21CN Legacy Interconnection Working Group

17th December 2004

Auditorium

City Place, Gatwick

Agenda

The purpose of the Working Group meeting today is to discuss the maintenance of existing legacy interconnect services during the establishment of the 21CN network.

To this purpose ,after previous discussions and feedback from industry, BT will present a proposal setting out the commercial arrangements arising from the physical changes to the network.

In addition BT will set out a proposal for the future architecture/routing arrangements for discussion and to obtain industry’s feedback

Agenda

      Introductions       Purpose of meeting       BT’s commercial proposal       Operational Issues       Contractual aspects and timescales       Discussion

LEGACY INTERCONNECTION IN 21CN17 DECEMBER 2004

ANTHONY SHEPPARDSENIOR PORTFOLIO STRATEGY MANAGER

FORWARD LOOKING STATEMENTS - CAUTION ADVISED

Certain statements in this presentation are forward-looking and are made in reliance on the safe harbour provisions of the US Private Securities Litigation Reform Act of 1995. These statements include, without limitation, those concerning: BT's plans for transformation of its networks; benefits to customers of the 21CN programme; key milestones and expected timetable for delivery of 21CN; and the benefits in relation to, for example interconnect, convergence and broadband

Although BT believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual outcomes may differ materially from those expressed or implied by these forward-looking statements

Factors that could cause differences between actual outcomes and those implied by the forward-looking statements include, but are not limited to: material adverse changes in economic and financial markets conditions in the markets served by BT; supplier arrangements; future regulatory actions and conditions in BT’s operating areas; technological innovations; developments in the convergence of technologies and the anticipated benefits and advantages of new technologies, products and services, including broadband, not being realised

AGENDA

BACKGROUND & GENERAL PRINCIPLES

COMMERCIAL PRINCIPLES

COMMERCIAL PROPOSALS

What is 21CN and why is change beneficial for the industry?

•21CN represents a multi-billion pound capital investment by BT for the benefit of the industry and the industry's customers

•21CN is the enabling infrastructure for growth and opportunity for the industry

•21CN will enable compelling new products and services for all operators to market to their customers.

•BT is committed to working closely and openly with industry to ensure that the benefits are maximised for operators, the economy and society.

For discussion purposes.No implementation assurances

Subject to Contract

BT’s Approach to Interconnect Portfolio

•Continue to provide any-any voice connectivity in consultation with customers

•Work with customers to ensure appropriate inter-operability of new services, for example through access to “network hooks”

•Provide new forms of Interconnect for the new IP world

•Discharge its regulatory obligations in a professional manner

•Minimise inconvenience to customers during the implementation of 21CN

•Support reasonable ongoing requirements for TDM interconnect until 2010

For discussion purposes.No implementation assurances

Subject to Contract

Principles

• An equitable, but affordable commercial agreement.

• BT will not indemnify altnets from investment risk due to obsolescence (e.g. Dial IP over the coming years)

• Recognise Ofcom’s policy of encouraging infrastructure build-out.

• Recognise the re-arrangement process is years long and the interconnect picture will be changing between offer and implementation.

Interconnect at DLEs

0

5

10

15

20

25

30

Operators I/X Links (000)

CSI

ISI via NGS sites

ISI (Non-NGS sites)

IEC (from non-NGSsites)ISI (all)

For discussion purposes.No implementation assurances

Subject to Contract

Key Migration Issues for Customers

BT closes switches -

•Customer traffic must be rearranged

•Value of POCs at non-NGS sites

•ISI users at DLE-only sites face biggest disruption

•FRIACO at DLEs expected to die due to broadband penetration

•How will SIA Systems Alteration clause be applied?

•Under existing contractual terms, the change process is designed for BAU rather than large tranche one-offs

•What happens to DLE conveyance rate?For discussion purposes.

