Standard Contract Forum 26 July 2007 13.30 Customer Suite, BT Centre, London

2. . Standard Contract Forum 26 July 200713.30Customer Suite, BT Centre, London

3. Standard Contract Forum 26 July 2007 • AGENDA • Introduction and Notes of Previous Meeting • Personal Number Call Announcement • Consult 21 • Contract Management Mechanism • System Alteration Provisions • Review of New and Amended Schedules • Any Other Business

4. Standard Contract Forum 26 July 2007 Sean Hartley 26 July 07

5. 070 – Pre Call Announcements • …to increase consumer protection from abuses on some existing 070 personal numbering services. • Obligation placed on call originators. • Implementation date 1st September. • Message content – still to be finalised.

6. Commercial Model • Increases the cost of call origination. BT will seek to recover these costs from terminating CPs. • Will result in lower outpayments (POLOs); • Reduction will be based on recovery of in-life and development costs, and for effective and ineffective calls; • Will monitor traffic and adjust rates where necessary;

7. Transit Option • Other Originating CPs may require or seek assistance in meeting the Ofcom requirement. • Technically possible; • Commercial model still to be finalised;

8. 21CN / Consult21 Update Standard Contract Forum 26th July 07 • The Plan • Broadband • Pathfinder • Interconnect • End User Communications

9. Overview of the March 07 Plan 2012 Nov – Dec 06 Nov – Dec 06 Jan – Mar 07 Jan – Mar 07 Apr – Jun 07 Apr – Jun 07 Jul – Sep 07 Jul – Sep 07 Oct – Dec 07 Oct – Dec 07 Jan – Mar 08 Jan – Mar 08 Apr – Jun 08 Apr – Jun 08 Jul – Sep 08 Jul – Sep 08 Oct – Dec 08 Oct – Dec 08 2009 2010 2011 Pathfinder Pathfinder POTS ISDN Service Trial Pathfinder ISDN 2/30 Review Period Pathfinder Review Broadband IPstream Development WM (BB first) IPstream trial National IPstream Migration (BB first) National Migration OTN Migration Testing Environment National Migration (PSTN, ISDN and IPstream) National Voice Mig’n Rel 4.1 Rel 4.2 Rel 5 (Q4) Rel 3 tbc ONES Ethernet Product Launches NGN Call Conveyance – Jul 2008 WBC – Apr 08

10. Pathfinder – Migration Pilot in South Wales The first end users, on Wick exchange, migrated to 21CN in November 06. Full migration completed in June. Bedlinog followed on 3rd July. Following issues surrounding a call server upgrade on 16th July, all end users were reverted to 20CN. Dates for restoration to 21CN and the ongoing migration plan are currently being evaluated. Options maintain the end date of 2011/12.

11. Broadband Technology trial of Wholesale Broadband Connect (WBC) performing well. WBC launch planned for early 2008 IPstream migration to 21CN trials started in West Midlands Consultation on the potential change from 20 to 31 product handover points (POSI) near conclusion.

12. Interconnect DLE interconnect circuit migration to Virtual Interconnect Circuits started in February. Next Generation PSTN Interconnect (NGN Call Conveyance) due to launch in July 08. Multi-Service Interconnect Links (MSIL) required for both broadband (WBC) and interconnect (NGNCC)

13. Communications Series of Webcalls being held for resellers Completed: Product retirements, 21CN overview, Migration process, CPE compatibility testing programme, and Switched-on communications campaign Broadband migration, Pathfinder Overview and Preparation Detailed preparing for 21CN Migration 27th Sept: Migration portal overview Webcall presentations on the Consult21 “Information for Resellers” website Reseller events later in year

14. Useful Websites Information and support for communication providers on the 21CN programme: http://www.btwholesale.com/consult21 The independent public information website covering the process of migration: http://www.switchedonuk.org For general information about BT’s 21CN programme: http://www.btplc.com/21CN/

15. Consult21 Working Group Information

16. Consult21 Working Group Information

17. Erica CummingCommercial LawyerStandard Contract Forum26 July 2007Contract Management Mechanism (CMM)

18. CMM 1. What is the CMM? 2. History of the CMM 3. Review of the CMM 4. Scope of Current CMM 5. CMM Process: Mediation and Early Neutral Evaluation 6. Exceptions to Early Neutral Evaluation 7. Further information

19. 1. What is CMM? • A tool CPs can use to resolve issues when negotiating terms and conditions of supply with BT on SMP (significant market power) products. • • Applies to CPs who purchase services from BT. • • From the TSR Undertakings: • “BT will work with Ofcom and other Communications Providers to set up, within six months from the date these Undertakings take effect, an effective mechanism to deal with issues surrounding terms and conditions relating to SMP Products, it being noted that the mechanism will not apply to certain types of contractual provision.” [12.1 Undertakings]

20. 1. What is the CMM? • 2. History of the CMM • 3. Review of the CMM • 4. Scope of Current CMM • 5. CMM Process: Mediation and Early Neutral Evaluation • 6. Exceptions to Early Neutral Evaluation • 7. Further information

