ANNUAL REPORT 08
BT GROUP PLC
CONTENTS
Welcome to the Equality of Access Board’s (EAB’s) Annual Report. The EAB was set up in
2005 to monitor BT’s delivery of the Undertakings. It also advises BT on compliance and
reports its findings to Ofcom and industry. Key opinions on BT’s performance during
2007/08 are expressed throughout the report and how the EAB forms these opinions is
explained in ‘About this Report’.
1
CHAIRMAN’S INTRODUCTION
2
REVIEW OF THE YEAR
4
GOVERNANCE
5
7
7
8
9
5
New EAB member
Himanshu Raja becomes the BT senior
manager to the EAB.
EQUIVALENCE
10
19
20
22
23
24
The EAB
Monitoring, advising and reporting
Stakeholder engagement
Conclusion and outlook
Products
Systems
Next Generation Networks
Exemptions and variations
Conclusion and outlook
The EAB and NGN
The EAB looks at developments in BT’s
NGN programme.
20
CONFIDENCE
25
26
31
34
BT’s governance framework
Behavioural change
Complaints, breaches and issues
Conclusion and outlook
35
OUTLOOK FOR 2008/09
37
ABOUT THIS REPORT
39
PWC’S ASSURANCE OPINION
41
GLOSSARY
31
Understanding breaches
The EAB looks at instances of non-compliance
with the Undertakings.
The Equality of Access Board (EAB) is a committee of the BT Group plc Board. BT Group plc is a public limited company registered in England and Wales. This
is the EAB Annual Report for the period ended 31 March 2008. Unless otherwise stated all facts, statistics, events or developments are correct to the nearest
practical date before 21 May 2008. The opinions expressed are those of the EAB, not necessarily those of BT Group plc. The EAB Annual Report is a requirement
of the Undertakings given to Ofcom by BT pursuant to the Enterprise Act 2002.
INTRODUCTION
For the past two and a half years, the Equality of Access Board has monitored and advised
BT on compliance with the Undertakings.
CARL SYMON, EAB CHAIRMAN 21 May 2008
This report summarises our views on BT’s delivery of the major
product and systems milestones required by the Undertakings during
2007/08, the impact of cultural change initiatives to encourage
compliant behaviour and the consequences of breaches.
The EAB believes that BT is committed to the delivery of the
Undertakings, although the company did not always achieve
compliance with every aspect of each requirement.
More widely, there is evidence that BT’s delivery of the Undertakings
has enabled improved competition in UK telecoms. The Office of the
Telecommunications Adjudicator has commended the increased
uptake of unbundled lines, and Ofcom has begun to roll back
regulation on BT’s retail businesses. There has also been more
international interest in ‘functional separation’ and equivalence as
tools to improve competition.
Objective oversight of compliance is crucial in ensuring that
functional separation is effective, and to encourage industry to have
confidence in the framework. The EAB has exercised this objectivity
in a number of instances this year, concluding differently to BT on
issues relating to breaches of the Undertakings and the assessment
of behavioural change. Recent comments from a Communications
Provider illustrate the importance of the EAB’s and the Equality of
Access Office’s competency and neutrality: “Thank you for all your
efforts at the EAO. Having initially been very cynical about the
organisation, I have come round to being an enthusiastic supporter
of it.”
The EAB is well equipped to deal with this more complex approach
to regulatory compliance. Independent members continue to
participate actively and fully. In September, we welcomed Himanshu
Raja as the new BT executive member, replacing Sally Davis, who
was named CEO of BT Wholesale. As a result, the EAB has continued
to receive expert insights into BT and its products.
As we have done since inception, the EAB met a number of
representatives from industry, Ofcom, OTA2, NGNuk and BT. We
remain keen to understand the impact of the Undertakings on
industry, and we recognise that success is dependent on cooperation
on all sides. We will continue to engage directly with stakeholders in
the coming year.
We are pleased to see that the advice that we have given BT during
the year – some as a result of investigations of issues raised by CPs –
has been accepted by the company, and changes made. The EAB will
continue to actively ensure that compliance with the Undertakings
supports the objective of creating and maintaining a level playing
field for all parties.
Lastly, although service levels remain outside of our formal remit, we
expect that as more of the Undertakings are met, BT will be able to
concentrate increasingly on improving the existing services and
systems and creating innovative, equivalent services for all of its
Communications Provider customers.
The EAB’s focus is evolving. During the previous two and a half
years, BT has had to deliver large product milestones and has begun
to separate the information systems supporting these deliveries. We
will continue to monitor BT’s compliance with these obligations
during 2008/09, but our scope will now include the ‘principlesbased’ regulation associated with the monitoring of Next Generation
Networks. BT’s ability to offer wholesale services on an Equivalence
of Inputs basis will be as crucial to the delivery of NGN as it was to
legacy products.
EAB Annual Report 2008
1
REVIEW OF THE YEAR
BT was required to deliver a wide range of Undertakings obligations during 2007/08. Our
report this year gives our views on BT’s delivery of major product milestones, it assesses
whether equivalent services are on offer for BT and non-BT CPs and it looks at behavioural
change in support of the Undertakings across the organisation. The key trends during the
year are summarised below.
BALANCING COMPLIANCE WITH
SERVICE PERFORMANCE
This year saw the most challenging delivery dates and complex
programmes covered by the Undertakings to date. BT struggled to
deliver some of the product and system milestones in full compliance
despite significant effort. The largest deliverable of the year,
Wholesale Line Rental Analogue Ready for Service (WLR3 RFS), was
delivered on its due date (30 June 2007), although not without
significant performance issues including a non-trivial breach of
ongoing compliance. The EAB also found a trivial breach in BT’s
delivery of the Equivalence of Input (EoI) version of WLR ISDN2 on
the RFS date of 30 September 2007. Regarding the systems covered
by the Undertakings, BT fulfilled its commitment to introduce user
access controls for key operational systems, although with a trivial
breach initially and another issue that was being investigated at the
time this report was published. Several smaller Undertakings
obligations such as the roll out of an equivalent product set for
Wholesale Extension Services by 31 March 2007 and the
development of a roadmap for the separation of Management
Information Systems were delivered on time.
As anticipated in last year’s Annual Report, the scale and complexity
of these Undertakings meant that there were some issues along the
way and some unfortunate side effects on service performance. A
case in point was WLR3 RFS, which BT delivered on the due date
using the Equivalence Management Platform (EMP) although BT
subsequently fell back to using non-EoI legacy systems for a two
week period in order to maintain service levels for customers. The
EAB expects this tension between meeting the requirements set
down by the Undertakings and maintaining service levels for
customers to continue until the systems support issues associated
with some product deliveries are fully resolved.
PROVIDING A LEVEL PLAYING FIELD
The EAB monitors BT’s delivery of products and systems on
equivalent terms to BT CPs and non-BT CPs. A review of ‘parallel
equivalence’ – which occurs when both new and legacy systems
and/or products run alongside each other – showed that the use of
legacy systems by some CPs while BT consumed the new EMP-based
products had not resulted in either BT CPs or non-BT CPs being
materially disadvantaged.
2
EAB Annual Report 2008
Analysis of the EoI product Key Performance Indicators (KPIs)
published by BT further confirms that BT CPs and non-BT CPs are not
experiencing significantly different performance levels over time
even though there are some short term variations. The EAB
concludes that while BT may not have achieved all of the deadlines
required by the Undertakings, non-BT CPs are able to use EoI
products on the same terms and conditions as BT CPs.
As a result, the EAB considers that one of the key aims of creating a
level playing field for wholesale inputs to CP products is largely
being achieved, although there have been breaches of EoI and not
all products have been fully delivered at launch. Nevertheless, the
EAB expects ongoing compliance with the Undertakings to remain a
priority for BT as it is only through this commitment to its obligations
that the company will continue to gain and maintain industry trust
and confidence.
ENGAGING WITH CPs
The EAB has continued its programme of engagement with industry
during the year and has acted on issues raised by CPs at its meetings. It
has noted that while there have been numerous issues and concerns,
on the whole many non-BT CPs are largely satisfied with the way that
the Undertakings are being delivered. However, there is still a sense
that they can result in a ‘one size fits all’ approach to product
development. The EAB expects to continue to meet industry
representatives in future to gain a balanced picture of Undertakings
implementation and to understand the implications for individual CPs.
The EAO also engages widely with industry, meeting CPs on an
informal basis and attending BT’s working groups for Next
Generation Networks. Industry opinion and reaction is vital to both
the EAB’s and the EAO’s work.
FOCUSING ON NEXT
GENERATION NETWORKS
The EAB further developed its monitoring framework for Next
Generation Networks (NGN) during 2007/08. The Undertakings
requirements for NGN are less detailed than those for legacy products
such as LLU as they do not include specified delivery deadlines,
although they have additional obligations relating to their design and
consultation prior to launch. As a result, the EAB’s approach is based
Many of the exemptions have come to an end and the Undertakings have proved
adaptable to a BT-wide reorganisation. Lessons have been learnt from lapses in compliance
and the organisation is endeavouring to deliver improved service for its customers in a
compliant setting.
on the EoI principles behind the delivery of NGN rather than primarily
focusing on compliance with specific delivery dates.
number has risen, and also to assess how BT is ensuring that the
appropriate lessons are learnt.
At present, the EAB’s principles-based monitoring programme is
fulfilled by the EAO’s attendance of BT’s 21st Century Network
working groups as well as the EAB hearing regularly from CPs and
from BT on progress. The EAB also validated the delivery of the first
NGN ‘enabling’ products during the year. NGN will continue to be a
key focus area for the EAB moving forward.
The EAB has proposed that Openreach improve its approach to
product management with the aim of reducing the number of this
type of breach in future. It was pleased to see BT using lessons
learned in remedying non-compliant incidents as part of its
Undertakings training for employees.
EVALUATING BEHAVIOURAL CHANGE
The successful implementation of the Undertakings is as reliant on
the behaviour of BT employees as it is on BT achieving the delivery
dates for large products and systems deliverables. During 2007/08,
the company deployed new training programmes to ensure that
employees continued to take account of the Undertakings in their
daily work. However, the EAB considered it critical that the focus in
introducing behavioural change should move away from BT
employees simply understanding what the Undertakings say to their
knowing what is required of them in practice.
BT also saw an increase in the customer satisfaction levels for its
equivalent products and services, as well as for its customer-facing staff
such as Openreach engineers and account managers. There were fewer
instances of some categories of non-compliant behaviour, such as
employees in call centres inappropriately accessing confidential
information. Complaints about Openreach engineers were a consistent
theme although they were small in absolute terms. Overall, the EAB is
satisfied that compliant behaviour is being embedded increasingly in
BT’s business culture, although it believes that it is only possible to assess
fully the impact of this behavioural change over a number of years.
LEARNING FROM BREACHES
OF THE UNDERTAKINGS
There were 20 breaches of the Undertakings notified to the EAB
between April 2007 and March 2008 (five non-trivial, 12 trivial and
three subject to EAO validation at the time this report was
published). This compares to the nine reported during 2006/07 (of
which two were non-trivial). The largest category of breaches
occurred in the delivery of EoI products. The EAB has analysed the
occurrence of breaches during the year to understand why the
ASSESSING THE UNDERTAKINGS
GOVERNANCE FRAMEWORK
During 2007/08, the Undertakings governance framework remained
largely unchanged. The EAB appointed a new member in November
2007 and also made some minor changes to its monitoring processes.
BT also kept the same governance processes that were set up when
the Undertakings were agreed two and a half years ago, although
the company’s new organisational structure from July 2007 has led
to some changes in the way that the Undertakings are applied. In
early 2008, the EAB undertook a review of this area and made
recommendations to BT on maintaining ongoing compliance with
the Undertakings. The EAB also noted that the governance
arrangements for BT Ireland (North) and for Openreach were
generally functioning well, although it recommended that
Openreach product managers could be more effective at considering
all aspects of compliance in product development and launch.
CONCLUSION
While the relationship between EoI product delivery and service
levels has been challenging for BT, the EAB is satisfied that
equivalent products and services are generally being delivered to
both BT CPs and non-BT CPs. The EAB is satisfied with the progress
that BT has made during the year in delivering its Undertakings
commitments and in ensuring that compliance with the
Undertakings is at the heart of the organisation.
The EAB also welcomes the improvements that BT has made to its
behavioural change programme throughout the year, although it
understands that there is still more to be done. Finally, it looks
forward to EoI principles being applied to NGN products over the
coming year.
EAB Annual Report 2008
3
GOVERNANCE
“On balance, industry’s view is that both the Equality of Access Board
and the Equality of Access Office have played an effective role in
monitoring compliance with the Undertakings”
‘IMPACT OF THE TELECOMS STRATEGIC REVIEW’, PUBLISHED BY OFCOM IN DECEMBER 2007
GOVERNANCE: THE EAB AND ITS WORK
Since its establishment in 2005, the EAB has monitored BT’s delivery of product
milestones, reported its views to industry and advised BT on a number of issues.
The EAB was established on 1 November 2005 as part of the Undertakings offered by BT
to Ofcom. It has five members, one of whom is a BT senior manager and three of whom are
non-executive independent members.
THE EAB
1
2
3
1 Carl Symon, Chairman of the EAB
Carl Symon was appointed a non-executive director of BT Group plc
on 14 January 2002. He retired from IBM in May 2001 after a
32-year career, during which he held senior executive positions in
the USA, Canada, Latin America, Asia and Europe. Carl is chairman of
HMV Group and Clearswift Systems Ltd and a non-executive director
of Rolls-Royce Group plc and Rexam plc.
2 Sir Bryan Carsberg, Independent
Sir Bryan Carsberg was Professor of Accounting and Business
Finance and Dean of the Faculty of Economic and Social Studies at
Manchester University, before becoming Professor of Accounting at
the London School of Economics from 1981 to 1984. He was
Director General of Oftel (the former telecommunications regulator)
from 1984 to 1992, Director General of the Office of Fair Trading
from 1992 to 1995 and Secretary General of the International
Accounting Standards Committee from 1995 to 2001. Sir Bryan is
currently Chairman of Council and Pro-Chancellor of Loughborough
University. He holds a number of non-executive board
appointments. He is a qualified Chartered Accountant.
3 Stephen Pettit, Independent
Stephen Pettit is a non-executive director of National Grid plc and
Halma plc. He is Chairman of ROK plc and a former executive
director of Cable & Wireless plc. Before joining Cable & Wireless,
Stephen was Chief Executive, Petrochemicals at British Petroleum.
He was previously a non-executive director of National Air Traffic
Services, KBC Advanced Technologies plc and Norwood Systems
Limited.
4
5
4 Dr Peter Radley, Independent
Dr Peter Radley is the Chair of the IEE Communications Sector Panel.
He is a Fellow of the Royal Academy of Engineering and has been
involved in the telecommunications industry since 1965. Between
1991 and 2002 he held positions in Alcatel with global responsibility
for technology and marketing and as Chairman and CEO for Alcatel
UK. He is a member of the Broadband Stakeholder Group. Since
2002, Peter has been an independent advisor to a number of
organisations including the DTI and South East England
Development Agency and he has also been chairman of technology
start-up companies in the broadband, IP and mobile sectors.
5 Himanshu Raja, BT senior manager
Himanshu Raja is the Chief Financial Officer of BT Design and BT’s
21CN programme. Himanshu joined BT Group in 2001 and has held
various senior financial positions in BT. Most recently he was Chief
Financial Officer of BT Operate, and before that Chief Finance Officer
of BT Wholesale. Before joining BT, Himanshu worked for US
companies MCI WorldCom, UUNET and MFS. Himanshu is a member
of the Governing Council of the National College for School
Leadership, a non-departmental public body dedicated to improving
leadership in schools. He is a qualified Chartered Accountant.
