National roaming - Stakeholders

National roaming
A further consultation
Issued: 22 July 2004
Closing date for responses: 16 September 2004
Contents
Section
1
2
3
4
5
Annex A
Annex B
Annex C
Annex D
Annex E
Summary
Background
Ofcom’s proposal
Responses to the first consultation exercise
How to respond to this consultation exercise
National Roaming Guidelines
Draft Notice to O2(UK)
Draft Notice to Vodafone Ltd
Ofcom’s consultation principles
Consultation response cover sheet
1
Page
2
4
8
14
18
20
27
29
31
33
Section 1
Summary
1.1
The present document sets out Ofcom’s proposal that Ofcom should not
impose, at this time, an access-related condition which would require O2 Ltd
(“O2”), Vodafone Ltd (“Vodafone”), Orange plc (“Orange”) and T-Mobile (UK)
Ltd (“T-Mobile”) (together the “2G mobile operators”), to provide national
roaming to Hutchison 3G(UK) Ltd (“3”) in specified circumstances.
1.2
National roaming, in the context of this document, is a facility which enables 3
to offer its customers the ability to make and receive calls in areas of the UK
where 3 has not yet built its 3G network. Such calls are conveyed by the 2G
network of an established 2G mobile operator, and the facility does not
enable advanced services which require a 3G network.
1.3
The consultation document entitled “National Roaming Condition” published
by Oftel on 15 May 2003 (the “May 2003 consultation”), considered whether
an access-related condition, in accordance with section 73 of the
Communications Act 2003 (the “Act”), should be imposed on each of the 2G
mobile operators requiring them to provide national roaming to 3 on terms
which are fair, reasonable and not unduly discriminatory. The consultation
proposed that such an obligation should apply except where 3 already has a
valid agreement with one of the 2G mobile operators. The obligation would
not apply until 3 had rolled out its 3G network to cover an area in which 20%
of the UK population lives, and it would cease to apply on 31 December 2009
unless earlier revoked by Ofcom.
1.4
The May 2003 consultation also proposed a set of guidelines, the purpose of
which was to set out the approach that Ofcom would be likely to take in
applying the proposed condition in the case of any dispute referred to it, and
to set out what it would consider to be reasonable terms and conditions.
1.5
Ofcom now considers that it should consult further on the question of whether
it is appropriate to impose a new national roaming condition on the 2G
operators. This further consultation is in the light of the outcome of the May
2003 consultation and other developments.
1.6
Ofcom recognises the importance of national roaming for a new entrant 3G
operator, and remains committed to the objective of ensuring that 3 has a
high degree of certainty as to the availability of national roaming and the
terms on which it will be supplied. Ofcom considers that the high degree of
certainty required by 3 can be achieved through means that require less
intrusive regulation than the imposition of an access-related condition at this
time. In reaching this view, Ofcom has put weight on the following factors,
amongst others:
•
the existence of a contract between 3 and O2 for the provision of
national roaming which is currently supporting commercial services
offered by 3, the confidential termination arrangements of which
Ofcom has seen;
2
•
the willingness of at least one 2G mobile operator, other than O2, to
commit to negotiate the supply of national roaming to 3 on commercial
terms equivalent to those required by the national roaming condition
currently in force and by the condition proposed in the May 2003
consultation if there is a real prospect of such business being offered
to it.
•
the ability of Ofcom to resolve disputes between 3 and any 2G mobile
operator, including O2, no less speedily than it could if there was an
access-related condition already in place; and the ability of Ofcom to
impose an access-related condition in the future if needed to ensure
that national roaming is available to 3, and to determine in a timely
way the terms on which it will be supplied.
•
Ofcom’s intention to provide written guidance on the way in which
Ofcom would expect to resolve a dispute about national roaming if
required.
In the light of these factors, Ofcom believes that it would not be proportionate
or objectively justified to impose, at this time, an access-related condition
requiring the 2G mobile operators to provide national roaming to 3 in specified
circumstances. Ofcom must not impose conditions under the Act unless it is
satisfied that the condition is, amongst other things, proportionate and
objectively justified.
1.7
Ofcom also proposes in this document to publish a set of guidelines, which
are substantively the same as those set out in the May 2003 consultation, to
indicate its likely approach should it be asked to resolve a dispute about
national roaming in the future.
1.8
Ofcom is inviting comments on the proposal that it should not, at this time,
impose ex ante regulation requiring the 2G mobile operators to provide
national roaming.
1.9
Ofcom is allowing eight weeks for representations to be made about its
proposal. Representations should arrive at Ofcom no later than 16 September
2004. Where possible, comments should be made in writing and sent by
email to [email protected]. However, copies may also be
posted or faxed to the address below. If any parties are unable to respond in
one of these ways, they should discuss alternatives with:
Michael Richardson
Ofcom
Riverside House
2a Southwark Bridge Road
London SE1 9HA
Tel: 020 7783 4157, Fax: 020 7783 4109. email to
[email protected]
1.10
More information about how to respond is contained in Section 5 of this
document.
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Section 2
Background
Ofcom
2.1
The office of the Director General of Telecommunications (the “Director”)
ceased on 29 December 2003 and his powers under the Act have now been
assumed by Ofcom. This document continues a consultation exercise initiated
by the Director in May 2003. For ease of reference, all references to Ofcom
are therefore to be taken as including the Director where they relate to the
period before 29 December 2003.
The 1999 national roaming condition
2.2
In October 1999, before the UK’s auction of 3G spectrum, O2, at that time
known as BTCellnet, and Vodafone voluntarily accepted a new licence
condition (the “1999 National Roaming condition”) which required them to
negotiate an agreement to provide national roaming to any “Relevant Mobile
Operator”. The term Relevant Mobile Operator was defined as any operator
which amongst other things, is authorised under the Wireless Telegraphy
Acts 1949 to 1998 to use radio spectrum in the frequency ranges which would
be allocated to carry 3G services, but had not been so authorised to use radio
spectrum in the frequency ranges allocated to 2G services.
2.3
Ofcom and the Government had recognised that, in competing to supply 3G
services, mobile operators with existing nationwide 2G networks would have
a significant advantage over new entrant 3G operators without an existing
nationwide network. Paragraph 3.5.1 of the Information Memorandum for the
3G Spectrum Auction, published on 1 November 1999 (the “Auction
Memorandum”) stated - “Roaming by customers of a 3G New Entrant onto
the network of a 2G operator would alleviate the initial inability to provide
mobile telecommunications services across the UK. The Government has
therefore sought to ensure that New Entrants should have a high degree of
certainty as to the availability of roaming and the conditions upon which they
would be able to conclude an agreement.”
2.4
The 1999 National Roaming condition required O2 and Vodafone to negotiate
an agreement to provide national roaming on reasonable terms and
conditions, and required them to negotiate amendments if the terms and
conditions ceased to be reasonable. O2 and Vodafone were also required to
ensure that any agreement was capable of having effect until 31 December
2009. The condition had no effect until the Relevant Mobile Operator had
rolled out a 3G network to cover an area in which 20% of the population of the
UK lives.
2.5
The 1999 National Roaming condition also set out detailed provisions under
which Ofcom could resolve disputes about the provision of national roaming,
as the Telecommunications Act 1984 gave Ofcom no powers to resolve
disputes about access; its dispute resolution powers at the time were limited
to disputes about interconnection. The condition stated that when determining
a dispute, Ofcom had a duty to have regard to, amongst other things, the
provision of national roaming at a price based on retail minus.
4
2.6
Ofcom also published a set of Guidelines (the “October 1999 Guidelines”) to
be read in conjunction with the 1999 National Roaming condition (see
Ofcom’s statement on National roaming of October 1999) which set out the
approach that Ofcom would be likely to take in applying the condition. The
October 1999 Guidelines placed considerable emphasis on the role of
commercial negotiation, and stated that before accepting a dispute for
resolution Ofcom would look for clear indications that the parties had engaged
in genuine negotiations that had proved unsuccessful. The October 1999
Guidelines also stated that Ofcom would only resolve disputes involving a
roaming agreement with one 2G mobile operator, and would not normally
accept disputes involving another 2G mobile operator while the first
agreement remained in force and was not going through any termination
notice period.
