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Summary

Main issues

2.1 Ofcom has published two draft determinations under Sections 188 and 190 of the Communications Act 2003 (the “2003 Act”) for resolving two disputes: the first between The Number (UK) Limited (“The Number”) and British Telecommunications Plc (“BT”); and the second, between Conduit Enterprises Ltd (“Conduit”) and BT.

2.2 These two disputes were referred separately to Ofcom by The Number and Conduit on 7 September 2005 and 20 December 2005, respectively. The disputes remain procedurally distinct, but Ofcom has decided to deal with both of them in this document.

2.3 The primary issue arising in these disputes is whether charges paid by The Number and Conduit to BT for the supply of the contents of BT’s database (known as the ‘Operator Services Information System’ or “OSIS”) are consistent with BT’s regulatory obligations.

2.4 There are two regulatory rules potentially relevant to these disputes:

1. BT is required under Universal Service Condition 7 (“USC7”) to supply on request the contents of its OSIS database in machine readable form to any person seeking to provide publicly available directory enquiry services, such as those provided by The Number and Conduit.
2. Separately, BT is required under General Condition 19 (“GC19”) to supply on reasonable request certain directory information for the purposes of the provision of certain services, again such as those provided by The Number and Conduit.

2.5 Under both of these regulatory rules, BT must supply the information on terms which are (among others) cost oriented and in a format agreed between the parties.

2.6 This document also, in dealing with the matters relevant to the dispute, sets out matters relevant to dealing with the complaint filed by Thomson Directories Limited (“Thomson”) regarding BT’s obligations under GC19.

History

2.7 The background to these disputes, including the nature of the OSIS database and the parties’ businesses and the history of the disputes, is set out in Section 3. The submissions made by all interested parties are summarised at Section 4.

2.8 In August 2002 and July 2000, The Number and Conduit, respectively, entered into licence agreements with BT for their use of, and access to, BT’s OSIS database. Under standard terms, BT charged each licensee a combination of fixed annual charges and a “per search” charge for the data needed to provide directory enquiry services to a user. BT’s own businesses also paid these charges under internal accounting arrangements.

2.9 BT’s OSIS database contains directory information of both BT and non-BT customers and BT pays other communications providers 66 pence per compiled entry in the database to obtain this data.

2.10 In June 2003, BT issued notices to The Number and Conduit to terminate their OSIS licences, in the expectation that new licence terms could be agreed. No new licences have yet been agreed. In the meantime, the present licences effectively remain in force by BT granting a series of short term licence extensions.

2.11 During negotiations between the parties to each dispute as to the terms of new licences, the European Court of Justice (“ECJ”) delivered its judgment on 25 November 2004 in Case C-109/03, KPN Telecom BV v. OPTA (“the KPN judgment”). This judgment was a ruling as to what ‘relevant information’ had, as a minimum, to be supplied to ensure provision of universal service directories and directory enquiry services under a provision of an EC directive that has now been repealed and, so far as is material to these disputes, been replaced by Article 25(2) of the Universal Service Directive (“USD”).

2.12 The Court decided on the facts in that case that “relevant information” comprised the name, address and telephone number of subscribers who have not expressly objected to being listed in a published directory. The Court further decided that only costs which related to the additional costs of making such data available to the requesting parties could be recovered by KPN. As regards data other than ‘relevant information’, the Court held that, if such data was supplied even though not required by the EC directive, there is no requirement which prevents any additional costs (e.g. for compilation) from being invoiced to requesting parties.

Overview of Ofcom’s analysis

2.13 The scope of these disputes was set by Ofcom to be:

1. Whether BT’s charges to The Number and Conduit for supplying directory information (“BT’s charges”) are consistent with BT’s obligations under USC7 and/or GC19.
2. Subject to Ofcom’s determination in respect of the issues in (1) above:
   1. What BT’s charges should be moving forward; and
   2. What BT’s charges should have been for the period between 25 July 2003 and the date of Ofcom’s final determination in relation to these disputes; and what, if any, adjustments should be made to payments made by The Number and Conduit, respectively, to BT in respect of the directory information supplied during this period.

2.14 In setting the scope in this way, Ofcom made clear that the assessment of this dispute would need to consider:

1. what rights and obligations, if any, were relevant to this dispute in relation to USC7; and
2. what rights and obligations, if any, were relevant to this dispute in relation to GC19.

2.15 Section 5 summarises the key legal, regulatory and contractual issues relating to these disputes. Section 6 and Section 7 then outline Ofcom’s provisional conclusions in relation to USC7 and GC19 respectively.

2.16 Ofcom has concluded, provisionally, that USC7 is unlawful: see Section 6. As a result, Ofcom is minded to determine that BT is not required to provide the OSIS database under USC7. No issues can therefore arise in relation to the consistency of BT’s charges for OSIS with USC7.

2.17 Given this, the main issue to be determined by Ofcom under the scope of these disputes is whether BT’s respective charges to The Number and Conduit for supplying certain directory information via the OSIS database are consistent with BT’s obligations under GC19.

2.18 To assess this, Ofcom has considered a series of propositions in relation to the application of GC19 (see Section 7). These are summarised below in order to guide the reader through this document and clearly explain Ofcom’s reasons for reaching its provisional conclusions on resolving these disputes.