No implementation assurancesSubject to Contract

BACKGROUND & GENERAL PRINCIPLES

COMMERCIAL PRINCIPLES

COMMERCIAL PROPOSALS

Contractual Principles & Issues

• SIA Systems Alterations Clause

• BT meets reasonable agreed costs of network engineering alterations to Operator network

• Connection Charge rebate applies if Capacity is ceased (SIA, Ann. A, App. B, 4)

• But current contract terms ineffective for large one-off network changes

• We need –

• upfront agreement on criteria for Operator cost reimbursement

• early agreement on terms & process for dealing with complex alterations

• to provide certainty for both BT and our customers

For discussion purposes.No implementation assurances

Subject to Contract

Backhaul from Closing DLEs

• All backhaul Connection costs met by BT

• Ongoing backhaul circuit costs met by BT for 6 months

• Applies to ISI Voice only at all closing DLE switches

• CSI: BT will simply re-point or cease circuits as agreed with customer

• Signalling aspects:

• IUP traffic backhauled to NGS

• ISUP circuits may be extended to Metro Node on same terms by agreement, if required

• FRIACO

• Decline in demand needs to be managed collectively by industry

• Need to consolidate off DLEs?

• Your views invited

For discussion purposes.No implementation assurances

Subject to Contract

Conveyance Charges for Re-located DLE Circuits

• Local Call Termination will continue to be charged for 6 months

• smooth impact of loss of competitive model based on legacy architecture

• Applies to ISI Voice at all closing switches

• Dial IP

• Residual demand needs to be managed collectively by industry to meet remaining end users’ requirements

• Need to consolidate off DLEs?

• Specialist ad hoc group?

• Your views invited

Views and Comments please!

Is there a better way of doing this?

Annex A: Can I install Capacity after Notice of a Switch Closure?

BT proposals

• From date Notice given under SIA:• New POCs for new customers or orders for new transmission systems/IEC access at customer’s risk (BT will not meet any costs of rearrangement or backhaul); Local Call Termination not available after DLE closure;

• Customers may bring into use spare capacity on existing ISI transmission systems already installed before Notice given and qualify for BT proposals on backhaul and Local Call Termination.

• From 7 months before Closure Date:• No new POCs accepted;

• No new capacity or IECs to be ordered;

• Customers may bring into use spare capacity on existing ISI transmission systems already installed before Notice given and qualify for BT proposals on backhaul and Local Call Termination.

• From Closure Date:• No expansion of capacity allowed under SIA;

• Installed capacity on existing ISI transmission systems brought into use will no longer qualify for BT proposals on backhaul and Local Call Termination

21CN

Metro node(ISUP)

Today

NGS(IUP / ISUP)

PoC

PoC

IEC

IEC (ISUP)

IEC(IUP/ISUP)

IEC (ISUP)

Annex B: Proposed Architecture

Conc

DLE

NGS

MSAN

Newinterconnect:

IP or ISUP4. If required,

operators with IECs to closing DLE have IEC redirected to NGS, if IUP is retained

3. If required, operators with PoC at closing DLE provided with IEC to NGS, if IUP is retained

1. IUP not available on 21CN

2. IUP continues to be available on NGS until withdrawal. Anticipated at the end of 21CN implementation

For discussion purposes.No implementation assurances

Subject to Contract

Maintenance of Legacy Interconnect - Operational Issues

Mark Ward Head of Interconnect and Numbering Services BT Wholesale - Network Design and Implementation

Typical Existing Architecture

CPSwitch

NGS

Conc

DLE

DLE

Conc

T

X

M

T

X

M

DLE

Conc

T

X

M

TDM I/C

IUP/UK-ISUP IEC

DLE SITE DLE SITE

NGS SITENote - 90% all ISI Capacity passes through an NGS site.

Example of Future Architecture

Signaling

GatewayCall

Server

21 CN

Voice / Data

Sig

Metro Node

TDM

IP

CPs

TDMGateway

Interim Arrangements

Signaling

Gateway

CallServer

TDMGateway

21 CN

Voice / Data

Sig

Metro Node

NGS

TDM

CPSwitch

IUP/UK-ISUP

UK-ISUP

Process

Tied to agreement on Commercials and new System Alteration Process (SAN)

Intend to provide SANs in tranches - 1year at a time (?)

Detailed discussions and agreement with Technical Account Managers on transfer method required.

Detailed programme with dates fully agreed .

Routes moved off closing DLEs approx. 6 months in advance of DLE closure (prevents dependency and any late running problems as previously experienced)

Transfer Scenario examples

1.Capacity no longer required - Cease

2. Capacity available at NGS - Cease & data-change

3. Capacity provided via NGS site - Re-jumper at NGS

4. Capacity provided via non-NGS site - provide Backhaul

5. UK-ISUP - direct MGW connection available if required.

6. Route Consolidation possibilities.

7. CSI - BT termination transferred as agreed

Example of detailed Transfer Scenario

The following is an example of work in progress to define a range of transfer

scenarios for discussion with individual CPs.

