market power in an identified services market; and

(b) it appears to OFCOM that the market in relation to which that market power determination has been made is a market relating to the provision of any such leased lines as are for the time being identified by the European Commission in the List of Standards published in the Official Journal of the European Communities.

(2) It shall be the duty of OFCOM to set, and to apply to the dominant provider, such SMP conditions authorised by this section as they consider appropriate.

(3) The SMP conditions authorised by this section are conditions for applying, so far as required by the provisions for the time being contained in Annex VII to the Universal Service Directive, the principles of non-discrimination, cost orientation and transparency in relation to the leased lines identified as mentioned in subsection (1).

(4) In this section "leased line" means an electronic communications service the provision of which consists in the reservation of a fixed amount of transmission capacity between fixed points on the same or different electronic communications networks.

SMP apparatus conditions: subject-matter

93 Conditions about apparatus supply

(1) Where OFCOM have made a determination that a person ("the dominant supplier") has significant market power in an identified apparatus market, they may--

(a) set such SMP conditions authorised by this section as they consider it appropriate to apply to that person in respect of the supply of electronic communications apparatus; and

(b) apply those conditions to that person.

(2) This section authorises the setting of SMP conditions of each of the following descriptions--

(a) conditions requiring the dominant supplier to maintain such a separation for accounting purposes between matters relating to the supply of electronic communications apparatus and other matters as may be described in the conditions;

(b) conditions imposing requirements about the accounting methods to be used in maintaining the separation; and

(c) conditions imposing such rules as OFCOM may make, for the purpose of securing the maintenance of the separation, about the use of cost accounting systems.

(3) This section also authorises the setting of SMP conditions imposing price controls in relation to the hiring of telephones which are hardwired to an electronic communications network.

(4) Conditions set under this section must not make provision in relation to the supply of electronic communications apparatus unless the apparatus is of a description of apparatus as respects the supply of which the dominant supplier has been found to have significant market power.

(5) For the purposes of this section a telephone is hardwired to an electronic communications network where, in order for it to be used with that network--

(a) it has to be physically attached to apparatus comprised in the network; and

(b) the attachment has to be effected by a process that requires the use of a tool.

Enforcement of conditions

94 Notification of contravention of conditions

(1) Where OFCOM determine that there are reasonable grounds for believing that a person is contravening, or has contravened, a condition set under section 45, they may give that person a notification under this section.

(2) A notification under this section is one which--

(a) sets out the determination made by OFCOM;

(b) specifies the condition and contravention in respect of which that determination has been made; and

(c) specifies the period during which the person notified has an opportunity of doing the things specified in subsection (3).

(3) Those things are--

(a) making representations about the matters notified;

(b) complying with notified conditions of which he remains in contravention; and

(4) Subject to subsections (5) to (7) and section 98(3), the period for doing those things must be the period of one month beginning with the day after the one on which the notification was given.

(5) OFCOM may, if they think fit, allow a longer period for doing those things either--

(a) by specifying a longer period in the notification; or

(b) by subsequently, on one or more occasions, extending the specified period.

(6) The person notified shall have a shorter period for doing those things if a shorter period is agreed between OFCOM and the person notified.

(7) The person notified shall also have a shorter period if--

(a) OFCOM have reasonable grounds for believing that the contravention is a repeated contravention;

(b) they have determined that, in those circumstances, a shorter period would be appropriate; and

(8) A notification under this section--

(a) may be given in respect of more than one contravention; and

(b) if it is given in respect of a continuing contravention, may be given in respect of any period during which the contravention has continued.

(9) Where a notification under this section has been given to a person in respect of a contravention of a condition, OFCOM may give a further notification in respect of the same contravention of that condition if, and only if--

(a) the contravention is one occurring after the time of the giving of the earlier notification;

(b) the contravention is a continuing contravention and the subsequent notification is in respect of so much of a period as falls after a period to which the earlier notification relates; or

(c) the earlier notification has been withdrawn without a penalty having been imposed in respect of the notified contravention.

(10) OFCOM must not give a notification under this section in a case in which--

(a) they decide that a more appropriate way of proceeding in relation to the contravention in question would be under the Competition Act 1998 (c. 41); and

(b) they publish a statement to that effect in such manner as they consider appropriate for bringing their decision to the attention of the persons who, in their opinion, are likely to be affected by it.

(11) For the purposes of this section a contravention is a repeated contravention, in relation to a notification with respect to that contravention, if--

(a) a previous notification under this section has been given in respect of the same contravention or in respect of another contravention of the same condition; and

(b) the subsequent notification is given no more than twelve months after the day of the making by OFCOM of a determination for the purposes of section 95(2) or 96(2) that the contravention to which the previous notification related did occur.

