BT 2015 Annual Report Download - page 40

38 BT Group plc
Annual Report 2015
Our relationship with HM Government
e are the larest supplier of networed  services to the UK public
sector. e wor with ore than 100 oranisations across central
local and devolved overnent healthcare police and defence to
provide soe of the UKs ost vital services. or eaple we run 
the ational ealth ervices secure national networ. e provide
telecounications services to the inistr of efence. nd we have
recentl started worin with the elsh overnent to operate the
ales-wide public sector broadband networ and with evon and
ornwall olice to provide their  services.
e can be reuired b law to do certain thins and provide certain
services to overnent. or eaple under the ounications
ct we and others can be reuired to provide or restore services
durin disasters. he ivil ontinencies ct 00 also sas that
the overnent can ipose obliations on us and others at ties
of eerenc or in connection with civil continenc plannin.
heecretar of tate can also reuire us to tae certain actions in
theinterests of national securit and international relations.
Regulation
n our arets in the UK and around the world counications and
 services are reulated b overnental and non-overnental
bodies. his is to ae sure that s and broadcasters abide b coon
standards and rules and that nobod is disadvantaed b those
providers with stron positions in their arets. elow we eplain the
reulator fraewor and soe of the recent and upcoin decisions
taen b reulators and how the aect us.
uropean Union U reulation
n U countries electronic counications networs and services are
overned b directives and reulations set b the uropean oission
. hese create a urope-wide fraewor coverin services such as
fied and obile voice broadband cable and satellite .
he directives include rules coverin access and interconnection
universal service obliations and a reuireent for national reulators
to review arets for sinificant aret power  ever three ears.
opanies with  tpicall have a aret share of 0 or ore and
are able to do thins such as increase prices without losin business to
copetitors as would happen in a full copetitive aret.
he directives also cover how reulators set price controls which can
have a aor ipact on the copanies subect to the. he rules
reuire national reulators to consult with the  on an price control
decisions before the are finalised to ae sure the are consistent
withuropeanreulations.
he  announced its strate for the iital inle aret on  a
01 which included a plan to review the U elecounications
raewor. s part of this review the  ais to assess how to
encourae investent in infrastructure and how to ae current
telecos and edia rules fit for new challenes and new providers.
he  will also consider a uropean approach to spectru anaeent.
UK reulation
he telecos and broadcastin industries are reulated priaril b
fco the UKs independent reulator within the fraewor set b the
various uropean directives the ounications ct and other UK and
U reulations and recoendations. he telecos sector is subect to
an etensive e-ante reulator fraewor set out under the uropean
oon eulator raewor whereas broadcastin and pa- is
onl subect to a iture of separate specific reulation and eneral
copetition law.
The Communications Act and Ofcom
he ounications ct ives fco leal powers and sets out how
electronic counication and broadcastin services should be reulated
in the UK. t includes the conditions set b the uropean directives.
fcos ain duties are
 to further the interests of citiens in relation to counications
atters and
 to further the interests of consuers in relevant arets where
appropriate b prootin copetition.
Under the powers of the ounications ct fco sets conditions
that s ust copl with. oe conditions nown as eneral
onditions appl to all s. hese ainl deal with protectin
consuers eneral access and interconnection plannin for
eerencies providin inforation to fco and allocatin and
transferrin phone nubers. ther conditions appl to certain
copanies that are universal service providers or that fco has
decided have  in a particular aret.
e are the desinated universal service provider for the UK ecept
for the ull area where it is K roup and so we have certain
obliations. he ain one is to ae sure that basic fied-line services
are available at an aordable price to all consuers in the UK. e are
also oblied to provide public paphones.
e have  in a nuber of arets includin usiness onnectivit
e thernet bachaul ied ccess e U   and holesale
arrowband e all riination. fcos aret reviews are therefore
ver iportant for us. ollowin a aret review if fco decides
that a  has  it can put controls in place tpicall on the prices
which the  can chare. fco will enerall tr to set chares
that are reasonabl based on costs and an appropriate return on
thecapitalinvested.
none can appeal aainst fcos decisions throuh a nuber of
routes includin to the opetition ppeal ribunal  or to the
ih ourt.
n arch 01 fco announced a aor review of the
diital counications aret. he trateic eview of iital
ounications will eaine copetition investent innovation
and the availabilit of products in the fied-line broadband and obile
arets. t will focus on three areas in particular
 ensurin the riht incentives for private-sector investent which can
help deliver availabilit and ualit of service
 aintainin stron copetition and taclin obstacles or bottlenecs
that iht be holdin the sector bac and
 identifin whether there is scope for dereulation in soe areas.
he first phase of the review will eaine current and future aret
factors that a aect diital counications services and current
reulator approaches. o infor this wor fco intends to enae
with a wide rane of staeholders  includin industr consuer
roups the UK overnent and devolved adinistrations  throuh
eetins and worshops. his phase of the review is epected to
conclude with a discussion docuent in suer 01.
BT’s Undertakings
n response to fcos 00 trateic eview of elecounications
we ave soe leall-bindin undertains under the nterprise ct
00. hese Undertains which included the creation of penreach
bean in epteber 00. he ai to ive clarit and certaint to the
UK telecos industr about the wa we provide upstrea reulated
products. his in turn supports eective and fair copetition in related
downstrea arets.
verseas reulation
he deree of reulation in international arets varies widel. his can
hinder our abilit to copete. e are pressin incubent operators
around the world and their national reulator authorities for fairer
cost-related wholesale access to their networs.
e are in discussions with both the  and U reulator authorities
over what we believe to be preature dereulation of parts of the U
telecos aret. his has ade it ore dicult for non-U s to enter
and copete in the U while uropean telecos arets reain open
to copetition fro U operators.