DLE 1Figure 1 - Option ‘A’ - Transfer Using CP to NGS Route Spare Capacity

Interconnect Scenario Before Transfer

DLE1 SITE

NGS SITE

DLE2 SITE

IEC

14 E1s

3 E1s

10 E1s (BH use 6 E1s)

4 E1s

12 E1s

CP

NGS

DLE 2 21CN

MGW

MSAN

MSAN

METRONODE

DLE 1

DLE1 SITE

NGS SITE

DLE2 SITE

IEC

18 E1s

3 E1s

10 E1s (BH use 6 E1s)

4 E1s

15 E1s

CP

NGS

DLE 2

Figure 2 - Option ‘A’ - Transfer Using CP to NGS Route Spare Capacity Preliminary DLE to NGS Route Enhancement

21CN

MGW

MSAN

MSAN

METRONODE

DLE 1

DLE1 SITE

NGS SITE

DLE2 SITE

IEC

18 E1s

3 E1s

10 E1s (BH use 6 E1s)

4 E1s

15 E1s

CP

AAR

AAR

NGS

DLE 2

Figure 3 - Option ‘A’ - Transfer Using CP to NGS Route Spare Capacity DLE 1 Transfer - Stage 1

21CN

MGW

MSAN

MSAN

METRONODE

NGS

DLE 1

DLE1 SITE

NGS SITE

DLE2 SITE

18 E1s

3 E1s

10 E1s (BH use 10 E1s)

4 E1s

15 E1s

CP

AAR

AAR

DLE 2

Figure 4 - Option ‘A’ - Transfer Using CP to NGS Route Spare Capacity DLE 1 Transfer - Stage 2

21CN

MGW

MSAN

MSAN

METRONODE

DLE 1

DLE1 SITE

NGS SITE

DLE2 SITE

18 E1s

3 E1s

10 E1s (BH use 10 E1s)

4 E1s

15 E1s

CP

NGS

DLE 2

Figure 5 - Option ‘A’ - Transfer Using CP to NGS Route Spare Capacity DLE 1 Transfer - Stage 3

21CN

MGW

MSAN

MSAN

METRONODE

DLE 1

DLE1 SITE

NGS SITE

DLE2 SITE

18 E1s

3 E1s

4 E1s

15 E1s

CP

NGS

CombinedRoute

10 E1s

DLE 2

Figure 6 - Option ‘A’ - Transfer Using CP to NGS Route Spare Capacity DLE 2 Transfer - Stage 1

Circuitsgrown ontoNGS Route

Combined Route14 E1s (BH use = 13 E1s)

Used for DLE 1 and DLE 2 traffic

21CN

MGW

MSAN

MSAN

METRONODE

DLE 1

DLE1 SITE

DLE 2

NGS SITE

DLE2 SITE

18 E1s

3 E1s

4 E1s

15 E1s

CP

NGS

CombinedRoute

10 E1s

AAR

AAR

Figure 7 - Option ‘A’ - Transfer Using CP to NGS Route Spare Capacity DLE 2 Transfer - Stage 2

Combined Route14 E1s (BH use = 13 E1s)

Used for DLE 1 and DLE 2 traffic

21CN

MGW

MSAN

MSAN

METRONODE

DLE 1

DLE1 SITE

DLE 2

NGS SITE

DLE2 SITE

18 E1s

Combined Route14 E1s (BH use = 13 E1s)

Used for DLE 1 and DLE 2 traffic

4 E1s

15 E1s

CP

NGS

CombinedRoute

10 E1s

Figure 8 - Option ‘A’ - Transfer Using CP to NGS Route Spare Capacity DLE 2 Transfer - Stage 3

21CN

MGW

MSAN

MSAN

METRONODE

Information Provision

Metro Node list on NIPP - still subject to revision - detailed address info via NISCC.

DLE closure timetable as soon as reasonably stable

Detailed per CP information per DLE provided with SAN

Completed Transfer of BT number ranges to NGN advised probably via NIPP.

Any Questions or Comments ?