3’s agreement with O2
2.7
In May 2000 3 (at that time TIW) was authorised to use 3G radio spectrum
and in December 2000 was given a licence under the Telecommunications
Act 1984 to provide Mobile Radio Telecommunications Services. As 3 had not
previously been authorised to use spectrum in the 2G frequency ranges, it
qualified as a “Relevant Mobile Operator” with rights to require Vodafone or
O2 to negotiate an agreement to provide national roaming. In December
2001, 3 and O2 announced that they had successfully negotiated a contract
to allow 3 to use the O2 network to offer nationwide voice and 2G data
services to customers. This agreement was achieved through commercial
negotiation, without recourse to the dispute resolution provisions of the 1999
National Roaming condition.
A new regulatory regime and a modified national roaming condition
2.8
When the new EU communications regime was implemented in the United
Kingdom on 25 July 2003, all individual licences granted under section 7 of
the Telecommunications Act 1984, including the licences of O2 and Vodafone
which contained the 1999 National Roaming condition, were abolished and
replaced by general conditions of entitlement which apply to all persons
providing electronic communications networks and services, or such networks
and services of a particular type. Additionally, individual Communication
Providers may be subject to specific conditions, such as those imposed as a
result of a finding of Significant Market Power (SMP), access-related
conditions or conditions imposed as a consequence of a provider being
designated as a universal service provider.
2.9
Before imposing SMP services conditions and access-related conditions
(other than Conditional Access conditions) Ofcom is required by the new
regime to carry out a national consultation. It is required also to notify and
consult with the European Commission (the “Commission”) and the National
Regulatory Authorities (“NRAs”) in other Member States for at least a month1.
However, following the Commission’s advice that it could not receive such
proposals before the requirements of the new Directives came into effect on
25th July 2003, these conditions could not be imposed on the first day of the
new regime.
1
Articles 6 and 7 of the Framework Directive as implemented in various provisions in the Act.
5
2.10
In order to avoid a regulatory gap, the Directives permit and require Member
States to continue some existing regulation until such time as each Member
State can complete its assessment of the imposition of new SMP services
and access-related conditions. This has been implemented in the United
Kingdom by paragraphs 9 and 22 of Schedule 18 of the Communications Act
2003 (the "Act"). Schedule 18 permits Ofcom to issue Continuation Notices
which have the effect of continuing certain licence conditions and
Interconnection directions under the old licensing regime for a transitional
period.
2.11
One of the conditions continued was the 1999 National Roaming Condition ie
Condition 69A of the licences of O2 and Vodafone. As was explained in
paragraph 3.105 of the statement Continuing Licence Conditions after 25
July, (the “September Statement”), Ofcom was not entitled to continue the
dispute resolution procedures set out on the face of the original licence
condition as the Communications Act 2003 provides for statutory dispute
resolution powers. A shortened version of the 1999 National Roaming
condition was therefore continued (“continued provision Condition 69A”).
Discontinuation of continued provisions
2.12
As was explained in chapter 5 of the September Statement on continuation
notices, paragraph 9(11) to Schedule 18 of the Act requires Ofcom, as soon
as reasonably practicable after giving a Continuation Notice, to take all steps
necessary to enable it to decide whether or not to set a condition for the
purpose of replacing the continued provision, and to decide whether or not to
exercise its power to set such a condition. That statement also explained that
paragraph 9 (12) to Schedule 18 of the Act requires Ofcom to give a notice (a
discontinuation notice) that the Continuation Notice ceases to have effect,
and that it must do this as soon as reasonably practicable after taking a
decision to impose (or not to impose) conditions under the new regime. A
consultation on discontinuing licence conditions was issued by Ofcom on 2
October 2003 which sought comments on a model discontinuation notice and
also whether the correct licence conditions and Interconnection directions had
been identified in relation to each market review.
Consultation on a new national roaming condition
2.13
On 15 May 2003, Ofcom published the May 2003 consultation which
considered whether an access-related condition, in accordance with section
73 of the Communications Act 2003, should be imposed on the four 2G
mobile operators requiring them to provide national roaming to a new entrant
3G operator (in effect, to 3) on terms which are fair, reasonable and not
unduly discriminatory. The consultation proposed that such an obligation
should apply except where 3 already has a valid agreement with one of the
2G mobile operators. The obligation would not apply until 3 had rolled out its
3G network to cover an area in which 20% of the UK population lives, and it
would cease to apply on 31 December 2009 unless earlier revoked by Ofcom.
2.14
The May 2003 consultation also proposed a set of guidelines, which were
similar to the October 1999 Guidelines, the purpose of which was to set out
the approach that Ofcom would be likely to take in the case of any dispute
referred to it under the Act, and to set out what it would consider reasonable
terms and conditions.
6
This consultation
2.15.
Ofcom’s revised proposal, which takes into account responses to the May
2003 consultation, and subsequent discussion with interested parties, is
explained in Section 3 of the present document. Ofcom considers it
appropriate that it should consult on the new proposal given the change from
its proposals in the May 2003 consultation.
2.16
If following this consultation Ofcom decides to proceed with the proposal
detailed in Section 3 of this document, as set out above Ofcom is under a
statutory duty to discontinue Continued Provision 69A. The discontinuation
notices which Ofcom would issue to O2 and Vodafone at the same time as
issuing its statement are at annexes B and C respectively.
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Section 3
Ofcom’s proposal
3.1
Ofcom remains committed to the objective, as set out in the Auction
Memorandum, of ensuring that 3 has a high degree of certainty as to the
availability of national roaming and the terms on which it will be supplied. The
question which Ofcom must now address is what action, if any, should it take
at this time to ensure delivery of that objective.
3.2
The May 2003 consultation closed on 24 July 2003. A summary of the
responses to this consultation is included in Section 4, along with Ofcom’s
comments on these responses. The May 2003 consultation showed that
opinion on this issue was highly polarised, with the four 2G mobile operators
arguing broadly that the imposition of a national roaming condition could not
be justified. 3 argued that a national roaming condition should be imposed but
that the wording of the condition proposed would jeopardise 3’s continued
ability to secure national roaming on reasonable terms.
3.3
During the year since the May 2003 consultation was published, Ofcom has
engaged in further discussion with 3 and the 2G mobile operators. Ofcom has
used its statutory powers to obtain, under conditions of strict confidentiality, a
copy of the agreement between O2 and 3, and considered the termination
arrangements included in that agreement. Also, at least one other 2G mobile
operator has indicated that it is willing to negotiate to supply national roaming
to 3 on terms equivalent to those which would have been required by
continued provision Condition 69A and the condition proposed in the May
2003 consultation if for any reason the agreement with O2 ceases to be
viable.
3.4
As a consequence of these facts, and in the light of practical experience of
the dispute resolution powers in the Act (which came into force during the
period following publication of the May 2003 consultation), Ofcom has
concluded, subject to the outcome of this consultation, that its objective can
be met by means which are less intrusive than the imposition at this time of
an access-related condition requiring the four 2G mobile operators to provide
national roaming to 3 in specified circumstances.
3.5
As stated above, Ofcom's objective is to ensure that 3 has a high degree of
certainty as to the availability of national roaming. The purpose of this
consultation is to seek comments on Ofcom's proposal as to how, in light of
current facts, this should be achieved. Ofcom is not therefore carrying out a
regulatory impact assessment as to the availability of national roaming in this
consultation.
