Virgin Media 2007 Annual Report Download - page 27

Union’’) and is transposed into U.K. regulation by the Universal Service Order. This Order has been
implemented by Ofcom which has imposed a number of specific universal service requirements on BT
and Kingston Communications, both of which have been designated by Ofcom as universal service
providers.
The European Commission has been considering the future scope of universal service obligations
as part of the Regulatory Framework Review (see above under ‘‘Regulation in the European Union’’).
Some of the main changes proposed are intended to improve the provision of information for
customers and end-users and to facilitate the use of e-communications services by disabled users. We
would be affected by any future decision to require us to provide or to contribute to the funding of
universal service in the U.K.
Electronic Communications Code
Under the Telecommunications Act 1984, which was largely replaced by the Communications Act
2003, licensed public telecommunications operators were eligible for enhanced legal powers under the
electronic communications code annexed to the Telecommunications Act 1984, or Code Powers. Code
Powers give enhanced legal rights of access to private land, exemption from some requirements of
general planning law and the right to install equipment in the public highway.
Any operator which possessed Code Powers under the previous licensing regime automatically
retained those powers under the Communications Act regime. Our subsidiaries that provide electronic
communications networks and services have Code Powers.
Each operator is required to certify to Ofcom each year that it has sufficient and acceptable
financial security in place to cover the costs which could be incurred by local councils or road
authorities if they were required to remove equipment or restore the public roads following the
insolvency of that operator. This security is commonly described as ‘‘funds for liabilities.’’ Ofcom has
indicated that it will generally require an operator to provide board level certification of third party
security for this purpose.
Next Generation Access
In September 2007, Ofcom launched a consultation process in respect of Next Generation
Access (NGA), the focus of which was to consider whether changes to current regulation were
necessary in order to stimulate increased and further investment in high-speed broadband access
networks. We will continue to engage with Ofcom in this debate throughout 2008.
Wholesale Broadband Access
Ofcom concluded the second phase of the Wholesale Broadband Market Review in February 2008.
A statement and action plan is expected in summer 2008. This will remove certain regulatory
obligations on BT to provide wholesale services currently used by operators to provide broadband
access in the most competitive areas of the U.K. Until the timing for these changes is proposed it is
not possible to accurately predict the impact for our business, The impact of any changes is unlikely to
be seen until late 2009.
Business Connectivity
A market review of Business Connectivity services was launched in January, 2008. It is likely this
will determine that competition exists in certain areas and, as such, a reduction in regulation over time
is likely to be proposed. The impact of these changes is unlikely to be seen until late 2009.
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