Virgin Media 2008 Annual Report Download - page 24

At the retail level, operators such as Virgin Mobile were required to offer a per minute
‘‘Eurotariff’’ and consequently, in August 2007, Virgin Mobile reduced its standard retail prices for
voice roaming calls within the EU in line with the Eurotariff requirements. Virgin Mobile will further
reduce its standard retail prices in July 2009, in line with the further reductions in the Eurotariff
mandated in the roaming regulations. At the wholesale level, charges paid by carriers such as Virgin
Mobile were capped until 2010. The Commission is currently consulting on extending the regulation for
a further three years with new maximum limits on retail Eurotariffs and extending the regulation to
require a Eurotariff for SMS messages and greater transparency for customers as well as wholesale
caps for data roaming. The Commission proposes the introduction of the Eurotariff for SMS messages
to be introduced by July 1, 2009.
Regulation in the U.K.
We are subject to regulation under the Communications Act 2003, the Broadcasting Acts 1990 and
1996 and other U.K. statutes and subordinate legislation. The Communications Act 2003 established a
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’’) in order to
own or operate TV channels or to provide certain facilities such as electronic program guides on the
cable TV platform or to hold radio frequency spectrum. 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 Significant Market Power 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; and
• a requirement to provide itemized billing on request from any customer.
In addition to the General Conditions of Entitlement, Ofcom imposes further conditions on
providers of electronic communications networks or services that have significant market power, or
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
22