2.19 First, Ofcom has considered whether BT is a relevant communications provider for the purposes of GC19.

2.20 Ofcom’s view is that, as explained at paragraphs 7.17 to 7.18, BT is a ‘person’ who provides ECNs (as well as ECSs) to whom Telephone Numbers have been Allocated by Ofcom (or Ofcom’s predecessor, Oftel). Accordingly, BT is a relevant communications provider for the purposes of GC19. In these disputes, BT has not disputed that it is in principle subject to the obligations imposed under GC19.

2.21 Second, Ofcom has considered the date from which BT been required to comply with GC19.

2.22 Ofcom’s view is that. for reasons set out at paragraphs 7.19 to 7.24, BT (in common with any other person qualifying as a relevant [CP] for the purposes of GC19) has been required to comply with its obligations under GC19 from 25 July 2003. It does not appear to Ofcom that BT has contested this point in these disputes.

2.23 Third, Ofcom has considered whether The Number and Conduit each have ‘rights of access’ under GC19.

2.24 Ofcom’s view is that, as explained at paragraphs 7.26 to 7.40, The Number and Conduit both have ‘rights of access’ as they provide voice DQ services to end-users in the UK who access their services through certain telephone numbers prefixed 118. In these disputes, BT has not disputed that these parties have ‘rights of access’ under GC19.

2.25 Fourth, Ofcom has considered whether The Number and Conduit have each effectively made a request to BT for the purposes of GC19

2.26 For reasons set out in paragraphs 7.41 to 7.72, Ofcom considers that both The Number and Conduit have, as a sub-set of data from OSIS, in effect requested information falling within GC19 as part of their continuing requests under the licence arrangements for the full bundle of OSIS data. In these disputes, BT has contested that The Number and Conduit made such requests under GC19 and BT has therefore appealed Ofcom’s inclusion of BT’s GC19 obligations as part of the scope of the issues in dispute to the Competition Appeal Tribunal. Those proceedings are, in effect, pending Ofcom’s final determination of these disputes.

2.27 Fifth, Ofcom has considered what Directory Information BT is required to supply to each of The Number and Conduit on (regulated) cost oriented terms under GC19.

2.28 As explained at paragraphs 7.76 to 7.92, Ofcom concludes, provisionally, that the relevant information that BT is required to supply under GC19 relates to BT’s subscribers of PATS (or, as the case may be, BT’s ex-subscribers where BT was originally allocated the telephone number) and, with respect to information relating to those subscribers or ex-subscribers, comprises:

1. the ‘name’ of such subscribers: see paragraphs 7.98 to 7.103 which set out Ofcom’s views on what is captured by this term;
2. the ‘address’ of such subscribers: see paragraphs 7.104 to 7.116 which set out Ofcom’s views on what is captured by this term; and
3. the ‘Telephone Numbers’ of such subscribers: see paragraphs 7.117 to 7.139 which set out Ofcom’s views on what is captured by this term.

2.29 Given that GC19 applies subject to the requirements of data protection legislation, Ofcom considers that, as explained at paragraphs 7.140 to 7.148, BT must make available certain information in order to comply with those requirements.

2.30 Finally, given the above, Ofcom has considered whether BT has made Directory Information falling within GC19 available to both The Number and Conduit on cost oriented terms.

2.31 For reasons set out in paragraphs 7.210 to 7.331, Ofcom provisionally concludes that it does not consider that BT’s overall charges for the supply of OSIS are, or have been, inconsistent with BT’s obligations under GC19. This is because both The Number and Conduit have requested, received and paid for access to the entire OSIS database and only a sub-set of that information falls within the regulated cost oriented terms of GC19.

2.32 Given this, no issues of past overpayments since 25 July 2003 arise in these disputes under the scope.

2.33 As to BT’s charges moving forward, Ofcom considers that, should either party make a request from BT for its GC19 data as a distinct, stand-alone product, BT should provide such a data set immediately and only seek to recover the costs of making this available to the requesting party. At paragraphs 7.222 to 7.230 of this document, Ofcom discusses what costs it regards should in principle be recovered in making GC19 data available to a requesting party.

Implications and Policy considerations

2.34 As Ofcom’s provisional findings in these disputes are likely to have an indirect impact on persons other than the parties to these disputes, Ofcom has set out the potential wider implications in Section 8.

2.35 In that Section, Ofcom also sets out its plans to address, in a policy project, some important issues flowing from this analysis, if Ofcom confirms its provisional conclusions in the final determinations to resolve these disputes. Given Ofcom’s provisional view that USC7 is unlawful, Ofcom will need to consider, as a priority, how the obligations imposed by Article 5 of the USD should be implemented in the UK.

2.36 Ofcom remains committed to competition in the supply of a range of directory information services in the UK and will consider as part of its ongoing DQ policy project whether it needs to make any changes to GC19 and the question of any ex ante regulation for wholesale access to BT’s OSIS data.

2.37 In the meantime, until Ofcom has consulted with stakeholders on any such appropriate changes and any new regulation has been put in place, Ofcom expects that BT will continue to supply persons, such as The Number and Conduit, with OSIS data on a commercial basis under their OSIS licences by granting them further licence extensions and without materially altering their terms. Ofcom intends to seek appropriate assurances from BT to confirm this.

• Resolution of price disputes concerning supply of certain directory information by British Telecommunications plc to The Number (UK) Ltd and Conduit Enterprises Ltd [pdf]
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