This section applies where—
OFCOM have made a determination that a person ("the dominant provider") has significant market power in an identified services market;
that person is the provider of a public electronic communications network or a person who makes available facilities that are associated facilities by reference to such a network;
it appears to OFCOM that the setting of conditions applying to the dominant provider under section 87 (and, where OFCOM think it appropriate, section 88) has failed to address competition problems identified by OFCOM in carrying out a market analysis for the purpose of setting or modifying those conditions; and
OFCOM have identified important and persisting competition problems or market failures in relation to the provision of network access.
OFCOM may set an SMP services condition (referred to in this section and section 89B as a "functional separation condition") requiring the dominant provider to transfer activities relating to the provision of network access to an independently operating business entity which is a part of the dominant provider.
Where a functional separation condition is imposed on the dominant provider, the products or services specified in the condition must be given to the dominant provider and to other persons—
on the same timescales, terms and conditions, including those relating to price and service levels, and
by means of the same systems and processes.
A functional separation condition must, where relevant, specify—
the precise nature and level of separation, specifying in particular the legal status of the entity to which activities are transferred;
an identification of the assets of that entity and the products or services to be supplied by it;
the governance arrangements (including incentive structures) to ensure the independence of the staff employed in that entity;
rules for ensuring compliance with the obligations imposed by the condition;
rules for ensuring transparency of operational procedures, in particular towards persons, other than the dominant provider, who in OFCOM's opinion are likely to be affected by the condition; and
a monitoring programme to ensure compliance, including a requirement for the publication of an annual report.