The impact of a national roaming condition
3.6
Except where 3 already has a valid national roaming agreement with a 2G
operator, the national roaming condition as proposed in the May 2003
consultation would have required each of the 2G mobile operators, in
response to a reasonable request from 3, to provide national roaming on
terms which are fair, reasonable and not unduly discriminatory. The condition
would have applied until 31 December 2009 unless earlier revoked by Ofcom.
8
The proposed condition was different in a number of respects from the
original 1999 National Roaming condition accepted by O2 (then BTCellnet)
and Vodafone in 1999.
3.7
In particular, the 1999 National Roaming condition had included detailed
dispute resolution processes as, unlike the Communications Act 2003, the
Telecommunications Act 1984 did not provide Ofcom with powers to resolve
disputes about access. Ofcom was not entitled to continue the specific
dispute resolution procedures referred to in the 1999 National Roaming
condition when the Communications Act 2003 came into force.
3.8
The original condition and the continued condition also contained an explicit
requirement that the terms of any agreement should continue to be
reasonable, and where they cease to be reasonable must be renegotiated.
Ofcom takes the view that a requirement to provide roaming on terms which
are reasonable would also require that those terms should remain
reasonable, and therefore this specific obligation was not included in the
condition proposed in the May 2003 consultation. In any event, Ofcom can be
asked to determine a dispute about the reasonableness of the terms of a
national roaming agreement.
3.9
The 1999 National Roaming condition and the condition continued in July
2003 also made specific reference to the matters to which Ofcom would have
regard when considering whether the terms and conditions of a national
roaming agreement are reasonable. The condition proposed in the May 2003
consultation did not make reference to these matters. The May 2003
consultation did, however, propose a set of guidelines which set out the
approach which Ofcom would expect to take when asked to determine a
dispute about national roaming. These guidelines were similar to those which
were published by Ofcom in association with the 1999 National Roaming
condition (ie the October 1999 Guidelines).The guidelines at Annex A to the
present consultation document are closely modelled on the October 1999
Guidelines.
The present agreement with O2
310
Ofcom has read, and has taken into account, the existing roaming agreement
between 3 and O2 in reaching its view that, even in the absence of a national
roaming condition, 3 would still have a high degree of certainty that national
roaming will continue to be available on reasonable terms. Should a dispute
arise about the terms of the present agreement, that dispute could be referred
to Ofcom as outlined in paragraph 3.14 below. The guidelines at Annex A set
out Ofcom’s policy on how it would expect to resolve such a dispute. Once
Ofcom had decided that it was appropriate for it to take on the dispute (it must
do so unless it considers that there are alternative means for resolving the
dispute, that resolution of the dispute by those means would be consistent
with its statutory duties and that a prompt and satisfactory resolution of the
dispute is likely if those means are used for resolving the dispute), except in
exceptional circumstances Ofcom would have a statutory duty to resolve the
dispute within 4 months. In Ofcom’s view, as discussed further below, the
prior existence of a national roaming condition would have no material impact
on Ofcom’s ability to resolve swiftly any dispute about national roaming,
whether in respect of the existing agreement or otherwise. Furthermore, as
the national roaming condition as proposed in the May 2003 consultation
applied “save where ...[3] has an existing valid agreement with a 2G
9
provider”, if a national roaming condition were imposed the obligation to
supply would not apply to other 2G mobile operators while the agreement
between O2 and 3 is in existence.
The availability of roaming from other 2G operators
3.11
During the period since the May 2003 consultation, Ofcom has encouraged 3
to explore alternative arrangements in the event that the agreement with O2
ceases to be viable for any reason. Commercial negotiation with other 2G
operators has been inconclusive, but in recent weeks at least one 2G mobile
operator has stated to Ofcom in correspondence its commitment to
negotiating an agreement with 3 to provide national roaming on terms
equivalent to those required by continued provision Condition 69A and the
national roaming condition proposed in the May 2003 consultation, if there
was a real prospect of such business being available to it. Ofcom has taken
this into account in reaching a view that it would not be proportionate at this
time to impose a national roaming condition on the 2G mobile operators.
3.12
As a matter of policy, Ofcom’s preference would be for 3 to secure its national
roaming requirements through market means rather than through regulation.
Since the May 2003 consultation, Ofcom has concluded its market review of
the mobile access and call origination market, which included an examination
of conditions in the supply of wholesale access and call origination on mobile
telephone networks in the UK. This market review concluded that no
undertaking has significant market power in the market, either individually or
in combination with one or more undertakings. This finding is supportive of
the proposition that national roaming should be available on reasonable
commercial terms from providers in the market. Ofcom has taken account of
the outcome of this market review in preparing its current proposals on
national roaming. However, Ofcom continues to hold the view that market
mechanisms alone may not offer 3 a high degree of certainty as to the
availability of national roaming and the terms on which it will be supplied. This
is consistent with the view set out by Ofcom in the mobile access and call
origination market review, in particular paragraphs 4.8 and 4.9 of the Mobile
access and call origination services market; Explanatory Statement and
Notification (August 2003). This stated that the market is not as competitive
as it could be, that certain weaknesses exist on specific SMP criteria, and that
it would remain legitimate for Ofcom to consider action to promote
competition in a proportionate way.
3.13
Ofcom has taken these conclusions into account in preparing these revised
proposals. Ofcom continues to hold the view that, if necessary to ensure 3
has a high degree of certainty as to the availability of national roaming and
the terms on which it is supplied, it would be within Ofcom’s discretion to
impose an access-related condition on one or more 2G mobile operators in
the future if it becomes proportionate to do so.
Dispute resolution
3.14
In the event that 3 had difficulty in obtaining national roaming on reasonable
terms in the market, Ofcom would be minded to use its statutory powers to
ensure that national roaming was provided, by imposing an access-related
condition. It may become apparent that 3 is having such difficulty (either
under its current agreement with O2 or in relation to a proposed agreement
with another operator) via a network access dispute which is referred to
10
Ofcom under section 185 of the Act. In such circumstances Ofcom would be
minded to impose a condition and resolve the dispute in accordance with that
condition. Ofcom is required to resolve disputes within 4 months except in
exceptional circumstances. Ofcom considers that it should be possible to
impose the condition (which requires consultation for 1 month) and resolve
the dispute within that time-frame. By contrast the dispute resolution
procedures under the 1999 National Roaming condition only required
resolution of the dispute within 6 months.
3.15
One of the concerns addressed in the May 2003 Consultation was the risk
that a decision not to impose ex ante regulation requiring the 2G mobile
operators to offer national roaming would expose 3 to damaging delays if it
was unable to negotiate access to national roaming on fair and reasonable
terms and had instead to ask Ofcom to resolve a dispute. Ofcom fully
recognises the risks that delay in such circumstances would present.
Nevertheless, Ofcom believes that the existence of a national roaming
condition would not materially reduce the time which it would take for Ofcom
to intervene and require one or more of the 2G mobile operators to provide
national roaming on fair and reasonable terms, if intervention was required.
This is because Ofcom could consult on a condition and work on resolving the
dispute (as if the condition was in place) at the same time.
3.16
The arguments in support of national roaming have been extensively debated
since the time of the spectrum auction, and would not, in Ofcom’s view,
require further lengthy consultation should Ofcom be asked to resolve a
dispute about national roaming in the absence of a national roaming
condition. The timescales for resolving a dispute would therefore not vary
greatly according to whether or not there was already a national roaming
condition in place.
New facts since May 2003
3.17
The proposal outlined by Ofcom in this consultation document is different to
that published 14 months ago. In the May 2003 consultation Ofcom presented
the initial view that an obligation to provide national roaming in certain
circumstances should be placed on all four of the 2G mobile operators at this
time.
