Section 94: Notification of contravention of condition

234.     This section gives OFCOM powers of enforcement in respect of all types of conditions set pursuant to section 45. Where OFCOM have reasonable grounds to believe that a person is or has been in breach of any condition, they may notify that person accordingly, and allow him a specified period of time in which to make representations to OFCOM and to take steps to comply with the condition or remedy the breach. That period must be one month, other than in the circumstances provided for by subsections (6) and (7) or where the case is an urgent case (see section 98(3)).

235.     OFCOM must not give such a notification where they decide that a more appropriate approach lies under the Competition Act 1998, in which case they must publish a notification to that effect.

236.     This section, and sections 95 to 100 and 102 and 103, implement Article 10 of the Authorisation Directive and Article 11(6) of the Universal Service Directive in the context of the enforcement of the conditions of entitlement.

Section 95: Enforcement notification for contravention of conditions

237.     If, by the end of the period specified in section 94, OFCOM are satisfied that the condition about which the provider was notified has still not been fully complied with, subsection (2) allows OFCOM to serve an enforcement notification on the notified provider. Such a notification requires the notified provider to take such steps as are specified in the notification to comply with the notified condition and remedy the consequences of any contravention, within the period specified in the notification. Those persons to whom an enforcement notification has been given are under a duty, enforceable by OFCOM via civil proceedings, to comply with it.

Section 96: Penalties for contravention of conditions

238.     This section allows OFCOM to impose a penalty on a notified provider where a notification of contravention under section 94, has been issued, and the notified provider is in contravention of any of the conditions specified there and has not, within the period allowed by OFCOM for the making of representations, taken steps to comply with the condition(s) concerned and to remedy the consequences. OFCOM may also impose a penalty where a person is in contravention of a requirement of an enforcement notice under section 95. OFCOM must notify the decision to impose a penalty, the reasons for it, and the period within which the penalty is to be paid to the person on whom it is being imposed within one week of that decision.

Section 97: Amount of penalty under s. 96

239.     In deciding on the amount of a financial penalty under section 96, OFCOM are required to consider whether the penalty is appropriate and proportionate, and to take account of any representations made by the person concerned, and any steps taken by him to comply with the notified condition. The penalty shall not, in any event, exceed 10 per cent of the turnover of that person's relevant business for the relevant period.

* relevant business is defined in subsection (5) to (7) as, broadly, business consisting of the provision of an electronic communications network, electronic communications service or associated facilities, and the supply of directories, directory enquiry facilities or electronic communications apparatus. In the case of a penalty imposed for the contravention of an SMP apparatus condition, the relevant business is only the business consisting of the supply of electronic communications apparatus.

* relevant period is defined in subsection (5) - subject to exceptions for providers who have not been carrying on business for a full year, or who have gone out of business - as the period of one year ending on the 31 March preceding the notification.

Section 98: Power to deal with urgent cases

240.     This section gives OFCOM additional powers where they determine that there are reasonable grounds for suspecting that a contravention of a condition of entitlement (other than an SMP apparatus condition) has caused, or creates a risk of, either a serious threat to public safety, public health or national security; or serious economic or operational problems or any communications provider or provider of associated facilities or any person who uses them.

241.     In such exceptional circumstances, OFCOM may in a notification of the contravention under section 94, reduce the one-month period allowed to the person who is alleged to be in breach of a condition to make representations and to take steps towards compliance. In addition, OFCOM may suspend the person's entitlement to provide networks, services and/or associated facilities, or may restrict that entitlement in some way (subsection (4)). OFCOM may postpone the entry into effect of the suspension and may also impose such conditions on the person whose service is to be suspended as they consider necessary to protect customers. Those conditions may include requirements for payment of compensation to customers for loss or damage or for annoyance, inconvenience or anxiety caused in consequence of the suspension; however, such conditions have effect only where the direction is confirmed in accordance with section 99.

Section 99: Confirmation of directions under s.98

242.     As soon as reasonably practicable after suspending or restricting a person's entitlement under section 98(4), OFCOM must give that person an opportunity of making representations to them about the grounds on which it was given and its effect and of proposing steps to remedy the situation.

243.     As soon as practicable after the period allowed by OFCOM for making representations, OFCOM must determine whether the contravention providing the grounds for the suspension or restriction did occur and whether the circumstances made it an urgent case justifying the suspension or restriction. If OFCOM decide that the contravention did occur and that the suspension or restriction was justified, they may confirm the direction. If not, OFCOM must revoke the suspension or restriction. They must notify the person concerned of their decision.

