TELECOMMUNICATIONS Citation and commencement 1 These Regulations may be cited as the Telecommunications (Leased Lines) Regulations 1993 and shall come into force on 20th October 1993. Interpretation 2 1 In these Regulations— “the 1972 Act ” means the European Communities Act 1972; “the 1984 Act ” means the Telecommunications Act 1984 ; “the approvals register” means the register of approvals given and designations made under section 22 of the 1984 Act which the Director keeps pursuant to section 23 of that Act; “ BT ” means British Telecommunications plc; “the BT licence” means the licence granted by the Secretary of State under section 7 of the 1984 Act to British Telecommunications on 22nd June 1984 to run the telecommunication systems referred to in Annex A thereof, in relation to which BT became the licensee as the nominated successor company on the transfer date ; “ the Commission ” means the Commission of the European Communities; “common ordering procedure” means an ordering procedure for the procurement of intra-Community private circuits which ensures that there is commonality across the telecommunications organizations in the information that has to be supplied by the user and the telecommunications organizations, and in the format in which the information is presented; “ the Community ” means the European Economic Community; “ the Directive ” means Council Directive 92/44/ EEC on the application of open network provision to leased lines ; “ Hull ” means Kingston upon Hull City Council and Kingston Communications (Hull) PLC ; “the Hull licence” means the licence granted by the Secretary of State under section 7 of the 1984 Act to Hull on 30th November 1987 to run the telecommunication systems referred to in Annex A thereof; “ Mercury ” means Mercury Communications Limited; “the Mercury licence” means the licence granted by the Secretary of State under section 7 of the 1984 Act to Mercury on 5th November 1984 to run the telecommunication systems referred to in Annex A thereof; “one-stop-ordering” is a system whereby all transactions involving a user, required for the procurement of private circuits with network termination points in more than one member State, supplied by more than one telecommunications organization to a single user, can be completed at one location between the user and a single telecommunications organization; “one-stop-billing” is a system whereby the billing and payment transaction for private circuits with network termination points in more than one member State supplied by more than one telecommunications organization to a single user can be completed at one location between the user and a single telecommunications organization; “private circuit” means a telecommunications facility provided in the context of the establishment, development and operation of the public telecommunications network, which provides for transparent transmission capacity between network termination points where both or all such points are situated within the Community and which does not include on-demand switching (that is to say, switching functions which the user can control as part of the private circuit provision); and “users” means end users and service providers, including telecommunications organizations where the latter are engaged in providing services which are or may be provided also by others. 2 References in these Regulations to the BT licence, the Hull licence and the Mercury licence are references to such licences as modified from time to time pursuant to sections 12 and 15 of the 1984 Act and regulations made under section 2(2) of the 1972 Act. 3 Any word or expression used in these Regulations shall, unless the context otherwise requires, have the same meaning as it has in the 1984 Act. Effect 3 1 These Regulations shall have effect for the purposes of the implementation of the Directive, and accordingly— a Schedule 1 shall have effect for the purposes of providing for the presentation of the information required to be published pursuant to Article 3 of the Directive; and b Schedule 2 shall have effect for the purposes of providing for the definition of a minimum set of private circuits with harmonized technical characteristics which the United Kingdom is required by Article 7 of the Directive to ensure is provided by telecommunications organizations separately or jointly. 2 For the purposes of the 1984 Act, the modifications to the conditions of the BT licence, the Hull licence and the Mercury licence made by regulations 4, 5 and 6 below respectively shall have effect as if they were made under section 12 of that Act by the Director. Modification of the BT licence 4 The conditions of the BT licence are hereby modified as follows— a in paragraph 1 of Part 1 of Schedule 1 (definitions, interpretations and transitional provisions relating to the conditions in Schedule 1)— i in sub-paragraph (w) (definition of Private Circuit) there shall be added at the end the following tailpiece— and a “Relevant Private Circuit” means a Private Circuit, not being a Private Circuit provided by the Licensee for another public telecommunications operator, where— i at least one Network Termination Point of which is located within the United Kingdom and all the network termination points of that circuit, and of any half circuit to which it is connected, are located within the European Economic Community; and ii the agreement between the Licensee