3.18
At the time of the May 2003 consultation, Ofcom was concerned that if the
national roaming condition was allowed to fall away, the 2G mobile operators
would have an incentive not to provide national roaming to 3 because of the
threat of additional competition from 3. Ofcom believed that a national
roaming condition would provide a strong signal to the 2G mobile operators
that access to national roaming was guaranteed, and therefore they would
have no incentive to refuse to provide roaming to 3 and may compete with
each other to obtain the additional wholesale business that national roaming
agreement would provide. However, Ofcom does not now believe that it is
necessary to impose an access-related condition in order to give the 2G
mobile operators that incentive to offer roaming. As stated in paragraph 3.1
above, Ofcom remains fully committed to the objective of ensuing that 3 has a
high degree of certainty as to the availability of national roaming and the
terms on which it is supplied. Ofcom believes that its firm commitment to the
future availability of national roaming should serve to make clear that a
strategy of excluding 3 from the market is not a strategy which would be
allowed to succeed. In addition, as referred to above, at least one 2G mobile
11
operator has stated to Ofcom in correspondence its commitment to
negotiating an agreement with 3 to provide national roaming on terms
equivalent to those required by continued provision Condition 69A and the
national roaming condition proposed in the May 2003 consultation, if there
was a real prospect of such business being available to it.
3.19
Ofcom was also concerned in the May 2003 consultation that in the absence
of a national roaming condition and guidelines setting out the detail of the
likely handling of, and the basis for considering, a national roaming dispute,
the level of uncertainty as to the likely outcome of such a dispute would be
high. Ofcom believed that such uncertainty would impact behaviour and
market entry, to the detriment of consumers. The negative impact of such
uncertainty remains a legitimate source of concern but Ofcom considers that
its firm commitment to the future availability of national roaming, and
publication of the guidelines at Annex A, will ensure that all parties have a
high degree of certainty as to Ofcom’s regulatory objective, and the basis on
which a dispute about national roaming would be addressed.
3.20
Ofcom acknowledged in the May 2003 consultation that statutory dispute
resolution procedures could be used in the absence of a pre-existing national
roaming condition to resolve network access disputes such as disputes about
national roaming. However, Ofcom was concerned that the need to consult on
a new access-related condition, as well as on the detail of the necessary
access obligation, would lead to damaging delay. As explained above, Ofcom
now believes that, given its prior publication of guidelines on how it would
expect to resolve disputes about national roaming, and given the present
extended consultation on the issues, a dispute about national roaming in the
absence of an access related condition could be concluded in a very similar
timescale to a dispute in the presence of an ex ante obligation to supply
national roaming.
Discontinuation of the continued national roaming condition
3.21
Continued provision Condition 69A was continued as a temporary measure
pending consideration of whether or not it should be replaced by an accessrelated condition under the Act. Ofcom has a statutory duty to discontinue
continued provision Condition 69A as soon as practicable after making its
decision as to whether or not to replace it with a new condition. Therefore if
following this consultation Ofcom decides that it would not be appropriate to
replace continued provision Condition 69A, in line with its proposal as set out
in this consultation document, then it must give discontinuation notices to O2
and Vodafone in line with those set out at Annexes B and C to this document
as soon as reasonably practicable.
Summary of proposals
3.22
It is Ofcom’s objective that 3 should have a high degree of certainty as to the
availability of national roaming and the terms on which it will be supplied. Four
key factors have combined to persuade Ofcom that this objective can be met
without, at this time, imposing an access-related condition obliging the four
2G operators to provide national roaming:
•
the existence of a contract between 3 and O2 for the provision of
national roaming which is currently supporting commercial services
12
offered by 3, the confidential termination arrangements of which
Ofcom has seen;
•
the willingness of at least one 2G mobile operator, other than O2, to
commit to negotiate the supply of national roaming to 3 on commercial
terms equivalent to those required by the national roaming condition
currently in force, and that proposed by the May 2003 consultation.
•
the ability of Ofcom to resolve disputes between 3 and any 2G mobile
operator, including O2, no less speedily than it could if there was an
access-related condition already in place; and the ability of Ofcom to
impose an access-related condition in the future if needed to ensure
that national roaming is available to 3, and to determine the terms of
which it will be supplied.
•
Ofcom’s intention to provide written guidance on the way in which
Ofcom would expect resolve a dispute about national roaming if
required.
3.23
It is Ofcom’s view that in the presence of these four factors, 3 would continue
to enjoy a high degree of certainty as to the availability of national roaming
and the terms on which it will be supplied. In these circumstances it would be
a disproportionate use of Ofcom’s statutory powers to impose an accessrelated condition at this time. Ofcom is inviting comments on this proposition.
3.24
Information about how to respond to this consultation exercise is provided in
Section 5.
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Section 4
Responses to the May 2003
consultation exercise
Broad views of respondents
4.1
Responses were received from the four 2G mobile operators, from 3 and from
BT.
4.2
None of the 5 mobile operators which responded to the consultation
document supported the imposition of a condition in the form proposed. The
four 2G mobile operators argued, broadly, that the imposition of any national
roaming condition cannot be justified. 3 argued that the text of the condition
which Ofcom had proposed would jeopardise 3’s continued ability to secure
national roaming on reasonable terms.
4.3
BT wished merely to note that there may be other areas in the mobile sector
where a similar consumer detriment might occur where there is currently no
regulatory backstop.
The importance of national roaming for a 3G new entrant
4.4
3 stated that customers today take for granted national coverage and, as
such, 3 needs to be able to offer its customers national coverage from the
start if it is to compete with 2G mobile operators. It also argued that its
decision to bid for a 3G spectrum licence, and its business plan, were based
on the belief that it would have access to national roaming. T-Mobile and
Vodafone argued that as 3 has already rolled out a 3G network across a
geographic area covering a high percentage of the UK population, market
entry has, by definition, already occurred and national roaming is no longer
needed for that purpose. Orange and O2 also pointed to the successful
market entry of Orange and T-Mobile, without access to national roaming,
some years after Vodafone and O2 had already established a market
presence, and argued that this demonstrated that national roaming is not vital
to market entry. T-Mobile further argued that 3’s successful market entry is
more dependent on customer acceptance of 3G services than coverage
which, T-Mobile claimed, is not as important a factor with 3G data services as
it is with 2G services.
4.5
Ofcom recognises that 3’s market entry was based on an assumption that it
would be able to offer services nationwide to customers from the time of its
launch, and this is dependent on its having national roaming. Whilst 3 has
built a 3G network with significant coverage (claimed by 3 to cover an area
where more than 70% of the UK population lives), coverage is not yet
comparable with the coverage offered by 2G networks which cover an area
where nearly 100% of the UK population lives. The differences in landmass
coverage are even greater; 70% population coverage equates to a smaller
quantum of landmass coverage. The 2G networks each cover around 80% of
the UK landmass. The fact that Orange and T-Mobile were able to enter the
mobile market without the benefit of national roaming does not demonstrate
that national roaming is not important to market entry today; the market when
Orange and T-Mobile first started to operate was much less mature than it is
14
today, digital coverage was still in its infancy and overall customer penetration
levels much lower. While customers’ acceptance of 3G services will
undoubtedly have a significant impact on 3’s successful market entry, the
availability of national coverage for basic services is likely to be a key
requisite for most customers; research commissioned by Ofcom in recent
years has consistently shown that coverage is one of the most important nonprice factors taken into account by mobile network users when choosing a
supplier.
The need for a national roaming condition
4.6
All of the 2G mobile operators referred to the existence of the national
roaming agreement with O2 as evidence that a regulatory condition is not
required. O2 specifically argued that the existence of its roaming agreement
means that the objective of ensuring a high degree of certainty about access
to national roaming has already been met. Orange further argued that the fact
that the agreement with O2 was negotiated without recourse to the dispute
resolution procedures in the national roaming condition indicates that the
condition was never required as 3 must have judged that it would obtain a
better deal through commercial negotiation. O2, Vodafone and Orange also
pointed to the commercial national roaming agreements which have been
negotiated across Europe in the absence of any regulatory requirement, often
in markets less competitive than that in the UK. Vodafone and T-Mobile also
argued that the remaining areas where 3 is unable to offer its own 3G
coverage are likely to be rural and other non metropolitan areas where 2G
mobile operators tend to have spare capacity and will have a commercial
incentive to offer national roaming to make a return on those parts of their
network. It was T-Mobile’s view that the value of the continued national
roaming condition for 3 lies in the leverage which it gives in negotiations with
O2 and other operators.