EAB Annual Report 2008
5
GOVERNANCE: THE EAB AND ITS WORK
THE EAB’S ROLE WITHIN BT’S REPORTING STRUCTURE
Ofcom
EAB
BT Group plc Board
Public reporting
BT CEO
Operating Committee
Openreach
BT Wholesale
BT Retail
Management reporting
BT Global Services
Group functions
Compliance oversight
BT Design
BT Operate
Compliance reporting
The EAB is a committee of the BT Group plc Board although its
structure, membership and obligations to Ofcom make it unique. It
has oversight of the whole of BT to monitor compliance with the
Undertakings. Its position in the company is shown in the diagram
above.
The EAB Secretariat organised eight EAB meetings and enabled the
EAB to receive a wide range of input to its deliberations. EAB
minutes have been provided to Ofcom as required and the EAB
Chairman regularly reported the EAB’s views to the BT Group plc
Board.
The EAB has Terms of Reference setting out its role, monitoring and
reporting remit, its powers, how its members are appointed and its
organisation. See http://www.bt.com/eab for more information.
The EAB Secretary conducted a board effectiveness review (a survey
of individual EAB members) in autumn 2007. All EAB members were
satisfied with the quality of information received from within BT, and
with the Board’s access to senior executives.
The Undertakings require that the EAB has five members: three
independent members, one BT Group plc non-executive director and
one BT senior manager. Sally Davis stood down from the EAB in
September 2007 when she became CEO of BT Wholesale. The BT
Chairman appointed Himanshu Raja as BT senior manager to the EAB
from 5 November 2007.
The EAB is supported by the EAO and the EAB Secretariat on all
matters within its remit. The EAO reports regularly to the EAB on the
detailed status of BT’s delivery of the Undertakings. It carries out
investigations into complaints made by CPs and into possible
breaches of the Undertakings on the EAB’s behalf.
6
EAB Annual Report 2008
The EAO Director has reported to the EAB that he has had no
concerns about the resourcing of his department. The EAB has 11
dedicated support staff, nine in the EAO and two in the EAB
Secretariat. The EAO post of Investigations Manager continues to be
unfilled in light of the EAO only receiving two complaints during this
year. The EAB judges that BT has continued to provide satisfactory
resources for the fulfilment of its remit.
GOVERNANCE: THE EAB AND ITS WORK
Monitoring, advising and reporting
The EAB monitors BT’s delivery of key Undertakings, reports on progress to Ofcom and CPs and offers advice to BT on its compliance with the
Undertakings. The EAB and the EAO fulfil these obligations through a number of formal and informal processes shown in the diagram below:
HOW WE WORK
Core monitoring processes
Audit & validation plan
Milestone validations
Product KPIs
CPs
CPs
BT
Complaints
Complaints & breaches
EAO
Behavioural measures
Exemptions & variations
EAO Monitoring Report
Regular & ad hoc
BT reports
Direct CP views
Issues management
EAO reviews
EAB breaches process
EAO assessments
EAB meetings: deliberation & decisions
EAB minutes & overviews
Annual Report
Ofcom briefing
Reporting to EAB
The EAB maintained rigorous monitoring processes during 2007/08.
It continues to monitor product milestones using the process
described at http://www.bt.com/eab. This involves a monthly
monitoring and reporting cycle to evaluate progress towards major
deliverables, ongoing compliance and product KPI performance. The
findings of this year’s monitoring programme are on p9.
During the year, the EAB evolved its approach to monitoring BT’s
Undertakings obligations regarding Next Generation Networks
(NGN). The Undertakings requirements for NGN are less detailed in
terms of delivery dates than those for the other EoI products as, for
example, they do not have Ready for Service (RFS) dates. This was
because NGN products did not exist on a commercial basis at the
time the Undertakings were agreed and launch dates could not be
specified. On the other hand there are additional obligations relating
to the design and consultation of these products prior to launch.
The EAB has developed a principles-based approach to track key
developments, for example it assesses BT’s engagement with
industry as part of ‘Consult21’. For more information, see p20.
The EAB has also evolved its approach to assessing behavioural
change in BT. During 2007/08, the EAB worked with BT to enhance
its approach to behavioural monitoring including developing new
metrics for monitoring change and uptake of training programmes.
More details on the new metrics and initial findings can be found
on p26.
Stakeholder engagement
A number of CPs have attended EAB meetings during 2007/08,
including KCOM, Virgin Media and Gamma Telecom, and the EAB
expects to continue to meet a wide range of industry representatives
during 2008/09. It also regularly meets the Chairman of OTA2 and
NGNuk. The EAB has expressed its view that non-BT CPs have their
part to play in successful implementation of EoI products and
interfaces, although not all appear to be fully engaged in this
process. It will continue to work with CPs over the coming year to
understand their concerns and encourage full engagement.
BT senior managers regularly attend EAB meetings to provide
updates on key issues, and the EAB receives updates from BT’s
regulatory affairs team. The EAB has also visited BT’s 21’s Century
Network core node in Cardiff to hear about progress in developing
the company’s NGN. The EAB also meets Ofcom’s and BT’s CEOs at
regular intervals to discuss progress. The regulator’s report on the
‘Impact of the Telecoms Strategic Review’ published in
EAB Annual Report 2008
7
GOVERNANCE: THE EAB AND ITS WORK
December 2007 said that the EAB had played an effective role in
monitoring compliance with the Undertakings.
The EAO meets regularly with CPs and attends Consult21 working
groups, and it logs issues and concerns raised during these meetings.
During 2007/08, a number of overseas regulators, government
departments and telecoms operators showed an interest in the
‘functional separation’ model put in place by BT. During the year, the
EAB and the EAO met representatives from Sweden, Ireland, New
Zealand, Japan and South Korea to discuss the EAB’s role and
activities.
Comments on the EAB’s and the EAO’s work include:
“The activities of the EAO have provided CPs with a degree of
confidence that BT is complying with its obligations. In particular,
the EAO has provided a useful avenue for exploring and addressing
behavioural issues. However, moving forward UKCTA would like to
see the EAO undertake more demanding assessments of the services
provided by BT to ensure that both the spirit and also the letter of
the Undertakings are being met”, UK Competitive
Telecommunications Association.
Ron Spithill, Director of Telecom New Zealand said: “It was a great
pleasure to meet the EAB Chairman, Carl Symon. The successful UK
experience is a valuable guide for New Zealand where our equivalent
organisation, the Industry Oversight Group (IOG) has just been
launched. Our challenge is to oversee the Telecom New Zealand
Separation Undertakings and we will have much in common with the
EAB. In time, we would hope to be able to feed back to the EAB the
learning from our experiences here”.
Conclusion and outlook
“Effective delivery of the Undertakings agreed between Ofcom and
BT is critical to the competitive telecoms industry in the UK and FCS
supports the detailed monitoring which the Equality of Access Office
carries out to ensure this. Progress on, for example, delivery of a fit
for purpose WLR3 has not been as smooth as CPs would have wished
but FCS has always found EAO receptive to its concerns and willing
to pursue any issues which have been referred”, Jacqui Brookes OBE,
CEO of the Federation of Communication Services (FCS).
8
EAB Annual Report 2008
The EAB has considered its governance arrangements against the
criteria set out in ‘About this Report’ on p37 and it is satisfied that
these are functioning well and that it is effective in monitoring
progress and advising BT on future steps. The EAB is also satisfied
with the level of resourcing available to enable it to fulfil its remit. It
expects to continue to engage with a wide range of stakeholders as
its role continues to evolve from focusing on BT’s delivery of major
milestones to wider delivery of equivalence and ongoing
compliance.
EQUIVALENCE
“Although there have been some significant hiccups on the voyage we
feel that BT has been pretty robust in its implementation of the
Undertakings. The Undertakings now need to adapt to the changing
environment and business models and Openreach needs to focus on
responsiveness, service and innovation as well as just equivalence”
ANDREW HEANEY, DIRECTOR OF STRATEGY AND REGULATION, CARPHONE WAREHOUSE
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
Ensuring that equivalent wholesale products and services are being offered
by BT underpins the competitive telecommunications landscape in the UK.
The EAB plays a vital role in monitoring BT’s delivery of products and services to
non-BT CPs on equivalent terms and conditions to those provided to its own
downstream businesses.
SECTION CONTENTS
10
Products
19
Systems
20
Next Generation Networks
22
Exemptions and variations
22
Conclusion and outlook
Products
BT is required to deliver ‘equivalence of inputs’ (EoI) for certain
network products, which involves offering wholesale products on the
same timescales, terms and conditions and using the same systems
and processes for both BT CPs and non-BT CPs. This enables both
sets of customers to use the same network ‘building blocks’ to offer
services to their own end customers. In the following pages, the EAB
describes BT’s EoI product delivery programme and considers the
following aspects on a product-by-product basis:
Delivery of EoI products
The launch of EoI products is complex and involves a number of
different stages. Delivery typically includes the requirement to meet
a Ready for Service (RFS) date for each product. From this date, BT
must make available an equivalent product or service for the end
users of both BT CPs and non-BT CPs. Thereafter, BT CPs must
process all new end users using the equivalent product.
Once the RFS date has been met, there is a further obligation for BT to
meet an Installed Base Migration Complete (IBMC) date, when all
existing BT CP end users must be moved over to the equivalent
product. The EAB monitors the delivery of both RFS and IBMC, as well
as ongoing compliance once these obligations have been delivered.
In the following pages, the EAB reports on BT’s progress in delivering
its EoI obligations and its ongoing compliance with the Undertakings
requirements for the LLU and IPstream portfolio. It also looks at
Ethernet products and the WLR portfolio. Products assured by
PricewaterhouseCoopers LLP are included in ‘About this Report’ on
page 37.
10
EAB Annual Report 2008
Comparative CP performance indicators
The EAB assesses key performance indicators (KPIs) published by
BT showing the output performance of BT’s regulated wholesale
products. The KPI charts for each product portfolio compare
service provided to CPs within BT to that for non-BT CPs.
Differences in performance are assessed using a statistical method
known as a ‘pooled z-test’, which ascertains whether differences
in performance are likely to be due to random variations and is
considered more reliable than looking at the data alone.
If performance falls within pre-set control limits, this provides
evidence that the product is being offered equivalently. If
performance is consistently outside of these limits, it indicates
that there is potentially an equivalence problem. However,
there are several factors that can cause performance to fall
outside the control limits and these don’t necessarily constitute
a breach of the Undertakings. The significance of these factors
for equivalent product performance is explained on a product
by product basis in the following pages. Furthermore, it must
be remembered that the control limits are statistical rules of
thumb to draw attention to areas where further investigation
may be required. Judgement is needed to decide on the
acceptability of any differing relative performance.
Equivalence
During 2007/08, the EAB reviewed the existence of ‘parallel
equivalence’, which occurs when both new and legacy systems and/or
products run alongside each other with CPs opting for one option and
BT choosing another. The review looked at the operation of ‘parallel’
legacy systems alongside the new strategic systems and considered
why some CPs were choosing to remain on the legacy platform while
others had moved to the new equivalence platform. It also looked at
the existence of parallel products in the LLU and Ethernet product
portfolios. Parallel equivalence is reviewed on a product-by-product
basis in the following pages.
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
LLU AND IPSTREAM PRODUCT PORTFOLIO
The Local Loop Unbundling (LLU) and IPstream portfolio enables BT CPs and non-BT CPs to lease local loop infrastructure to offer telephony
and broadband services to end users. Some CPs purchase LLU from Openreach while others purchase IPstream from BT Wholesale. IPstream
uses LLU as an input but includes more of BT’s network and functionality in the service. The building blocks for LLU and IPstream are shown
in the diagrams below:
VOICE
NETWORK
BT LOCAL EXCHANGE
CP
DSLAM
BES
CP
NETWORK
MDF
LLU(MPF)
WWW
BT LOCAL EXCHANGE
voice
switch
MDF
LLU(SMPF)
CP
DSLAM
BT LOCAL EXCHANGE
IPstream
consuming
LLU(SMPF)
voice
switch
MDF
CP operated service
BT
TELEPHONY
NETWORK
Openreach operated service
BT
DSLAM
BES
CP
NETWORK
WWW
BT
TELEPHONY
NETWORK
BT DSL
NETWORK
BT Wholesale operated service
WWW
Customer wiring
The diagram at the bottom shows the IPstream product purchased by BT CPs. Non-BT CPs provide access to the Internet via their own
data centres.
EAB Annual Report 2008
11
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
Delivery of LLU and IPstream products
Prior to this second milestone BT had flagged a risk to the EAB
around its delivery. Subsequently BT confirmed that it believed it
had not delivered IBMC as only one third (2.7 million) of customer
records had been transferred by 31 December 2006 using the EMP.
The company said that it had chosen to limit the number of records
it transferred to maintain service levels for customers as it felt that
the EMP was too unstable to handle all orders and repair requests.
The EAB confirmed that BT not delivering IBMC by its due date was a
non-trivial breach of the Undertakings.
CP performance comparisons in
the IPstream and LLU portfolio
IPstream product KPIs
The chart below shows that both IPstream provision and repair
performance appears to have favoured non-BT CPs for most of
the year. Except for the last two months, neither measure fell
within the control limits as should be the case if the
performance for BT CPs and non-BT CPs is very similar.
IPSTREAM PROVISION AND REPAIR PERFORMANCE 2007–2008
40
Non BT CPs better
30
Pooled z-test score
LLU RFS and IPstream consuming LLU
BT was obliged to deliver two main LLU deadlines in the previous
reporting year. LLU RFS in June 2006 was the first major product
delivery via the Equivalence Management Platform (EMP) and the
EAB concluded that BT delivered the majority of the product
equivalently, although a problem with one order type constituted a
trivial breach. At this point BT was required to ensure IPstream
consumed EoI LLU for all new end users. The second requirement
was for BT to ensure the entire installed base of over eight million
IPstream circuits consumed EoI LLU by 31 December 2006.
20
10
0
-10
BT set itself a target date of 31 March 2007 to complete mass
migration of IPstream customer records. The company asserted on
20 March 2007 that it had achieved this interim goal ahead of
schedule with a residual ‘tail’ of fewer than 1% of lines remaining to
be converted by the end of August 2007. It later confirmed that it
delivered full IBMC in August 2007 and this was validated by the
EAB in November 2007. While the delay in delivering full IBMC may
have maintained the customer experience for LLU customers, the
EAB believes that this led to subsequent delays in the delivery of
other EoI products such as Wholesale Line Rental. This was because
the timetable for systems development came under pressure during
the delivery of LLU as a result of problems with an earlier software
release on the EMP which were not resolved in time for EoI products
with later delivery dates.
-20
BT CPs better
04/07 05/07 06/07 07/07 08/07 09/07 10/07 11/07 12/07 01/08 02/08 03/08
IPstream provision
Control limits
IPstream repair
Source: BT
Investigation of the provision data revealed that BT has a higher
proportion of ‘simultaneous provide’ order types than non-BT
CPs. This is a more complex order type because it requires the
physical line to be installed as well as the broadband service and
is therefore less likely to be completed on time. In addition
non-BT CPs had chosen to place some orders with a provision
lead time of greater than five days. Orders with longer lead times
are more likely to be completed successfully on time. Therefore,
the chart shows that, except in July 2007, non-BT CPs have
experienced better provision and repair performance.
Analysis of the repair performance identified that BT CPs have
a higher proportion of faults that when re-tested appear not to
have been resolved, therefore requiring further work by BT
Wholesale. This provides BT with extended completion times
and hence poorer fault clearance performance. This
contributed to the figures above which show that non-BT CPs
experienced better performance during the year.