and the user to provide the Private Circuit does not provide for messages to be conveyed thereby to be routed via a satellite link (notwithstanding that they may be so conveyed); ; and ii after sub-paragraph (ee) (definition of the United Kingdom) there shall be inserted the following sub-paragraph— eeA “users” means end users and service providers, including telecommunications organizations where the latter are engaged in providing services which are or may be provided also by others; ; b in condition 16— i in the headpiece of paragraph 16.1 at the beginning there shall be inserted “In relation to services other than the provision of Relevant Private Circuits,”; ii in the headpiece of paragraph 16.3 after “notice” there shall be inserted “referred to in paragraph 16.1(a)”; and iii after paragraph 16.3A there shall be inserted the following— 16.3B The Licensee shall publish by notice in accordance with the presentation given in paragraphs A to C of Schedule 1 to the Telecommunications (Leased Lines) Regulations 1993 information on offerings on technical characteristics, tariffs and supply and usage conditions in respect of Relevant Private Circuits.The information shall be published in the manner provided for in paragraph 16.3 above. Where the information concerns new types of Relevant Private Circuit offerings, it shall be published as soon as possible, and no later than two months before the implementation of the offering.Changes in existing offerings shall be published as soon as possible and, unless the Director agrees otherwise, no later than two months before the implementation.The supply conditions published pursuant to this paragraph shall include at least the elements defined in paragraph C of Schedule 1 to the Telecommunications (Leased Lines) Regulations 1993. ; c after condition 46 there shall be inserted the following condition— Condition 46A Relevant Private Circuits 46A.1 The Licensee shall provide a minimum set of Relevant Private Circuits in accordance with Schedule 2 to the Telecommunications (Leased Lines) Regulations 1993.The Licensee must ensure, if it provides other Relevant Private Circuits beyond the minimum set, that such provision does not impede the provision of the minimum set. 46A.2 The Licensee shall not terminate an existing offering of a Relevant Private Circuit unless— a the offering has continued for a reasonable period of time; and b the Licensee has consulted with the users affected. Without prejudice to any other remedy or right of appeal which the user may have in law or pursuant to contract or these conditions, where the user does not agree with the termination date as envisaged by the Licensee, he may bring the case before the Director. 46A.3 The Licensee shall not take for reasons of the alleged failure of the user of a Relevant Private Circuit to comply with the usage conditions any measure (including, without prejudice to the generality of the foregoing, the refusal to provide a Relevant Private Circuit, the interruption of the provision of Relevant Private Circuits or the reduction of the availability of Relevant Private Circuit features) unless— a the measure is a specified measure authorized by the Director in the case of a defined infringement of usage conditions; or b the Licensee has been notified pursuant to regulation 7(3) of the Telecommunications (Leased Lines) Regulations 1993 that the Director consents to the taking of the measure. 46A.4 The Licensee shall ensure that tariffs for Relevant Private Circuits follow the basic principles of cost orientation and transparency in accordance with the following rules— a tariffs for Relevant Private Circuits shall be independent of the type of application which the users of the Relevant Private Circuit simplement; b tariffs for Relevant Private Circuits shall normally contain the following elements— i an initial connection charge; and ii a periodic rental charge, that is to say, a flat-rate element, and when other tariff elements are applied, these must be transparent and based on objective criteria; c tariffs for Relevant Private Circuits apply to the facilities provided between Network Termination Points at which the user has access to the Relevant Private Circuits. For Relevant Private Circuits provided by more than one telecommunications organization, half-circuit tariffs, that is to say, from one Network Termination Point to a hypothetical mid-circuit point, can be applied. 46A.5 The Licensee shall formulate and put in practice, by 31st December 1993 at the latest, a cost accounting system suitable for the implementation of paragraph 46A.4.Without prejudice to the generality of the foregoing, that system shall include the following elements— a the cost of Relevant Private Circuits shall in particular include the direct costs incurred by the Licensee for setting up, operating and maintaining them, and for marketing and billing them; and b common costs, that is to say, costs which can neither be directly assigned to Relevant Private Circuits nor to other activities, are allocated as follows— i whenever possible, common cost categories shall be allocated based upon direct analysis of the origin of the costs themselves; ii when direct analysis is not possible, common cost categories shall be allocated based upon an indirect linkage to another cost category or group of cost categories for which a direct assignment or allocation is possible, and such