4.7
3 argued that its ability to secure national roaming on reasonable terms would
be jeopardised in the absence of a condition which provides the same rights
and obligations as the national roaming condition which applied before 25
July 2003
4.8
As stated in Section 3 of this consultation document, Ofcom now believes that
to secure certainty the imposition of a regulatory condition under the present
circumstances would be a disproportionate use of Ofcom’s statutory powers.
Should circumstances change, and should it become apparent that 3 is
having difficulty in obtaining national roaming through market forces on
reasonable terms, then Ofcom would be minded to impose a regulatory
condition to ensure that 3 was able to obtain a national roaming agreement
with a 2G mobile operator on reasonable terms.
Guidelines on the approach which Ofcom would expect to take when asked to
determine a dispute about national roaming
4.9
Vodafone strongly supported the substance of the guidelines published with
the May 2003 consultation and argued that they should be relied on in place
of a regulatory condition and allowed to inform the context in which
commercial negotiations may take place. T-Mobile recommended that the
guidelines should be extended to address issues to do with incompatibility
which might render roaming impractical, and stated that no operator should
be required to offer roaming where it does not have capacity and/or is unable
15
to get planning permission for masts etc. Conversely, Orange argued that the
guidelines represent a “detailed and prescriptive regulatory intervention
promoting a particular commercial model”. 3 wished to see the text altered so
as to bind Ofcom to take into account the factors set out in the guidelines,
rather than present these as matters which Ofcom was likely to take into
account.
4.10
3 made specific points about the definition of retail minus, arguing that fixed
fees would be relevant only where a part of retail prices was itself a fixed fee
or where additional costs over and above the 2G mobile operator’s existing
network business are most appropriately recovered through a fixed fee. 3 also
wished to point out that as national roaming is more akin to call origination
than to an end to end call (and termination costs are passed through where
relevant), the distinction between calls to domestic compared to international
numbers may be inappropriate. 3 also recommended that the basis of
charges for services such as GPRS data services should be clarified with
regard to the cost of content and other value added components. Finally, 3
suggested that “costs saved” should be defined more specifically as the
totality of avoidable retailing costs rather than the marginal cost of retailing an
individual call.
4.11
T-Mobile was concerned that the guidelines should reflect the stance taken by
the European Commission in the conclusions of its investigation of the
infrastructure sharing and national roaming agreement between T-Mobile
Germany and O2 Germany, and in particular that the guidelines should
require that certain services are barred to roaming customers. T-Mobile also
argued that roaming should be barred in areas where 3 has already rolled out
its own network.
4.12
T-Mobile also made some specific proposals about the calculation of the
retail minus prices. T-Mobile stated that “costs saved” should not include
handset subsidies and maintenance and replacement, as 3 benefit from these
activities. T-Mobile also argued that the costs of wholesale billing and other
wholesale platforms should be taken into account. T-Mobile also warned that
further necessary development of in call handover from 2G to 3G would add
costs.
4.13
Ofcom believes that the guidelines provide all parties with a high degree of
certainty about the approach which Ofcom will take if presented with a dispute
about national roaming. The guidelines do not prescribe the form of any
commercial agreement which any parties may choose to enter into. They may
however, as Vodafone pointed out in its response, inform the context in which
commercial negotiations may take place.
4.14
Ofcom does not accept that the agreement between T-Mobile Germany and
O2 Germany to share 3G infrastructure and roaming facilities is comparable
with national roaming by a 3G new entrant onto an existing 2G mobile
network, and Ofcom does not believe that similar competition concerns arise.
The effect on competition of a national roaming agreement which enables 3 to
offer full national coverage for basic calls during the rollout of its 3G network,
is likely to be very different to the effect of an agreement by two or more
established 2G operators to offer each other 3G national roaming. A timelimited agreement with a new entrant 3G operator is expected to enable
market entry, where such market entry might not otherwise be possible, thus
increasing competition in the longer term.
16
4.15
The guidelines make explicit that in considering a dispute, Ofcom will assess
whether the request for national roaming is reasonable. Issues to do with lack
of capacity or compatibility, and legal impediments to erecting masts would be
relevant in judging the reasonableness of the disputed request.
4.16
As the guidelines explain, the precise definition of “costs saved” cannot be
decided in advance of a determination request, as much depends on the
precise nature of the services being provided. To the extent that 3 does not
benefit from handset subsidies (and equipment maintenance and
replacement) provided by its roaming partner, Ofcom would expect the retail
minus price for national roaming to exclude the relevant costs. Similarly, the
precise nature of additional costs incurred in providing national roaming are
difficult to quantify in advance of a dispute, as these too will depend on the
circumstances; the guidelines list a number of such costs which may be
included. Ofcom wishes to avoid making these guidelines unduly prescriptive.
4.17
This summary of responses is not intended to be comprehensive and is
limited to responses to questions which have a direct bearing on the proposal
contained in this second consultation document.
17
Section 5
How to respond to this consultation
exercise
5.1
Where possible, comments should be made in writing and sent by email to
[email protected]. However, copies may also be posted or
faxed to the address below. If any parties are unable to respond in one of
these ways, they should discuss alternatives with:
Michael Richardson
Ofcom
Riverside House
2a Southwark Bridge Road
London
SE1 9HA
Tel: 020 7783 4157, Fax: 020 7783 4109
Or by email to [email protected]
5.2
If possible please send responses in text form as email attachments, as this
makes it easier to process them. If you have any queries about the issues
raised in this consultation, or need guidance on the appropriate form of
response, please contact us using the details above.
5.3
Also note that Ofcom is keen to make responding to consultations easy, and
has published some consultation principles (see Annex D) which it seeks to
follow. If you have any comments or suggestions on how Ofcom conducts its
consultations, please call our consultation helpdesk on 020 7981 3003.
Alternatively you can contact Philip Rutnam, Partner, Competition and
Strategic Resources, who is Ofcom’s consultation champion, with any
concerns or comments about consultation processes:
Philip Rutnam
Ofcom
Riverside House
2A Southwark Bridge Road
London SE1 9HA
Tel: 020 7981 3585
Fax: 020 7981 3333
Email: [email protected]
Further copies of this document
5.4
This document can be viewed on Ofcom's website, www.ofcom.org.uk .
Paper copies can be made available on request.
Publication of representations
18
5.5
On this occasion, Ofcom will not be inviting interested parties to comment on
the representations made by others. However, in the interests of
transparency, all representations will be published, except where respondents
indicate that a response, or part of it, is confidential. Respondents are
therefore asked to separate out any confidential material into a confidential
annex which is clearly identified as containing confidential material. Ofcom
will take steps to protect the confidentiality of all such material from the
moment that it is received at Ofcom's offices. In the interests of transparency,
respondents should avoid applying confidential markings wherever possible.
5.6
Non-confidential representations can be viewed on Ofcom's website.
19
Annex A
National roaming guidelines
Introduction
A.1
The purpose of these Guidelines is to set out the approach that Ofcom is
likely to take in the case of any dispute referred to it under the
Communications Act 2003 (the “Act”) about the provision of national roaming
to a new entrant 3G operator, and to set out what it would consider
reasonable terms and conditions. As 3 is currently the only new entrant 3G
operator, these Guidelines refer throughout to 3, although in principle they
would apply to any new entrant 3G operator. Ofcom would normally expect to
follow the Guidelines and to give reasons if it departs from them, however
each case will be viewed on its merits. The Guidelines may be amended from
time to time as necessary in the light of experience of their operation and
changing circumstances, and after consultation with interested parties.
