SCOTTISH ADVISORY COMMITTEE ON TELECOMMUNICATIONS MINUTES OF THE 76^th MEETING HELD ON TUESDAY 18 MARCH 2002 AT 28 THISTLE STREET, EDINBURGH

Present: Jeremy Mitchell (Chair)
Chris Griffith
Mark Hagger
Kenneth Murray
Wendy Reynolds
Alastair Robertson
Barry Stevens MBE
Peter Wilson (Consultant)
George Halford (Secretary)
Lisa Proffitt (Administration Support)
Ian Forsyth (Oftel)
Bernice Head (Oftel)
Mike James (BT) – Item 14 only

1. OPENING REMARKS AND APOLOGIES FOR ABSENCE

1. The Chair opened the meeting and welcomed Bernice Head and Ian Forsyth from Oftel who had been invited to brief the Committee on Scottish complaints handling /statistics and OFCOM developments, respectively. Both were welcome to stay throughout the meeting. Mike James from BT had been invited to address the meeting on BT’s views on the Oftel consultation document reviewing the fixed telephony market. He would then withdraw to allow the Committee to discuss the consultation document but would join members for lunch to enable informal discussion.
2. Sue Williams was not expected to attend this meeting and otherwise all members of the Committee were present.

2. MINUTES OF THE 75^th MEETING HELD ON 22 JANUARY 2002

2.1 These were approved.

3. MATTERS ARISING FROM THE 75^th MEETING

• 4.4 SACOT Annual Report

1. The draft had been circulated to Members and any comments/amendments considered. A final version had been submitted to Oftel for them to arrange printing. Once the supply of printed leaflets had been received copies would be issued to Members and to SACOT’s list of outside contacts.

ACTION (Secretary/Chair)

• 6.3 Research Project

1. The draft questionnaire had been circulated and comments/suggestions considered. The project was proceeding at speed with the raw data from the questionnaires just received. The focus groups with small business representatives had been held last week.

• 9.2 June meeting/reception

1. It was hoped to combine this meeting with a reception to which MSPs and others would be invited, provided that the substantive OFCOM bill had been published. This would allow the Committee to express its views to a wide range of interests of the importance of ensuring that the OFCOM Consumer Panel had a statutory presence in Scotland and of ensuring that the interests of consumers in Scotland were adequately provided for. Final arrangements cannot be made until the publication of the bill is imminent, but the expected format is for a short SACOT meeting at Thistle Street followed by a reception at the Signet Library. The meeting date is currently scheduled for 18 June.

• 10 BT presentation

1. Members reviewed a number of developments since the BT presentation. Barry Stevens highlighted the rollout of satellite broadband to the Shetlands but take up was limited as it was seen as expensive. Mark Hagger had noticed that Oftel information had shown UK DSL as twice as expensive as the continent and half as fast. Alastair Robertson felt that the recent SCC report had been helpful in making the point about the need for a bold broadband strategy for Scotland. Kenneth Murray hoped that the recent announcement of lower prices for broadband would encourage take up. Alastair Robertson noted that one service provider had amended their terms and conditions to limit ‘unmetered’ access.

4. REPORTS FROM CHAIR AND MEMBERS

i. Chair’s Report

• Meetings of the Telecoms Ombudsman Implementation Group, 24 January, 29 January, 5 February, 19 February, 26 February, 5 March

1. The work on this group continues to be intensive but significant progress has been made. A most useful meeting had been held with industry representatives who were well briefed on the implications. Understandably, their major concern was the financial implications of the scheme. Formal letters to companies inviting their participation were about to be issued. Governance arrangements for the scheme had been finalised and a recruitment exercise had been held to select Council members. A large number of applications had been received and the Chair had applied. He could now advise the Committee that he had been selected as one of four public interest members of the Telecoms Ombudsman General Council. The Chair emphasised, however, that he was not there as the SACOT Chair, or as a representative for Scotland, but to serve the interests of consumers throughout the UK. Responses to the letters to companies inviting their participation were now awaited but it had been made clear that if insufficient companies participated voluntarily then it was expected that a statutory scheme would be introduced through appropriate clauses in the forthcoming OFCOM bill. Committee Members unanimously congratulated the Chair on his appointment which they felt had been well earned.

