1. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change.

2. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 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.

3. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. Agenda 1.Datastream Product Developments 2005/06 2.High Level Product Description for Flexible Access Services (FAS) 3.Consultation – Proposal for Datastream Withdrawal & Migration to 21CN FAS 4.Project Timescales

4. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. Agenda 1.Datastream Product Developments 2005/06 2.High Level Product Description for Flexible Access Services (FAS) 3.Consultation – Proposal for Datastream Withdrawal & Migration to 21CN FAS 4.Project Timescales

5. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. Datastream Product Developments 2005/06 Removal of Datastream Port Reservation scheme – June 2005 Launch of VP Aggregation & Stat Gain Credit schemes – June 2005 Larger Virtual Paths – launch expected Q4 2005/06 (subject to notification) Datastream Max (high speed end user product) – Beta Trial expected Q3 2005/06 (subject to notification) Virtual Path Automation:  Phase 1 – New Orders – delivered December 2004  Phase 2 – Cancellations & new order enhancements – launch expected Q4 05/06  Phase 3 – VP re-grades & re-arranges – launch expected Q1 06/07

6. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. Agenda 1.Datastream Product Developments 2005/06 2.High Level Product Description for Flexible Access Services (FAS) 3.Consultation – Proposal for Datastream Withdrawal & Migration to 21CN FAS 4.Project Timescales

7. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. Exchange building CMSANs CMSAN Groups (max 20k users per group) FMSAN Dedicated BW to CMSAN groups Dedicated BW to single CMSANs Flexible Access Services (FAS) Metro network ****** SP Ingress Ethernet switch Egress Ethernet Switch (serves SP) Aggregate Access (AA) Note: Figure shows bandwidth (BW) delivery to single AA. Can deliver to any AA on any Metro.

8. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. What is FAS? Flexible Access Services (FAS) allow Communication Providers (CP) to access DSL end users via an Ethernet based transport – PPPoA and PPPoEoA. FAS comprises three basic components:  Aggregate Access (AA)  SVLANS from point of handover to CMSANs or CMSAN Groups  End User Access (EUA) It is a partially managed service, aimed at Communication Providers who want to provide their own broadband networks either to other Service Providers or directly to end users. FAS allows Communication Providers to develop and differentiate their own end user services.

9. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. Aggregate Access 1)Aggregate Access at any Metro node. Potential options are: a)Customer-sited Handover b)In-span Handover c)In-building Handover 2)Bandwidth: a)1 Gig Ethernet b)Demand for other sizes? c)Allow overbooking (likely to be possible – at CP risk) 3)Metro node list circulated to industry on 26 th September 2005.

10. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. SVLAN 1)Dedicated to a CP a)Connect from any Aggregate Access in any Metro node. 2)Connect to single CMSAN or a CMSAN Group a)CMSAN group will be limited to a max of 20k End Users (EUs) i.e. not the whole of a large exchange (top ~300 exchanges have more than 20k end users) 3)Shared SVLAN (under review) 4)Small increments (0.5Mb) (increments and max size to be determined) 5)Resilience anticipated to be same as on current Datastream product 6)SDSL & ADSL EUAs on the same SVLAN (day 2)

11. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. End User Access (EU) 1)ADSL a)Rate adaptive upstream and downstream (upstream limit of 832kbps or possibly 432kbps -views?) b)No fixed rate option (allows CP to control bit rate) 2)SDSL (day 2) 3)AAL5 encapsulation only 4)Protocols a)PPPoA and PPPoEoA (auto-sensed) b)Ethernet bridging (under review) 5)All modifications intended to be supported (FAS/IPS/DS, regrades, SP migrations, change SVLAN) 6)StandardCare / EnhancedCare 7)Multiple VCs per SDSL EUA (need further discussion to determine characteristics) a)Mapping VCs to separate SVLANs (day 2) 8)Multiple VCs on ADSL EUA (under review) a)Mapping VCs to separate SVLANs

12. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. Agenda 1.Datastream developments for 2005/06 2.High level product description for Flexible Access Services (FAS) 3.Consultation – Proposal for Datastream withdrawal & migration to 21CN FAS 4.Project Timescales

13. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. For consultation - Datastream Withdrawal Options for stopping New Supply Provide 12 months notice for the withdrawal of new supply on an exchange by exchange basis as FAS becomes available Proposal to stop New Supply either  12 months after FAS is available at the exchange or,  when an agreed percentage of the UK population is covered by FAS Proposal for Withdrawal of Datastream 12 month notification for the withdrawal of Datastream Product withdrawal, 3 months after FAS has been rolled out to all current Datastream exchanges Options for contracting with New Communication Providers No new Communication Providers on Datastream from  launch of Flexible Access Services (FAS) or,  when an agreed percentage of the UK population is covered by FAS This would apply to all exchange areas where FAS is available.

14. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. For consultation - 21CN Migration from Datastream to FAS Not a forced migration - option for CPs to stay on Datastream, until Datastream is withdrawn Planning for FAS to Datastream migrations Planning for End User Access migrations: FAS to IPstream Further work Definition of 21CN migration process for Datastream to FAS customers Product Commercials

15. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. For consultation - 21CN Migration from Datastream to FAS General: FAS config. details provided to the CP at least 2 days before migration Migration will require jumpering, with EU outage Bulk – as part of DSLAM offload: Most efficient & least End User impacting (may give shorter EUA outage times) Changeover date should be given (may not be guaranteed) All of the CP’s EUAs within an exchange Bulk – separate from DSLAM offload: Planned as now - completed on a negotiated date CP-selected set of EUAs Singleton – any time Aim to complete on Customer agreed date

16. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. Agenda 1.Datastream developments for 2005/06 2.High level product description for Flexible Access Services (FAS) 3.Consultation – Proposal for Datastream Withdrawal & Migration to 21CN FAS 4.Project Timescales

17. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. Datastream Withdrawal 21CN roll-out and migration proposals published26/09/2005 Start consultation on withdrawal of Datastream & migration considerations to the new FAS product on 21CN30/09/2005 Confirm list of current enhancements to be launched on Datastream30/09/2005 Propose a process for product withdrawal31/03/2006 G G G G

18. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. FAS Product - Launch Plan Requirements capture14/07/2005 High level Product Description (presentation)29/09/2005 High level Product Design complete (slides distributed)30/09/2005 A Publish draft SPINs (distribute document)5/12/2005 G Detailed Product Description published31/01/2006 G Pricing and Terms and Conditions31/03/2006 G Handbook, STINs, CRF published31/03/2006 G Alpha trial complete30/06/2006 G Customer trial (on 21CN) Summer ‘06 G Launch (when 21CN migrations commence) 2nd half of ‘06 G G G

19. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. Abbreviations used AAAggregate Access AAL5ATM Adaptation Layer 5 (LAN transport) ADSLAsymmetric Digital Subscriber Line ATMAsynchronous Transfer Mode BTWBT Wholesale BWBandwidth CMSANCopper MSAN DSDatastream EUAEnd User Access FASFlexible Access Services FMSANFibre MSAN IPInternet protocol IPSIPstream MSANMulti Service Access Node PPPoAPoint to point protocol over ATM PPPoEPoint to point protocol over Ethernet SDSLSymmetric Digital Subscriber Line SINService Information Note SPService Provider SPINService Provider Information Note STINService Trial Information Note SVLANService Virtual Local Area Network VCVirtual Circuit

20. Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change.