A.2
Access to national roaming on fair, reasonable and non discriminatory terms
alleviates the initial inability of new entrant 3G operators such as 3 to provide
mobile communications services across the UK. At the time of the UK’s 3G
spectrum auction, the government sought to ensure that new entrants should
have a high degree of certainty as to the availability of roaming and the
conditions upon which they would be able to conclude an agreement. This
was achieved through a national roaming condition which was included in the
licences granted under the Telecommunications Act 1984 to O2 (at that time
known as BTCellnet) and Vodafone.
A3.
The national roaming condition is no longer in force as licences granted under
the Telecommunications Act 1984 were abolished on 25 July 2003. Ofcom
considered imposing a new access-related condition under section 45 and 73
of the Communications Act 2003, but decided that on the facts this was not
proportionate at the time when the decision was taken. Part of the basis for
that decision was that Ofcom considered that the publication of these
Guidelines would ensure that all interested parties would have a high degree
of certainty about the availability of national roaming and the terms on which
Ofcom would require it to be supplied, if Ofcom was requested to resolve a
dispute. Necessarily, these guidelines are based on circumstances prevailing
at the time of their publication, and these may change.
Ofcom’s dispute resolution
A4.
Ofcom hopes that, in the event of a dispute, the parties can arrive at a
commercially negotiated solution. As set out below, Ofcom will not accept a
dispute for resolution unless the parties can show that steps have been taken
to agree on the issues that could reasonably be expected to be covered by a
commercial agreement. If negotiations have failed, however, and the dispute
is referred to Ofcom under the Act, then Ofcom must consider whether it is
appropriate for Ofcom to handle the dispute. Ofcom must decide that it is
appropriate for it to handle the dispute unless it considers that there are
alternative means for resolving the dispute, that resolution of the dispute by
those means would be consistent with its statutory duties and that a prompt
20
and satisfactory resolution of the dispute is likely if those means are used for
resolving the dispute. Ofcom considers it unlikely that alternative dispute
resolution would be appropriate for any national roaming dispute.
A.5
Ofcom expects that a referred dispute about the provision of national roaming
to 3 would be viewed as a matter which raises significant regulatory issues
and, notwithstanding that none of the parties to the dispute might have SMP
in the relevant market, Ofcom would accept the dispute and would be minded
to impose an access obligation and to resolve the dispute in line with that
access obligation. In Ofcom’s view this approach is consistent with the
approach set out in its Guidelines for the handling of competition complaints,
and complaints and disputes about breaches of conditions imposed under the
EU Directives.
A.6
Ofcom considers it is sufficient that 3 has one valid agreement in place, and
Ofcom does not intend that the statutory dispute resolution process should be
used to play the 2G operators off against each other. Ofcom recognises,
however, that 3 may need to terminate a roaming agreement if the agreement
becomes obsolete because of changes in technology, company ownership or
market structure for example. In such cases, it would be reasonable for 3 to
refer to Ofcom a dispute about the provision of national roaming by an
alternative provider.
A.7
Ofcom will not accept a dispute for resolution unless the parties can show that
steps have been taken to agree on the issues that could reasonably be
expected to be covered by a commercial agreement. This reflects the fact that
the dispute resolution procedure is intended to be a measure of last resort
only. However, Ofcom would accept a dispute where the evidence suggests
that one party has tactically refused to negotiate with the other at all or
reasonably. Ofcom would expect a commercial roaming agreement to
address among other things, such issues as traffic forecasting, provision of
capacity, branding, services and supplementary services, quality of service,
call routing, network management and technical issues, duration of
agreement and review procedures, charging structures and prices.
A.8
Except in exceptional circumstances Ofcom must resolve disputes no more
than four months after the day on which Ofcom decides it is appropriate for it
to handle the dispute. Ofcom recognises the urgency which may be attached
to disputes about the provision of national roaming and will endeavour to
reflect this in the speed with which such disputes are considered. Ofcom
considers that it could consult on a proposed condition to negotiate a national
roaming agreement at the same time as considering the dispute (without preempting the outcome of the consultation on the proposed condition), thus
cutting down on the time taken to deal with the matter.
In considering the matters set out above, Ofcom will view the following
features of a national roaming agreement as particularly important.
Charges for national roaming
A.9
Ofcom considers that the most appropriate charge for national roaming is on
a "retail minus" basis. If Ofcom resolves a dispute about roaming by setting a
charge, the objective of the price determination would be to allow 3 a chance
to compete effectively with the existing 2G mobile operators. It is not the
21
intention to place an unfair burden on the 2G mobile operators or give 3 an
unfair advantage.
A.10
A determination based on retail minus should ensure that the 2G mobile
operator has broadly the same profit on services provided to 3 as on services
provided to its own retail customers and that 3 should obtain roaming services
at a fair, non-discriminatory price.
A.11
It is preferable that all prices and charging structures result from commercial
negotiation. However, in order to provide certainty to 3 that (in the event of a
dispute) it will be able to obtain roaming at a price that enables it to compete
with operators that have both 3G spectrum and 2G networks, Ofcom’s likely
approach to a price determination for roaming is set out here:
•
At the time of the 3G auction, Ofcom suggested in its May 1999
consultation, Access to second generation mobile networks for new
entrant third generation operators, that the retail-minus charge for
roaming would be expressed as a single pence per minute rate based on
average retail prices because of the concern that high fixed fees could
make roaming uneconomic. Network operators argued that the roaming
charge should include fixed fees as a contribution to the costs of providing
coverage in areas where traffic is light as well as to cover the installation
of new capacity on the basis of uncertain forecasts of roaming traffic.
Ofcom is not specifying the structure which might emerge from a
commercial agreement, should one be reached. If operators can agree a
roaming tariff which includes fixed fees then Ofcom would not expect to
intervene. Ofcom would not necessarily rule out the inclusion in a roaming
agreement of some fixed charges; in the event that it is asked to make a
determination, it will examine carefully the justification for such charges
and their likely effect;
•
The charge for roaming would be calculated by subtracting from the retail
price the costs saved by serving other network operators rather than retail
customers and adding any extra costs incurred by providing network
operators with roaming services;
•
The retail price would be taken as the average effective revenue from
connections, rental and calls for those 2G services that are available to
roaming customers. This may be calculated separately for different
services, such as national and international calls and peak and off-peak
periods;
•
For some services, notably data services such as GPRS, minutes used
may not be the most appropriate charging basis. Such services may be
more appropriately charged according to usage or "by the bit". In the
event that the parties cannot agree on a charging basis, Ofcom is likely to
determine that roaming usage will be charged on the same basis as the
2G mobile operator’s relevant retail products taking into account charges
for content or other value added components not provided ;
•
The retail revenue will be calculated from the 2G mobile operator’s total
revenue and total minutes. Adjustments may be made to allow for
operator specific tariffs and pricing strategies (such as free calls) where
these are not available to new customers;
22
•
‘Costs saved’ shall be the costs incurred in undertaking those activities
which must be carried out in order to serve a retail customer but which are
not required in order to provide roaming to another network operator. The
precise definition of the costs to be excluded cannot be decided in
advance of a determination request. However, it is likely that they will
include in whole or in part:
−
The cost to the service provider of subsidising the price of handsets paid
by customers;
The cost to the network of acquisition bonuses paid to service providers;
The costs of equipment maintenance or replacement;
The costs of retail marketing and sales;
The costs of finance and retail billing, including bad debt;
Retail computing costs;
Customer service costs (back and front office);
For bearer services the costs of providing the content or other value
added component using the network.
−
−
−
−
−
−
−
These shall be costs not exceeding those which would be incurred by the 2G
mobile operators or its tied service providers in order to serve its retail
customers. Where network acquisition bonuses are used by the service
provider to subsidise handsets, such bonuses shall not be 'double counted' in
calculating retail minus.