21. 2. History of CMM • CMM Issue 1 published on 22 March 2006 • Contained a nine month review provision: • “This CMM shall be subject to a review nine months from the date it takes effect. The review shall be carried out by BT and any Communication Providers who wish to participate in that review to determine the effectiveness of the scheme as envisaged by the original undertaking.” [Clause 7 CMM Issue I] • Review conducted by industry and BT in Jan 2007 following open invitation to industry to participate

22. 1. What is the CMM? • 2. History of the CMM • 3. Review of the CMM • 4. Scope of Current CMM • 5. CMM Process: Mediation and Early Neutral Evaluation • 6. Exceptions to Early Neutral Evaluation • 7. Further information

23. 3. Review of CMM • Minutes from January 2007 Review Meeting: • ”It was recognised that the CMM had not been used.  It was felt that this was, in part, a reflection of the good work that had been done over the last 12 months to resolve potential CMM issues and find a compromise without needing to resort to the formal CMM process.  It was also recognised that the number of contract negotiations over the last 12 months was not huge.” • “There was some concern about the profile of the CMM and everyone agreed to do some work to educate people within their organisation to understand the role and scope of the CMM.” • “There were no other comments about the effectiveness of the CMM.” • Agreed to further review at later of: • - 12 months from 1 April 2007; or • - 6 months after CMM is first used

24. 1. What is the CMM? • 2. History of the CMM • 3. Review of the CMM • 4. Scope of Current CMM • 5. CMM Process: Mediation and Early Neutral Evaluation • 6. Exceptions to Early Neutral Evaluation • 7. Further information

25. 4. Scope of Current CMM • CMM applies to all issues arising out of the negotiation of terms and conditions for BT contracts of supply for SMP Products in relation to: • (a) Reference Offer for new SMP products; and • (b) Review/variation of existing T&Cs/contract or as a consequence of a regulatory right of either party; and • (c) Provisions covering the position where a CP has objected to terms and conditions it is being asked to sign up to. [clause 2.1] • A dispute may be raised on a specific term or condition but CMM will take account of overall context and other T&Cs [clause 2.1] • Can only use CMM once negotiations on the issue(s) have reached an impasse [clause 2.3] • CMM can be invoked by one or more CPs and BT will comply with process if it is invoked by a CP. Use of the CMM is optional for CPs [clause 2.4]

26. 1. What is the CMM? • 2. History of the CMM • 3. Review of the CMM • 4. Scope of Current CMM • 5. CMM Process: Mediation and Early Neutral Evaluation • 6. Exceptions to Early Neutral Evaluation • 7. Further information

27. 5. CMM Process • If dispute reaches an impasse: • Step 1 – Internal Escalation: Once a party invokes the CMM it has 30 days to escalate and discuss the issue internally [clause 3.1] • Step 2 - Mediation: If not resolved then parties can take to non-binding mediation (BT pays 50% costs of mediation) [clauses 3.2(a), 3.3] • Mediation process as per Chartered Institute of Arbitrators Independent Dispute Resolution Scheme (IDRS) document (see link in CMM) [clause 3.5] • Step 3 – Early Neutral Evaluation (ENE): If mediation fails within 2 months then parties can take to non-binding ENE (BT and CP each pay 15% and remained to be allocated as part of the ENE). [clause 3.4](NB: Exceptions)[clause 4] • ENE process as per Chartered Institute of Arbitrators Independent Dispute Resolution Scheme (IDRS) document (see link in CMM) • Mediation/ENE costs capped: • - £10,000 per party per dispute (for mediation and ENE) [clause 3.6] • - £500,000 per party per annum for all CMM disputes. [clause 3.6]

28. 1. What is the CMM? • 2. History of the CMM • 3. Review of the CMM • 4. Scope of Current CMM • 5. CMM Process: Mediation and Early Neutral Evaluation • 6. Exceptions to Early Neutral Evaluation • 7. Further information

29. Mediation • Independent Dispute Resolution Services Ltd (IDRS) is a wholly owned subsidiary of the chartered Institute of Arbitrators. • IDRS have a cost-controlled mediation process and this has been adapted for the CMM - developed by industry and BT to offer independent assistance to both parties negotiation contractual matters as specified in the CMM • Does not apply if parties have already started legal proceedings (unless all parties agree to suspend) • Each party pays £250 registration fee plus written statement detailing dispute • IDRS suggests suitable mediators and parties have 5 days to agree to one or else IDRS will appoint one by default • Mediator will be chosen from IDRS IP and Electronic Media Panel • If matter is settled then parties make a written agreement – this signed settlement agreement will be a binding court-enforceable document • Maximum mediation time of 20 hours (including up to 5 hours pre-reading) but may extend with agreement of the parties. • £220 +VAT per hour plus travel expenses (BT pays 50% total costs)

30. 1. What is the CMM? • 2. History of the CMM • 3. Review of the CMM • 4. Scope of Current CMM • 5. CMM Process: Mediation and Early Neutral Evaluation • 6. Exceptions to Early Neutral Evaluation • 7. Further information