95 Enforcement notification for contravention of conditions

(1) This section applies where--

(a) a person ("the notified provider") has been given a notification under section 94;

(b) OFCOM have allowed the notified provider an opportunity of making representations about the matters notified; and

(2) OFCOM may give the notified provider an enforcement notification if they are satisfied--

(a) that he has, in one or more of the respects notified, been in contravention of a condition specified in the notification under section 94; and

(b) that he has not, during the period allowed under that section, taken all such steps as they consider appropriate--

(i) for complying with that condition; and

(ii) for remedying the consequences of the notified contravention of that condition.

(3) An enforcement notification is a notification which imposes one or both of the following requirements on the notified provider--

(a) a requirement to take such steps for complying with the notified condition as may be specified in the notification;

(b) a requirement to take such steps for remedying the consequences of the notified contravention as may be so specified.

(4) A decision of OFCOM to give an enforcement notification to a person--

(a) must be notified by them to that person, together with the reasons for the decision, no later than one week after the day on which it is taken; and

(b) must fix a reasonable period for the taking of the steps required by the notification.

(5) It shall be the duty of a person to whom an enforcement notification has been given to comply with it.

(6) That duty shall be enforceable in civil proceedings by OFCOM--

(a) for an injunction;

(b) for specific performance of a statutory duty under section 45 of the Court of Session Act 1988 (c. 36); or

96 Penalties for contravention of conditions

(1) This section applies (in addition to section 95) where--

(a) a person ("the notified provider") has been given a notification under section 94;

(b) OFCOM have allowed the notified provider an opportunity of making representations about the matters notified; and

(2) OFCOM may impose a penalty on the notified provider if he--

(a) has, in one or more of the respects notified, been in contravention of a condition specified in the notification under section 94; and

(b) has not, during the period allowed under that section, taken the steps OFCOM consider appropriate--

(i) for complying with the notified condition; and

(ii) for remedying the consequences of the notified contravention of that condition.

(3) Where a notification under section 94 relates to more than one contravention, a separate penalty may be imposed in respect of each contravention.

(4) Where such a notification relates to a continuing contravention, no more than one penalty may be imposed in respect of the period of contravention specified in the notification.

(5) OFCOM may also impose a penalty on the notified provider if he has contravened, or is contravening, a requirement of an enforcement notification given under section 95 in respect of the notified contravention.

(6) Where OFCOM impose a penalty on a person under this section, they shall--

(a) within one week of making their decision to impose the penalty, notify that person of that decision and of their reasons for that decision; and

(b) in that notification, fix a reasonable period after it is given as the period within which the penalty is to be paid.

(7) A penalty imposed under this section--

(a) must be paid to OFCOM; and

(b) if not paid within the period fixed by them, is to be recoverable by them accordingly.

97 Amount of penalty under s. 96

(1) The amount of a penalty imposed under section 96 is to be such amount not exceeding ten per cent. of the turnover of the notified provider's relevant business for the relevant period as OFCOM determine to be--

(a) appropriate; and

(b) proportionate to the contravention in respect of which it is imposed.

(2) In making that determination OFCOM must have regard to--

(a) any representations made to them by the notified provider;

(b) any steps taken by him towards complying with the conditions contraventions of which have been notified to him under section 94; and

(3) For the purposes of this section--

(a) the turnover of a person's relevant business for a period shall be calculated in accordance with such rules as may be set out by order made by the Secretary of State; and

(b) provision may also be made by such an order for determining what is to be treated as the network, service, facility or business by reference to which the calculation of that turnover falls to be made.

(4) No order is to be made containing provision authorised by subsection (3) unless a draft of the order has been laid before Parliament and approved by a resolution of each House.

(5) In this section--

"relevant business" means (subject to the provisions of an order under subsection (3) and to subsections (6) and (7)) so much of any business carried on by the notified provider as consists in any one or more of the following--
(a)
the provision of an electronic communications network;
(b)
the provision of an electronic communications service;
(c)
the making available of associated facilities;
(d)
the supply of directories for use in connection with the use of such a network or service;
(e)
the making available of directory enquiry facilities for use for purposes connected with the use of such a network or service;
(f)
any business not falling within any of the preceding paragraphs which is carried on in association with any business in respect of which any access-related condition is applied to the person carrying it on;
"relevant period", in relation to a contravention by a person of a condition set under section 45, means--
(a)
except in a case falling within paragraph (b) or (c), the period of one year ending with the 31st March next before the time when notification of the contravention was given under section 94;
(b)
in the case of a person who at that time has been carrying on that business for a period of less than a year, the period, ending with that time, during which he has been carrying it on; and
(c)
in the case of a person who at that time has ceased to carry on that business, the period of one year ending with the time when he ceased to carry it on.

