BT Responds to Industry Request for Clarity on Undertakings
Industry feedback on the first issue of the Undertakings Bulletin has identified a requirement for people outside BT to understand more about the Undertakings and what they mean. BT has produced an overview.
Background to the Undertakings
BT’s Undertakings are in lieu of a reference to the Competition Commission under the Enterprise Act 2002.
Ofcom reached the conclusion under its strategic review that competition was being restricted in markets for the supply of wholesale access and backhaul services in the UK and in directly related Downstream retail markets. Ofcom reached the conclusion under its strategic review that in order for competition in fixed telecommunications to be effective, BT needed to make access to the enduring economic bottleneck parts of its network available on the same terms as is made available to itself.
Ofcom believed that the combination of BT’s Upstream market power and vertical integration provided BT with the incentive and ability to discriminate against its downstream competitors.
BT offered Undertakings designed to address Ofcom’s concerns in June 2005. Ofcom consulted on the proposed Undertakings. As a result of the comments made BT offered revised Undertakings which were accepted on 22nd September 2005.
Undertakings are legally binding commitments, and can be enforced through the courts by Ofcom obtaining an injunction or by a person who has suffered loss as a result of a breach suing BT for damages.
The Undertakings comprise 20 sections and four Annexes. Broadly, they cover:
Section 1 – scope. The Undertakings apply to BT in the UK
Section 2 – definitions of terms used
Section 3 – sets out the products for which equivalence is required
Section 4 – requirements to improve the transparency around Carrier Pre-Selection, DataStream and Partial Private Circuits
Section 5 – sets out the requirement to build Access Services (Openreach), and details principles and obligations relating to its operation and portfolio
Section 6 – requirements over the structure and operation of BT Wholesale
Section 7 – obligations relating to the location of equipment in exchanges
Section 8 – conditions surrounding the maintenance of boundaries between Upstream and Downstream divisions, and how they trade with communications providers
Section 9 – BT must put in place a Code of Practice and associated training
Section 10 – BT must establish and support an Equality of Access Board. Its remit is also set out
Section 11 – conditions relating to next generation networks and access to products they support
Sections 12 – 21 – detailed conditions relating to contract management, Northern Ireland, and operation of the Undertakings
Annex 1 – detailed timetable for the delivery of product equivalence
Annex 2 - permitted exceptions to general rules concerned with influence over Commercial Policy and the control of Customer Confidential and Commercial Information
Annex 3 – the detail of how obligations in Section 6 relating to Private Circuits are to be delivered
Annex 4 – defines the Equipment referred to in Section 7