Section 100: Suspending service provision for contraventions of conditions

244.     Subject to compliance with section 102, this section gives OFCOM a power to suspend or restrict a person's entitlement to provide electronic communications networks, electronic communications services and/or associated facilities where OFCOM are satisfied that that person is in serious and repeated breach of any conditions imposed on him (other than an SMP apparatus condition) and that an attempt, by the imposition of penalties or the giving of an enforcement notification under section 95 or both, to secure compliance has failed. The suspension or restriction must be appropriate and proportionate to the seriousness of the repeated contraventions.

245.     A direction by OFCOM under this section may suspend entitlement generally or in relation to particular networks, services or facilities and may take effect indefinitely or for a fixed period. A direction may also include, where appropriate, conditions, such as the payment of compensation, to protect the customers of a provider. Where appropriate, OFCOM may revoke the suspension or restriction.

Section 101: Suspending apparatus supply for contraventions of conditions

246.     Subject to compliance with section 102, OFCOM have the power under section 101 to give a direction suspending or restricting a person from supplying electronic communications apparatus where OFCOM are satisfied that the person is in serious and repeated breach of an SMP apparatus condition and that an attempt, by the imposition of penalties or the giving of an enforcement notification under section 95 or both, to secure compliance has failed. The suspension or restriction must be appropriate and proportionate to the seriousness of the repeated contraventions.

247.     A direction by OFCOM under this section may take effect indefinitely or for a fixed period and may require the supplier to take measures to protect its customers. A direction may also include, where appropriate, conditions, such as the payment of compensation, to protect the customers of a supplier. Where appropriate, OFCOM may revoke the suspension or restriction.

Section 102: Procedure for directions under ss. 100 and 101

248.     Unless a case is urgent, before exercising their powers under sections 100 and 101, OFCOM must notify a contravening provider or supplier of the proposed direction, allow him the least one month to make representations and consider each representation made by him.

*The meaning of an urgent case is set out in subsection (4) and (5) and arises where there is a serious threat to public safety, public health or national security or a serious economic or operational problem that makes it inappropriate to give a contravening provider or supplier time to make representations.

249.     If a case is urgent, OFCOM may give a direction without consulting the relevant contravening provider or supplier. However, as soon as practicable after giving a direction in an urgent case OFCOM must provide the relevant contravening provider or supplier with an opportunity to make representations and to propose steps to remedy the contravention (see subsection (3)).

Section 103: Enforcement of directions under ss. 98, 100and 101

250.     It is an offence for any person to provide a network, service or associated facility or to supply electronic communications apparatus while he is subject to a direction given under sections 98, 100 and 101 suspending his entitlement to do so or where he does so in contravention of any restriction in such a direction. A person found guilty will be liable to a fine.

Section 104: Civil liability for breach of conditions or enforcement notification

251.     This section provides that the obligation of a person to comply with any applicable conditions under section 45, or the conditions imposed by a direction under section 98 or 100, or any requirements imposed by an enforcement notification under section 95, is a duty owed to every person who may be affected by the contravention of the condition or requirement. Where a person sustains loss or damage as a result of a breach of that duty or of an act which induces a breach of the duty or interfering with its performance, that person may bring civil proceedings against the provider or supplier concerned. OFCOM's consent is required before proceedings can be brought in respect of a breach of condition under section 45. In any such proceedings, a person may defend himself by demonstrating that he did everything reasonable and exercised all due diligence to avoid breaching the condition or requirement in question.

Section 105: Consideration and determination of network access questions

252.     This section applies where a network access question has arisen and needs to be determined and OFCOM consider that, for the purpose of determining that question, it would be appropriate for them to exercise their powers to set, modify or revoke access-related conditions authorised by section 73(2) or (4) or SMP services conditions authorised by section 87.

*A network access question is defined in subsection (6) as a question relating to network access or the terms or conditions on which network access is or may be provided.

253.     Before considering whether, for the purposes of determining the network access question, to set, modify or revoke access-related conditions authorised by section 73(2) or (4) or SMP services conditions authorised by section 84, OFCOM must publish a notification of their proposal. If, after considering the network access question, OFCOM decide not to set, modify or revoke such conditions, they must publish a notification of their decision. This section implements Article 5(4) of the Access Directive.

