Virgin Media 2008 Annual Report Download - page 23

Virgin Media TV’s advertising sales department, IDS, competes with the sales departments of
BSkyB, ITV, Channel 4 and Five. Consolidation in the advertising sales market could have an adverse
effect on IDS’s ability to sell advertising at attractive rates.
sit-up sells a wide range of products, including electronics, jewelry, clothing and home furnishings
through its auction-based retail shopping channels. Consequently, it competes with a large variety of
retailers in the U.K. market. In common with other retailers, the business experiences a seasonal peak
in the fourth quarter of the year and is significantly affected by general consumer confidence, exchange
rate fluctuations and purchasing trends. sit-up also competes with other shopping and auction-based
channels. As the majority of its sales are initiated from television broadcasts, sit-up also competes with
other television channels for audiences.
Government Regulation
Regulation in the European Union
The European Parliament and Commission regulate our principal business activities through
directives and various other regulatory instruments which are transposed into the U.K. through national
legislation.
In particular, in February 2002, the European Commission adopted a package of new directives
which, together, set out a new framework for the regulation of electronic communications networks and
services throughout the European Union, or EU. This new framework consisted of four directives,
namely:
• Directive 2002/21 on a common regulatory framework for electronic communications networks
and services (the Framework Directive);
• Directive 2002/20 on the authorization of electronic communications networks and services (the
Authorization Directive);
• Directive 2002/19 on access to and interconnection of electronic communications networks and
associated facilities (the Access and Interconnection Directive); and
• Directive 2002/22 on universal service and users rights relating to electronic communications
networks and services (the Universal Service Directive).
This package of directives was supplemented, subsequently, by the Communications and Privacy
Directive which dealt with, among other things, data protection issues in relation to the provision of
electronic communications services.
The U.K. Government incorporated these directives into its national laws under the
Communications Act 2003, which came into effect on July 25, 2003, and the Communications Privacy
Regulations, which came into effect on December 11, 2003.
During 2006, the European Commission commenced a review of these directives (the Regulatory
Framework Review). This review led to the publication of a number of draft amending directives in
November 2007. The amendments to the directives are currently being discussed between the European
Parliament, the European Commission and the European Council as the parties seek to reach a
compromise position. The final form of the directives and the timing for their adoption is therefore
currently unclear.
In June 2007, the EU Roaming Regulation (the Roaming Regulation) imposed new retail and
wholesale price controls on international mobile voice roaming within the EU and required greater
levels of transparency of retail pricing information.
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