To see whether the above factors were the main contributors to
the differing performance levels being experienced, they were
then excluded from the data and the chart was redrawn as
shown on the next page. It can be seen that after excluding the
known factors, the underlying performance is more closely
aligned to the equivalence control limits. Repair performance is
very close to the control limits, and although provision falls
outside of the limits, it has not consistently favoured either BT
or non-BT CPs. Overall the charts demonstrate that, in the
main at least, IPstream is now a mature product which has
12
EAB Annual Report 2008
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
been subject to EoI for a long period, although different
processes and choices by CPs have an impact on overall
equivalence performance:
LLU provision and repair
LLU PROVISION AND REPAIR PERFORMANCE 2007–2008
10
IPSTREAM PROVISION AND REPAIR PERFORMANCE AFTER ANALYSIS
2007–2008
0
-10
Pooled z-test score
40
Non BT CPs better
30
Pooled z-test score
Non BT CPs better
20
-20
-30
-40
10
-50
0
-60
04/07 05/07 06/07 07/07 08/07 09/07 10/07 11/07 12/07 01/08 02/08 03/08
-10
-20
BT CPs better
SMPF provision (basic)
BT CPs
better
04/07 05/07 06/07 07/07 08/07 09/07 10/07 11/07 12/07 01/08 02/08 03/08
IPstream provision without
simultaneous provides
Control limits
SMPF repair (care level 1)
Source: BT
Control limits
IPstream repair without retests
Source: BT
IPstream migrations
This KPI compares the migration of broadband customers from
BT CPs to non-BT CPs with the migration of customers in the
opposite direction, ie from non-BT CPs to BT CPs. If the data is
within the control limits, then statistically there is no difference
in performance for a BT CP to lose or gain a customer.
The chart shows that migration to non-BT CPs was better for much
of the year because some non-BT CPs were slow in migrating
circuits to BT. Latterly the difference in performance has narrowed,
but this will be kept under close review.
IPSTREAM MIGRATIONS PERFORMANCE 2007–2008
Analysis of SMPF provision has shown that it was affected by
‘flexible jumpering’ which is a service available to all CPs on an
EoI basis and which can improve provisioning times. BT CPs
rapidly adopted flexible jumpering, but most non-BT CPs have
yet to take up the facility although the EAB asked BT to ensure
non-BT CPs were aware that it was available. This helps to
explain the consistently better performance experienced by
BT CPs. At the time this report was published, full analysis of
the March performance had not taken place however the EAB
will continue to monitor the situation.
LLU repair performance has been within or close to the control
limits for most of the year, with minor deviations in the early part
of the year due to incomplete inventory records causing delays in
fault resolution. The EAB continues to monitor the situation to
ascertain whether performance appears to be settling more
consistently within the control limits over time.
20
To non BT CPs better
Pooled z-test score
15
10
5
0
-5
-10
To BT CPs better
04/07 05/07 06/07 07/07 08/07 09/07 10/07 11/07 12/07 01/08 02/08 03/08
IPstream migrations
Control limits
Source: BT
EAB Annual Report 2008
13
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
LLU migrations
The chart shows a tendency for a slightly better performance in
migrations to non-BT CPs in most months, although there were
a number of fluctuations during the year. The largest took
place in October 2007 when one non-BT CP suffered a short
term processing problem within their own business. The EAB
will continue to closely monitor this chart.
SMPF MIGRATIONS PERFORMANCE 2007–2008
15
In contrast, BT Wholesale was originally still using the older tactical
‘eCo’ system for MPF while non-BT CPs were using either the EMP or
also using the tactical system. From July 2007 BT Wholesale agreed
to use the EMP system for all of its transactions.
To non BT CPs better
10
5
Pooled z-test score
For SMPF the EAB’s review of parallel equivalence found that BT
Wholesale was using the EMP, but many non-BT CPs were still using
the older ‘tactical’ Line Share Automation (LiSA) platform. The EAB
concluded that if non-BT CPs chose to remain on older platforms any
small differences in performance experienced were of their own
volition. In January 2008, Openreach reported that all LLU
operators had moved over to the EMP for provision activities and
that it was decommissioning LiSA. Repair services will continue to be
delivered via older tactical platforms for some CPs through their own
choice until these older platforms are closed in June 2008.
0
It is to be hoped that the move towards using the EMP for all LLU
services will bring to an end the current concerns regarding parallel
systems and provides a more straightforward basis for allowing BT to
demonstrate that equivalence is being achieved.
-5
-10
-15
-20
-25
LLU and IPstream conclusion
To BT CPs better
04/07 05/07 06/07 07/07 08/07 09/07 10/07 11/07 12/07 01/08 02/08 03/08
SMPF migration
Control limits
Source: BT
There were insufficient volumes of MPF transactions involving
BT CPs to perform statistically valid testing of MPF provision,
repair or migrations. Therefore no chart for MPF is included in
this report.
Equivalence for LLU and IPstream products
In its review of parallel equivalence, the EAB found that BT CPs and
non-BT CPs use two different variants of the IPstream product: BT
CPs use IPstream Central Plus which offers more functionality than
the IPstream Central product used by non-BT CPs. Both products are
available on an EoI basis to all CPs, and all CPs can opt for the
product they prefer. In practice, IPstream Central Plus is used almost
exclusively by BT Retail.
The EAB compared the performance of these two products as part of
its review and found that differences in performance were limited. It
found that on the whole an equivalent service was being offered
although there were some technical differences in how video servers
could be hosted, for example. BT Wholesale has committed to
launch a combined replacement product – known as ‘IPstream
Connect’ – that should eliminate this parallel equivalence by 31 July
2008.
14
EAB Annual Report 2008
The EAB has found that while BT may have missed the original
deadline or not succeeded in fully achieving the relevant
Undertakings at the time, towards the end of the year the company
had reached a position where some LLU and IPstream products were
experiencing equivalent performance and others were just outside of
the control limits. By the end of June 2008 all CPs are expected to
be using a common platform for both provision and repair for
IPstream and LLU and this may further stabilise comparative
performance. Additionally, the EAB expects that instances of parallel
equivalence will be reduced through the introduction of new
products. For example, the planned launch of IPstream Connect
should mitigate any concerns regarding the differences between
IPstream Central and Central Plus.
Delays to BT’s delivery of its commitments for the LLU and IPstream
portfolio have also had consequences for the subsequent delivery of
other products, such as those in the Wholesale Line Rental family,
since these are predominantly based on the EMP and related
systems. As the EAB’s previous Annual Report pointed out, this
year’s milestones were probably the most challenging and to some
extent these were made more difficult still because of the
compliance issues encountered in respect of the earlier milestones.
The cumulative effect may start to subside now that BT has delivered
most of the large product milestones.
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
ETHERNET PRODUCT PORTFOLIO
BT EXCHANGE
BT EXCHANGE
WES
WES-LA
CP Eqm’t
BES daisy chain
CP Eqm’t
CP
NETWORK/
POP
BES
WEES
Connects end user to CP
Connects BT exchange to CP
Connects end user to BT local exchange
Connects BT exchange to BT exchange
Connects end user to end user
Delivery of Ethernet products
WES IBMC (31 March 2007)
BT had only one new Undertakings obligation in the Ethernet
portfolio during 2007/08. The company was required to process all
existing customers for WES in an equivalent manner from 31 March
2007.
There were two exemptions to the delivery – LAN Extension Service
and Fibre Distributed Data Interface Interconnection Service – which
Ofcom agreed could be delayed by six months to 30 September
2007.
The EAB confirmed that BT had delivered WES IBMC by the required
deadline, although it had done so by using the existing ‘tactical’
order and fault handling system in an EoI way rather than the EMP.
The EAO’s validation had included checks that all relevant Ethernet
products were passed to Openreach and that all customers were
informed of the completion of the work. The EAB validated delivery
of the amended requirements as a result of the exemptions in
November 2007.
The Undertakings do not require BT to deliver WES over the EMP,
although BT has informed the EAB that it aims to move all
Openreach EoI products onto this strategic system soon.
Comparative CP performance in the Ethernet
portfolio
Only one Ethernet product, WES, has had sufficient volumes
consistently to enable a statistically valid comparison of BT CP
and non-BT CP performance. WES provision performance was
predominantly within the control value limits for the year.
Repair only had sufficient volumes from November 2007 but
has been consistently within the control limits.
WES PROVISION AND REPAIR PERFORMANCE
5
Non BT CPs better
3
Pooled z-test score
The Ethernet product portfolio is diverse in order to meet the needs
of a wide range of CPs. It includes products such as Wholesale
Extension Service (WES) and Backhaul Extension Service (BES)
products, which aggregate traffic from non-BT CPs’ equipment in
BT’s exchanges to CPs’ own core networks. The Undertakings require
WES and BES to be launched on an EoI basis.
1
-1
-3
-5
BT CPs better
04/07 05/07 06/07 07/07 08/07 09/07 10/07 11/07 12/07 01/08 02/08 03/08
WES provision
Control limit
WES repair
Source: BT
EAB Annual Report 2008
15
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
Ethernet conclusion
There have been insufficient volumes for BES and Wholesale
End-to-End Ethernet Service (WEES) to perform pooled z-tests
for provision or repair over the last year and as a result, this
graph is not included. However, absolute performance has
been broadly the same for BT and non-BT CPs.
Equivalence in the Ethernet portfolio
The EAB investigated a claim raised by a CP regarding a potential
case of non-equivalence or ‘parallel equivalence’ in the Ethernet
portfolio (see p10 for a full definition of parallel equivalence). As
part of its review the EAB found that one WES product (WES-LA) is
mainly designed for use by non-BT CPs as it augments their existing
network infrastructure, while BT CPs use another which provides a
complete end-to-end service (WEES). However, it also found that
very few WES-LA circuits had been sold since the product was
launched giving rise to concerns from a CP that WES-LA was not a
commercially viable or attractive product.
Partly in response to the EAB’s concerns about WES-LA, Openreach
implemented a review of pricing in the Ethernet portfolio which led
to a reduction in the price of WES-LA and increased that of other
WES variants. Openreach also said that low demand for WES-LA may
have resulted from the product being developed to meet a
regulatory requirement rather than to cater for actual market
demand. The EAB will monitor whether the price cut stimulates
demand for the product among non-BT CPs over time.
While the product KPIs for the Ethernet portfolio show that
performance experienced by non-BT CPs and BT CPs is broadly the
same, the EAB has recorded one instance of non-equivalent
behaviour with regards to Ethernet products. BT identified a breach
of the Undertakings regarding wideband planning for Openreach EoI
Ethernet products at some London sites. When Openreach was
created, responsibility for wideband planning was divided between it
and BT Wholesale on a site-by-site basis. Following BT’s
reorganisation in July 2007, planning was transferred from BT
Wholesale to BT Operate. This resulted in Openreach EoI circuits for
Ethernet products such as WES and BES being managed by BT
Operate at some sites, and by Openreach planners at others. They
should only have been managed by Openreach.
In addition, BT informed the EAB that BT Operate planners did not
implement Openreach’s policy on Excess Construction Charges (ECC)
as they applied to Ethernet products. Therefore, customers at
adjacent sites may have paid different prices for the same product,
although all customers of BT CPs and non-BT CPs at a BT Operate
planner’s site were under-charged. The EAB considered this to be a
non-trivial breach of the Undertakings because it resulted from a
conscious but poor management decision by BT that could have
been avoided. The EAB confirmed that this breach was remedied in
October 2007 by BT moving employees from BT Operate to
Openreach.
16
EAB Annual Report 2008
The EAB is satisfied that BT is meeting the delivery requirements in
the Undertakings for Ethernet products. The EAB’s validation of WES
IBMC and an analysis of the product KPIs for Ethernet and a review
of parallel equivalence have shown that equivalent Ethernet
products are on offer for both non-BT CPs and BT CPs. However, the
EAB has expressed its concern that BT is delivering these equivalent
products using the older tactical system rather than moving to the
EMP, possibly limiting the functionality available on Ethernet
products.
BT has responded to these concerns by telling the EAB and industry
that it will launch the next generation of WES and BES products on
BT’s 21CN using the EMP and that this may resolve existing
concerns. The EAB will monitor the launch of these products to
ensure that they continue to be offered on an equivalent basis.
The EAB has also heard industry concerns that the introduction of
the Openreach Ethernet portfolio has been protracted, confusing
and difficult for non-BT CPs to manage. The EAB does not have a
remit with regards to product development and service levels,
although it considers these to be closely associated with CP uptake
and usage of new EoI products and has prompted Openreach to take
action.
Openreach has responded to these concerns by telling the EAB that
going forward it is fully committed to involving CPs in product
development. It said that this is because it no longer needs to fully
focus all of its resources on meeting the launch dates for legacy
products specified by the Undertakings as most of these key dates
have already passed. It has said also that it will seek ways of gaining
a greater understanding of CP development needs and it plans to
improve its own prioritisation processes.
Openreach is also reviewing its product development and ‘Statement
of Requirements’ process as part of this improvement. The EAB will
continue to monitor developments in this area and will assess
whether this improves non-BT CPs’ satisfaction with the Ethernet
portfolio.
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
WLR PRODUCT PORTFOLIO
Wholesale Line Rental (WLR) supplied by Openreach is used by both BT CPs and non-BT CPs so that they can offer their own branded
telephony services to customers. There are a number of Undertakings obligations regarding WLR and in this reporting period Openreach was
required to make an EoI version of the analogue WLR product ready for service as well as WLR ISDN2 and WLR ISDN30. BT also had to use
these EoI versions for its new end users.
WLR ANALOGUE: allows a CP to provide the features of a traditional telephone line
BT CORE
NETWORK
WALL SOCKET
BT EXCHANGE
one analogue channel
usually for voice
WLR ISDN 2: allows a CP to provide the security of two circuit-switched digital channels (eg for debit/credit card transactions)
BT CORE
NETWORK
ISDN 2
LINE BOX
BT EXCHANGE
two 64kb digital channels mostly
for data, but can be used for voice
WLR ISDN 30: allows a CP to connect an end user’s switchboard to the local exchange providing up to 30 voice and/or data channels
BT CORE
NETWORK
USERS
SWITCHBOARD
BT EXCHANGE
up to thirty 64kb digital channels
usually for voice but can carry data
EAB Annual Report 2008
17
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
Delivery of WLR products
The EAB validated that Openreach had made a WLR service available
to both non-BT and BT CPs on an EoI basis and that BT had used this
service for its new end users. The Undertakings do not require the
EAB to look at WLR product performance other than for EoI and it
also has no remit with regards to service levels. However, the EAB
has been made directly aware of industry concerns in this regard and
it expressed disappointment with the poor service levels experienced
by WLR3 end users. It was also concerned that the functionality
delivered at RFS was less than originally promised.
Additionally, following the RFS date, BT informed the EAB that it had
to revert to non-EoI processes for the period 13-30 July 2007 and
was therefore in breach of its ongoing EoI obligation for WLR3. The
EAB considered this to be a non-trivial breach of the Undertakings
because it had taken place so soon after the RFS milestone and as
the EAO had found that 52% of new end user orders were not
processed equivalently during that period. The EAB agreed
subsequently that this breach was remedied by 31 July 2007.
In the months prior to the delivery date for WLR3 RFS, the EAB had
expressed concern about whether BT would meet the deadline for
this large and complex product delivery as the company had not met
the ‘good faith’ date of 31 December 2006 for WLR3 RFS and this
had triggered allowance payments for CPs. The EAB validated that
BT made payments to CPs of 25 pence per WLR line as part of this
voluntary obligation. BT agreed to extend the payments to CPs until
the end of July 2007 and this covered the period when the company
fell back on the use of non-EoI systems for some new end user
orders.
Regarding the ongoing delivery of WLR3, the EAB recommended
that Openreach draw up an action plan to improve the functionality
of WLR3 more quickly than planned. This includes specifying where
there have been improvements to the existing delivery schedule and
gaining the support of CPs for these amendments. The EAB observed
that BT needs to make the delivery of agreed levels of functionality
in future product deliveries an essential part of its business
objectives and it will be closely monitoring improvements to WLR3.
WLR ISDN2 RFS (30 September 2007)
The Undertakings require BT to offer an EoI version of WLR ISDN2.
The EAO’s validation highlighted a potential breach relating to some
new end-user orders which were not handled via the EoI process. In
May 2008, following a breach investigation, the EAB confirmed that
this was a trivial breach of RFS and that the obligation was therefore
not met in full until 5th November 2007.
WLR ISDN30 RFS (29 February 2008)
BT asserted that it had met the obligation to deliver RFS for ISDN30
and the EAO’s validation of BT’s delivery of this product was under
way at the time this report was published.
