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Introduction and Background

The purpose of this consultation

1.1 Ofcom regulates the accuracy of bills issued by providers of electronic communications services. It does this through General Condition 11 (the “condition”) of the General Conditions of Entitlement. The condition imposes an across-the-board requirement for billing accuracy on all providers of public electronic communications services.

1.2 Additionally, the condition requires providers of publicly available telephone services with a relevant annual turnover in excess of £40m to seek and obtain approval of their metering and billing systems from third-party assessors against a prescribed standard. This complex of approval arrangements represents the Ofcom Metering and Billing Approval Scheme.

1.3 A provider’s metering and billing system is approved when it complies with the requirements of the Oftel Metering and Billing Direction (the “Oftel Direction”), which is in essence a technical standard intended to ensure that compliant systems will deliver accurate bills. The Oftel Direction was adopted on 22 July 2003 and was virtually identical to the preceding standard, OTR003: 2001, issued in 2001.

1.4 The need to review the Oftel Direction arose because its requirements had been drawn up in 2001. Despite subsequent market and technological developments it has not been revised. The Oftel Direction largely focuses on metering and billing issues as they arise in the assumed context of a residential customer being provided with voice telephony services by a vertically integrated communications provider. The proposed Ofcom Direction improves on the Oftel Direction by being more capable of accommodating new technologies, services and business models while maintaining the existing level of consumer protection.

1.5 In this document we are therefore proposing two changes to the Ofcom Metering and Billing Approval Scheme:

• a new standard against which Metering and Billing systems are assessed for approval, the Ofcom Metering and Billing Direction; and
• consequential changes to General Condition 11 that will implement the proposed Ofcom Direction.

1.6 The draft Ofcom Direction is published in this document as the Schedule to Annex 6; the Oftel Direction is at Annex 7. The proposed changes to the General Condition appear at Annex 8. The main changes to the Oftel Direction are described in Section 2 and to the condition in Section 3.

The Notification of the Ofcom Metering and Billing Direction

1.7 Some general conditions have effect by means of a direction. Where this is the case, and we are proposing to give a direction that affects the operation of that condition, we are required, under section 49 of the Communications Act 2003 (“the Act”), to publish a Notification. The Notification states our proposal to give the direction and specifies the period within which representations about the proposal may be made.

1.8 The purpose of this consultation is to notify Ofcom’s proposal to adopt a new Metering and Billing Direction and to consult on the proposed changes. The Notification is Annex 6 of this document. The period during which representations may be made will end on 11 January 2008. It is intended that the proposed Ofcom Direction will be adopted on the same date as the post-consultation Statement is published.

1.9 In accordance with Ofcom’s revised Consultation Guidelines (see http://www.ofcom.org.uk/consult/consult_method/ofcom_consult_guide) the duration of the consultation period is one month, extended by two weeks to take account of the Christmas/New Year period. The subject matter of this consultation falls within a Category 3 consultation which concerns detailed technical issues.

The Notification of a proposed modification to General Condition of Entitlement 11 on Metering and Billing

1.10 Concurrently with the consultation on the Ofcom Direction, Ofcom is also consulting on amendments to the condition. Under section 48 of the Act, where we are proposing to modify a General Condition we are required to publish a Notification stating our proposal to make the modification and specifying a period within which representations about the proposal may be made. The Notification is Annex 8 of this document. The period during which representations may be made will end on 11 January 2008. It is intended that the proposed modification will be adopted on the same date as the post-consultation Statement is published.

1.11 The modification represents amendments proposed by the Statement on the Review of the Ofcom Metering and Billing Scheme published on 22 June 2006. There are additional amendments proposed in this document that remove time-expired transitional provisions and make the necessary changes to the condition to enable the proposed Ofcom Direction to be implemented. The proposed revisions to the condition are described in Section 3 of this document and the amended condition is shown in the Schedule to Annex 8. In proposing these modifications Ofcom has considered its duties under sections 3 and 4 of the Act.

1.12 In accordance with Ofcom’s revised Consultation Guidelines (see http://www.ofcom.org.uk/consult/consult_method/ofcom_consult_guide) the duration of the consultation period is one month extended by two weeks to take account of the Christmas/New Year period. The subject matter of this consultation falls within a Category 3 consultation which concerns issues which have already been the subject of a previous consultation. This consultation concerns the consequential amendments necessary to implement the proposed Ofcom Direction.

Background to the consultation

1.13 Ofcom published a Statement on its Review of the Ofcom Metering and Billing Scheme on 22 June 2006, at http://www.ofcom.org.uk/consult/condocs/metering/statement . This followed a Consultation on the Ofcom Metering and Billing Scheme published on 24 November 2005.

1.14 The Statement’s main conclusions were that:

• Ofcom would convene an industry experts group to revise the Oftel Direction;
• data services would not be included in the Metering and Billing Approval Scheme on a mandatory basis but Ofcom would strongly encourage providers to include selected data services voluntarily – this decision to be reviewed within three years; and
• General Condition 11 would be amended to set a transitional period for approvals under the Oftel Direction, to exclude data services explicitly from the mandatory scope of approval and to clarify that the definition of “bill” applies in circumstances where customers are charged for their use of communications services without being formally billed for their use. Examples are calling cards and pre-pay services.

The Ofcom Experts Working Group and the revised Direction

1.15 The Ofcom Experts Working Group (the “OEWG”) was convened to propose improvements to the existing Oftel Direction. It met fifteen times between November 2006 and June 2007 and delivered its final recommendations in July 2007. Its Terms of Reference and other public documents are posted at the OEWG corner of Ofcom’s Metering and Billing webpage at http://www.ofcom.org.uk/telecoms/groups/mandb/ewg/

1.16 The members of the group were invited to join on the basis of their general expertise about billing issues and their knowledge of particular segments of the electronic communications market. Within the group their role was to bring their individual experience to the task – they were not there as formal representatives of their companies. However their companies cover a broad spectrum of the communications market and included: BT, BSkyB, Cable & Wireless, Carphone Warehouse, Hutchison 3G, O2, Thus, Virgin Media and Vodafone. Members of the Metering and Billing Approval Bodies Forum (MABABF) comprising BABT, BSI Global and NQA also took part.

1.17 The group adopted a consensus way of working and decision-making and achieved a good level of cooperation and genuine collaboration throughout its existence. Inevitably unanimity was not achievable over every issue and individual members of the group retain the right to dissent from conclusions with which they do not agree.

1.18 Ofcom acknowledges the quality and breadth of the group’s experience and the enthusiasm and commitment that members demonstrated. We also acknowledge the support of companies willing to allow their employees to participate in what has proved to be a long and time-consuming process.

1.19 The outcome is a new Direction which will ensure that consumers continue to remain protected with regard to the accuracy of their bills in a way that takes account of how the market and technology have evolved since 2001.

1.20 The draft Direction as delivered is posted at http://www.ofcom.org.uk/telecoms/groups/mandb/ewg/public/. Ofcom is proposing to accept the technical content of their recommendations virtually in its entirety. The proposed Ofcom Direction is the schedule to annex 6 of this document.

1.21 Ofcom would like to draw on the group’s knowledge to maintain the Ofcom Direction in future and to propose such modifications as may become appropriate to reflect market and technological changes. This does not require it to become a permanent body but to retain a residual capacity to be convened when appropriate.

Consultation timings

1.22 Annex 1 of this document explains how to respond to this consultation, which closes on 11 January 2008. It is intended that the proposed modified condition and proposed Ofcom Direction will be adopted on the same date as the post-consultation Statement is published.

The full document is available below

• The Ofcom Metering and Billing Scheme [pdf]
  Full Print Version

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