United Kingdom

By Alessandro Mauro
To submit comments and updates: alessandro.mauro@telecomitalia.it

The Undertakings
In September 2005 the British regulatory authority (Ofcom), at the outcome of the Strategic Review of Telecommunications, decided to intervene on the so called "bottleneck" represented by the access network of British Telecom (BT). This, in fact, represented a barrier to the OLOs free access to the market.

After several months of talks, an agreement was found between BT and Ofcom: BT bound itself to comply with a number of Undertakings assumed with the NRA, which established new rules for the supply of products and services to OLOs and their commercial departments, in order to guarantee equality of access at conditions that  did not discriminate against the competitors of the incumbent.

Furthermore, BT took the commitment to guarantee the so called Equivalence of Inputs (EOI) and a functional separation, that is to say a systems separation to allow a wholesale offer “on an EOI basis”, i.e. based upon which:

a) an offer made to its commercial network and to OLOs is the same in terms of price, commercial conditions, SLAs, time schedules, etc. and
b) systems, processes and commercial information communicated were the same.

In 2010 Ofcom approved an updated version of the Undertakings which contains new deadlines for the BT systems separation process.

Openreach
The creation of Openreach in 2006 is part of the new course started with the Undertakings. Openreach, which is in charge of the fixed access network (“the first mile”), even if it is part of the British Telecom Group, it is configured as a functionally separated entity, with its own head office and independent systems.

Openreach has it own commercial brand and its CEO reports directly to the CEO of British Telecom Group PLC. Both BT Retail and OLOs have a direct relationship with Openreach.

The Equality of Access Board
The Undertakings provided for the establishment of a special body (the Equality of Access Board), at that time the first one in the international regulatory framework, tasked with monitoring the compliance with the  undertakings adopted.
The Equality of Access Board (EAB), established in November 2005, is part of the British Telecom Group PLC
Board Committee and is chaired by a non-executive director of BT; the four other members are a senior manager of the incumbent operator and three independent members, chosen after a consultation with Ofcom. The EAB is supported by the EAB Secretariat, which looks after primarily organisation of board meetings, and is assisted by the Equality of Access Office (EAO), whose director reports hierarchically to the head of BT Public Affairs department, which monitors the correct implementation of the Undertakings by BT, and gives its opinion with regards to the complaints received.
In particular, the EAO conducts periodic verifications on a number of criteria established vs the correct implementation by BT of the Undertakings, as well as the respect of the Code of Practice, and reports monthly the results to the EAB.

The works in progress
Ofcom published in September 2009 a variation to the Undertakings that contains an extension of the deadline for BT with reference to the Openreach systems separation obligations and the supply of certain products "on an Equivalence of Inputs basis”. Following these changes, the EAB was tasked with a monitoring activity with respect to the effective compliance of the incumbent with its systems obligations.

During the period 2009/10,  BT reported to the EAB 13 cases of non-compliance with the Undertakings:

1. 11 of these were considered by the Board non-trivial cases (including 5 cases of non-compliance with the deadlines and 6 cases of failure to respect the principle of equal treatment);
2. 2 were classified as trivial.

With regard to the complaints received from BT, they are constantly decreasing (7 in 2009/10, 19 in 2008/09, 40 in 2007/08). This year the EAB received no OLOs’ complaints.

At the same time, there have been a strong increase in the number of reports sent informally by the OLOs to the Board: a signal that there are still issues that deserve a constant monitoring.