18
EAB Annual Report 2008
Comparative CP performance in the WLR portfolio
The EAB monitors product KPIs for the WLR portfolio. BT has
recently started to report on WLR3 performance as shown in
the chart below, although it is still too early for orders from
non-BT CPs to reach sufficient volumes to allow fully reliable
measurement. However, the chart shows that the performance
recorded so far is moving towards the control limits. The EAB
will continue to monitor closely WLR3 equivalence
performance over the next 12 months as systems, processes
and order volumes settle down.
WLR3 PROVISION PERFORMANCE 2007–2008
10
Non BT CPs better
0
Pooled z-test score
Analogue WLR (WLR3) RFS (30 June 2007)
BT was required to make WLR3 Ready for Service by 30 June 2007
and on 3 July the company asserted that it had met this deadline
subject to EAB validation.
-10
-20
BT CPs better
-30
07/07
08/07
09/07
10/07
11/07
12/07
01/08
02/08
03/08
WLR3 analogue provision
basic
WLR3 ISDN2 Eol tactical
provision (all orders)
WLR3 analogue provision
premium
Control limit
Source: BT
WLR conclusion
The EAB expressed concern in its regular news overview throughout
2007 regarding the delivery of WLR3 RFS. BT had previously missed
the voluntary deadline associated with this milestone and the EAB
considered delivery of the WLR3 RFS obligation as well as those for
ISDN2 and ISDN30 to be at risk. BT’s subsequent delivery of WLR3
RFS demonstrated its commitment to keeping its delivery
programme on track, although the early breach of ongoing
compliance and the continued problems with service levels show
that it is sometimes challenging to balance the need to comply with
the Undertakings with the likely impact on customer experience. For
a fuller analysis of breaches of the Undertakings relating to the
delivery of EoI products, see p31.
With more non-BT CPs expected to buy WLR3 over the coming year,
Openreach needs to ensure that the EMP will deliver product and
process improvements. Openreach has said that it will engage with
CPs to better understand their requirements going forward and this
will be a crucial part of encouraging non-BT CPs to migrate from the
legacy product WLR2 to WLR3. Without the significant migration
from WLR2 to WLR3 by non-BT CPs the benefits of an equivalent
WLR3 service will not be fully experienced.
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
Systems
The EAB monitors a number of the systems underpinning the
delivery of key EoI products and the separation of BT’s operations
into ‘upstream’ and ‘downstream’ divisions. These are large and
complex legacy systems which may require the transfer of tens of
millions of customer records to enable equivalent services to be
delivered. The EAB has monitored progress in systems work in the
following areas during 2007/08:
Operational Support Systems (User Access Controls)
Operational Support Systems (OSS) are defined in the Undertakings
as “those support systems carrying out the functions and processes
which help to run a network and business, including… pre-ordering,
taking a customer’s order, configuring network components,
creating a bill and managing faults”.
Physical separation involves separating a large number of the
systems used by Openreach from those used by the rest of BT so that
confidential information cannot be shared inappropriately across
organisational boundaries. The Undertakings require full physical
separation of OSS by 2010 and during 2007 the Undertakings were
varied to introduce a series of binding interim milestones to enable
progress to be measured at key stages. The amendment required the
EAB to audit by December 2007 BT’s delivery of the first stage of
OSS separation and report its findings to Ofcom.
PwC’s audit of OSS
The EAB commissioned an independent assurance report from PwC
in respect of the WLR3 SMPF and MPF milestone and the WLR3
ISDN2 milestone, to be completed ahead of the required date. The
scope of PwC’s work* was agreed in advance with the EAO and
included testing of the user access controls of all 20 systems in scope
of the changes.
The assurance opinion confirms the satisfactory implementation of
BT’s remedy for the non-compliant incident identified by the EAO’s
validation. It also highlighted a potential incidence of noncompliance in respect of an additional system within the 20 that
were audited. This issue is currently under investigation by BT and
the EAO.
Due to the revised date for the implementation of the user access
controls to the systems supporting WLR ISDN30, PwC has not yet
concluded its assurance work in this area which will be subject to a
separate audit opinion.
* PricewaterhouseCoopers LLP (“PwC”) will permit the disclosure of its report, to
communications providers regulated by Ofcom subject to prior receipt of a hold
harmless letter (in a form specified by PwC) under which the communications
provider agrees and acknowledges, inter alia, that PwC, its members, partners,
employees and agents neither owe or accept responsibility to such third party.
Equivalence Management Platform
In this first stage, BT was required to introduce user access controls
for the OSS underpinning the WLR3 and LLU EoI products. This
entailed the introduction of user access controls for 20 systems
underpinning Metallic Path Facility (MPF), Shared Metallic Path
Facility (SMPF) and WLR3 by 30 June 2007.
The Equivalence Management Platform (EMP) is the ‘strategic’ OSS
designed to handle the majority of transactions for EoI products such
as LLU and WLR. Operated by Openreach, it replaces the ‘tactical’
systems that pre-date the Undertakings and which were not designed
originally to handle end user orders in an equivalent manner.
The EAB completed its validation by February 2008 and it found
from its sample testing that access controls for one of the twenty
relevant systems had not been adequately applied. It found that a
small number of users could inappropriately access a search engine
for almost three months after the milestone date, although there
was no evidence that inappropriate usage had taken place.
The Undertakings do not require the EAB to monitor the
performance of the EMP in its own right. However, as the platform
underpins Openreach’s delivery of its EoI product milestones and
ongoing EoI compliance after those milestones have been achieved,
it is an important factor in EAB product validations.
BT investigated this potential non-compliance and notified the EAB
subsequently that it was a trivial breach. The EAB confirmed this and
found that although BT delivered the majority of its requirements for
the establishment of user access controls for OSS by the required
date of 30 June 2007, it had met the milestone in full only in late
September 2007 when the breach was remedied.
Additionally, BT had to implement user access controls for the
systems supporting WLR ISDN2 by September 2007 and for WLR
ISDN30 by February 2008 (originally due in December 2007, but at
the request of industry Ofcom agreed to a delay in implementation
until February 2008). Ofcom also required that these three
milestones should be subject to an external audit of all the systems
in scope to be completed by 30 June 2008.
During 2007/08, the EAB noted that Openreach had made some
improvements to the performance of the EMP, but that it was not
robust in all areas. In particular, the EAB expressed its concern
regarding the capability of the EMP for WLR3 customers. Indeed,
the performance of the platform has been a recurring theme in the
delivery of EoI products and since the delivery of LLU RFS via the
platform, Openreach has struggled to develop the EMP so that it can
process the large number of customer records associated with each
milestone in the timescales specified by the Undertakings.
Openreach has said that it continues to work proactively with its
customers to encourage them to buy services via the EMP rather
than the existing, legacy systems. The EAB will continue to pay close
attention to EMP performance as a contributing factor in the
delivery of equivalence.
EAB Annual Report 2008
19
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
Management Information Systems (roadmap)
Management Information Systems (MIS) are classified by the
Undertakings as those “which hold commercial information or
customer confidential information and which are used by BT to help
plan and direct business and organisational operations, decisionmaking and competitive strategies”. The Undertakings require BT to
separate its MIS at two incremental levels:
Level 1: the application of access rights and controls to ensure
that users have access only to the data to which they are entitled.
Level 2: separations of systems data and separate versions of the
application software so that users are confined by their access
rights.
Following its successful delivery of Level 1 system separation for
specific MIS in 2006, BT was required to provide a ‘roadmap’ to
Ofcom by 30 June 2007 setting out its plans to implement Level 2
systems separation by 30 June 2010. The EAB validated that BT had
delivered the roadmap. Ofcom has requested that BT supply an
updated version after April 2008.
Systems conclusion
The EAB is satisfied that BT’s plans for the large scale delivery of OSS
and MIS are on track, although it acknowledges there have been a
couple of implementation issues. It still has concerns about the
functionality and performance of the EMP despite improvements that
Openreach has made to the platform during 2007/08. As the EMP will
be at the centre of EoI NGN product launches as well as continuing to
support the EoI legacy products, resolution of the problems associated
with the platform will be crucial in encouraging its use by both BT CPs
and non-BT CPs. Progress on the wider system separation programme
will remain a key focus for the EAB as it is where the vast majority of
the milestone-related work remains to be done.
NEXT GENERATION NETWORKS
BT’s Next Generation Network (NGN) will transform the wholesale services offered to CPs as well as being offered on an equivalent basis.
The EAB monitors the delivery of BT’s NGN obligations.
NGN and 21CN
BT’s 21st Century Network (21CN) is the ‘next generation’ network currently being deployed by the company. BT is upgrading its network to
offer new high bandwidth services to customers, which involves simplifying BT’s existing network from 16 platforms to a single converged
Internet protocol fibre-optic network.
The 21CN programme is focused entirely on the backhaul and core network, while the access network from end-user to the main distribution
frame (MDF) at the BT exchange is not upgraded as part of the programme. Openreach has started looking at next generation access (NGA)
which focuses on this part of the network.
NGN AND 21CN
OTHER CP
NETWORKS
ON
ON
BS
BS
ONBS
ONBS
ACCESS NETWORK/NGA
EAB Annual Report 2008
BT CORE
NETWORK
21CN/NGN
Access node
20
L
SI
M
Metro node
Core node
End users
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
The Undertakings regarding NGN do not have set delivery dates like those for legacy products and systems as many NGN products did not
exist at the time the Undertakings were agreed. However, many of the obligations for NGN are still demanding as they require products to be
delivered on an EoI basis from launch. There are also requirements regarding the design and delivery of the underlying NGN infrastructure,
consultation with industry and the provision of compensation arrangements associated with some NGN products.
The EAB and NGN
The EAB has developed a ‘principles-based’ approach to monitoring BT’s NGN obligations, which involves monitoring a range of areas rather
than checking compliance with specific delivery deadlines, although the EAB has responsibility for validating that NGN products were
launched on an EoI basis. It has organised its approach to monitoring into nine areas as described below:
NGN theme
BT activity
No foreclosure of network access
BT must ensure that non-BT CPs can purchase Significant Market Power (SMP) products using its
21CN infrastructure and on terms that allow them to compete effectively with BT’s end-to-end
services provided over 21CN. The company must ensure that it does not take design decisions that
would preclude the aforementioned obligations without industry consultation.
Charges based on efficient design
Where BT’s Network Access charges are required by SMP obligations to be applied on a
cost-orientated basis, the costs should be what BT would have reasonably incurred had the
company designed and built its NGN in the most efficient manner. There are also some exceptions to
this obligation regarding further changes that could be made by Ofcom or through consultation
with industry.
Provision of network access on
an Equivalence of Inputs basis
BT must ensure that SMP Network Access products provided over its NGN are offered on an EoI basis
from launch, although this does not apply to all products.
Provision of network access on
a timely basis
Where BT launches a new downstream product using NGN Network Access in an SMP market, it
must ensure the network access is available sufficiently in advance of the launch, such that non-BT
CPs are able to launch competing downstream products at the same time.
Broadband dialtone
BT could potentially use its 21CN to enable connections to its broadband service via software
control alone rather than the manual engineering required for LLU. This facility is known as
‘broadband dialtone’ and BT is obliged to ensure that LLU CPs are not materially disadvantaged
solely as a result of this software-controlled migration.
Industry group
BT must participate in any industry group established by Ofcom to agree aspects of the transition
from existing networks to NGNs.
Operational dispute adjudicator
BT must agree to participate in any 21CN operational dispute adjudication scheme established by
Ofcom.
Compensation arrangements
BT’s migration to 21CN may impact non-BT CPs in a number of ways. The Undertakings set out
principles to be applied if BT has agreed to pay compensation to non-BT CPs and if they incur
increased network costs.
NGN implementation
The Undertakings allow for BT Lines of Business to cooperate with each other to carry out the
design, build and implementation of NGN.
Discussion, design and development of NGN
The EAB began monitoring progress in each of these areas during
2007/08. Most importantly, the EAB found that BT had invested
significant effort in the industry consultation process, Consult21. On
the whole, Consult21 had proven an effective mechanism to discuss
design decisions and issues although the EAO heard from CPs that,
despite consultation, they felt BT did not always adequately factor
industry concerns into the development of new products. The EAB
observed that issues such as the number of designated Points of
Service Interconnect (POSI) were discussed and resolved through
Consult21. Equally it observed that a design decision made prior to
the Undertakings regarding the use of a specific call gateway and
protocol is continuing to have ramifications throughout the design
process. This is also under review by Consult21.
Some CPs have told the EAB that they have struggled to assimilate all
of the information provided as part of the large 21CN consultation
programme. The EAB also noted that it was hard for any CPs – including
BT – to foresee all of the future implications of a design decision.
However, to avoid inadvertent foreclosure, identification of the
implications was one of the key objectives of the consultation process.
The EAB also found that some of the changes to the NGN plans had
been unsettling for CPs, particularly where they had invested time
and effort in the original planned strategy. The agreement between
Ofcom and BT that BT will publish its future plans on a quarterly
basis should help improve matters and the EAB will monitor this
process to ensure that it provides greater transparency and more
timely dissemination of information for CPs.
EAB Annual Report 2008
21
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
Alongside Consult 21, the EAB found that BT was complying with
the obligation to participate in the industry group NGNuk. In
addition, Ofcom has still to determine whether an operational
dispute adjudicator is required.
Delivery of NGN products
The EAB has validated that the first two 21CN-related products
launched on a small scale were delivered on an EoI basis, although it
flagged some learning points regarding one of the products. The
EAB confirmed that NGN Openreach Network Backhaul Services
(ONBS) was delivered compliantly by BT. ONBS was launched on 9
October 2006 to support the start of the ‘Pathfinder’ trial of 21CN
services for a very limited number of users in the Cardiff area.
The EAB validated that NGN Virtual Interconnect Circuit (VIC) was
launched on 1 July 2006. Although not strictly a 21CN network
access product, the EAB validated the delivery of NGN VIC as a trial
run ahead of the forthcoming NGN product launches. It found that
BT had met the necessary requirements for delivery, although the
EAB made some minor recommendations to BT regarding aspects of
the product.
Following these first two validations and associated issues, the EAB
worked with BT to develop its monitoring framework further in
preparation for future, more significant NGN product validations.
One of the first of these will be Multi Service Interconnect Link
(MSIL), which will link non-BT CP networks to the POSI. Currently
there are 29 POSIs planned for Voice and 20 for Broadband, and
MSIL will be available in different bandwidths to connect to these
POSIs. The 1 Gigabit version launched on 30th January 2008 is
currently under validation by the EAO. BT plans to launch a 10
Gigabit version in Spring 2008.
In the year to come, attention will turn to the end-user orientated
services, as opposed to the infrastructure components focused on to
date. The Wholesale Broadband Connect service up to 24-Mbit
which was launched at the end of April 2008 will be a key focus for
the EAB.
NGN conclusion
Overall the EAB has been satisfied with BT’s level of compliance with
the NGN obligations in the Undertakings to date. Most of the work
so far has been at the design and development stage and the
consultation process seems to have worked well for the most part.
The technology issues associated with this programme have proven
challenging both for BT’s implementation and industry interaction.
However the real test will come in 2008/9 and beyond when
products start being delivered over the platform in significant
volumes.
An important factor in further developing the EAB’s monitoring
framework for NGN is gaining an understanding of the relationship
between BT’s meeting of planned launch dates for products and
maintaining a high quality service for customers. During the delivery
of some of the legacy products described on the previous pages, BT
met the compliance deadline set by the Undertakings but did not
manage to maintain service levels for customers. As there are no set
Undertakings delivery dates for NGN, BT will need to ensure that it
has balanced the need to maintain a reliable service with a realistic
timeframe for the delivery of EoI products.