(6) In the case of a contravention of an SMP apparatus condition the relevant business is so much of any business carried on by the person in respect of whose contravention the penalty is imposed as consists in the supply of electronic communications apparatus.

(7) So much of any business of a person on whom the penalty is imposed as falls within paragraph (f) of the definition of a relevant business shall be disregarded for the purposes of this section except in relation to--

(a) a contravention of an access-related condition imposed in respect of that business; or

(b) a contravention of an enforcement notification given under section 95 relating to such a condition.

(8) In this section "the notified provider" has the same meaning as in section 96.

98 Power to deal with urgent cases

(1) This section applies where OFCOM determine--

(a) that they are entitled to give a notification under section 94 with respect to a contravention by a person ("the contravening provider") of a condition set under section 45, other than an SMP apparatus condition;

(b) that there are reasonable grounds for suspecting that the case is an urgent case; and

(2) A case is an urgent case for the purposes of this section if the contravention has resulted in, or creates an immediate risk of--

(a) a serious threat to the safety of the public, to public health or to national security;

(b) serious economic or operational problems for persons (other than the contravening provider) who are communications providers or persons who make associated facilities available; or

(c) serious economic or operational problems for persons who make use of electronic communications networks, electronic communications services or associated facilities.

(3) OFCOM may, in a notification under section 94 with respect to the contravention, specify a period of less than one month for doing the things mentioned in subsection (3) of that section.

(4) OFCOM shall also have power to give to the contravening provider--

(a) a direction that his entitlement to provide electronic communications networks or electronic communications services, or to make associated facilities available, is suspended (either generally or in relation to particular networks, services or facilities); or

(b) a direction that that entitlement is restricted in the respects set out in the direction.

(5) A direction under subsection (4)--

(a) must specify the networks, services and facilities to which it relates; and

(b) except so far as it otherwise provides, takes effect for an indefinite period beginning with the time at which it is notified to the person to whom it is given.

(6) A direction under subsection (4)--

(a) in providing for the effect of a suspension or restriction to be postponed, may provide for it to take effect only at a time determined by or in accordance with the terms of the direction; and

(b) in connection with the suspension or restriction contained in the direction or with the postponement of its effect, may impose such conditions on the contravening provider as appear to OFCOM to be appropriate for the purpose of protecting his customers.

(7) Those conditions may include a condition requiring the making of payments--

(a) by way of compensation for loss or damage suffered by the contravening provider's customers as a result of the direction; or

(b) in respect of annoyance, inconvenience or anxiety to which they have been put in consequence of the direction.

(8) OFCOM have power to revoke a direction given under subsection (4)--

(a) with effect from such time as they may direct;

(b) subject to compliance with such requirements as they may specify; and

(c) to such extent and in relation to such networks, services or facilities, or parts of a network, service or facility, as they may determine.

99 Confirmation of directions under s. 98

(1) As soon as reasonably practicable after giving a direction under section 98(4), OFCOM must give the person to whom it is given--

(a) an opportunity of making representations to them about the grounds on which it was given and its effect; and

(b) an opportunity of proposing steps to remedy the situation.

(2) As soon as practicable after the period allowed by OFCOM for making those representations has ended, they must determine--

(a) whether the contravention providing the grounds for the giving of the direction did occur; and

(b) whether the circumstances made it an urgent case justifying the giving of the direction.

(3) If OFCOM decide that the contravention did occur and that the direction was justified, they may confirm the direction.

(4) If not, they must exercise their power to revoke it.

(5) As soon as reasonably practicable after determining whether to confirm the direction, OFCOM must notify the person to whom it was given of their decision.

(6) Conditions included in a direction by virtue of section 98(7) have effect only if the direction is confirmed.

100 Suspending service provision for contraventions of conditions

(1) OFCOM may give a direction under this section to a person who is a communications provider or makes associated facilities available ("the contravening provider") if they are satisfied--

(a) that he is or has been in serious and repeated contravention of conditions set under section 45, other than an SMP apparatus condition;

(b) that an attempt, by the imposition of penalties or the giving of enforcement notifications under section 95 or both, to secure compliance with the contravened conditions has failed; and

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