indirect linkage shall be based on comparable cost structures; iii when neither direct nor indirect measures of cost allocation can be found, the cost category shall be allocated based upona general allocator computed by using the ratio of all expenses directly or indirectly assigned or allocated, on the one hand, to Relevant Private Circuits and, on the other hand, to other services. After 31st December 1993, other cost accounting systems may be applied only if they are suitable for the implementation of paragraph 46A.4 and have as such been approved by the Director for application by the Licensee. ; and d in condition 53— i at the beginning of paragraph 53.3 there shall be inserted “Subject to paragraph 53.3A,”; ii after paragraph 53.3 there shall be inserted the following— 53.3A In relation to Relevant Private Circuits, the Licensee shall not beheld to have failed to comply with these Conditions if the Licensee takes the following measures in order to safeguard the security of network operations during the period when an emergency situation prevails— a the interruption of the service; b the limitation of service features; or c the denial of access to the service, provided that the following conditions are satisfied— i the Licensee makes every reasonable endeavour to ensure that service is maintained to all users; and ii the Licensee takes as soon as reasonably possible all reasonable steps to notify the users and the Director of the beginning and the end of the emergency as well as the nature and extent of temporary service restrictions; and in this paragraph, an emergency situation means an exceptional case of force majeure, which, without prejudice to the generality thereof, includes extreme weather, flood, lightning or fire, industrial action or lockouts, war, military operations, or civil disorder. ; iii after paragraph 53.5A there shall be inserted the following— 53.5B Nothing in these conditions shall prevent the Licensee, where it considers it unreasonable to provide a Relevant Private Circuit in response to a particular request under its tariffs and supply conditions published pursuant to paragraph 16.3B, from varying those conditions in that case with the consent of the Director. ; and iv in the headpiece of paragraph 53.12 between “40” “and 47” there shall be inserted “46A.3 to 46A.5”. Modification of the Hull licence 5 The conditions of the Hull licence are hereby modified as follows— a in paragraph 1 of Part 1 of Schedule 1 (definitions, interpretations and transitional provisions relating to the conditions in Schedule 1)— i in sub-paragraph (x) (definition of Private Circuit) there shall be added at the end the following tailpiece— and a “Relevant Private Circuit” means a Private Circuit, not being a Private Circuit provided by the Licensee for another public telecommunications operator, where— i at least one Network Termination Point of which is located within the United Kingdom and all the network termination points of that circuit, and of any half circuit to which it is connected, are located within the European Economic Community; and ii the agreement between the Licensee and the user to provide the Private Circuit does not provide for messages to be conveyed thereby to be routed via a satellite link (notwithstanding that they may be so conveyed); ; and ii for all after sub-paragraph (ff) (definition of Systems Business) there shall be substituted the following— gg “Telephone” means an item of telecommunication apparatus capable when connected to the Licensees' public switched telephone network of transmitting and receiving uninterrupted simultaneous two way speech conveyed, or as the case may be to be conveyed, by means of that network; and hh “users” means end users and service providers, including telecommunications organizations where the latter are engaged in providing services which are or may be provided also by others. ; b in condition 15— i in the headpiece of paragraph 15.1 at the beginning there shall be inserted “In relation to services other than the provision of Relevant Private Circuits,”; ii in the headpiece of paragraph 15.4 after “notice” there shall be inserted “referred to in paragraph 15.1(a)”; and iii after paragraph 15.4 there shall be inserted the following— 15.4A The Licensee shall publish by notice in accordance with the presentation given in paragraphs A to C of Schedule 1 to the Telecommunications (Leased Lines) Regulations 1993 information on offerings on technical characteristics, tariffs and supply and usage conditions in respect of Relevant Private Circuits.The information shall be published in the manner provided for in paragraph 15.3. Where the information concerns new types of Relevant Private Circuit offerings, it shall be published as soon as possible, and no later than two months before the implementation of the offering.Changes in existing offerings shall be published as soon as possible and, unless the Director agrees otherwise, no later than two months before the implementation.The supply conditions published pursuant to this paragraph shall include at least the elements defined in paragraph C of Schedule 1 to the Telecommunications (Leased Lines) Regulations 1993. ; c after condition 48 there shall be inserted the following condition— Condition 48A Relevant Private Circuits 48A.1 The Licensee shall provide a minimum set of Relevant Private Circuits in accordance with Schedule 2 to the Telecommunications (Leased Lines) Regulations 1993.The Licensee must ensure, if it provides other Relevant Private Circuits beyond the minimum set, that such provision does not impede the provision of the minimum set. 48A.2 The Licensee shall not terminate an existing offering of a Relevant Private Circuit unless— a the offering has continued for a reasonable period of time; and b the Licensee has consulted with the users affected. Without prejudice to any other remedy or right of appeal which the user may have in law or pursuant to contract or these conditions, where the user does not agree with the termination date as envisaged by the Licensee, he may bring the case before the Director. 