31. Early Neutral Evaluation (ENE) • IDRS also have a early-neutral evaluation (ENE) process which has been adapted by industry and BT for the CMM • As with mediation, the ENE does not apply if parties have already started legal proceedings (unless all parties agree to suspend) • Submit application form with £500 registration fee (form available from IDRS) • IDRS appoints an expert within 3 working days of receipt of application. Expert is a retired judge or senior ranking legal professional from the IDRS IP and Electronic Media Panel (or else parties are free to agree the choice of expert) • Parties submit written case statement with supporting documents within 3 working days of the expert being appointed. Include a <10 page statement noting legal and factual matters which may assist or reduce scope of dispute. • Can have oral hearing or documents only (quicker). Parties may be represented at an oral hearing. Hearing held by 6th working day following receipt of documents. • Hearing generally 1 day (or 2 days with consent of expert and parties) • Expert free to consult Ofcom on matters of regulatory policy relating to the dispute • “Where appropriate, the expert shall be guided in reaching a determination by the need to achieve terms and conditions that emulate those that would prevail in a competitive market”

32. 1. What is the CMM? • 2. History of the CMM • 3. Review of the CMM • 4. Scope of Current CMM • 5. CMM Process: Mediation and Early Neutral Evaluation • 6. Exceptions to Early Neutral Evaluation • 7. Further information

33. 6. Exceptions to ENE • Unless the parties otherwise agree, the following types of disputes will not be eligible for early neutral evaluation: • Pricing and payment terms; • Limitation of liability or exclusion of loss provisions (except clauses with uncapped liability on part of CP); • Regulatory policy; • Network security or integrity; • Fraud or issues relating to artificial inflation of traffic; • Network policy; • Credit vetting policy and terms; • Termination rights (relating to: insolvency or ceasing to trade; repeated or persistent breach; which provide the party in breach with the opportunity to remedy that breach; for convenience; relating to change of control of BT or change of legal ownership of BT); • Intellectual property rights; and • Third party financial or performance guarantees

34. 1. What is the CMM? • 2. History of the CMM • 3. Review of the CMM • 4. Scope of Current CMM • 5. CMM Process: Mediation and Early Neutral Evaluation • 6. Exceptions to Early Neutral Evaluation • Further information

35. 7. Further Information • CMM and associated mediation and ENE documents available at: • BTW: • http://www.btwholesale.com/application?origin=child_link_index.jsp&event=bea.portal.framework.internal.refresh&pageid=editorial_one_column&nodeId=navigation/node/data/Pricing_and_Contracts/Contract_Management_Mechanism/navNode_Contract_Management_Mechanism • Openreach • http://www.openreach.co.uk/orpg/products/cmm/cmm.do

36. Questions?

37. STANDARD CONTRACTS FORUMREVISED SYSTEM ALTERATIONS26 July 2007Keith Mitchinson

38. Standard Contract Forum - Thursday 26 July 2007SYSTEM ALTERATION PROVISIONS • Issue for 2004 General Contract Review (raised by BT and 3 other CPs) • Agreed: • Need for improved process for “Simple” System Alterations • Need to introduce new process for “Complex” System Alterations - where more notice and greater coordination required • Finalisation stalled in 2005 over suitability for 21CN • To move ahead BT proposed a special “Complex” process for DLE closures • Several CPs suggested sensible rather to proceed with whole process – to make “Simple” fit-for-purpose; as well as to introduce “Complex” • Effectively we have followed “Complex” process informally for DLE closures – increasingly compliant • Now for Tranche 5 of DLE Closures onwards BT suggests formalise new process…. therefore BT “push” to directly affected CPs now, and make available to all CPs

39. Standard Contract Forum - Thursday 26 July 2007SYSTEM ALTERATION PROVISIONS • “7 MONTHS” - CURRENT SIA PROVISION • Trigger – System Alteration Notice • Month 1 – receiving CP provides quotation for costs • Month 3 – both CPs agree quotation for costs • Implement accordingly

40. Standard Contract Forum - Thursday 26 July 2007SYSTEM ALTERATION PROVISIONS • “SIMPLE” – REVISED 7 MONTHS’ NOTICE • Trigger – System Alteration Notice • Month 1 – receiving CP agrees to proceed • Month 3 (was 1) - receiving CP details changes and provides quotation for costs • Month 4 (was 3) – both CPs agree changes and quotation for costs • Implement accordingly

41. Standard Contract Forum - Thursday 26 July 2007SYSTEM ALTERATION PROVISIONS • “COMPLEX” – NEW 12 MONTHS’ NOTICE • Trigger – High Level Complex System Alteration Notice • Month 1 – receiving CP agrees to proceed • Month 2 – Detailed Complex System Alteration Notice issued • Month 3 – Agree outline programme • Month 4 - receiving CP details changes and provides quotation for costs • Month 5 – both CPs agree programme and quotation for costs • Implement accordingly

42. Standard Contract Forum 26 July 2007 SIA CONTRACT DOCUMENTATION NEW SCHEDULE : • 204 BT 03 UK-wide Number Calls

43. Standard Contract Forum 26 July 2007 • SIA CONTRACT DOCUMENTATION (Cont) • REVISED DOCUMENTS: • • 07 Reciprocal Non-Geographic Number Portability • 404 Operator 03 UK-wide Number Calls