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Introduction

The existing regulatory arrangements

1.1 On 24 November 2005 Ofcom published a Consultation on the review of the Ofcom Metering and Billing Approval Scheme at http://www.ofcom.org.uk/consult/condocs/metering

1.2 The existing scheme entered into force as part of the new regulatory framework on 25 July 2003. Its requirements are set out in Condition 11 (Metering and Billing) of the General Conditions of Entitlement (http://www.ofcom.org.uk/telecoms/ioi/g_a_regime/gce/gcoe/#content ).The condition comprises two separate sets of requirements.

1.3 The first requirement applies to all Communications Providers providing Public Electronic Communication Services (PECS). It states that such providers shall not issue any bill in respect of the provision of services unless every amount in the bill represents and does not exceed the true extent of services actually provided. Additionally, providers are required to retain records so that they can demonstrate their compliance with the requirement. Ofcom may direct the length of time that such records are kept, up to a maximum of 15 months, but has not as yet exercised this power.

1.4 The second requirement is restricted to Communications Providers who provide Publicly Available Telephone Services (PATS) and whose turnover (less sales rebates, value added tax and other taxes directly related to turnover) from the provision of such services exceeds £40 million in the most recent complete financial year. PATS providers must apply for approval of their Total Metering and Billing System (TMBS) from a recognised Approval Body and obtain such approval as soon as is practicable. A TMBS will be approved when it is compliant with the Ofcom Metering and Billing Direction (http://www.ofcom.org.uk/telecoms/groups/mandb/docs/?a=87101) which is a technical standard applying numerical and quality objectives. Currently, three Approval Bodies: the British Approvals Board of Telecommunications (BABT), the British Standards Institution (BSI) and National Quality Assurance (NQA) are recognised by being referenced in the General Condition.

1.5 The second requirement constitutes the Ofcom Metering and Billing Approval Scheme. As at 16 June 2006 there are 32 companies participating in the scheme of which 17 have achieved approval and 15 are still seeking it.

Scope of the Review

1.6 The Review has been conducted in a rapidly changing environment. In the years since 2001, when the scheme acquired its essential features, developments such as the primacy of data over voice, capacity-based charging, unmetered voice calls, ‘all you can eat’ tariffs derived from ISP models and converged products and services have achieved a more salient presence in the market.

1.7 Notwithstanding the directions in which the market is moving, the review’s focus has been limited to the current scheme with a view to identifying incremental improvements that will make the scheme sustainable over a medium term period. However, we believe that the dynamics of the market will require a more root-and-branch review before the end of this decade. The development of next generation networks and the continuing movement towards convergence will have far-reaching consequences that make long-term projections unstable at present. The statement commits Ofcom to a fresh review in the next three years (see section 2.46).

Summary of the Review’s proposals

1.8 The review proposed that industry had a more active role to play in the process of updating and maintaining the Direction so that it becomes flexible enough to accommodate new services and products while continuing to ensure that compliant systems achieve high standards of metering and billing accuracy.

1.9 The review also considered a number of options for revising the existing scope of the scheme. These included:

• extending the scheme to apply to selected data services;
• modifying the threshold at which providers of voice telephony services must seek approval for their metering and billing systems, currently set at £40 million of annual turnover;
• restricting the scheme to residential and SME customers;
• the possibility of a self-declaration option to demonstrate compliance with the requirements of the Direction.

Summary of the Statement’s conclusions

1.10 The statement proposes that:

• Ofcom will convene an industry experts group to revise the existing Direction;
• data services will continue to be excluded from the Scheme although Ofcom will strongly encourage providers to include selected data services voluntarily in their approvals – this decision will be reviewed within three years;
• there will be no change to the existing £40 million threshold;
• the possibility of a self-declaration option will not be pursued.

• Review of the Ofcom Metering and Billing Scheme [pdf]
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