•
Costs incurred in providing a roaming service to another network operator
will also be taken into account. These may include:
−
Additional wholesale billing costs which are incurred as a result of
providing roaming;
Computing costs (including system upgrades to allow roaming) of
servicing other network operators;
Any additional administrative or operational costs associated with the
provision of roaming services;
Any additional investment costs which can be shown to be incurred solely
to provide roaming services. In the case of a dispute, Ofcom will consider
carefully if the retail price can be considered to cover any additional
investment necessary to provide roaming services.
−
−
−
•
For simplicity, it is likely that the ‘net’ avoidable costs (ie costs saved less
those additional costs incurred) will be calculated as a percentage of the
average effective revenue. This percentage reduction in the retail price
will be applied to the initial retail price and any subsequent changes in
retail price. This will ensure that roaming charges will track changes in
retail prices. The value of the net avoidable costs will be revised annually.
Branding
A.12
Ofcom is of the opinion that branding issues are best resolved through
commercial negotiation. Before the 3G auction, potential new entrants
expressed concern that the incumbent 2G mobile operator might target
customers roaming on the 2G network. Such issues should, in the first
instance, be addressed in the commercial agreement between the parties.
23
However, complaints about anti-competitive behaviour can always be referred
to Ofcom under the provisions of the Competition Act 1998.
Start of roaming
A.13
Under the terms of the former national roaming condition, the obligation to
provide national roaming did not apply until such time as 3 had rolled out its
3G network to cover a geographical area where 20% of the UK population
lives. At the time when these Guidelines were published, 3 had rolled out its
network to an area well in excess of that minimum requirement and,
therefore, Ofcom considers that it is unnecessary to set out a view, in these
Guidelines, on the extent to which 3 should roll out its own 3G network before
a request for national roaming might be considered reasonable.
A.14
Ofcom would not consider it reasonable to expect the 2G mobile operators to
provide roaming services in areas where 3 has rolled out a network. If a 2G
mobile operator does not provide service in the areas where 3 has network
build, this will ensure that Relevant Provider’s network has to be capable of
supporting a commercial service. It is not Ofcom’s intention that 3 should use
the 2G Provider’s network as a safety net in the event that its own network
cannot support its customers.
End of roaming
A.15
National roaming is intended to provide a temporary mechanism that will
offset some of the disadvantages that a new entrant 3G operator will face
when competing with the established 2G operators. 3’s obligation, contained
in its Wireless Telegraphy Act licences, to roll out its 3G network to a
geographical area where 80% of the UK population lives by 31 December
2007, ensures that incentives for 3 to roll out its own 3G network are
maintained. Nevertheless, Ofcom considers that it would still be reasonable
for 3 to require access to national roaming for 2 years beyond its 31
December 2007 deadline for rolling out its own 3G network, as 80% coverage
would still place 3 at a significant disadvantage when competing with 2G
operators with coverage in excess of 90%. The parties to a national roaming
agreement can commercially agree an earlier or later end date, but if Ofcom
resolves a dispute, it is likely to set an end date of 31 December 2009.
A.16
As discussed above Ofcom does not consider that the 2G mobile operator
should be under any obligation to provide roaming services in areas where 3
has rolled out a network. If roaming coverage is reduced or even withdrawn in
areas where 3 has rolled out a network, this will ensure that the 2G network is
not used to provide a safety net if 3’s 3G network fails.
Roaming coverage and undue discrimination
A.17 A national roaming agreement would be expected, initially, to provide roaming
services that allow 3 to provide national coverage. The roaming agreement
should allow 3 to sell services to subscribers in areas other than those in
which it has network build. However, Ofcom expects that 3 will market
services primarily based on 3G to customers based inside its coverage area
because a roaming charge based on retail minus will give 3 little margin on
roamed traffic.
24
A.18
Ofcom would expect a commercial agreement to contain specific
arrangements designed to manage any capacity problems on the 2G network
caused by 3’s traffic. Ofcom considers that it would be reasonable that a
commercial agreement includes procedures for 3 to provide the 2G mobile
operator with timely information in order to facilitate network planning and
provision of capacity and provision for ensuring that forecasts are accurate
and sufficient.
A.19
As discussed previously, if the 2G mobile operator can show that any
additional investment costs are incurred solely to provide roaming services
these costs may be taken into account in the price to provide roaming
services.
Services provided
A.20
It is not Ofcom’s intention that innovative valued added services provided by
the 2G mobile operator to its own customers (such as, for example, internet
service provision or mobile banking and cash services) should be ‘resold’ by
3. It is the intention that 3 should be able, as far as is technically feasible, to
provide its own value added services to its own customers while they are
roaming on a 2G network.
A.21
The exact range of services to be provided by the 2G mobile operator under a
roaming agreement would be the subject of commercial negotiations.
However, Ofcom would expect that a roaming agreement should cover
Teleservices and Bearer Services supported over the 2G mobile operator’s
2G public electronic communications network as defined by ETSI in the GSM
series of standards.
A.22
The GSM standards support 2G network Bearer Services in either packet
switched or circuit switched modes. The capability of the network to support
different types of communication services will depend on the specific version
of 2G standards implemented within the network at any time.
A.23
Ofcom considers that it would be reasonable, if 3 wishes, for a national
roaming agreement to cover all Bearer Services (including GPRS) and
Teleservices, and all essential Standard GSM Supplementary Services.
Standard GSM Supplementary Services include Number Identification
(Calling Line Identification), Call Offering (Call Forwarding) and Call
Restriction (Call Barring). Any determination by Ofcom that resolves a dispute
over services will address the issue of GSM Supplementary Services,
including technical feasibility.
In-call hand-over
A.24
In-call hand-over between 2G and 3G networks owned by different operators
may be technically feasible. Inter-operator hand-over may be available in
early releases of 3G standards. If Ofcom resolved a dispute about interoperator in-call handover it would consider that the service should be offered
to 3 if the service is supported by the 3G standards. Ofcom notes that there
are concerns that this feature may not be available in the first release of Third
Generation equipment. If this feature should become available after any
roaming agreement is in place then, in Ofcom’s view, it would be reasonable
for the service to be offered and the roaming agreement modified to reflect
25
this (subject to technical constraints and the consideration of any extra costs
incurred by the 2G mobile operator).
Compatible standards
A.25
It is expected that national roaming will be implemented in a similar way to
international roaming so that the customers of 3 only require a single SIM
card in their handsets and will have the same mobile subscriber number for
the 3G and 2G networks. It will be necessary for the networks to use
compatible standards.
A.26
Any roaming agreement needs to take into account the technologies
employed by the 2G and 3G networks. If non-compatible standards are used
significant re-engineering may be required to provide the necessary interfaces
between the two networks to facilitate roaming. Ofcom would not expect the
2G mobile operator to provide roaming if incompatibility between 2G and 3G
standards render national roaming impractical.
26
Annex B
Draft notice to O2 (UK) Ltd under
Paragraph 9 of Schedule 18 to the
Communications Act 2003
Notice that Condition 69A set out in the continuation notice given
to O2(UK) Limited on 23 July 2003 will cease to have effect from
the date this notice is deemed to be effected in accordance with
section 7 of the Interpretation Act 1978 and section 394(7) of the
Communications Act 2003
1.
Ofcom, in accordance with Paragraph 9(9) of Schedule 18 to the
Communications Act 2003 (‘the Act’) hereby gives notice to O2 (UK) Limited
(‘O2’) that Condition 69A contained in Schedule 1 to the continuation notice
given to O2 on 23 July 2003, which took effect from 25 July 2003, ('the
Continuation Notice'), will cease to have effect from the date this notice is
deemed to be effected in accordance with section 7 of the Interpretation Act
1978 and section 394(7) of the Communications Act 2003 (the ‘Discontinued
Provision’).
2.
In giving this notice, Ofcom has, in accordance with Paragraph 9 (11) of
Schedule 18 to the Act, taken all steps necessary for enabling it to decide
whether or not to set a condition under Chapter 1 of Part 2 of the Act for the
purpose of replacing the Discontinued Provision and whether or not to
exercise its power to set a condition under that Chapter for that purpose.
