Virgin Media 2013 Annual Report Download - page 16

I - 14
Regulation of Telecommunications Services
In order to operate in the telecommunications sector, a provider must comply with general conditions imposed by Ofcom.
These general conditions cover a broad range of issues including interconnection standards, number portability, deployment of
telephone numbers, access to emergency services and sales and marketing standards. Any breach of these general 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. Ofcom also undertakes triennial reviews of the various economic markets within the
telecommunications sector to establish whether any provider has significant market power warranting the imposition of remedies.
Broadband Services
Ofcom is in the final stages of its triennial review of the Fixed Access markets (including Wholesale Local Access incorporating
physical or passive network access via methods such as LLU and duct access) and Wholesale Broadband Access market (virtual
or active network access via methods such as provision of wholesale managed service products). Proposals made by Ofcom in
this review indicate that there is no substantive change in its approach to regulation. Therefore, we do not anticipate significant
consequences for our operations.
We anticipate that, in line with Ofcom’s current proposals, BT will again be found to have significant market power in the
Wholesale Local Access market and at least one sub-national area of the Wholesale Broadband Access market and will be required
to provide certain products and services on regulated terms, including providing access to its ducts and poles infrastructure.
Mobile Telephony Services
As a MVNO, we are subject to EU regulations relating to retail prices for roaming services. These regulations set limits on
certain wholesale and retail tariffs for international mobile voice roaming, SMS tariffs and data roaming within the EU, provide
for greater levels of transparency of retail pricing information, impose measures to guard against bill shock in respect of data
roaming and set maximum roaming rates within the EU. A new measure effective July 1, 2014 will allow consumers to select an
alternative provider for their EU roaming services. The measure is intended to increase competition for the provision of roaming
services.
Mobile termination charges applied by MNOs are regulated by Ofcom under a significant market power charge control
condition. Under our MNO agreement with EE these changes in mobile termination charges are passed on to us and we have
experienced a reduction in revenue from such charges. Ofcom is in the process of reviewing mobile termination charges for the
period of 2015-2018, and its current proposals suggest that rates will stabilize around current levels.
Government Communications White Paper
The U.K. government published a White Paper reviewing U.K. Communications legislation. It plans to consult on a number
of areas in the future, including the prominence of various services in platforms’ electronic program guides and retransmission.
Non-Industry Specific Regulation
Our business activities are subject to certain environmental and health and safety laws and regulations. Failure to comply with
these laws and regulations may result in us incurring fines or other penalties and we may incur expenditure to account for these
fines or penalties, maintain compliance and/or undertake any necessary remediation. In addition, any breach of the aforementioned
laws and/or regulations by our affiliates, vendors and contractors could result in liability for us.
Legal Proceedings
From time to time, we have become involved in litigation relating to claims arising out of our operations in the normal course
of business. For additional information, see note 15 to our consolidated financial statements in Part II of this annual report.
Patents, Trademarks, Copyrights and Licenses
We do not have any material patents or copyrights nor do we believe that patents play a material role in our business. We own
or have the right to use registered trademarks, which in some cases are, and in others may be, of material importance to our business.
This includes the exclusive right to use the “Virgin” name and logo under licenses from Virgin Enterprises Limited in connection
with our corporate activities and the activities of our consumer and business operations. These licenses, which expire in April
2036, are exclusive to us within the U.K. and Ireland, and are subject to renewal on terms to be agreed. They entitle us to use the