Section 106: Application of the electronic communications code

254.     Sections 106 to 119 and Schedule 3 amend the telecommunications code (set out in Schedule 2 to the Telecommunications Act 1984) in order to translate it into a code applicable to apparatus used in electronic communications networks and services. The telecommunications code is designed to facilitate the installation and maintenance of telecommunications systems. It confers rights on operators to install and maintain apparatus in, over or under land and results in considerably simplified planning procedures, similar to those given to other utilities. These provisions, along with Schedule 2 to the Telecommunications Act 1984, implement Articles 11 and 12(1) of the Framework Directive, and Article 4(1) and 6(1) of, and condition 5 of Part A of the Annex to, the Authorisation Directive.

255.     Sections 106 to 119 provide that "the electronic communications code" (as it will in the future be known) will no longer be applied to operators by way of licences (and licence conditions), but rather as a result of directions given by OFCOM in response to applications by individual providers of electronic communications networks or systems of conduits to be used for the provision of electronic communications networks. The principal changes to the code which will be effected under Schedule 3 include the replacement of references in it to telecommunications apparatus, services and systems with references to electronic communications apparatus, services and networks respectively; amendments to enable the application of the code to persons who provide a system of conduits by which an electronic communications network may be provided, but do not actually provide the network; and the addition of a provision to encourage the sharing of apparatus by operators to whom the code applies (which was previously contained in sections 10(3A), (3B) and (3C) of the Telecommunications Act 1984 and section 189 of the Broadcasting Act 1990; now see new paragraph 29 of the code).

256.     Section 106 provides that the electronic communications code will apply to any person in respect of whom OFCOM have given a direction for this purpose. Subsection (5) provides that such a direction may specify that the code is to apply to the person concerned only in relation to particular places, or particular networks or parts of networks or particular conduit systems or parts of conduit systems.

257.     Subsection (3)(b) provides that the electronic communications code will also apply to the Secretary of State or any Northern Ireland department if either of them is providing or intends to provide an electronic communications network.

258.     Subsection (4) provides that the code may only be applied to a person for the purposes of the provision of an electronic communications network or for the purposes of the provision of a system of conduits to be used in connection with the provision of an electronic communications network.

259.     Paragraph 17 of Schedule 18 provides that where, immediately before the coming into force of this section, the code applied to any person by virtue of the conditions of his telecommunications licence, that person shall be treated, after the coming into force of this section, as a person in whose case the code applies by virtue of a direction given by OFCOM.

Section 107: Procedure for directions applying code

260.     This section provides that OFCOM may only give a direction applying the code in response to an individual application for this purpose, and specifies the procedures that apply to such applications. Subsection (2) provides that applicants must comply with all requirements as to form, content and manner of application as have been set out by OFCOM in a notification.

261.     In deciding whether or not to give a direction applying the code OFCOM, in addition to their general duties and their duties for the purpose of fulfilling Community obligations under sections 3 and 4 respectively, must have regard to a number of factors, including the benefit to the public; the difficulty of providing the network or service without the code; the need to encourage shared use of apparatus; and whether the applicant has sufficient resources to meet any liabilities that may arise as a result of action taken by him under the code.

262.     Subsections (6) to (10) lay down the procedures that OFCOM must follow when they propose to give a direction applying the code. These include obligations to publish a reasoned statement of the terms of their proposal, and to allow at least one month for representations to be made by persons likely to be affected. This implements Article 6 of the Framework Directive.

Section 108: Register of persons in whose case code applies

263.     Section 108 places OFCOM under a duty to keep an up-to-date public register of persons to whom the code applies and to record in this register every direction given under section 106. OFCOM must publish (and comply with) a notification setting out the hours during which this register will be open to the public and the fees for inspection.

Section 109: Restrictions and conditions subject to which code applies

264.     The Secretary of State, following consultation with OFCOM and others may, by regulations, make the application of the code subject to restrictions and conditions. In making such regulations, the Secretary of State must consider OFCOM's general duties and their duties for the purpose of fulfilling Community obligations. She must also consider the environment, road-traffic management, the need to encourage the sharing of apparatus and the need to ensure that the provider will be able to meet any liabilities incurred due to the imposition of the code.

Section 110: Enforcement of restrictions and conditions

265.     This section gives OFCOM powers of enforcement in respect of the restrictions and conditions subject to which the electronic communications code applies. Where it appears to OFCOM that a person to whom the code applies is or has been in breach of any condition or restriction subject to which the code applies, they are obliged to notify that person accordingly and to allow him a specified period of time (usually one month) in which to make representations to OFCOM and to take steps to comply with the condition or restriction or to remedy the breach. This section and sections 111 to 113 implement Article 10 of the Authorisation Directive in the context of the enforcement of those restrictions and conditions.

