Módulo de Elasticidad:

5.222 Section 47(2) of the Act requires conditions to be objectively justifiable, non- discriminatory, proportionate and transparent.

5.223 An obligation to provide Network Access is objectively justifiable in that it will

encourage greater access to BT’s network and will therefore foster competition. The obligation does not discriminate unduly between providers, as it is imposed on BT and BT is the only operator which has been provisionally found to hold SMP in Market 2. The proposed obligation is also proportionate in what it is trying to achieve since it is directly targeted at addressing the market power which Ofcom believes BT holds in this market and it does not require BT to provide access where it is not technically feasible or reasonable. The proposed obligation also passes the

requirement of transparency since its aims and effects described above are clear on the face of the condition itself, as set out in the notification at Annex 5.

5.224 Ofcom has also taken into account the factors set out in Section 87(4) of the Act. In particular, the proposed obligation would require BT to meet requests that are reasonable only, by which it is meant, inter alia, that the terms of access are technically and economically viable, and feasible. The requirement on BT only to meet reasonable network access requests also ensures that due account is taken of the investment made by BT initially in providing the network whilst ensuring that effective competition is secured in the long term.

5.225 Ofcom has considered its duties under section 3 of the Act. For all the above reasons, we consider that ensuring Network Access on reasonable request will further the interests of citizens and consumers in relevant markets by the promotion of competition.

5.226 Ofcom has also considered the Community requirements as set out in section 4 of the Act. We consider the proposed condition in particular would promote competition in relation to the provision of electronic communications networks and encourage the provision of Network Access for the purpose of securing efficiency and sustainable competition in downstream markets for electronic communications networks and services, resulting in the maximum benefit for retail consumers of broadband internet access services.

5.227 For all the reasons set out above, we consider that the proposed condition is

appropriate to address the competition concerns identified, in line with section 87(1) of the Act.

Requirement not to unduly discriminate

5.228 Section 87(6)(a) of the Act authorises the setting of an SMP services condition requiring the dominant provider not to unduly discriminate against particular persons, or against a particular description of persons, in relation to matters connected with the provision of Network Access.

5.229 The proposed condition will provide that BT must not unduly discriminate against particular persons or against a particular description of persons in relation to matters connected with Network Access.

5.230 The aims and effects of a condition not to unduly discriminate in Market 2 would be the same as those discussed above in Market 1, as would the proposed condition. As such we do not repeat those discussions here.

Legal tests

5.231 Section 47(2) of the Act requires conditions to be objectively justifiable, non- discriminatory, proportionate and transparent.

5.232 Ofcom considers that the proposed obligation is objectively justifiable, in that it provides safeguards to ensure that competitors, and hence consumers are not disadvantaged by BT discriminating unduly in favour of its own retail activities or between different providers. The proposed obligation does not discriminate unduly between providers, as the proposed obligation is imposed on BT and BT is the only operator which has been provisionally found to hold SMP in Market 2. The proposed obligation is proportionate since it only prevents behaviour which is unduly

discriminatory. Behaviour that is unduly discriminatory (particular in favour of the dominant provider’s own retail divisions) is likely to have a negative effect on

consumers by reducing the effectiveness of competitors to the dominant provider, as their wholesale input products would be of inferior quality (or not competitively priced), compared to those available to the dominant provider’s own retail division. However, it is no more intrusive than necessary to achieve its purpose effectively as it only relates to undue discrimination. Differences that reflect, for example, costs of provision, are not necessarily undue discriminatory.

5.233 Finally, the proposed obligation is transparent since its aims and effects described above are clear on the face of the condition itself, as set out in the notification at Annex 5. In addition, Ofcom has given guidance as to how it might treat undue discrimination in the Discrimination Guidelines.

5.234 We have considered our statutory obligations and the Community requirements set out in Sections 3 and 4 of the Act.

5.235 In particular, as Ofcom considers that BT should be required to provide Network Access, the proposed obligation would encourage the provision of Network Access and service interoperability for the purpose of efficiency and sustainable competition in downstream markets by ensuring that BT does not unduly discriminate. This is necessary to ensure that there is a competitive level playing field. As Ofcom considers that BT has SMP in the provision of wholesale broadband access in Market 2, it controls a key input into a range of downstream services, principally asymmetric broadband internet access. Ofcom considers that an obligation designed to prevent undue discrimination would promote competition and the interests of consumers and maximise choice in downstream markets.

5.236 For the above reasons, we consider that the proposed condition in particular furthers the interests of citizens and furthers the interests of consumers in relevant markets by the promotion of competition, in line with section 3 of the Act.

5.237 Ofcom has considered the Community requirements as set out in section 4 of the Act. We consider the proposed condition in particular promotes competition in relation to the provision of electronic communications networks and encourage the provision of Network Access for the purpose of securing efficiency and sustainable competition in downstream markets for electronic communications networks and services, resulting in the maximum benefit for retail consumers of broadband internet access services.