48A.3 The Licensee shall not take for reasons of the alleged failure of the user of a Relevant Private Circuit to comply with the usage conditions any measure (including, without prejudice to the generality of the foregoing, the refusal to provide a Relevant Private Circuit, the interruption of the provision of Relevant Private Circuits or the reduction of the availability of Relevant Private Circuit features) unless— a the measure is a specified measure authorized by the Director in the case of a defined infringement of usage conditions; or b the Licensee has been notified pursuant to regulation 7(3) of the Telecommunications (Leased Lines) Regulations 1993 that the Director consents to the taking of the measure. 48A.4 The Licensee shall ensure that tariffs for Relevant Private Circuits follow the basic principles of cost orientation and transparency in accordance with the following rules— a tariffs for Relevant Private Circuits shall be independent of the type of application which the users of the Relevant Private Circuits implement; b tariffs for Relevant Private Circuits shall normally contain the following elements— i an initial connection charge; and ii a periodic rental charge, that is to say, a flat-rate element, and when other tariff elements are applied, these must be transparent and based on objective criteria; c tariffs for Relevant Private Circuits apply to the facilities provided between network termination points at which the user has access to the Relevant Private Circuits. For Relevant Private Circuits provided by more than one telecommunications organization, half-circuit tariffs, that is to say, from one network termination point to a hypothetical mid-circuit point, can be applied. 48A.5 The Licensee shall formulate and put in practice, by 31st December 1993 at the latest, a cost accounting system suitable for the implementation of paragraph 48A.4 Without prejudice to the generality of the foregoing, that system shall include the following elements— a the costs of Relevant Private Circuits shall in particular include the direct costs incurred by the Licensee for setting up, operating and maintaining them, and for marketing and billing them; and b common costs, that is to say, costs which can neither be directly assigned to Relevant Private Circuits nor to other activities, are allocated as follows— i whenever possible, common cost categories shall be allocated based upon direct analysis of the origin of the costs themselves; ii when direct analysis is not possible, common cost categories shall be allocated based upon an indirect linkage to another cost category or group of cost categories for which a direct assignment or allocation is possible, and such indirect linkage shall be based on comparable cost structures; iii when neither direct nor indirect measures of cost allocation can be found, the cost category shall be allocated based upon a general allocator computed by using the ratio of all expenses directly or indirectly assigned or allocated, on the one hand, to Relevant Private Circuits and, on the other hand, to other services. After 31st December 1993, other cost accounting systems may be applied only if they are suitable for the implementation of paragraph 48A.4 and have as such been approved by the Director for application by the Licensee. ; and d in condition 54— i at the beginning of paragraph 54.3, there shall be inserted “Subject to paragraph 54.3A,”; ii after paragraph 54.3, there shall be inserted the following— 54.3A In relation to Relevant Private Circuits, the Licensee shall not be held to have failed to comply with these Conditions if the Licensee takes the following measures in order to safeguard the security of network operations during the period when an emergency situation prevails— a the interruption of the service; b the limitation of service features; or c the denial of access to the service, provided that the following conditions are satisfied— i the Licensee makes every reasonable endeavour to ensure that service is maintained to all users; and ii the Licensee takes as soon as reasonably possible all reasonable steps to notify the users and the Director of the beginning and the end of the emergency as well as the nature and extent of temporary service restrictions; and in this paragraph, an emergency situation means an exceptional case of force majeure, which, without prejudice to the generality thereof, includes extreme weather, flood, lightning or fire, industrial action or lockouts, war, military operations, or civil disorder. ; iii after paragraph 54.4, there shall be inserted the following— 54.4A Nothing in these conditions shall prevent the Licensee, where it considers it unreasonable to provide a