22
EAB Annual Report 2008
Exemptions and variations
In 2007/08, BT and Ofcom agreed six further variations to the
Undertakings giving a total of 14 since the Undertakings were
agreed in September 2005. The six variations were to:
Provide for a more detailed obligation and an increased number
of delivery dates by which BT must separate its OSS
Introduce a concept of ‘Exceptional Incident’ to allow BT to use
all of its resources to deal with events such as terrorist attacks or
pandemic illness and provide for oversight of this process by both
Ofcom and the EAB
Extend the RFS date for ISDN30 from 31 December 2007 to
29 February 2008
Reflect recent organisational changes made in BT, particularly the
creation of BT Design and BT Operate and their designation as
neither “upstream” nor “downstream” as defined by the
Undertakings. Much of the focus is on information sharing, where
rules are introduced concerning disclosure of BT Wholesale and
Openreach Customer Confidential Information to the new units
Allow more time for Ofcom to conclude a decision on the outstanding
exemption requests (Wavestream, Redcare and Pathfinder)
Require BT to launch an IPstream Connect service as a
replacement for BT IPstream Central and BT IPstream Central Plus
and to complete migration of its own and CPs’ installed base by
31 March 2009.
In the same period, BT and Ofcom have agreed to a series of
temporary exemptions to the Undertakings, most of which have
resulted in variations or additional obligations for BT. These include:
An exemption in relation to the severe flooding of summer 2007
which allowed BT to suspend its Undertakings obligations in the
flood area and divert resources to damage repair
Two exemptions in relation to the Tags and Messaging Services
helpdesks, granting them access to Openreach OSS data for a
limited period.
In December 2007, Ofcom also consulted on three further proposed
exemptions or variations for Wavestream, Redcare Fire and Security
and backhaul to copper MSANs at six small sites for BT’s 21CN
Pathfinder trial. The consultation period for these closed on 25
January 2008.
The EAB has validated BT’s delivery of the 17 exemption-related
obligations due in the year to 31 March 2008 although it expressed
concern in two areas. The EAB had expressed concern that there are
risks around the delivery of FeatureNet and FeatureLine and BT was
granted a further extension to the existing exemption for
FeatureLine which it must now deliver by 1 June 2008. FeatureNet is
due to be delivered by 1 July 2008. The EAB was dissatisfied with
the time that it had taken BT to remedy the trivial breach in the
ISDN/Home Highway conversion process which had been
outstanding since April 2007. It validated that BT had resolved this
issue in March 2008.
Some CPs have told the EAB that it is too easy for BT to request
exemptions and to request further extensions once the due date is
near, although the EAB has found no evidence that this is the case
and considers that BT’s ability to deliver amended Undertakings has
been consistent on the whole. In any event, it is up to Ofcom to
decide whether or not exemptions are granted. While some of the
EQUIVALENCE: DELIVERY OF PRODUCTS AND SYSTEMS
exemptions cover niche products with few users and are arguably
easier to achieve than the delivery of major product milestones, the
EAB has commended BT’s commitment to providing transparency
around the delivery of these smaller obligations.
Conclusion and outlook
The EAB is satisfied that equivalent products are being offered to BT
CPs and non-BT CPs across each of the EoI product portfolios. In
those cases where parallel products and systems exist as a result of
some CPs continuing to use legacy products or BT and non-BT CPs
choosing different product variants, BT is working to resolve the
issues with the release of new EoI products. Even so, BT still has
much work to do to reassure CPs about the reliability of the strategic
EMP and the functionality of the EoI products before some will be
persuaded to migrate their customers to the new platform.
While the EAB is satisfied that equivalence is being delivered for
most products, it still has a number of concerns. BT has delivered the
majority of its Undertakings obligations during 2007/08, although
in some cases it did so later than the due date or not in the required
quantities. Many of these problems were due to systems
development issues – in particular with the EMP – a problem which
has occurred since the first large scale product delivery, LLU RFS in
June 2006.
During 2007/08, BT was sometimes forced to choose between
maintaining service levels for customers and meeting the deadline
set down in the Undertakings. On some occasions it compromised
quality of service to meet very large product delivery obligations
while in other cases it opted to maintain service levels by offering
services using the older, tactical systems and therefore not adhering
to the letter of the Undertakings. The EAB anticipates that BT will
continue to face these difficult choices.
Resolving this challenging balance between offering suitable service
levels and meeting the letter of the Undertakings will be all the more
important as BT launches its 21CN product range. Consultation with
industry is a vital part of these launches and the EAB is satisfied that
BT is on the whole factoring in industry concerns when making its
next steps.
Many in the industry regard service levels as of the utmost
importance and equivalence as a secondary concern. However, the
two remain closely interlinked as equivalence should drive improved
service levels for all CPs in the longer term. In addition, now that
many of the formal obligations have been completed, the focus of
future developments can be around customer driven improvements
to EoI products. The EAB will continue to monitor the uptake of EoI
products and expects to recommend actions to BT to further
increase confidence in the equivalence framework.
EAB Annual Report 2008
23
CONFIDENCE
“The EAB is in a strong position to ensure that the cultural change
necessary to make functional separation a success occurs”
ALEX WATSON-JACKSON, DIRECTOR OF LEGAL AND REGULATORY AFFAIRS, EXPONENTIAL-E
CONFIDENCE: BT’S COMMITMENT TO THE UNDERTAKINGS
The behaviour of BT employees, the management of major organisational change and the
handling of compliance failures are all factors in encouraging both the EAB and industry to
have confidence in BT’s commitment to the Undertakings.
SECTION CONTENTS
25
BT’s governance framework
26
Behavioural change
31
Breaches, complaints and issues
34
Conclusion and outlook
BT’s governance framework
The governance structure set up by BT immediately after the
Undertakings took effect has remained unchanged. It consists of:
The Group Undertakings Forum (GrUF): a steering forum with
responsibility for setting direction
The Group Programme Board: its role include managing priorities,
resolving issues and ensuring cross Line of Business (LoB)
consistency
The Group Programme Office: supports the GrUF and the Group
Programme Board by providing regular programme reporting and
offering expert help and guidance to individual programme
delivery teams.
Each LoB has its own Undertakings delivery programme office which
reports to the Group Programme Office, and this gives regular
progress updates to the EAB. Over the year BT has continued to
operate business-wide teams for the coordination of key
deliverables, including OSS separation and the WLR3 products.
As part of BT’s recent organisational change, additional programme
management arrangements have also been established in the new
areas of the business described below.
BT’s new organisational structure
In April 2007, BT announced a new structure involving the creation
of two major new units. BT Design was established in July to deliver
the processes, systems and non-Openreach network to enable the
BT LoBs to provide solutions over the global 21CN network. It aims
to improve speed to market and the customer experience and reduce
development costs. BT Operate was established at the same time to
deploy and manage these services.
The Design Council was set up in June 2007 to oversee the effective
development and delivery of the global 21CN platform for all BT
customers, and to address portfolio and technical issues that cannot
be directly resolved between the BT LoBs. A new financial model
which determines the basis of trading across the company was also
established.
As part of the organisational change, BT and Ofcom reviewed the
Undertakings to ensure that none were rendered obsolete by the
changes and the key principles were not undermined. As a result,
Ofcom agreed a variation to the information sharing requirements of
the Undertakings to reflect the new organisational boundaries which
took effect on 1 April 2008. BT and Ofcom also agreed that the EAB
should monitor BT’s compliance with the Undertakings during the
change programme.
The EAB and Ofcom identified particular areas of interest where it
asked BT to demonstrate that the organisation’s aspirations for
change were being balanced with its Undertakings obligations.
These included the maintenance of the information boundaries
for BT Wholesale regulated products, the trading model,
implementation of Operational Support Systems separation,
Openreach’s interface with BT Design and BT Operate, and the 21CN
governance arrangements. The EAB also began to assess other areas
where compliance with the Undertakings could be affected by the
new organisational structure, such as the Statement of Requirements
process, information sharing and the operation of the Design
Council.
In light of the EAB’s review, the EAB concluded that BT had made
strong efforts to highlight and address potential compliance risks
arising out of the organisational changes. There was good evidence
that in key areas the regulatory advice on achieving ongoing
compliance had been well communicated and implemented. This
was particularly the case for compliance with the SoR process.
However, some compliance risk management issues were
highlighted in the review, and the EAB asked BT to provide a
response to them. These included ensuring that those individuals
with Annex 2 status were made fully aware of the permissions and
limitations of their role and ensuring that the development of the
Design Council’s remit and processes were congruent with the
Undertakings. BT has acted promptly to address these issues and the
EAB will revisit the effectiveness of BT’s response in 2008/09.
EAB Annual Report 2008
25
CONFIDENCE: BT’S COMMITMENT TO THE UNDERTAKINGS
Openreach and the Undertakings
Openreach is the BT LoB with principal responsibility for the delivery
of EoI products and therefore the EAB monitors a number of
requirements associated with Openreach’s operations and
governance. During 2007/08, the EAB focused on Openreach’s
delivery of key product and systems milestones as well as its ongoing
compliance with the Undertakings. Openreach had already delivered
its early commitments regarding its establishment and governance
framework.
The EAB found that even though the Openreach governance
framework is functioning well, there is scope for some aspects of its
governance arrangements to be strengthened. In particular, product
managers could be more effective at considering all aspects of
compliance in product development and launch following a number
of breaches regarding the delivery of EoI products (see p31).
The EAB also confirmed that the incentive plans of members of the
Openreach senior management team were linked to the
performance of Openreach as required by the Undertakings and not
to that of BT Group.
An area for improvement jointly identified by the EAO, Openreach
and BT is Openreach’s governance of the management of its assets
contained in the physical layer of BT’s access and backhaul networks,
which have been subject to breaches of the Undertakings (see p31).
The EAB is pleased to see that Openreach and BT’s Regulatory
Compliance team have jointly initiated a risk review of the key
interfaces between Openreach and the rest of BT in the
management of these assets, and the development of a mitigation
plan. The EAB will be closely monitoring the recommendations and
implementation of this plan.
The Undertakings in Northern Ireland
BT has an obligation to implement aspects of the Undertakings in
Northern Ireland although its operations are not subject to the
structural provisions, and it continues to function as an integrated
unit. Although part of a single management structure within BT
Ireland, BT Ireland (North) has a separate programme office to
manage and report on the Undertakings. Over the year, there have
been regular meetings of the BT Ireland (North) Regulatory
Compliance Committee that coordinates delivery of the
Undertakings, on which the EAO and non-BT CPs have observer
status. In addition to its attendance at these meetings the EAO has
also participated in the Ofcom Northern Ireland Telecoms
Stakeholder Forum. BT Ireland (North) has also participated in the
Forum and has effectively reported on all of its Undertakings related
activities to the EAO every quarter.
The EAB concluded a review of information boundaries within BT
Ireland (North) during 2007/08. Although BT Ireland (North) is not
required to comply with the rules on information sharing in the
Undertakings, the EAB’s review found that the company had put
measures in place to limit information flows between upstream and
downstream functions within its operations. The EAB commended
26
EAB Annual Report 2008
BT Ireland (North) on this positive step and suggested further
measures to help the company build on its achievement; for example
it agreed with BT Ireland (North)’s proposed separation of the
engineering workforce to ensure appropriate information boundaries
are maintained.
Governance conclusion
Overall, the EAB is satisfied with the governance arrangements that
BT has put in place to oversee the delivery of the Undertakings as
judged against the criteria described in ‘About this Report’ on p37,
although it has recommended improvements to Openreach’s product
management processes following a number of breaches relating to
EoI products. It will continue to monitor that BT moves to its new
organisational structure compliantly.
Behavioural change
BT has made commitments to ensure that BT employees adopt
suitable behaviour in compliance with the Undertakings. Some
commitments are specific and measurable such as sharing of
confidential information between different LoBs, the exercise of
influence over commercial policy, and the development and delivery
of EoI products. Others are generic and less easily measurable, such
as adherence to the Code of Practice when dealing with end users.
The EAB has sought to assess BT’s achievements in respect of these
commitments by understanding the approach to promoting
appropriate behaviour and by analysing evidence on outcomes.
How BT seeks to influence employee behaviour
Over the last two and a half years, BT has taken a number of steps to
ensure that employees understand and comply with the
Undertakings. There have been two important developments this
year in respect of training and systems access:
Training
One of BT’s earliest actions after the signing of the Undertakings was
the publication of a Code of Practice for all employees and the rollout of training programmes in respect of it. More information on
completions of computer based training modules on the Code of
Practice can be found on p27. During this year the EAB encouraged
BT to undertake more tailored training targeting specific areas of the
business most at risk of inappropriate behaviour. The resultant
‘Living the Spirit’ programme is interactive and classroom-based,
allowing for discussion of real world scenarios faced by agents and
engineers in dealing with customers. Although definitive results
from the programme are difficult to identify at this early stage, the
EAB is encouraged by the adoption of this approach.
CONFIDENCE: BT’S COMMITMENT TO THE UNDERTAKINGS
Assessing understanding
BT has conducted two separate surveys of employees within the last
18 months to assess how well the Undertakings (and appropriate
behaviour in support of them) are understood. The results of the
surveys have assisted the company in focusing resources in
particular parts of the business or on specific aspects of
misunderstanding.
Abiding by the Rules – training people
If people are to abide by the rules, they need appropriate training to
understand their obligations. The key metric in this regard is Code of
Practice training completions among BT employees, shown in the
chart below.
CODE OF PRACTICE TRAINING
100
Percentage of Actual Compliance
Systems access
Another means of encouraging compliant behaviour is by ensuring
that employees know that systems can track inappropriate activity.
The EAB reported last year on so called ‘peripheral vision’ incidents
in which agents access data they should not see in respect of an EoI
product because their system access allows it. User access controls
were introduced for many systems this year to prevent such
incidents. In addition a Compliance Automated Test tool was
introduced and first used in October 2007 to highlight apparent
inconsistencies in system usage and an individual’s location in the
organisation.
95
90
85
2006
External consultants conducted a general compliance culture survey
in early 2007 which included a substantial section on the
Undertakings. They found that there was a high level of
understanding among BT employees about the function of
Openreach and the requirement to deal with all CPs equally. The
majority of BT employees had also found adapting to the new
compliance regime reasonably straightforward. However, the survey
highlighted a few areas for improvement as more than half of
employees felt that compliant processes and procedures were not
always followed and just under a quarter reported that they were
not aware of the Undertakings, although this may be because they
recognise the regulatory requirements under a different name such
as ‘equivalence’.
A behavioural audit specifically within Openreach concluded that risk
management and controls relating to behavioural change needed
improving. It recommended a number of actions to Openreach’s
management team, including providing targeted refresher training
and improving the understanding of information sharing principles,
which Openreach has been focusing on implementing during the last
year. A follow up behavioural audit was commissioned and returned
a satisfactory result on Openreach’s implementation of the original
recommendations.
Measuring behavioural change
In 2006, the EAB developed a ‘behavioural dashboard’ to provide a
rounded picture of performance in this area, with different measures
grouped under the headings of ‘Drivers, Activities and Outcomes’.
This was the basis of reporting in the 2007 EAB Annual Report.
Since then the EAB and BT have attempted to refine the dashboard
and in late 2007 BT engaged an external consultancy which
recommended a more simplified approach to reporting in the form
of a matrix based around three aspects of behavioural tracking:
“abiding by the rules”, “industry trust” and “customer satisfaction”.
People, processes and products can each play a part in delivering
positive outcomes under each of these headings. In the following
pages, the EAB reviews areas where BT has made positive progress
and others where further work is required.
2007
2008
2006
2007
2008
Managers
Team Members
Source: BT
For BT overall, managers’ and team members’ completion rates
remain ahead of the target of 90% for team members and 95% for
managers. The EAB commends particularly the high compliance level
for managers, although notes a small year-on-year fall for team
members. Given the large number of BT employees, sustaining these
levels is a significant achievement. The EAB also continues to
recommend vigilance in ensuring that high-risk contractors receive
this training. Although not required by the Undertakings, BT
volunteered a target of 90% completions by March 2008 for this
type of contractor which it exceeded. The EAB welcomes BT’s plans
to create a new supply arrangement that includes an obligation for
contractors to complete training in how to comply with the
Undertakings.