5.238 For all the reasons set out above, we consider that the proposed condition is

appropriate to address the competition concerns identified, in line with section 87(1) of the Act.

Requirement to publish a Reference Offer

5.239 We believe that it is appropriate to impose a requirement on BT as a result of its SMP to publish a Reference Offer (RO). The terms of the RO are listed in relation to

Market 1 above. The main reasons for the publication of an RO are to assist transparency for the monitoring of potential anti-competitive behaviour and to give visibility to the terms and conditions on which other providers would be able to purchase wholesale access services.

5.240 The aims and effects of a condition to publish a reference offer in Market 2 would be the same as those discussed above in Market 1, as would the proposed condition. As such we do not repeat those discussions here.

Legal tests

5.241 Section 47(2) of the Act requires conditions to be objectively justifiable, non- discriminatory, proportionate and transparent.

5.242 The proposed obligation is objectively justifiable, in that it relates to the need to ensure that competition develops to the benefit of consumers. The proposed obligation does not discriminate unduly between providers, as the proposed

obligation is imposed on BT and BT is the only operator which has been provisionally found to hold SMP in Market 2. The proposed obligation is proportionate in that only information that is necessary to ensure that there is no material adverse effect on competition is required to be provided. The proposed obligation meets the test of transparency set out in the Act since its aims and effects described above are clear on the face of the condition itself, as set out in the notification at Annex 5.

5.243 We have considered our statutory obligations and the Community requirements set out in Sections 3 and 4 of the Act.

5.244 The publication of a RO would mean that other CPs would have the necessary information readily available to allow them to make informed decisions about entry into the market. It would also, in combination with a requirement not to discriminate unduly, facilitate service interoperability and secure freedom of choice for the customers of CPs. Further, the proposed obligation would promote the interests of purchasers of wholesale broadband access by enabling them to adjust their

downstream offerings in competition with BT, in response to changes in BT’s terms and conditions. Finally, the proposed obligation would make it easier for Ofcom and BT’s competitors to monitor any instances of discrimination.

5.245 Ofcom has considered its duties under section 3 of the Act. For all the above

reasons, we consider that the proposed condition in particular furthers the interests of citizens and furthers the interests of consumers in relevant markets by the promotion of competition.

5.246 Ofcom has considered the Community requirements as set out in section 4 of the Act. We consider the proposed condition in particular promotes competition in relation to the provision of electronic communications networks and encourage the provision of Network Access for the purpose of securing efficiency and sustainable competition in downstream markets for electronic communications networks and services, resulting in the maximum benefit for retail consumers of broadband internet access services.

5.247 For all the reasons set out above, we consider that the proposed condition is

appropriate to address the competition concerns identified, in line with section 87(1) of the Act.

Requirement to notify charges, terms and conditions

5.248 We believe that it is appropriate to impose a requirement on BT as a result of its SMP to publish any planned changes to charges, terms and conditions in advance of those changes taking place. The main benefit of this in wholesale markets is that other CPs would have sufficient notice to consider whether these changes necessitate a change in their retail offerings.

5.249 The aims and effects of a condition to publish charges, terms and conditions in Market 2 would be the same as those discussed above in Market 1, as would the proposed condition. As such we do not repeat those discussions here.

Legal tests

5.250 Section 47(2) of the Act requires conditions to be objectively justifiable, non- discriminatory, proportionate and transparent.

5.251 The objective justification for imposing such an obligation is that general and reliable visibility of a dominant operator’s prices is needed to enable Ofcom and competitors to monitor BT’s prices for possible anti-competitive behaviour. The proposed

obligation does not discriminate unduly between providers, as the proposed obligation is to be imposed on BT and BT is the only operator which has been provisionally found to hold SMP in Market 2 and therefore other providers’ behaviour would not be capable of having a materially adverse effect on competition. We consider that a 28 day notification period achieves the purpose of allowing third party

providers a sufficiently long period to plan for changes to terms, conditions and charges and adjust their own offerings, whilst not being unduly burdensome to BT. The proposed obligation is transparent since its aims and effects described above are clear on the face of the condition itself, as set out in the notification at Annex 5. 5.252 We have considered our statutory obligations and the Community requirements set

out in Sections 3 and 4 of the Act.

5.253 In particular, the proposed obligation would encourage compliance with

transparency, for the purpose of facilitating service interoperability and securing freedom of choice for the customers of CPs. The proposed obligation would promote the interests of purchasers of wholesale broadband access by enabling them to adjust their downstream offerings in competition with BT, in response to changes in BT’s terms and conditions. The proposed obligation would also promote competition in downstream markets by allowing BT’s competitors to make appropriate changes to their products. Finally, the proposed obligation would make it easier for Ofcom and BT’s competitors to monitor any instances of discrimination.

5.254 We consider that the proposed condition in particular furthers the interests of citizens and furthers the interests of consumers in relevant markets by the promotion of competition, in line with section 3 of the Act.