3.
All directions, determinations, consents and other provisions which were
continued under the Continuation Notice by virtue of Paragraph 9(8) of
Schedule 18 to the Act will also cease to have effect from the date this notice
is deemed to be effected in accordance with section 7 of the Interpretation Act
1978 and section 394(7) of the Communications Act 2003 to the extent that
they were given or made for the purposes of the Discontinued Provision.
4.
To the extent that the Continuation Notice does not cease to have effect
under Paragraph 1 of this notice, the Continuation Notice shall continue to
have effect until Ofcom has given a further notice to O2 in accordance with
Paragraph 9(9) of Schedule 18 to the Act that it shall cease to have effect.
5.
The Director General of Telecommunications issued a consultation as to his
proposals to discontinue the Discontinued Provision on 2 October 2003 and
requested comments by 9.00 a.m. on 16 October 2003. Ofcom have taken
into account the comments received during that consultation.
6.
In this notice, except as otherwise provided or unless the context otherwise
requires, words or expressions shall have the meaning assigned to them. For
the purposes of interpreting this notice, headings and titles shall be
disregarded.
27
A person authorised under paragraph 18 of the Schedule to the Office of
Communications Act 2002
[ ] 2004
28
Annex C
Draft notice to Vodafone Limited
under Paragraph 9 of Schedule 18 to
the Communications Act 2003
Notice that continued provision condition 69A set out in the
continuation notices given to Vodafone Ltd on 23 July 2003 will
cease to have effect from the date this notice is deemed to be
effected in accordance with section 7 of the Interpretation Act 1978
and section 394(7) of the Communications Act 2003
1.
Ofcom, in accordance with Paragraph 9(9) of Schedule 18 to the
Communications Act 2003 (‘the Act’) hereby gives notice to Vodafone
Limited (‘Vodafone’) that Condition 69A contained in Schedule 1 to the
continuation notice given to Vodafone on 23 July 2003, which took effect
from 25 July 2003, ('the Continuation Notice'), will cease to have effect from
the date this notice is deemed to be effected in accordance with section 7 of
the Interpretation Act 1978 and section 394(7) of the Communications Act
2003 (the ‘Discontinued Provision’).
2.
In giving this notice, Ofcom has, in accordance with Paragraph 9 (11) of
Schedule 18 to the Act, taken all steps necessary for enabling them to decide
whether or not to set a condition under Chapter 1 of Part 2 of the Act for the
purpose of replacing the Discontinued Provision and whether or not to
exercise its power to set a condition under that Chapter for that purpose.
3.
All directions, determinations, consents and other provisions which were
continued under the Continuation Notice by virtue of Paragraph 9(8) of
Schedule 18 to the Act will also cease to have effect from the date this notice
is deemed to be effected in accordance with section 7 of the Interpretation Act
1978 and section 394(7) of the Communications Act 2003 (the ‘Discontinued
Provision’ to the extent that they were given or made for the purposes of the
Discontinued Provisions.
4.
To the extent that the Continuation Notice does not cease to have effect
under Paragraph 1 of this notice, the Continuation Notice shall continue to
have effect until Ofcom has given a further notice to Vodafone in accordance
with Paragraph 9(9) of Schedule 18 to the Act that it shall cease to have
effect.
5.
The Director General of Telecommunications issued a consultation as to his
proposals to discontinue the Discontinued Provision on 2 October 2003 and
requested comments by 9.00 a.m. on 16 October 2003. Ofcom have taken
into account the comments received during that consultation.
6.
In this notice, except as otherwise provided or unless the context otherwise
requires, words or expressions shall have the meaning assigned to them. For
the purposes of interpreting this notice, headings and titles shall be
disregarded.
29
A person authorised under paragraph 18 of the Schedule to the Office of
Communications Act 2002
[ ] 2004
30
Annex D
Ofcom’s consultation principles
How we will approach each formal consultation
There are seven principles which we will follow for each written consultation:
Before the consultation
1.
Where possible, we will hold informal talks with people and organisations
before announcing a big consultation to find out whether we are thinking in
the right direction. If we do not have enough time to do this, we will hold an
open meeting to explain our proposals shortly after announcing the
consultation.
During the consultation
2.
We will be clear about who we are consulting, why, on what questions and
for how long.
3.
We will make the consultation document as short and simple as possible with
a summary of no more than two pages. We will try to make it as easy as
possible to give us a written response. If the consultation is complicated, we
may provide a shortened version for smaller organisations or individuals who
would otherwise not be able to spare the time to share their views.
4.
We will normally allow ten weeks for responses.
5.
There will be a person within Ofcom who will be in charge of making sure we
follow our own guidelines and reach out to the largest number of people and
organisations interested in the outcome of our decisions. This individual (who
we call the consultation champion) will also be the main person to contact
with views on the way we run our consultations.
6.
If we are not able to follow one of these principles, we will explain why. This
may be because a particular issue is urgent. If we need to reduce the
amount of time we have set aside for a consultation, we will let those
concerned know beforehand that this is a ‘red flag consultation’ which needs
their urgent attention.
After the consultation
7.
We will look at each response carefully and with an open mind. We will give
reasons for our decisions and will give an account of how the views of those
concerned helped shape those decisions.
31
We think it is important for everyone interested in an issue to see the views of others
during a consultation. We would usually publish all the responses we have received
on our website.
We would prefer people and organisations to give us views which they would be
happy to see in public. But if those who have responded to a consultation tell us that
some or all of their views must stay confidential, we will respect this.
We will also:
•
list these seven principles in every consultation document that we publish;
•
run a consultation helpdesk – to help organisations such as small businesses
and consumer and community groups make their views heard in response to
our consultations; and
keep a table on our website at www.ofcom.org.uk listing all current consultations,
those recently closed and (as far as possible) those we are planning in the near
future. The table will include a brief summary of each document.
32
Annex E
Consultation response cover sheet
1
In the interests of transparency, we will publish all consultation responses in
full on our website, www.ofcom.org.uk, as soon as possible after the
consultation period has ended, unless a respondent specifies that all or part
of their response is confidential. We will also refer to the contents of a
response when explaining our decision, unless we are asked not to.
2
We have produced a cover sheet for responses (see below) and would be
very grateful if you could send one with your response. This will speed up our
processing of responses, and help to maintain confidentiality by allowing you
to state very clearly what you don’t want to be published. We will keep your
completed cover sheets confidential.
3
We strongly prefer to receive responses in the form of a Microsoft Word
attachment to an email. Our website therefore includes an electronic copy of
this cover sheet, which you can download from the ‘Consultations’ section of
our website.
4
Please put any confidential parts of your response in a separate annex to
your response, so that they are clearly identified. This can include information
such as your personal background and experience. If you want your name,
contact details, or job title to remain confidential, please provide them in your
cover sheet only so that we don’t have to edit your response.
33
Cover sheet for response to an Ofcom consultation
BASIC DETAILS
Consultation title:
To (Ofcom contact):
Name of respondent:
Representing (self or organisation/s):
Address (if not received by email):
CONFIDENTIALITY
What do you want Ofcom to keep confidential?
Nothing
Name/contact details/
job title
Whole response
Organisation
Part of the response
If there is no separate annex, which parts?
If you want part of your response, your name or your organisation to be confidential,
can Ofcom still publish a reference to the contents of your response (including, for
any confidential parts, a general summary that does not disclose the specific
information or enable you to be identified)?
Yes
No
DECLARATION
I confirm that the correspondence supplied with this cover sheet is a formal
consultation response. It can be published in full on Ofcom’s website, unless
otherwise specified on this cover sheet. If I have sent my response by email, Ofcom
can disregard any standard email text about not disclosing email contents and
attachments.
Name
Signed (if hard copy)
34