BT has updated the Code of Practice to reflect new information
sharing rules which came into force on 1 April 2008 to take account
of the establishment of BT Design and BT Operate. In response to
comments from the EAB and others, BT simplified the text of the
Code of Practice and was awarded a ‘Crystal Mark’ by the Plain
English Campaign for the revised document. It is also aiming to
refresh training across the company including via a revised computer
based training package. The EAB believes that more tailored training
is the most effective way forward in this area.
Abiding by the Rules – compliant use of process and systems
Alongside training, the dashboard measures how well BT employees
abide by the rules in their day-to-day use of processes and systems.
A key issue is ‘peripheral vision’ where call centre agents within BT
Retail and BT Global Services – because they deal with multiple
products and systems – could have the opportunity to see and use
inappropriate information in an EoI product transaction. Nearly all of
these incidences are blocked by system controls before they can
constitute non-compliance. Nevertheless, they represent an
EAB Annual Report 2008
27
CONFIDENCE: BT’S COMMITMENT TO THE UNDERTAKINGS
CP SATISFACTION WITH OPENREACH ENGINEERS FROM THE
POINT OF VIEW OF EQUIVALENCE
100
90
80
Percentage score
indicator of employee behaviour with regards to systems usage. BT
has implemented system and organisation changes to reduce the
risks in this area which, combined with the system separation
milestones achieved to date, has greatly reduced the number of
incidences in the product areas monitored by the EAB. There have
been hardly any incidences of IPstream peripheral vision reported
since quarter two. The monthly level of WLR incidents following its
launch in September 2007 has also decreased over the year to zero.
This is good evidence of effective managerial support for compliant
behaviour.
70
60
50
40
30
LEVEL OF POTENTIAL NON-COMPLIANT BEHAVIOUR
20
10
900
0
800
04/07 05/07 06/07 07/07 08/07 09/07 10/07 11/07 12/07 01/08 02/08 03/08
Number of incidents
700
Source: BT
600
500
400
The EAB has also noted that engineering behaviour has become the
largest single category of CP complaints about delivery of the
Undertakings to BT. However, this represents a very small proportion of
overall engineering visits. Out of approximately 3.3 million customer
visits by Openreach engineers, under 1% resulted in a complaint.
300
200
100
0
Q1
Q2
Q3
Q4
09/07 10/07 11/07 12/07 01/08 02/08 03/08
IPstream
WLR3
Source: BT
Abiding by the rules – equivalent products
Developing and delivering equivalent products is a central feature of
the Undertakings framework. It typically involves substantial systems
and organisational change led by senior management. However BT’s
employees have a responsibility to ensure that they follow the EoI
processes for such products, whether they are in Openreach, BT
Wholesale or the downstream LoBs. On p26, the EAB reports its
recommendation to BT that management action is required to
ensure product teams learn from an increased number of EoI-related
breaches.
Trust – Engineer Behaviours
Openreach engineers deal with end users on behalf of CPs on a daily
basis. A key dashboard measure of the degree of industry trust is
CPs’ perceptions of how engineers behave with their customers. The
chart in the next column shows shows that there has been no
change in industry perceptions in this respect. Around 60% of CPs
responding to a survey report that they believe “Openreach
engineers behave appropriately from the point of view of
equivalence”.
28
EAB Annual Report 2008
The EAB asked Openreach to survey end users to provide a
comprehensive perspective on their impressions of Openreach
engineers. This survey found that over 90% of end users were satisfied
with their interaction with Openreach engineers. Less than 3% of end
users recalled the engineer making a comment about their CP (or any
other), and no negative or derogatory statements were recalled. The
EAB encouraged Openreach to discuss these findings with its CP
customers as they seemed better than CPs’ current perceptions.
The EAB therefore concludes that although the overall score in this
area is somewhat disappointing, inappropriate behaviour by
Openreach engineers does not appear to explain it. Nonetheless the
EAB continues to encourage all CPs to speak to Openreach, BT or the
EAB if they believe they have contrary evidence.
Trust – Statement of Requirement requests
Another element of employee activity which might influence industry
trust is the handling of CPs’ Statements of Requirement (SoR) requests
by Openreach. Non-BT CPs and BT CPs must use the SoR process to
request a change to Openreach products and their attributes. The
process applies to products defined as having Significant Market Power
and Openreach is required to respond to requests within set timescales.
The dashboard tracks data on SoR requests accepted or rejected by
Openreach from non-BT CPs compared with those from BT CPs. The
EAB suggests that this data can be interpreted from two particular
perspectives. The relative volume of SoRs submitted by CPs can
indicate the levels of trust by CPs in the process. The rate of
acceptance and rejection can influence industry perceptions of
Openreach’s even-handedness. The data in 2006/07 showed nonBT CPs submitted less than a quarter of the SoRs submitted by BT
CPs and had a much higher proportion rejected. The chart opposite
shows that this year non-BT CPs still submitted about one half fewer
SoRs than BT, although substantially more than in the previous year.
CONFIDENCE: BT’S COMMITMENT TO THE UNDERTAKINGS
Also, the proportion rejected or accepted is now more comparable
for both BT and non-BT CPs. This may start providing industry with
greater reassurance on Openreach behaviour.
VOLUME OF SoRs RECEIVED DURING THE YEAR
120
100
Customer satisfaction
The dashboard measures CP satisfaction with both the
Undertakings-related and wider performance of Openreach and BT
Wholesale.
80
Number of SoRs
An Openreach survey found that brand awareness levels for
consumers had been boosted by seeing Openreach-branded
engineering vehicles and coverage of Openreach in the media.
However, to raise its profile further, Openreach is working with CPs
to promote its brand as part of the ‘Expect Openreach’ campaign.
The objective is for CP call centres to emphasise the Openreach
brand when arranging engineering appointments.
60
40
Satisfaction with Openreach
20
OPENREACH UNDERTAKINGS SATISFACTION SURVEY
0
70
Pending
Rejected
Accepted
Withdrawn
Total
65
BT CPs
60
Percentage score
Non-BT CPs
Source: BT
The product development and SoR process is currently being
reviewed for Openreach by Spectrum Value Partners. A programme
director has been appointed to oversee the Product Development
Re-engineering project. The EAB will continue to monitor this
process and any future developments.
Trust – Openreach brand awareness
Another measure of trust contained in the dashboard is the level of
awareness of the Openreach brand among customers. The graph
below looks at brand familiarity among consumer and business
customers, and shows that awareness of the Openreach brand
increased rapidly at first, but that there was a more mixed picture
in 2007/08:
55
50
45
40
35
30
QA
QB
March 2007
March 2008
QA = How confident that Openreach will deliver against its TSR commitments
QB = Do you believe Openreach delivers products equivalently to all its customers
Key
QA confidence rating between 1 (not at all confident) and 10 (completely
confident); all respondent scores are then modelled to give a score on a
1 to 100 scale index.
QB = % of respondents that answered "yes"
Source: BT
OPENREACH BRAND AWARENESS
The chart above shows improvement for both measures of customer
satisfaction with Openreach’s Undertakings-related performance.
Particularly encouraging is the significant rise in confidence in
Openreach’s delivery of its Undertakings commitments.
50
Percentage score
40
30
20
10
0
Consumer Prompted Awareness
March 2006
Business Prompted Awareness
March 2008
March 2007
Source: BT
EAB Annual Report 2008
29
CONFIDENCE: BT’S COMMITMENT TO THE UNDERTAKINGS
CUSTOMER SATISFACTION WITH OPENREACH EOI PRODUCTS
100
90
Percentage score
80
70
60
50
40
Satisfaction with BT Wholesale
The chart below shows that satisfaction with BT Wholesale is almost
flat year on year, although this has been at relatively high absolute
levels. It is interesting to note that CPs perceive the ability to deliver
products equivalently is higher in absolute terms than confidence in
BT Wholesale delivering against its commitments. This is the
opposite of the situation for Openreach, although the absolute
numbers for Openreach and BT Wholesale are not comparable as the
data is recorded in different ways.
30
BT WHOLESALE UNDERTAKINGS SATISFACTION SURVEY
20
10
90
0
04/07 05/07 06/07 07/07 08/07 09/07 10/07 11/07 12/07 01/08 02/08 03/08
85
Overall time taken to repair faults from which first reported
Product reliability
Source: BT
80
Percentage score
Delivering products in a working condition
75
70
65
60
The chart above shows increased satisfaction with the products that
Openreach is providing as it demonstrates a marked improvement in
fault remediation. It also shows a more modest improvement in
provision and a roughly flat score for delivering products in a
working condition. Overall this appears to represent an improvement
in perceptions by customers.
55
50
QA
March 2006
QB
March 2008
March 2007
QA = How confident that BT Wholesale will deliver against its TSR commitments
QB = Do you believe BT Wholesale delivers products equivalently to all its customers
Key
QA confidence rating between 1 (not at all confident) and 10 (completely
confident); all respondent scores are then modelled to give a score on a
1 to 100 scale index.
QB = % of respondents that answered "yes"
Source: BT
Conclusion
Overall, the EAB sees some signs of improvement in areas of the
dashboard. Some of the improving trends – particularly in the
‘abiding by the rules’ and the ‘satisfaction’ sections – indicate that
BT is making progress in encouraging behavioural change in line
with the Undertakings. However the EAB also notes that the
absolute levels of some of the measures are still below the levels BT
should be aiming for and that the company has a long way to go to
fully gain industry trust. The EAB believes that ensuring BT
employees have a firm grasp on how the Undertakings should be
applied in their particular role is the key to driving improvements in
behaviour overall. Lastly, the measures show that behavioural
change tends to be incremental and that it is challenging to
influence and to measure. Both BT and the EAB will continue to
focus on this area during 2008/09.
30
EAB Annual Report 2008
CONFIDENCE: BT’S COMMITMENT TO THE UNDERTAKINGS
Complaints, breaches and issues
The Undertakings place obligations on BT and the EAB to identify
and report on breaches. Both BT and the EAB handle complaints
from CPs regarding incidents of non-compliance. BT also receives
complaints directly from employees.
Complaints to BT
BT’s arrangements for handling complaints relating to the
Undertakings from CPs have continued to operate effectively this
year. The number of complaints cases has increased year on year
(from 28 in 2006/07 to 40 in 2008/09) but the overall volume
remains low. Perhaps the most striking pattern this year is the
increase in the number of complaints relating to behavioural issues
such as Openreach engineers’ interactions with end users. This has
risen from eight in 2006/07 to 25 in 2007/08, although it still
represents a tiny proportion of all visits made by Openreach
engineers. A typical example involves a Service Provider alleging
that an Openreach engineer has discussed the pricing of a retail
product in comparison with other Service Providers, including BT
Retail. By contrast the number of complaints regarding nonequivalence has fallen from 17 last year to 11 this year.
UNDERTAKINGS-RELATED COMPLAINTS FROM CPs TO BT CLOSED IN
2007/08
None of the complaints cases handled by BT either this or last year
has resulted in the identification of an Undertakings breach.
However, in a small minority of cases involving engineer behaviour,
BT reported that the engineer in question admitted an error and
necessary management action was taken to remind the individual of
what would be appropriate in future.
Complaints to the EAB
During 2007/08, the EAB received two complaints from non-BT CPs.
In April 2007, Thus plc alleged a breach of the Undertakings by BT
regarding the lack of an anti-slamming process for all CPs and the
governance of the existing process used by BT. Although no breach
was found by the EAO’s investigation, it recommended a solution
and for BT Wholesale to engage with Thus over the issue raised. This
resulted in Thus withdrawing the complaint in May 2007.
In May 2007, the EAB received a complaint from a CP which
requested to remain anonymous alleging that Openreach supplied
dark fibre to BT CPs in contravention of the Undertakings provisions
regarding Openreach’s product portfolio. The EAO found that since
the downstream product offered by BT Global Services was covered
by an exemption to the Undertakings (pending the outcome of BT’s
discussions with Ofcom in relation to a requested exemption from
EoI), no breach had occurred. As a result, the EAB did not uphold the
complaint.
Breaches
The Undertakings place obligations on BT and the EAB to identify
and report on breaches. Following a breach notification from BT or
the EAO the EAB determines its view on the breach, including its
significance (trivial or non-trivial) and the appropriateness of the
proposed remedial action. A description of the breaches reported
during 2007/08 as well as an analysis of year-on-year trends can be
found on the next page.
2
11
2
25
Equivalance
Behaviour
Information sharing
Other
Source: BT
EAB Annual Report 2008
31
CONFIDENCE: BT’S COMMITMENT TO THE UNDERTAKINGS
In 2006/07, the EAB reported nine breaches, two of which were non-trivial. A further seventeen breaches have been confirmed by the EAB
in 2007/08 and at year end three further breach cases remained open pending the EAO’s investigation. Five non-trivial breaches were
identified, four resulting from non-EoI activity in respect of Openreach products, and one concerning inappropriate sharing of Openreach CCI.
They were:
Non-trivial breach details
Remedy
Confidential Information relating to a large number of Openreach customers was
inappropriately shared within BT Wholesale as part of a wider financial report.
Openreach CI and CCI were immediately removed from this financial report.
This breach was notified by BT to the EAB in July 2007, and the EAB agreed with
BT’s assessment that the breach was non-trivial because a significant number of
customers were affected over several months.
BT Retail used non-EoI processes for WLR3 orders for some new-end users from
13 to 30 July 2007, and was therefore in breach of its ongoing EoI obligation for
this product.
The EAB judged this to be a non-trivial breach of the Undertakings as it had taken
place very soon after the relevant RFS date and 52% of new-end user orders were
not processed equivalently during the period.
BT reported to the EAB that an Openreach Special Faults Investigation (SFI) product
in relation to LLU lines (launched in late 2006) had not been delivered in an EoI way.
For example, a manual investigation process for specific types of faults was found to
be available only to BT Wholesale.
Other consequential action followed included audits, training, disciplinary action
and internal communications.
The EAB validated BT’s remedial actions and closed the case in October 2007.
BT Retail stopped using non-EoI processes for WLR3 new-end users from 31 July
2007.
The EAB validated this remedial action and noted that the breach fell within the
period during which BT had continued to offer voluntary payments to CPs of 25
pence per WLR3 line even though it was not obliged to do so. The EAB closed this
case in December 2007.
BT set out several remedial actions in this case, including making a manual process
available to all CPs, investigating potential system fixes and conducting wider
audits.
The EAB validated all remedial action and closed the case in March 2008.
The EAB considered this a non-trivial breach because the design of the SFI
product – which had been launched after the Undertakings came into force – had
failed to encompass EoI requirements. The continuing use of non-EoI processes by
Openreach demonstrated inadequate training to help BT employees to identify
inappropriate activity.
BT reported to the EAB that the original allocation of London wideband planners
between Openreach and BT Wholesale, at the time Openreach had been
established, had resulted in the application of non-EoI processes for some CPs’
circuits. For example, excess construction charges had not been applied
equivalently by the planners in BT Wholesale (who moved during this time to BT
Operate) in comparison with the planners in Openreach.
The principal remedial action in this case was to relocate the planners in BT Operate
to Openreach by October 2007.
In addition briefings were issued to non-Openreach managed sites and planners
about circumstances in which they are not allowed to plan Openreach circuits.
The EAB validated BT’s remedial actions and closed the case in February 2008.
The EAB considered this to be a non-trivial breach of the Undertakings because it
resulted from a conscious but poor management decision by BT that could have
been avoided.
BT’s handling of ‘Tie Pair in Use’ (TPIU) messages provided in error in respect of LLU
BT reported that this breach was remedied by the introduction of the enhanced EoI
orders was found to have been non-equivalent in two separate respects. BT
process for TPIU in September 2007.
Wholesale agents continued to make use of their system access to resolve TPIU errors The EAB validated BT’s remedial actions and closed the case in May 2008.
directly, rather than via the Openreach EoI process. In addition, Openreach
progressively made a manual TPIU error resolution process available to CPs with large
volumes of orders. This process was not notified as generally available to all CPs.