Section 111: Enforcement notification for contravention of code restrictions

266.     If, by the end of the period specified in the notification under section 110, OFCOM are satisfied that the condition or restriction in question has not been complied with, they may serve an enforcement notice on the notified provider. Such a notice requires the provider to comply with the requirements set out in the notice. This duty is enforceable by OFCOM in civil proceedings.

Section 112: Penalties for contravention of code restrictions

267.     Where a notified provider has not complied with a requirement notified under section 110 or 111, or remedied the consequences of the notified contravention, OFCOM may impose a penalty. In deciding on the amount of a financial penalty, OFCOM are required to consider whether the fine is appropriate and proportionate, and to take account of any representations made by the person concerned, and any steps taken by him to comply with the condition or restriction in question. The maximum fine that may be imposed under this section is £10,000. The Secretary of State may by order amend this provision so as to substitute a different maximum penalty.

Section 113: Suspension of application of code

268.     Subsection (1) allows OFCOM, if satisfied that a person has been in repeated and serious contravention of the requirements under section 38 to pay an administrative charge, that proceedings to recover any outstanding amounts have failed to secure complete compliance with section 38 and have no reasonable prospect of securing compliance and that the imposition of penalties under section 41 has failed to secure compliance, to give a direction suspending the application to that person of the electronic communications code. OFCOM must also be satisfied that the suspension of the application of the code is appropriate and proportionate to the seriousness of the repeated contraventions.

269.     Subsection (2) allows OFCOM, having given a direction suspending a provider's entitlement to provide an electronic communications network, or part of such a network under section 42, 100, 132 or 140, to give a further direction suspending the application to that provider of the electronic communications code.

270.     Similarly, under subsection (4), if a provider has been in repeated and serious contravention of any restriction or conditions set out in the Secretary of State's regulations made under section 109, OFCOM can by giving a further direction suspend the code in relation to its application to parts of the provider's network which are not yet in existence, or where the disapplication of the code would not prevent the continued provision of the network.

271.     Suspension of the application of the code will continue for as long as the suspension of entitlement remains in force (in the case of suspensions under subsection (2)) or until revoked by OFCOM. Suspension means that the provider cannot exercise any right conferred on him by the code but, unless OFCOM otherwise provide in a scheme made under section 117, suspension does not have any other effect on agreements entered into or on actions taken under the code. In other words, the suspension should not affect the rights of the operator to maintain service on the parts of its network unaffected by the suspension. This section implements Article 14(2) of the Authorisation Directive.

Section 114: Procedure for directions under s. 113

272.     Except in an urgent case, OFCOM must not give a direction under section 113(4) suspending the application of the code to any person ("the operator") unless they have: (i) notified the operator of the proposed suspension and of the steps (if any) that they are proposing to take under section 113; (ii) provided him with an opportunity of (during a period of not less than one month after the date of notification) making representations about the proposals and of proposing steps for remedying the situation that has given rise to the proposed suspension; and (iii) considered every representation and proposal made to them during that period.

273.     As soon as practicable after giving a direction under section 113 in an urgent case, OFCOM must provide the operator with an opportunity to make representations about the effect of the direction and of any steps taken under section 113 in connection with the suspension and to propose steps for remedying the situation that has given rise to the situation.

*Subsection (4) provides that a case is urgent for the purposes of this case if OFCOM consider that it would be inappropriate to allow time, before giving a direction under section 113, for the making and consideration of representations, because the circumstances appearing to OFCOM to require the suspension fall within subsection (5).

* The circumstance listed in subsection (5) include a serious threat to public safety, public health or to national security, serious economic or operational problems for persons (apart from the contravening provider or supplier) who are communications providers or persons who make associated facilities available or serious economic or operational problems for persons who make use of electronic communications networks, electronic communications services or associated facilities.

Section 115: Modification and revocation of application of code

274.     OFCOM may, by a further direction, alter the code's application under section 106(5) to particular places or particular networks or parts of networks or particular conduit systems or parts of conduit systems. Under subsections (2) and (3), OFCOM may, by a further direction, revoke a direction applying the electronic communications code either on the application of the person to whom the code applies or where such a person ceases to be a communications provider or a provider of a conduit system.

275.     Before giving such directions OFCOM must, in accordance with section 106, first publish a notification of their proposal to give the direction and consider any representations made about that proposal. This implements Article 14(1) of the Authorisation Directive.

Section 116: Notification of cessation by person to whom code applies

276.     Where the code has been applied to a person who provides an electronic communications network of a type not designated for the purpose of section 33 or who provides a system of conduits, and that person ceases to provide that network or system of conduits, he must notify OFCOM. Failure to do so may result in the provider being penalised an amount not exceeding £1,000. Secretary of State may by order amend this provision so as to substitute a different maximum penalty.