Relevant Private Circuit in response to a particular request under its tariffs and supply conditions published pursuant to paragraph 15.4A, from varying those conditions in that case with the consent of the Director. ; and iv in the headpiece of paragraph 54.13 for “and 41” there shall be substituted “, 41 and 48A.3 to 48A.5”. Modification of the Mercury licence 6 The conditions of the Mercury licence are hereby modified as follows— a in paragraph 1 of Part 1 of Schedule 1 (definitions, interpretations and transitional provisions relating to the conditions in Schedule 1)— i in sub-paragraph (w) (definition of Private Circuit) there shall be added at the end the following tailpiece— and a “Relevant Private Circuit” means a Private Circuit, not being a Private Circuit provided by the Licensee for another public telecommunications operator, where— i at least one Network Termination Point of which is located within the United Kingdom and all the network termination points of that circuit, and of any half circuit to which it is connected, are located within the European Economic Community; and ii the agreement between the Licensee and the user to provide the Private Circuit does not provide for messages to be conveyed thereby to be routed via a satellite link (notwithstanding that they may be so conveyed); ; and ii between sub-paragraph (ee) (definition of the United Kingdom) and the word “and”, there shall be inserted the following sub-paragraph— eeA “users” means end users and service providers, including telecommunications organizations where the latter are engaged in providing services which are or may be provided also by others; ; b after condition 1 there shall be inserted the following condition— Condition 1A Relevant Private Circuits 1A.1 The Licensee shall not terminate an existing offering of a Relevant Private Circuit unless— a the offering has continued for a reasonable period of time; and b the Licensee has consulted with the users affected. Without prejudice to any other remedy or right of appeal which the user may have in law or pursuant to contract or these conditions, where the user does not agree with the termination date as envisaged by the Licensee, he may bring the case before the Director. 1A.2 The Licensee shall not take for reasons of the alleged failure of the user of a Relevant Private Circuit to comply with the usage conditions any measure (including, without prejudice to the generality of the foregoing, the refusal to provide a Relevant Private Circuit, the interruption of the provision of Relevant Private Circuits or the reduction of the availability of Relevant Private Circuit features) unless— a the measure is a specified measure authorized by the Director in the case of a defined infringement of usage conditions; or b the Licensee has been notified pursuant to regulation 7(3) of the Telecommunications (Leased Lines) Regulations 1993 that the Director consents to the taking of the measure. ; c in condition 15— i in the headpiece of paragraph 15.1 at the beginning there shall be inserted “In relation to services other than the provision of Relevant Private Circuits,”; ii in the headpiece of paragraph 15.3 after “notice” there shall be inserted “referred to in paragraph 15.1(a)”; and iii after paragraph 15.3 there shall be inserted the following— 15.3A The Licensee shall publish by notice in accordance with the presentation given in paragraphs A to C of Schedule 1 to the Telecommunications (Leased Lines) Regulations 1993 information on offerings on technical characteristics, tariffs and supply and usage conditions in respect of Relevant Private Circuits.The information shall be published in the manner provided for in paragraph 15.3. Where the information concerns new types of Relevant Private Circuit offerings, it shall be published as soon as possible, and no later than two months before the implementation of the offering.Changes in existing offerings shall be published as soon as possible and, unless the Director agrees otherwise, no later than two months before the implementation. The supply conditions published pursuant to this paragraph shall include at least the elements defined in paragraph C of Schedule 1 to the Telecommunications (Leased Lines) Regulations 1993. ; and d in condition 50— i at the beginning of paragraph 50.3, there shall be inserted “Subject to paragraph 50.3A,”; ii after paragraph 50.3, there shall be inserted the following— 50.3A In relation to Relevant Private Circuits, the Licensee shall not be held to have failed to comply with these Conditions if the Licensee takes the following measures in order to safeguard the security of network operations during the period when an emergency situation prevails— a the interruption of the service; b the limitation of service features; or c the denial of access to the service, provided that the following conditions are satisfied— i the Licensee makes every reasonable endeavour to ensure that service is maintained to all users; and ii the Licensee takes as soon as reasonably possible all reasonable steps to notify the users and the Director of the beginning and the end of the emergency as well as the nature and extent of temporary service restrictions; and in this paragraph, an emergency situation means an exceptional case of force majeure which, without prejudice to the generality thereof, includes extreme weather, flood, lightning or fire, industrial action or