Virgin Media 2007 Annual Report Download - page 25

regulatory authority, the Office of Communications (Ofcom), as the single regulatory authority for the
entire communications sector.
Under the Communications Act 2003, communications providers, such as ourselves, are no longer
required to hold individual licenses in order to provide electronic communications networks and
services, although certain licenses are required (see below under ‘‘Cable TV Regulation’’ and ‘‘Mobile
Telecoms Regulation’’) in order to own or operate mobile networks, TV channels or to provide certain
facilities such as electronic program guides on the cable TV platform. Even so, all communications
providers are subject to a set of basic conditions imposed by Ofcom, which are known as the General
Conditions of Entitlement. Any breach of these conditions could lead to the imposition of fines by
Ofcom and, ultimately, to the suspension or revocation of a company’s right to provide electronic
communications networks and services.
The General Conditions of Entitlement and SMP Conditions
Full details of the General Conditions of Entitlement are available on Ofcom’s website
(www.ofcom.org.uk). Some of the requirements under the General Conditions of Entitlement include:
• a requirement to negotiate interconnection arrangements with other network providers
• a requirement to ensure that any end-user can access the emergency services and that accurate
customer location data is made available to the emergency services
• a requirement to offer outbound number portability to customers wishing to switch to another
network provider and to support inbound number portability where we acquire a customer from
another network provider
• a requirement to comply with a number of high-level obligations designed to address consumer
harm associated with broadband migrations
• a requirement to ensure that any end-user can access a directory enquiry service
• a requirement to publish up-to-date price and tariff information
• a requirement to provide itemized billing on request from each customer
In addition to the General Conditions of Entitlement, Ofcom imposes further conditions on
providers of electronic communications networks or services who have significant market power (SMP)
in identified markets. In regulatory terms, SMP equates to the competition law concept of dominance.
The EU regulatory framework adopted in 2002, required Ofcom to carry out a number of initial
market reviews to establish which providers held SMP in these markets, and should therefore be
subject to further conditions, and to keep these markets and any other relevant markets identified by
Ofcom under regular review. This resulted in British Telecommunications plc (BT) being found to have
SMP in a substantial number of markets and as a result, being made subject to further regulatory
requirements in both wholesale and retail markets. Under the Regulatory Framework Review (see
above under ‘‘Regulation in the European Union’’) the number of markets that Ofcom is obliged to
keep under review and where it is required to make SMP assessments has been reduced significantly
with effect from November 2007. It is possible that this will lead, over time, to the lifting of a number
of regulations previously imposed on BT, particularly in retail markets, with the result that BT will be
able to compete more aggressively in these markets. However, prior to any such regulation being
reduced in any market, Ofcom is obliged to undertake a further market review. Only if the market is
deemed to be competitive will a reduction in regulation be considered. Moreover, any reduction of
specific SMP-related regulation would not remove the requirement for BT to comply with remaining
SMP-related regulation, the General Conditions of Entitlement and U.K. and EU competition law.
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