• Scottish Regulators Consumer Chairmen’s Group, 28 February

4.2 The Chair and Secretary had hosted this meeting. SCC had agreed to undertake a study into consumer representation arrangements in devolved political systems such as Germany, Spain, Canada and the USA. The Chair felt that this could provide useful material for reviewing arrangements in Scotland. The minutes would be circulated once received.

ACTION (Secretary)

• Telecoms Advisory Panel (ACT Chairs), 16 January

4.3 Minutes of this meeting which the Chair had reported on at the last meeting had now been circulated.

• Telecoms Advisory Panel (ACT Chairs), 5 March

4.4 Minutes of this meeting were not yet available. Major topics were the OFCOM Consumer Panel arrangements, which would be covered later in the agenda, and a draft Memorandum of Understanding (MOU) between Oftel and ACTs. This document had been an amalgam of broad principles and detailed instructions and it had been agreed that, rather than spending great effort on editing and agreeing its content, that it should be revised into its two components and regarded as working guidelines for the ACTs. A copy would be circulated to Members once received.

ACTION (Secretary)

• SCC working lunch on communications, 13 March

4.5 This followed the publication of SCC’s report on telecommunications and broadcasting strategy for Scotland. A range of media representatives had been present and the focus was more on broadcasting than communications. It seemed likely that OFCOM would have sub-groups of their internal Content Panel to monitor broadcasting content in each of the home nations.

• NIACT conference, 7 March

4.6 The Chair, Secretary and Alastair Robertson (as a CfB member) had attended. Each reported that they had been very impressed by the professionalism with which the conference was run. Sir Reg Empey MLA, Minister for Enterprise, Trade and Investment had used the conference to launch a draft Consumer Strategy. It was clearly an event of major importance to the industry in Northern Ireland with many companies taking display stands. However, there was concern that the programme was rather tight for the range of speakers involved and this inhibited any realistic interchange of views with those attending.

• Financial Services Authority - e-Commerce Committee

4.7 Alastair Robertson explained that there had again been no further meetings and suggested that this standing item might be deleted. The Chair requested that he check whether this group is still formally in existence and advise the Secretary accordingly.

ACTION (Alastair Robertson)

• Communications for Business (CfB)

4.8 The Committee had met in Belfast to coincide with the NIACT conference. The main discussion had centred on the vulnerability of small businesses and it had been agreed that these should be defined as such amongst the business group. This would have implications for the Small Business task force. The other main topic had been about barriers against transfer og domain names.

• Directory Enquiries consumer Group, 7 February

4.9 Alastair Robertson had attended what had he had thought was the first meeting of the Consumer Issues Sub-group only to find that there had been a previous meeting in December to which no consumer representatives had been invited. To allow representatives to catch up on the background a briefing meeting had been arranged for 25 March. Parallel running of new enquiry numbers against old had been agreed but Alastair Robertson felt that this was impractical for public payphones.

• Oftel Price Comparison Website Group

4.10 Mark Hagger again reported that there had been no recent meetings. The Secretary undertook to again confirm its existence.

ACTION (Secretary)

• Consumer Forum on Communications

4.11 Peter Wilson had been prevented from attending the scheduled meeting due to disruption of rail travel by severe weather. The meeting had been due to consider the draft OFCOM bill. As this was not yet available it had been agreed to reschedule the meeting to June.

 5. SECRETARY'S REPORT

• Staffing

1. The Secretary had now received, and accepted, a short-term contract through to the end of March 2003. This was on a part-time basis of 4 days a week. The Secretary explained that, normally, he would be working Tuesday to Friday. With Lisa Proffitt working Mondays, Tuesdays and Wednesday mornings this should ensure that someone is normally on duty. Peter Wilson noted that there had been a delay in forwarding correspondence for him from the SACOT e-mail address. The Secretary apologised and explained that this must have been when Lisa Proffitt had a week’s annual leave which was the followed by sick leave. Although the Secretary was present throughout this period and handling calls and e-mails he had not accessed the SACOT e-mail address as this normally received only routine e-mails. He would ensure this was checked in future on a regular basis.

