Telecoms Regulation in the New Millennium David Edmonds Director General OFTEL

OFTEL’S AGENDA Changing Framework of Regulation Market Developments - OFTEL response Key Issues -Internet Unbundling Mobiles Price Control

CHANGING FRAMEWORK 1984 Telecommunications Act – creaking – not designed for multi-player industry EU Directives – raft of new obligations – review started Technology advancing/competition increasing – need more flexibility – only regulate where needed

CHANGES - SHORT TERM Utilities Bill – promoting consumer interest is paramount primary duty – Regulatory Committee – Statutory Telecoms Consumer Council Competition Act – tough new powers – fines of up to 10% of UK turnover – working with OFT and other regulators

CHANGE - MEDIUM TERM New Telecommunications Act – Green Paper in November – need licences – What rules? How change? EU Review – effective 2003 – shape of market in four years time – set principles and leave details to Member States

“ALL CHANGE” Convergence - same and new services delivered to TV, phone, PC Technology - Internet Protocol Networks Mergers and acquisitions/globalisation Consumer demands changing

OFTEL’S GOAL Best deal for the customer in terms of Quality Choice Value for money

OFTEL’S OBJECTIVES Network competition Services competition Preventing anti-competitive practice Fair distribution of benefits Consumer protection

OBJECTIVES MATCHED TO A THREE PART CORE STRATEGY network competition services competition Promoting Promoting & protecting Compliance competition consumer interests consumer protection fair distribution of benefits preventing anti- competitive practice

PRINCIPLES OF REGULATION Regulation directed towards competition and consumer protection Regulate only where necessary Regulatory tools adapted to extent of competition Technologically neutral Coherent and consistent

THE INTERNET Access Network The Internet Instant messaging Communities Web Ecommerce Video Music

INTERNET ACCESS VIA THE PSTN 95% households have telephone line Subscription free Internet access services OFTEL is not opposed to unmetered access

COMPETITION IN THE ‘ACCESS NETWORK’ The Internet PSTN ADSL Leased Lines Fibre to the building Radio Cable Modems Digital TV Satellite 3rd Generation mobile

ACCESS TO BANDWIDTH Digital Subscriber Loop technologies (DSL) –fast / always on access over copper wires OFTEL consultation –BT upgrades own network –others upgrade BT network Second consultation document very shortly

REGULATING THE MOBILE MARKET Market evolving fast Response to consumers –calls to mobiles –pricing and quality of service Response to industry –Indirect Access Approach to 3G

PRICE CONTROL Retail/wholesale controls - expire 2001 Review started – examination of competition for different services? Different customers? – public meetings planned Issues – new retail control needed? Extent? – call origination pricing

Areas market fails to deliver Nature of telecoms/ networks Promoting & protecting Consumers Promoting competition Compliance Advice on rights to consumers Interworking with other ‘regulators’ e.g. DPR Managing access to certain scarce resources Behavioural not prescriptive rules = current strategy = development of current strategy COMPETITION ‘PLUS’ Legislative changes Coherent regulation across converging sectors