5.255 With respect to section 4 of the Act, we consider the proposed condition in particular promotes competition in relation to the provision of electronic communications

networks and encourage the provision of Network Access for the purpose of securing efficiency and sustainable competition in downstream markets for electronic

communications networks and services, resulting in the maximum benefit for retail consumers of broadband internet access services.

5.256 For all the reasons set out above, we consider that the proposed condition is

appropriate to address the competition concerns identified, in line with section 87(1) of the Act.

Requirement to publish technical information

5.257 As a result of our proposal that BT has SMP in Market 2 we believe it is appropriate to require BT to publish any changes to technical information 90 days in advance of making such changes to existing Network Access unless Ofcom consents otherwise. 5.258 The aims and effects of a condition to publish technical information in Market 2 would

be the same as those discussed above in Market 1, as would the proposed condition. As such we do not repeat those discussions here.

Legal tests

5.259 Section 47(2) of the Act requires conditions to be objectively justifiable, non- discriminatory, proportionate and transparent.

5.260 The proposed obligation is objectively justifiable in that it enables competing

operators to make full and effective use of Network Access. The proposed obligation does not discriminate unduly between providers, as the proposed obligation is imposed on BT and BT is the only operator which has been provisionally found to hold SMP in Market 2. The proposed obligation is proportionate in that in most circumstances 90 days is the minimum necessary to allow competing providers to modify their networks and any extension would be required only where it was

reasonable to do so. The proposed obligation is also transparent since its aims and effects described above are clear on the face of the condition itself, as set out in the notification at Annex 5.

5.261 Ofcom has considered its duties under section 3 of the Act. We consider that, in ensuring that Communication Providers’ systems are interoperable with any changes to technical specifications likely to affect their business, the proposed condition in particular furthers the interests of citizens and furthers the interests of consumers in relevant markets by the promotion of competition.

5.262 Ofcom has also considered the Community requirements as set out in section 4 of the Act. We consider the proposed condition in particular promotes competition in relation to the provision of electronic communications networks and encourage the provision of Network Access for the purpose of securing efficiency and sustainable competition in downstream markets for electronic communications networks and services, resulting in the maximum benefit for retail consumers of broadband internet access services.

5.263 For all the reasons set out above, we consider that the proposed condition is

appropriate to address the competition concerns identified, in line with section 87(1) of the Act.

Transparency as to quality of service

5.264 We believe that it is appropriate to impose a requirement on BT, as a result of its SMP, to publish information related to transparency as to quality of service. The main benefit of this in wholesale markets is that other CPs could ensure that the service they receive from BT is equitable to that provided by BT to its own retail divisions. The obligation will require BT to publish information as directed by Ofcom, rather than requiring BT to publish specific information from the date of the imposition of the obligation. This is the same as the condition imposed in previous reviews. As we have not considered it necessary to issue any such direction based on concerns that BT may be discriminating in the quality of service it provides, we are of the view that it is appropriate to continue this approach.

5.265 The aims and effects of a condition to provide transparency as to quality of service in Market 2 would be the same as those discussed above in Market 1, as would the proposed condition. As such we do not repeat those discussions here.

Legal tests

5.266 Section 47(2) of the Act requires conditions to be objectively justifiable, non- discriminatory, proportionate and transparent.

5.267 The proposed obligation is objectively justifiable in that it enables competing operators to make full and effective use of Network Access and to ensure that, in purchasing this access, they are not unduly discriminated against. The proposed obligation does not discriminate unduly between providers, as the proposed

obligation is imposed on BT and BT is the only operator which has been provisionally found to hold SMP in Market 2. The proposed obligation is proportionate because it only requires BT to publish information as directed by Ofcom in the event we consider such information is required to monitor BT’s compliance with its other

obligations. The proposed obligation is also transparent since its aims and effects are clear on the face of the condition itself, as set out in the notification at Annex 5; it is clear that BT should publish the information to allow competing providers to ensure

that they wholesale services they purchase are provided by BT on a basis that does not unduly discriminate against them.

5.268 Ofcom has considered its duties under section 3 of the Act. We consider that, in allowing other parties to monitor whether any undue discrimination is occurring in the way BT provides WBA services to competing providers compared to its own retail divisions, the proposed condition in particular furthers the interests of citizens and furthers the interests of consumers in relevant markets by the promotion of competition.

5.269 Ofcom has also considered the Community requirements as set out in section 4 of the Act. We consider the proposed condition in particular promotes competition in relation to the provision of electronic communications networks and encourage the provision of Network Access for the purpose of securing efficiency and sustainable competition in downstream markets for electronic communications networks and services, resulting in the maximum benefit for retail consumers of broadband internet access services.

5.270 For all the reasons set out above, we consider that the proposed condition is

appropriate to address the competition concerns identified, in line with section 87(1) of the Act.

Requirement to account separately

5.271 We believe that, because of its SMP, BT should be required to account separately for internal and external sales to provide monitoring of its other SMP services conditions