The EAB considered this to be a non-trivial breach because of the duration of the
breach, the volume of orders handled non-compliantly as a result and the introduction
by Openreach of a further non-compliant process on top of the original non-compliant
activity by BT Wholesale. The first element of the breach occurred from July 2006 to
March 2007 and the second from October 2006 to September 2007.
32
EAB Annual Report 2008
CONFIDENCE: BT’S COMMITMENT TO THE UNDERTAKINGS
This is similar to the pattern of the two non-trivial breaches reported
in 2006/07, one of which concerned non-EoI transactions and the
other inappropriate use of Openreach assets by another BT business,
though the volume is higher.
The other 12 breaches identified this year were classified as trivial.
They are summarised by category in the table below.
Category
No
Example
EoI – breaches associated
with the delivery of
equivalence of inputs for
major products
4
BT Wholesale agents progressed a small
number of SMPF fault orders inappropriately
with Openreach
Inappropriate information 5
sharing between BT LoBs
A mistakenly addressed e-mail led to some
Openreach Customer Confidential
Information being given to a person in BT
Wholesale on two occasions.
Lack of effective control
of Openreach assets
3
A BT Retail faults diagnosis team accessed
Openreach assets directly to perform line
testing without Openreach’s knowledge
Total
12
By comparison, seven trivial breaches were reported in last year’s
Annual Report: two on EoI, four on information sharing and one on
Openreach assets control.
What might explain the pattern of breaches?
One potential explanation for the increase in breaches and
particularly ones involving EoI is that the ‘footprint’ of products and
systems covered by the Undertakings has become progressively
larger. During 2007/08, there were a number of large and complex
EoI products due to be launched and five of the sixteen breaches
reported to the EAB by BT were associated with these EoI product
deliveries, for example the delivery of WLR3 RFS (see p18).
Conversely this means that two-thirds of cases this year involved
breaches of ongoing compliance requirements for products that
were delivered before April 2007. Some of these breaches actually
started last year but were only identified within the last 12 months,
which may be due to improved understanding and detection across
the organisation.
The EAB was disappointed that product-related EoI breaches have
occurred in both of the last two years, suggesting that BT has not
fully learnt the lessons from previous events. This led the EAB to
advise BT that its approach to product development should be
improved to ensure full compliance with the Undertakings. It will
become very important to maintain management focus in this area,
especially given the large number of 21CN products which are
expected to be launched over the next few years.
Managing and remedying breaches
The EAB has worked with BT to improve the effectiveness of BT’s
breach investigation process and the remediation of non-trivial
breaches. BT has begun to conduct a root cause analysis of all breach
cases to establish any areas of particular weakness in achieving or
sustaining compliant processes and behaviour among BT employees.
It has also made improvements to breach tracking, reporting and
investigation. The EAB welcomes these developments but would like
to see further improvements to the timeliness of BT’s reporting and
remediation of breach cases.
BT plays an active role in identifying and remedying breaches. All
five of this year’s non-trivial breaches were identified by BT. In two
cases the EAB and BT agreed on the significance of the breaches and
on the delivery of associated remedial action. In the other three
cases, the EAB judged the breaches to be non-trivial whereas BT’s
breaches process had classified them as trivial. However, in two of
these cases BT had flagged its decisions as ‘borderline’.
In many cases the triviality of the breach meant that remedial action
was straightforward, for example ceasing access to a particular
system for the relevant team. However, others have taken longer to
resolve. In particular, the EAB has expressed its dissatisfaction to BT
with the implementation of action to remedy the non-trivial breach
associated with BT Global Services engineers performing single-line
socket shifts in customer premises without the knowledge or control
of Openreach (first reported in the EAB’s 2007 Annual Report). This
breach began in January 2006 but remediation did not reduce the
instances of non-compliance to minimal levels until early 2008. That
aside, the EAB concluded that most remedial action throughout
2007/08 was delivered successfully within a reasonable timeframe.
It also closed all outstanding cases from the previous year.
The EAB has also sought assurances that BT’s analysis of breaches
has led to an improved understanding about Undertakings
compliance among employees. To this end, the EAB was pleased to
see that the ‘Living the Spirit’ programme in Openreach (see p26)
includes scenarios based on actual breaches. Alongside this, the
promotion of a compliance culture has been helped by BT’s
transparency in notifying breaches to the EAB and their subsequent
publication on the EAB’s website.
Issues management
The EAB looks into issues relevant to the Undertakings raised
informally by CPs during meetings with the EAB or the EAO.
Fewer issues were raised by CPs and investigated by the EAO during
2007/08 compared to the previous year. This may be the result of a
greater understanding of the products covered by the Undertakings
and an increased familiarity with the EAB’s remit. It could also be a
sign that CPs have fewer issues to raise regarding BT’s delivery of the
Undertakings as there is increasing satisfaction with the company’s
engagement on key issues.
EAB Annual Report 2008
33
CONFIDENCE: BT’S COMMITMENT TO THE UNDERTAKINGS
While there has been a more varied range of issues raised during
2007/08, none of the issues investigated has led to the
identification of a breach. However, the investigation of one issue –
bridge cases – has led to a wider review of how BT handles
escalations in general (scheduled to take place during 2008/09). On
another, the EAO encouraged Openreach to change the way that it
handled faults following an issue raised by a CP. 20% of all issues
investigated resulted in follow-up actions for BT. Non-BT CPs have
told the EAO that they find its issues management process a useful
way of exploring and resolving concerns without submitting formal
complaints.
ISSUES RAISED BY SOURCE
80
60
40
20
Conclusion and outlook
0
Non-BT CPs
EAO and BT
Ofcom
2007-2008
2006-2007
Source: EAO
Issues raised by non-BT CPs comprise the largest percentage of all
issues investigated by the EAO. The EAO has also found that those
issues raised by CPs during 2007/08 have increased in complexity,
and are therefore taking longer to resolve. While the majority of
issues are resolved within three months, a small number took up to
six months to be concluded.
To some extent, the longer resolution time for some issues relates to
their subject matter. As the chart below shows, there were a number
of issues raised with regards to NGN and NGA where the guidelines
for offering equivalent services are still being developed.
ISSUES RAISED BY AREA OF CONCERN 2007-2008
3
3
3
The number of complaints from non-BT CPs received by both the
EAO and BT, and the number of issues reported informally to the
EAO remain crucial indicators of industry confidence in BT’s
compliance with the Undertakings. The EAB will continue to pay
close attention to industry concerns and will continue to work with
BT to resolve issues before they become formal complaints.
5
4
5
NGN
Equivalence
Access to BT Infrastructure
Voice products
General - no theme
Acount management,
contracts and billing
Source: EAO
34
EAB Annual Report 2008
The EAB is satisfied with BT’s progress in promoting behavioural and
cultural change in line with the Undertakings. The EAB considered it
critical that the focus in introducing behavioural change should
move away from BT employees’ simply knowing what the
Undertakings say to their knowing what is required of them in
practice. It would also like to see evidence that this best practice is
being shared across the company. While work is still needed in some
areas, the EAB considers that BT has made a positive step forward
with the introduction of the ‘Living the Spirit’ programme.
However, measuring the impact of behavioural change remains more
problematical. The new dashboard may provide progress in this area,
although the EAB considers that meaningful change can only be
seen to take place over time. It expects to continue to build on its
monitoring approach in this area over the coming years.
6
Ethernet
The EAB considered that BT has generally put in place an effective
governance structure and behavioural programme and this gives the
EAB confidence that the company is committed to delivering the
Undertakings. The EAB has particularly commended BT Ireland
(North)’s commitment to establishing information sharing
boundaries even though it is not required to do so by the
Undertakings. However, the EAB will continue to monitor progress in
areas where it has raised concern, including its recommendations for
Openreach to consider all aspects of compliance in product
development and launch. It has also recommended that BT clarify
some of the governance arrangements set up as part of its
reorganisation to ensure that compliance with the Undertakings is
maintained.
OUTLOOK
The EAB gives its opinions on key trends shaping its work and its areas of focus for the
coming year. Forward-looking information is not fully supportable, but the focus areas for
2008/09 identified below are based on key trends and priorities identified during
2007/08.
FOCUSING ON ONGOING COMPLIANCE
AS WELL AS THE DELIVERY OF
PRODUCT MILESTONES
In 2008/9 the work of the EAB will be driven by the evolution of the
Undertakings as they move from a focus on milestone achievement
to compliance in a more general sense. There are few large
milestones left to deliver, but there are a large number of ongoing
obligations dating from those previously delivered or for obligations
with no set delivery date.
Beyond these milestones, the EAB will increase its focus on how
much compliance with the Undertakings has become an ongoing
part of ‘business as usual’ within BT. It will pay particular attention
to:
The recent reorganisation which created BT Design and BT
Operate to ensure the information sharing boundaries and
compliance controls agreed with Ofcom are properly
implemented and used
The way in which BT makes its exchange space available for CPs
to use
The billing arrangements for its EoI products
The effectiveness of its 21CN consultations and how it deals with
customer escalations.
The EAO will revisit many of the previously achieved obligations to
ensure that delivery is being sustained satisfactorily.
All of the existing major products will have passed their RFS dates
and so attention will turn to IBMC dates. There will also be a number
of obligations covering the migration between products and the
changes required when a number of exemptions expire.
There are also a number of new product launches planned on both
legacy and 21CN platforms. Other than IPstream Connect, their
launch dates may not be specified in the Undertakings but principles
such as equivalence and information confidentiality will apply to
many of them from launch and the EAB will monitor and advise BT
on its approach to ensure this is the case.
ENSURING THAT ALL PRODUCTS ARE
DELIVERING EQUIVALENCE FOR CPs
The product KPIs will continue to be a key focus area, as they can
indicate whether ‘equivalence of inputs’ to a product is delivering
‘equivalence of performance’ as expected. In particular, the KPIs
that relate to the WLR portfolio and for the migrations between
products and/or CPs will be under the closest scrutiny.
During 2007/08, there was insufficient data to analyse fully whether
equivalence of performance was being delivered for WLR3.
However, during 2008/09, the EAB hopes to see WLR performance
within the control limits.
OVERSEEING THE LAUNCH OF
EQUIVALENT NEXT GENERATION
PRODUCTS AND SERVICES
21CN will become increasingly important to the EAB as the
programme becomes a reality with the launch of new products,
services, processes and platforms. The effectiveness of the
consultations, the resultant key design decisions and the equivalence
of the network access products will be a focus for the EAB. BT’s new
broadband service up to 24Mbit, BT Wholesale Broadband Connect,
and the Multi-Service Interconnect Link (MSIL) product that CPs will
use to connect to 21CN will be of particular interest.
Alongside 21CN, the year will also see developments in Next
Generation Access (NGA). The EAB will be monitoring Openreach’s
‘fibre to the premises’ project at Ebbsfleet to ensure it is compliant,
as well as assessing the Undertaking implications that may result
from the conclusion of Ofcom’s wider consultation on NGA.
EAB Annual Report 2008
35
MAINTAINING A FOCUS ON
INFORMATION SHARING WITHIN BT
Systems separation milestones are the most significant still to be
delivered and are subject to both internal and external audits carried
out on behalf of the EAB. Systems separation is important because it
can provide safeguards in controlling the flow of sensitive
information, but its introduction can involve complex software
development work. The EAB will monitor the application of these
systems safeguards to examine their effectiveness.
CHECKING THAT COMPLIANCE
TRAINING RESULTS IN SUSTAINED
BEHAVIOURAL CHANGE
The EAB will continue to focus on behavioural change because it
believes that this is central to delivering the underlying principles of
the Undertakings. The EAB believes that an understanding of the
relevant obligations by an individual and the ability to use that
understanding effectively will be key to ensuring appropriate
behaviour across BT.
As a result the EAB will continue to help BT develop the dashboard
to measure the changes in understanding, but even more
importantly it will be reviewing the programmes of activity BT is
putting in place to ensure effective understanding of the
Undertakings.
MAKING STAKEHOLDER ENGAGEMENT
CENTRAL TO THE EAB’S ROLE
The EAB expects to engage with a wide range of stakeholders during
the coming year. It hopes to continue to develop its understanding
of the impact of the Undertakings on both small and large CPs in the
UK, as well as continuing to investigate particular concerns raised by
industry. With the migration of a number of products and services to
BT’s NGN, the EAB will continue to hear industry views on the
network implementation.
The ‘functional separation’ model followed by BT is attracting
attention across Europe and the rest of the world. The EAB will
continue to share its experiences of assessing compliance in a
functionally separated organisation.
36
EAB Annual Report 2008
FUTURE RISKS
The EAB does not believe that BT will achieve the milestone of 30%
of its analogue end-user base being migrated to WLR3 by 30 June
2008. It also believes that there are risks associated with the
changes required before the FeatureNet exemption expiry on
30 June 2008 and the delivery of the WLR ISDN2 IBMC of 31 March
2009.
In terms of ongoing compliance, the area that has the most risks
associated with it is around the boundaries between business units
within BT, particularly where they have moved as a result of the
recent organisational change. The risks of inappropriate information
sharing and Openreach’s control of its assets across these boundaries
will continue to be significant.
The EAB has flagged its concern during 2007/08 regarding overall
service levels for some EoI products. The EAB does not have a
specific remit covering service, but would like to see product and
process improvements introduced via the EMP during 2008/09 to
ensure the migration of legacy EoI products to the new 21CN
platform runs smoothly.
It will also continue to monitor that Openreach makes improvements
to its product management processes for EoI products as this was an
area of concern during 2007/08.
CONCLUSION
In the coming year the EAB will maintain its focus on monitoring
whether equivalence and compliance are at the heart of how BT
does business with CPs. Delivery of the remaining milestones – and
particularly those judged to be at risk – will be one way that the
EAB continues to assess progress. However, it will also be seeking
far-reaching evidence that BT employees not only understand their
obligations, but are committed to compliant ways of working on an
ongoing basis. This continued commitment will become all the more
important as BT launches the first large scale next generation
products in 2008/09. The EAB considers industry feedback to be
crucial in making an on-going assessment of BT’s commitment to
delivering equivalence.
ABOUT THIS REPORT
The EAB is required to submit an annual report to Ofcom providing its views on a range of
matters relating to BT’s compliance with the Undertakings. The EAB must also publish a
summary report (the “EAB Annual Report”) on its activities which is subject to an
independent assurance review.
This is the third Annual Report and like the previous reports includes
a number of key opinions which are independently assured by
PricewaterhouseCoopers LLP (“PwC”). PwC also undertakes
assurance activity of the product key performance indicators (KPIs)
and other data in this report and assesses whether this report is
consistent with the EAB’s annual report to Ofcom. PwC’s
independent report and opinions are set out later in this report.
This section explains the reporting policies adopted by the EAB in
forming its opinions.
Opinions on the EAB’s governance and the adequacy of
its resources
On p8, the EAB reports that it has “considered its governance
arrangements against the criteria set out… and is satisfied that
these are functioning well and that it is effective in monitoring
progress and advising BT on future steps.” In reaching this opinion
the EAB considered the following matters:
The confidence of the EAB in the quality of information received
from BT and the EAB’s access to senior BT executives, as
expressed in the results of a review of members opinions
conducted by the EAB Secretariat in Autumn 2007
Developments in the EAB’s monitoring processes over the last
year to include BT’s Undertakings obligations regarding Next
Generation Networks (NGN) and the addition of new metrics for
monitoring behavioural change in BT
The quality and timeliness of the reports submitted by the EAO to
the EAB
The performance of the EAO’s breaches and complaints processes
and the EAO’s work with BT to improve the analysis, reporting
and remediation of breach cases
The findings of the BT Internal Audit review of the EAO in Q3
2007/08
The views of CPs and industry bodies expressed during direct
engagement with the EAB
The relevant skills and experience of EAB members and their
understanding of the EAB’s role and responsibilities in BT
The EAO’s access to information held by BT; and the adequacy of
the process for compiling annual reports and the ability of the
EAB to have unfettered influence on the detailed content and
conclusions of the reports
The views of the Director EAO and EAB Secretary on the level of
resources at their disposal.
