National roaming - Stakeholders
Transcription
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. 3 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. 7 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. 13 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