Section 117: Transitional schemes on cessation of application of code

277.     This section gives OFCOM a power to put in place a transitional scheme in cases where the code has ceased to apply to a provider by reason of the code being either suspended, revoked or modified in relation to that provider.

278.     Subsection (3) gives a non-exhaustive list of the type of provision that might be contained in a transitional scheme. The examples given relate to the removal or retention of apparatus installed under the code, and the restoration of land affected by the code. Such a scheme may also provide for the transfer of rights and liabilities arising out of agreements made or obligations incurred under the code; authorise apparatus on code land to be retained for use by other providers; and provide for any issues arising from the scheme to be referred to OFCOM.

Section 118: Compulsory acquisition of land etc.

279.     Schedule 4 confers on code operators the power to purchase compulsorily land in England and Wales and Scotland, where authorised by the Secretary of State and with the consent of OFCOM. In Northern Ireland, code operators may purchase compulsorily land by requesting (with the consent of OFCOM) the Secretary of State to order that land vests in them. This provision re-enacts sections 34 to 40 of the Telecommunications Act 1984 (which are repealed by the Act), with certain consequential amendments to take account of the abolition of the regulatory regime under the Telecommunications Act 1984.

*A code operator is a provider of an electronic communications network to whom OFCOM have applied the electronic communications code.

280.     The power to purchase compulsorily extends to land that is required by the code operator for or in connection with the establishment or running of an operator's network. For the purposes of Schedule 4, an operator's network does not include a conduit system.

281.     In England and Wales, the Acquisition of Land Act 1981 and, in Scotland, the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947 applies to compulsory purchases by code operators as if they were local authorities within the meaning of those Acts. Under these Acts, code operators must make and publish an order so that land owners are given the right to object to the purchase and to have their objections heard. Only after objections have been heard can the Secretary of State be requested to confirm the order. In Northern Ireland, the Secretary of State must follow the procedures laid down in Schedule 6 to the Local Government Act (Northern Ireland) Act 1972 and Schedule 8 to the Health and Personal Social Services (Northern Ireland) Order 1972.

282.     Where land is acquired compulsorily in England and Wales and Scotland, the benefit of certain provisions in, respectively, the Town and Country Planning Act 1990 and Town and Country Planning (Scotland) Act 1997 applies to code operators.

283.     A code operator may not dispose of any land purchased compulsorily in England, Wales, Scotland or Northern Ireland except with the consent of OFCOM.

284.     Paragraph 19 of Schedule 18 (transitional provisions) provides that any compulsory purchase orders, vesting orders or authorisations made by the Secretary of State which are effective immediately before the commencement of Schedule 4 are to have effect after the commencement of that Schedule as if made or given under that Schedule.

285.     Paragraphs 6, 7 and 8 of Schedule 4 enable representatives of code operators authorised by the Secretary of State in writing to enter upon and survey (at any reasonable time) any land (except land covered by buildings or used as a garden or pleasure ground) in England, Wales, Scotland and Northern Ireland for the purpose of ascertaining whether it would be suitable for use by them for, or in connection with, the establishment or running of their networks. The powers of entry conferred on code operators are subject to the following provisions:

• in England and Wales, sections 324(8) and 325(1) to (5), (8) and (9) of the Town and Country Planning Act 1990 (as modified);

• in Scotland, sections 269(9) and 270(1) to (5), (8) and (9) of the Town and Country Planning (Scotland) Act 1997 (as modified); and

• in Northern Ireland, section 40(2) to (5) and (8) of the Land Development Values (Compensation) Act (Northern Ireland) 1965 (as modified).

286.     Code operators must make good, or pay compensation for, any damage caused to land or chattels by the exercise of their power of entry. Compensation must also be paid for any disturbance in the enjoyment of land or chattels of any person by the exercise of their power of entry.

287.     Paragraph 9(1) of Schedule 4 applies certain provisions of Part 1 of the Compulsory Purchase Act 1965 for the purpose of the acquisition of land in England and Wales by agreement by code operators. Sub-paragraphs (2) and (3) apply the corresponding enactments in Scotland and Northern Ireland, respectively.

288.     In exercising her powers under Schedule 4, the Secretary of State must have regard to the duties imposed on OFCOM under sections 3 and 4 of the Act and the need to protect the environment, to ensure that highways are not damaged or obstructed, to minimise interference with traffic and to encourage the sharing of electronic communications apparatus (see paragraph 2).