lockouts, war, military operations, or civil disorder. ; iii after paragraph 50.4A, there shall be inserted the following— 50.4B Nothing in these conditions shall prevent the Licensee, where it considers it unreasonable to provide a Relevant Private Circuit in response to a particular request under its tariffs and supply conditions published pursuant to paragraph 15.3A, from varying those conditions in that case with the consent of the Director. ; and iv in the headpiece of paragraph 50.12 before “12” there shall be inserted “1A.2”. Functions of the Director and the Secretary of State 7 1 The Director shall— a from time to time publish in an appropriate manner so as to provide easy access thereto for users information on the licensing and declaration requirements for private circuits in accordance with the presentation given in paragraph D of Schedule 1 to these Regulations; and b in keeping the approvals register, in causing particulars to be entered in that register regarding the information in respect of the conditions for the attachment of terminal equipment to private circuits, enter that information in accordance with the presentation given in paragraph E of the said Schedule 1. 2 The Director shall from time to time by notice published in the London, Edinburgh and Belfast Gazettes provide references to the publication of information in respect of private circuits— a by— i BT pursuant to paragraph 16.3B of the conditions of the BT licence; ii Hull pursuant to paragraph 15.4A of the conditions of the Hull licence; and iii Mercury pursuant to paragraph 15.3A of the conditions of the Mercury licence; regarding the information in respect of offerings and technical characteristics, tariffs and supply and usage conditions; and b by himself— i regarding the information in respect of licensing and declaration requirements which he is required to publish pursuant to paragraph (1) of this regulation; and ii in the approvals register, regarding the information in respect of the conditions for the attachment of terminal equipment. 3 The Director shall, in relation to any application for consent to the taking of any measure pursuant to paragraph 46A.3(b) of conditions of the BT licence, paragraph 48A.3(b) of the conditions of the Hull licence, or paragraph 1A.2(b) of the conditions of the Mercury licence adopt a procedure providing for a transparent decision-making process in which due respect is given to the rights of the parties, and without prejudice to the generality of the foregoing, the Director shall— a give both parties the opportunity to state their case; and b notify to the parties in writing the decision and the reasons therefor within oneweek of its adoption. 4 The Director shall encourage the establishment, in accordance with the procedural and substantive rules of competition in the EEC Treaty and in consultation with BT, Hull and Mercury and with users, of— a a common ordering procedure for private circuits throughout the Community; b a one-stop-ordering procedure for private circuits, to be applied where requested by the user; and c a one-stop-billing procedure for private circuits, to be applied where requested by the user, which envisages that all price elements resulting from the national private circuits and the respective parts of international private circuits provided by the telecommunications organizations involved are identified separately in the bill for the user. 5 The Director shall— a where he approves a cost accounting system pursuant to paragraph 46A.5 of the conditions of the BT licence or paragraph 48A.5 of the conditions of the Hull licence, inform the Secretary of State, who shall thereupon inform the Commission before the system is applied; b keep available, with an adequate level of detail, information on the cost accounting systems applied by BT and Hull pursuant to the said conditions, and, upon receipt by the Secretary of State of a request from the Commission for this information, he shall submit it to the Secretary of State, who shall there upon submit it to the Commission. 6 The Director shall— a at least for each calendar year, make available to the Secretary of State statistical reports showing the performance in relation to the supply conditions, in particular (but without prejudice to the generality of the foregoing) with respect to delivery time and repair time, published by BT in accordance with paragraph 16.3B of the conditions of the BT licence, by Hull in accordance with paragraph 15.4A of the conditions of the Hull licence and by Mercury in accordance with paragraph 15.3A of the conditions of the Mercury licence, and the Secretary of State shall send such reports to the Commission no later than five months after the end of the relevant calendar year; and b keep available the data on cases where the access to or use of leased lines has been restricted, in particular (but without prejudice to the generality of the foregoing) because of alleged infringements of special or exclusive rights or the prohibition of simple resale of capacity, as well as details of the measures taken, including the reasons therefor, and upon receipt by the Secretary of State of a request from the Commission for this data, he shall submit it to the Secretary of State, who shall thereupon submit it to the Commission. Patrick McLoughlin Parliamentary Under-Secretary of State, Department of Trade and Industry 24th September 1993