• Scottish Executive Trade Association Seminar, 26 February

5.2 The Secretary attended this event but SACOT appeared to be the only consumer representative body present. The Scottish Executive was announcing improvements to their consultation arrangements with trade associations. This was welcomed by the delegates but they made the familiar point that consultation after the document was written was often perceived to be pointless as policy decisions had already been made. They would prefer more regular meetings and the opportunity to influence policy development before consultation documents were issued.

• Oftel EU directive meeting, 12 March

5.3 The Secretary reported that this meeting of the EU Policy Focus Group was to alert a wide range of consumer and industry bodies of the implications of the imminent issue of new EU telecoms directives and their implementation. Existing regulatory measures would need to be reviewed and amended where necessary. The main package of directives would be implemented by the forthcoming OFCOM bill. What concerned the Secretary was the suggestion that the EU directives would only be applied to non-competitive markets. This appeared to leave Scotland vulnerable if aspects of the UK market, because of the dominance of the economy by the southeast of England and London, were defined as competitive while it was clear that Scotland was largely a monopoly of one service provider. A further meeting was due to be held in mid-April following the publication of the EU directives which the Secretary would attend and report on.

ACTION (Secretary)

• Finance

5.4 The Secretary reminded members of the need to submit their claims as soon as possible to ensure prompt payment due approach of the end of the financial year. For the forthcoming year, an increase in resources to ACTs had been agreed which would allow members to exceed a total of six days attendance allowance. Members intending to exceed that limit would need to apply in advance to the Secretary to obtain authorisation. This would be dependent on the budget spend. Enhanced records would be maintained by the Secretariat to allow more detailed monitoring.

6. Complaints Statistics

   6.1 Bernice Head, from CRS Oftel, addressed the Committee on this topic. Firstly, she dealt with the comments made at the last SACOT Committee meeting. She apologised for the erroneous references to Wales that had now been corrected. The complaint registered against SACOT had been an input error that had now also been corrected. The request for more data on trends could be met but would require more input effort at CRS. There would, however, be a discontinuity in the data relating to the transfer of complaints work to Oftel. For example UK statistics showed an overall decline in the number of complaints whereas the numbers for Scotland had increased. This was almost certainly due to the greater resources available to CRS which enabled more calls from Scotland to be taken, while SACOT’s figures were lower due to the limited staffing and communications available to them when they dealt with complaints directly. The Chair commented that SACOT would prefer to get the trend data and to take account of the discontinuity. In comparison to the UK complaint issues in Scotland mirrored those elsewhere. A number of meetings had been held with service providers to highlight complaints and to pressure them into responding to complaints more quickly. This was achieving some improvement. A common complaint at this time of year was delays in repairs due to pressure on resources from adverse weather. Also significant were the number of complaints about BT Openworld internet access with users unable to access the network. While BT Retail and BT Openworld were two different entities CRS were encouraging a co-ordinated approach to handling customer complaints as they did not consider the regulatory barrier to cross over arrangements should prevent effective co-ordination in the handling of complaints.

   6.2 Members asked for a copy of the current complaint categories which Bernice Head undertook to supply to the Secretariat for distribution.

   ACTION (Bernice Head/Secretary)

   6.3 The Chair asked if contentious accounts were causing concern and Bernice Head explained that this was a common complaint where initial accounts were far higher than customers anticipated. CRS had advised service providers to simplify the arrangements that subscribers had to implement to gain access to their systems.

   6.4 Mark Hagger emphasised the usefulness of aggregated trend data but suggested that their presentation could be improved through the use of graphs etc.

   6.5 Barry Stevens was concerned at the discrepancies in totals from one month to another. Bernice Head explained that this was overwhelmingly due to the quality assurance (QA) process that CRS conducted. A proportion of complaints was reviewed and this often resulted in the categories being adjusted. The only way this could be avoided would be to delay their issue until the QA process had been completed. The Committee may feel, however, that they would prefer the raw data sooner and accept the resultant discrepancies. The Committee agreed that this was the case.