Opinion on BT’s governance associated with the
Undertakings
On p26, the EAB says that it is “satisfied with the governance
arrangements that BT has put in place to oversee the delivery of
the Undertakings as judged against the criteria described ‘[in this
section], although it has recommended improvements to
Openreach’s product management processes following a number
of breaches relating to EoI products”.
In reaching its conclusions of BT’s governance arrangements the EAB
has had regard to the following processes:
Mechanisms in place for ensuring complete and accurate
monitoring of implementation that have also been extended to
the newly created BT Operate and BT Design
Measures in place to detect and remedy breaches. In particular
BT’s commitment to improving the effectiveness of its
management of breach cases to include root cause analysis to
understand and address specific areas of weakness
BT’s processes to handle complaints relating to the Undertakings
BT’s programme of reporting to the BT Group plc Board and the
relevant committees.
The EAB also took account of the following information resulting
from the implementation of these processes and the EAO’s own indepth reviews and audits of BT’s ongoing delivery of the
Undertakings:
The findings of the EAO’s monthly monitoring reports on BT’s
compliance with the Undertakings, including steps being taken to
deliver future commitments
Quarterly reports from BT on its progress in implementing and
measuring behavioural change
The Director EAO’s reports to the EAB which, inter alia, track and
comment on governance developments
Quarterly reports from the Openreach CEO, on the measures
being taken to ensure and maintain a compliant organisation
The views expressed by individual CPs in presentations to the EAB
The EAO’s quarterly reports on complaints relating to the
Undertakings which include an assessment of BT’s complaints
handling arrangements
Experience of reporting to the EAB on breach investigations and
follow-up by BT and the EAO
The results of the EAO’s issues management process where all the
issues raised by CPs or internally are assessed to determine if they
require further investigation
EAB Annual Report 2008
37
The findings of the EAO’s review of BT’s ongoing compliance with
the Undertakings in the context of BT’s organisational
transformation
The findings of the EAO’s ongoing compliance audits as detailed
in the EAO’s Audit and Validation Plan which includes exemptions
and variations.
Opinion on BT’s delivery of the Undertakings during
2007/08
In the section ‘Equivalence’, the EAB reports its opinions of BT’s
delivery of several key Undertakings during the year. The individual
opinions (summarised in the table below) are determined through
the EAB’s Undertakings validation process; NGN monitoring process;
and its processes for monitoring ongoing compliance and
exemptions and variations.
Blue
An EAO validation review has confirmed BT’s delivery of the
Undertaking by the required date.
Green
Undertaking delivery on track, or Undertaking completion
asserted by BT and an EAO validation review is in progress.
Amber
Undertaking is at risk i.e there are key issues that could impact
the delivery of the Undertakings to the agreed date but these
are being managed within the programme; or the EAO
validation is in progress but is awaiting evidence from BT.
Red
Undertaking date has been missed or is in jeopardy i.e there are
key unresolved issues that will impact the delivery of the
Undertaking agreed date; or the EAO validation has highlighted
significant concerns.
Only the EAO Director can recommend moving an Undertaking from
green to blue status. This decision is based on a validation review to
determine whether BT has completed the requirements of the
Undertakings by the due date. The EAO leads this review having
previously agreed success criteria with BT, and where appropriate
having commissioned IARC to undertake review activity on its behalf.
Products
Due Date
EAB Opinion
LLU and IPstream
consuming LLU IBMC
31 December 2006
Delivery in full August 2007
WES IBMC
31 March 2007
Delivered on time
WLR Analogue RFS
30 June 2007
Delivered on time
WLR ISDN2 RFS
30 September 2007
Not achieved – trivial breach
regarding some new end
user orders
WLR ISDN30 RFS
29 February 2008
EAO validation ongoing
NGN
Milestone dates are
voluntary
ONBS (Backhaul product)
Not specified
Delivered on an EoI basis
VIC (Interconnect
product)
Not specified
Delivered on an EoI basis
MSIL (Interconnect
product)
Not specified
EAO validation ongoing
38
EAB Annual Report 2008
Systems Separation
OSS –User access controls
(WLR and LLU)*
30 June 2007
Not achieved – trivial breach
of the application of user
access controls.
* see results of external
audit p.19
*The Undertakings (section 5.44.5c) require an external audit of the delivery of
the OSS user access controls.
Exemptions and Variations
Over the year, the EAB has also monitored BT’s compliance with
variations and exemptions to the Undertakings by the agreed date.
There were 17 obligations due in the year up to March 2008 and the
EAB has validated that all of these were delivered. It has also
commended BT’s commitment and transparency regarding the
delivery of these smaller obligations. However, in the ‘Equivalence’
section the EAB expressed concern about BT implementing the
required changes to FeatureLine and FeatureNet required by June
and July 2008 respectively.
Opinions on BT’s progress towards Undertakings due in
2008/09
The EAO’s monthly status report also informs the EAB’s plans for
monitoring, and its perspectives on BT’s future compliance, set out
in the ‘Outlook’ section of this report. This section includes the EAB’s
opinion that it does not believe that BT will achieve the
milestone of 30% of its analogue end-user base being
migrated to WLR3 by 30 June 2008. It also believes that there
are risks associated with the changes required before the
FeatureNet exemption expiry on 30 June 2008 and the delivery
of the WLR ISDN2 IBMC of 31 March 2009.
The EAB believes that in terms of ongoing compliance, the area
that has the most risks associated with it is around the
boundaries between business units within BT, particularly
where they have moved as a result of the recent organisational
change. It says that the risks of inappropriate information
sharing and Openreach’s control of its assets across these
boundaries will continue to be significant. It also believes there
are risks around service levels for some EoI products and would like
to see increased stability on the EMP during 2008/09. It will also
continue to monitor that Openreach makes improvements to its
product management processes for EoI products.
Product KPI monitoring
The EAO monitors BT’s KPIs on products covered by the
Undertakings on a monthly basis and reports them to the EAB. In
conducting this review the EAO considers the accuracy of the KPI
data supplied to it by BT and the effectiveness of mechanisms for
ensuring complete and accurate reporting of KPIs and BT’s future
plans for KPI development. As a further layer of assurance over the
accuracy of the product KPIs, BT’s IARC Group also review the
integrity of the systems from which the data is drawn. Also as part of
the external assurance of the Annual Report data, the auditors
review the product KPI compilation process. The EAO’s monthly
report highlights any significant changes to individual indicators
which suggest potential non-equivalence. The EAO investigates
these situations further with BT and reports its findings to the EAB.
INDEPENDENT ASSURANCE REPORT TO
THE EQUALITY OF ACCESS BOARD
AND OFCOM
Respective responsibilities of the Equality of Access
Board and PricewaterhouseCoopers LLP
We have been engaged to express an independent opinion on
selected aspects of the Equality of Access Board (“EAB”) Annual
Report for the year ended 31 March 2008 (the “Report”). The
preparation of the Report in accordance with the requirements of
the Undertakings given to Ofcom by BT Group plc (“BT” or the
“Group”) pursuant to the Enterprise Act 2002 effective
22 September 2005 (the “Undertakings”) is the sole responsibility
of the EAB.
There are no generally accepted standards for reporting on
compliance with the Undertakings or in respect of related
performance measures. The reporting policies adopted by the EAB in
forming their opinions expressed within the Report are described in
the section titled ‘About this Report’ on pages 37 to 38 (the
“Reporting Policy”).
Scope and approach
Our engagement was designed to provide assurance on:
whether, in our opinion, the EAB’s opinions in respect of:
– its governance arrangements;
– BT’s governance associated with the Undertakings;
– BT’s delivery of the Undertakings during the year ended
31 March 2008; and
– the future risks associated with the Undertakings due after
31 March 2008;
are fairly stated in accordance with the Reporting Policy. These
opinions are shown on pages 8, 26 and 36 within the Governance,
Confidence and Outlook for 2008/09 sections of the Report and
reproduced in bold italic text within the Reporting Policy and in
respect of BT’s delivery of the Undertakings during the year ended
31 March 2008 shown in the table on page 38 of the Reporting
Policy with further description given on pages 9 to 23 of the
Equivalence section of the Report (the “EAB’s Opinions”).
In this regard, we planned our procedures to have a reasonable
expectation of detecting material misstatements or omissions in
the EAB’s Opinions. We obtained an understanding of the
relevant controls and procedures applied by the EAB and the
Equality of Access Office (“EAO”) to generate, aggregate and
evaluate information in respect of the Group’s governance,
delivery and ongoing compliance with the Undertakings,
including the EAO monitoring and reporting, the audit and
validation, the quick checks, the exemptions and variations and
the breaches and complaints processes. We performed tests of
these controls and procedures and reviewed the work undertaken
by BT’s Internal Audit and Regulatory Compliance department
(“BT IARC”) on behalf of the EAB including, to the extent
considered necessary, review of detailed workpapers and reperformance of testing;
whether, in our opinion, the Report is consistent with the EAB’s
annual reporting to Ofcom which consists of the Report and
certain additional annexes (the “Ofcom Report”). In this regard,
we planned our procedures to have a reasonable expectation of
identifying any material inconsistency in the Report compared
with the content of the Ofcom Report. We performed a full
comparison of the text of the Report to the more detailed Ofcom
Report. Other than the consistency of the Report and the Ofcom
Report we have not been engaged to provide assurance over the
Ofcom Report. Accordingly we do not express any separate
opinion on the Ofcom Report;
whether, in our opinion, the Product Key Performance Indicators
for IPstream Provision and Repair Equivalence 2007-2008 and
IPstream Provision and Repair Equivalence after analysis 20072008 shown on pages 12 to 13 (the “IPstream Provision and
Repair KPIs”) are properly prepared in accordance with the
Reporting Policy. In this regard, we planned our procedures to
provide us with reasonable assurance they are properly prepared
in accordance with the Reporting Policy. We completed, in
conjunction with BT IARC, tests over data generation within the
underlying management information systems of the group, data
consolidation and reporting; and
whether, in our opinion, the Product Key Performance Indicators
for IPstream Migrations Equivalence 2007-2008, LLU Provision
and Repair Equivalence 2007-2008, LLU – SMPF Migrations
Equivalence 2007-2008 and WES Provision and Repair
Equivalence 2007-2008 shown on pages 13 to 15 (the “Other
Product KPIs”) are properly compiled from the underlying
management information of the Group. In this regard, we
planned our procedures to provide us with reasonable assurance
they are properly compiled from underlying management
information. We completed tests over data consolidation and
reporting only and did not perform testing over the generation of
data within the underlying management information systems of
the Group.
In addition, we reviewed the minutes of EAB meetings, discussed
with employees of the Equality of Access Office the processes to
collate the Report and reviewed the remainder of the Report for
consistency with our knowledge of the Group in order to report
whether anything came to our attention to indicate that the
remainder of the Report is inconsistent with the findings of our work.
Our engagement includes the expression of an opinion on the
fairness of the EAB’s opinions in respect of BT’s governance
associated with the Undertakings, BT’s delivery of the Undertakings
during the year ended 31 March 2008 and BT’s progress towards
Undertakings due after 31 March 2008. Our assurance procedures,
which are described above, focus on understanding and evaluating
the relevant controls and procedures applied by the EAB and the
EAO to generate, aggregate and evaluate information in respect of
the Group’s governance and compliance with the Undertakings. We
have not been engaged to provide any separate independent
assurance over the internal controls and other actions implemented
by the Group to ensure compliance with the Undertakings.
Accordingly we do not express an opinion in this regard.
We planned and performed our evidence-gathering procedures to
obtain a basis for our conclusions in accordance with the
International Standard on Assurance Engagements 3000 (Revised) –
“Assurance Engagements other than Audits or Reviews of Historical
Information”. We have not performed an audit, and therefore do not
express an audit opinion, in accordance with International Standards
on Auditing (UK and Ireland).
We believe that our work provides a reasonable basis for our
conclusions.
EAB Annual Report 2008
39
Considerations and limitations
Conclusions
The Group’s governance measures to ensure compliance with the
Undertakings represent a set of internal controls and other actions
designed to provide reasonable assurance regarding compliance, in
all material respects, with each of the Undertakings and to support
reporting of compliance with those Undertakings. Further, the EAB’s
governance measures to monitor, assess and report on the Group’s
compliance with the Undertakings represent a set of internal
controls and other actions designed to provide reasonable assurance
regarding the assessment of compliance, in all material respects,
with each of the Undertakings. Because of the inherent limitations in
any set of internal controls, for example the degree of judgement
required in applying certain controls, internal controls may not
prevent, detect or report non-compliance with the Undertakings.
Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may have become inadequate
because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
In our opinion:
This report, including the conclusion, has been prepared for and only
for the EAB and Ofcom for the purpose of allowing the EAB to meet
its requirements under the Undertakings and for no other purpose.
We do not, in giving this opinion, accept or assume responsibility for
any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
21 May 2008
40
EAB Annual Report 2008
the EAB’s Opinions, shown in bold italic text on pages 37 and 38
of ‘About this report’ and in respect of delivery of the
Undertakings during the year ended 31 March 2008 shown in
the table on page 38 of ‘About this report’ are fairly stated in
accordance with the Reporting Policy;
the EAB Annual Report for the year ended 31 March 2008 is
consistent with the Ofcom Report;
The IPstream Provision and Repair KPIs on pages 12 to 13 are
properly prepared in accordance with the Reporting Policy;
The Other Product KPIs on pages 13 to 15 are properly compiled
from the underlying management information of the Group; and
Nothing has come to our attention to indicate that the remainder
of the EAB Annual Report for the year ended 31 March 2008 is
inconsistent with the findings of our work.
GLOSSARY
21CN
–
BT’s 21st Century Network
BES
–
Backhaul Extension Service
Consult21
–
BT’s consultation programme for its 21st Century Network
CPs
–
Communications Providers
EAB
–
Equality of Access Board
EAO
–
Equality of Access Office
Eco
–
Electronic customer ordering
EMP
–
Equivalence Management Platform
EoI
–
Equivalence of input
IARC
–
BT’s Internal Audit and Regulatory Compliance team
IBMC
–
Installed Base Migration Complete
KPI
–
Key performance indicator
LiSA
–
Line Share Automation
LLU
–
Local Loop Unbundling
LoB
–
BT Line of Business
MIS
–
Management Information Systems
MPF
–
Metallic Path Facility
MSIL
–
Multi-Service Interconnect Link
NGA
–
Next Generation Access
NGN
–
Next Generation Network
NGNuk
–
Independent NGN industry body
ONBS
–
Openreach Network Backhaul Services
OSS
–
Operational Support Systems
OTA2
–
Office of the Telecommunications Adjudicator
Parallel equivalence
–
parallel products or systems used by BT CPs equivalence and non-BT CPs
Pooled z-test
–
Statistical indicator of comparative CP performance
PPC
–
Partial Private Circuit
RFS
–
Ready for Service
SMP
–
Significant Market Power
SMPF
–
Shared Metallic Path Facility
SoR
–
Statement of Requirements
TPIU
–
Tie Pair in Use
VIC
–
Virtual Interconnect Circuit for BT’s 21st Century Network
WEES
–
Wholesale End-to-End Ethernet Service, mainly purchased by BT CPs
WES
–
Wholesale Extension Service
WES-LA
–
Wholesale Extension Service – Local Access, mainly purchased by non-BT CPs
WLR
–
Wholesale Line Rental
WLR3
–
EoI version of Wholesale Line Rental
EAB Annual Report 2008
41
BT GROUP PLC
Registered Office: 81 Newgate Street, London EC1A 7AJ
Registered in England and Wales No: 4190816
Produced by the Equality of Access Office
Registered office: 81 Newgate Street, London EC1A 7AJ. Registered in England and Wales No. 4190816. Produced by BT Group. Designed
by Greentarget, London. Printed by Bowne. The material used is Greencoat Plus Velvet, which is produced using 80% recovered waste fibre
and 20% virgin wood fibre. All pulps used are elemental chlorine free (ECF). The FSC logo identifies products which contain wood from well
managed forests certified in accordance with the rules of the Forestry Stewardship Council.
www.bt.com PHME 55513
Please recycle