Schedule 1 Conditions inserted in Schedule 1 to the Relevant Licences

“SCHEDULE 1

PART 6:

THE LEASED LINES DIRECTIVE CONDITIONS

Interpretation

LLD1

In this Part

(a)

“the Leased Lines Regulations” means the Telecommunications (Open Network Provision and Leased Lines) Regulations 1997; and “Relevant Private Circuit” means a Private Circuit where—

(i)

at least one network termination point 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 Area; 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) where the Licensee is not authorised so to convey messages consisting in live speech;

(b)

the expressions “Leased Lines Directive”, “network termination point”, “public telecommunications network”, “relevant private circuit market” and “user” shall have the same meaning as in the Leased Lines Regulations;

(c)

the Leased Lines Directive Conditions being conditions which are inserted for the purposes of the application of the Leased Lines Directive shall accordingly be construed in accordance with that Directive; and

(d)

in the event of any conflict between any provision of the Leased Lines Directive Conditions and any provision of any other Condition of this Licence, the latter provision shall, to the extent of such conflict, be taken to be disapplied.

Application of the Leased Lines Directive Conditions

LLD2.1

The Conditions in this Part shall only apply in the circumstances and to the extent set out in Condition LLD2.2.

LLD2.2

Where—

(a)

the Director has determined in accordance with regulation 8 of the Leased Lines Regulations that the Licensee is an organisation having significant market power in respect of a relevant private circuit market or that no holder of a Relevant Licence is an organisation having significant market power in respect of that market; and

(b)

the Director directs the Licensee to comply with all or some of the following Conditions in this Part in respect of any relevant private circuit market specified by the Director to the extent specified by the Director,

those Conditions shall apply in accordance with that direction.

Availability of information

LLD3

The Licensee shall publish by notice in accordance with the presentation given in paragraphs A to C of Schedule 2 to the Leased Lines Regulations 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 in these Conditions for the publication of the charges and other terms and conditions on which the Licensee offers inter alia to provide telecommunication services other than Relevant Private Circuits by means of any of the Applicable Systems. Changes in existing offerings and information on new offerings shall be published as soon as possible and, unless the Director agrees otherwise, no later than twenty eight days before the implementation.

Information on supply conditions

LLD4

The supply conditions published in accordance with Condition LLD3 shall include at least the elements defined in paragraph C of Schedule 2 to the Leased Lines Regulations.

Conditions for the termination of offerings

LLD5

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 in accordance with 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.

Access and usage conditions

LLD6.1

The Licensee shall not restrict access to and usage of Relevant Private Circuits save as permitted by the Director.

LLD6.2

No technical restrictions shall be introduced or maintained for the interconnection of Relevant Private Circuits to each other or to public telecommunications networks.

LLD6.3

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, earthquake, flood, lightning or fire.

LLD6.4

Where a user’s terminal equipment no longer complies with the approval conditions laid down in accordance with Council Directive 91/263/EEC^f1 or Council Directive 93/97/EEC^f2 for its connection to the network termination point of the type of Relevant Private Circuit concerned, the Licensee may, notwithstanding any obligation under this Licence to provide to users access to and usage of Relevant Private Circuits, interrupt the provision of the Relevant Private Circuit concerned until the terminal equipment is disconnected from the network termination point provided that the Licensee—

(a)

immediately informs the user about the interruption giving reasons for it; and

(b)

restores the provision of the Relevant Private Circuit concerned as soon as the user has ensured that the terminal equipment is disconnected from the network termination point.

Provision of a minimum set of Relevant Private Circuits

LLD7

The Licensee shall provide such of the minimum set of Relevant Private Circuits with harmonised technical characteristics specified in Schedule 3 to the Leased Lines Regulations as may be specified by the Director in any direction referred to in Condition LLD2.2(b). The Licensee shall ensure, if it provides other Relevant Private Circuits beyond the minimum set, that such provision does not impede the provision of the minimum set.

Control by Director

LLD8.1

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 authorised by the Director in the case of a defined infringement of usage conditions; or

(b)

the Licensee has been notified in accordance with regulation 10 of the Leased Lines Regulations that the Director consents to the taking of the measure.

LLD8.2

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 in accordance with Condition LLD3, from varying those conditions in that case with the consent of the Director.

Tariffing principles and cost accounting

LLD9.1

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, without prejudice to the principle of non-discrimination set out in these Conditions;

(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 shall 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 organisation notified in accordance with regulation 12(1) of the Leased Lines Regulations, half-circuit tariffs, that is to say, from one network termination point to a hypothetical mid-circuit point, can be applied.

LLD9.2

The Licensee shall formulate and put in practice a cost accounting system suitable for the implementation of Condition LLD9.1. Without prejudice to the generality of the foregoing, the 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 Relevant Private Circuits, 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, shall be 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 on the basis of 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.

LLD9.3

Other cost accounting systems may be applied only if they are suitable for the implementation of Condition LLD9.1 and have as such been approved by the Director for application by the Licensee.”