   6.6 Peter Wilson asked how CRS pursued complaints that, to the customer, appeared to have been ignored. Bernice Head explained that these were raised directly with the service provider and, normally, resulted in a speedy response.

   6.7 The Chair thanked Bernice Head for her most useful presentation and for travelling to Scotland. The session had been of great interest to Members. He proposed that the topic of improving the presentation of statistics be put on the agenda for the next meeting and for members to come armed with specific proposals.

   ACTION (Secretary/Members)

    

7. OFCOM

1. Ian Forsyth, Oftel, addressed the Committee on OFCOM developments. The substantive OFCOM bill was due to be published in late April but could be delayed to late May. The paving bill had completed its progress and was now awaiting Royal Assent, which was expected around Easter. This would allow for the appointment of a Chair to the OFCOM Bard in June/July. The Chief Executive and remaining Board members should be appointed in autumn 2002. The Steering Group of Chief Executives of the five existing regulatory bodies were managing progress to their integration. This should lead to the establishment of OFCOM as a unified body towards the end of 2003 or, if delays are experienced, by April 2004. Provided the OFCOM Bill was included in the next Queen’s speech Royal Assent to the substantive bill could be expected by late summer of 2003.
2. The Chair reviewed SACOT’s position of wanting adequate statutory safeguards of Scottish consumer interests on both the OFCOM board and the Consumer Panel although he accepted that the former would be more difficult to achieve. It was of interest to note that the OFCOM Content Board may have a Scottish representative. The Telecoms Advisory Panel (TAP) (ACT Chairs) had suggested a �cooping study should also be carried out into the format of the Consumer Panel but while the suggestion had been endorsed by the OFCOM Steering Group they felt that now was too soon. The TAP disagreed and were hoping to commission a study shortly. The SACOT Chair had written to the TAP Chair with an outline requirement.
3. Alastair Robertson was concerned that with the pressure on Oftel staff to be involved in the preparation for OFCOM there was a danger that important issues might not receive all the attention that was necessary. Ian Forsyth assured him that this concern was well appreciated and under constant review. Peter Wilson had been disappointed that the bill team did not appear to have taken on board the concerns which ACTs and others had expressed. Ian Forsyth explained that they worked to a specific brief from Ministers and their room for manoeuvre was quite limited. The Chair highlighted the agreement between the Ministers and Executives of Scotland, Wales and Northern Ireland to work together to protect the interests of their citizens. What influence this co-ordinated approach would have on Westminster Ministers would be seen in due course.
4. Ian Forsyth said that if Oftel held a seminar on the arrangements for the Consumer Panel it was highly likely that ACT Chairs would be involved.

8.1 The Chair referred to the letter from Chris Kenny that indicated that Oftel had at last taken on board the need to involve ACT Members in Oftel projects at an early stage. Once the finalised project plan for 2002/03 had been received the Secretary would circulate it to members. The Chair requested that members should review this with care and pick out one or two projects that they were really interested in and would be prepared to devote time to. The Secretary would prepare a list and co-ordinate with NIACT, WACT etc to try to eliminate duplication.

ACTION (Members/Secretary)

9.1 The Chair proposed that a sub-committee of Alastair Robertson, Barry Steven and Kenneth Murray should take forward the planning for this event. They had the outline programme that had been prepared by the Secretary and should consider which local authorities might be invited to participate e.g. Highland, Western Isles, Orkney, Shetland and Moray. The Chair would be prepared to address delegates on SACOT’s activities and views and suggested that the Scottish Executive might be prepared to speak on the progress of the aggregated broadband project. This approach was agreed and Members asked that the format should if at all possible ensure that the SACOT meeting and the open meeting were held on the same day. It was important that delegates invited to attend were given the opportunity to present their views on telecommunications and the key issues facing their region.

ACTION (Alastair Robertson/Barry Stevens/Kenneth Murray/Secretary)

10.1 The Chair’s response was endorsed, but Kenneth Murray highlighted the difficulties for users caused by the absence of directories.

10.2 The Chair’s response was endorsed.

iii Competition Commission (S/004): "Mobile Phones Inquiry"

10.3 The Chair’s response was endorsed. The Chair reported that he had been invited to attend the inquiry and give evidence but had had to decline due to another commitment. However, the Chairs of WACT and CfB had attended and were questioned intensely on their views.

Consultation documents for discussion

11. i Oftel consultation document (S/001): "Developing a Strategic Approach to Market Information"

11.1 The Chair introduced this document by stating that it was useful and covered interesting issues but he had no strong views about any of the questions raised. Barry Stevens felt that there was potential for negotiating an agreed system design for presenting information to consumers in a straightforward manner that enabled effective comparisons. The Chair thanked Barry Stevens and undertook to take account of his views into SACOT’s response.

ACTION (Chair/Secretary)

11.2 The Chair apologised that this document had been issued to members late due to its not having been received by the Chair and Secretariat earlier. The Chair favoured the proposed Oftel line. Members agreed but Wendy Reynolds observed that this was a particularly difficult and opaque document.

ACTION (Chair/Secretary)

iii Oftel statement (S/008): "Effective Competition Review; Dial Up Internet Access"

11.3 The Chair proposed to respond to this statement, as it had not listed the respondents to the consultation document. More importantly, it did not distinguish from which community responses emanated which made it impossible to assess which reflected the interests of consumers and which the industry. This is of key importance in making a judgement of their relevance. Members supported this proposal.

ACTION (Chair/Secretary)

12. ANY OTHER BUSINESS

12.1 No other business was raised.

13. DATES OF NEXT MEETINGS

1. 14 May 2002.
2. 18 June 2002.

14. PRESENTATION BY Mike James, BT re Oftel consultation document (S/005): "Protecting Consumers by Promoting Competition"

1. Mike James from BT was welcomed by the Chair and invited to address the Committee.
2. This was a key document as far as BT was concerned and should be reviewed to confirm whether Oftel’s judgements of competition were fair and, where markets were judged non-competitive, whether the remedies proposed were appropriate.
3. The consultation document deals with six areas. Firstly, the cost-based access product. As calls on access are sold to service providers and there is, in BT’s view no need for regulation of prices. The second area is broad based control. BT agrees that the lowest spending customers should have protection. Control is therefore more about deciles 5 to 8. Given the developments for customers in this market – BT together – unmetered PSDN – recent reductions in broadband costs – BT’s view is that controls are not required at the top end of the market and that the Light User Scheme gives sufficient protection for the lowest two deciles. The third area concerns moderate users and the balance between access and call prices. Of the Oftel suggestions of controlling the total bills of customers in the third decile (or 3^rd to 5^th deciles) or extending the Light User Scheme to the 3^rd decile the preference is for the last as this allows for inflation increases and is (without the introduction of means testing) seen as logical and straightforward to administer. The fourth area concerns hardwired telephones and the rental of apparatus. BT has no strong objections to the continuation of controls over this very small sector of the market. The fifth area concerns small business assurance and BT feels that regulatory controls have ceased to be relevant with the advent of schemes like Business advantage plus. Lastly, there is the choice between regulatory conditions applied to licences as against voluntary assurances. Oftel seem to favour the former but BT’s view is that similar controls coud be achieved through voluntary controls backed-up by penalties for breaches. Oftel as the regulator could ensure that the spirit of voluntary assurances were not breached with the power to invoke sanctions.
4. The Chair thanked Mike James for his very thorough explanation of BT’s views and Mike James then left the meeting.

Consultation documents for discussion

1. The Chair circulated copies to Members of some notes on this consultation document prepared by Mike Tedd, Chair of WACT, which he felt may aid them in their consideration of this topic. Members were asked to submit their comments to the Chair by the end of March. Members would consider what BT had had to say but whatever controls were maintained needed to be, in the Chair’s opinion, legally enforceable.

The Chair thanked Members for their participation and closed the meeting.

SACOT

March 2002