ITEM 1

Introduction

1.

The Panel agreed the agenda.

ITEM 2

Matters arising from September 2000 meeting

2.

The Panel agreed the minutes.

3.

In December 2000, OFTEL issued a statement and draft direction on leased lines. The consultation period ended on 16 January 2001 and was followed by a period of comments on comments until 30 January 2001. The document explained that OFTEL had adopted a two-stage process to its policy relating to national leased lines, and that the December statement was the first stage. It set out OFTEL’s response to the request from Energis and other operators to issue a direction relating to the provision of partial private circuits (PPCs) by BT. It also explained the first stage of OFTEL’s policy in relation to wholesale part leased lines or PPCs and to retail leased lines. The web address for the statement was: http://www.oftel.gov.uk/competition/nll1200.htm

In the second stage, OFTEL would set out its conclusions on whether wholesale prices for some or all PPCs needed to be regulated. OFTEL planned to publish a further statement in Spring 2001. The Panel would be updated on leased lines at the next LBUP meeting.

4.

The publication of the Mobile Market Review Consultation Document and the Calls to Mobiles Consultation Document were both scheduled for February 2001. An update would be included at the next LBUP meeting.

ITEM 3

Market Research Presentation

5.

Karen Metcalfe gave a presentation to the Panel on the findings of the Market Research Workshop held before September’s LBUP meeting. The presentation covered the main issues raised during the workshop, how these issues would be addressed and the next steps. It was explained that the workshop had been useful in raising concerns and topics not covered by specific OFTEL projects in the Management Plan, to supplement other data and evidence of issues and to give the Panel an opportunity to discuss concerns in an informal manner. The main points raised in the presentation were:

• large business telecom users should form a syndicate which could commission analysts to organise international benchmarking studies; OFTEL would look at developing an accreditation system for third party information;
• operators had not felt under threat of losing large businesses’ custom despite customer service/account management issues;
• there was a misconception that all big businesses were making good use of the Internet.

OFTEL planned to publish the report on the findings of the Workshop on the OFTEL website and had forwarded the results to the relevant project teams. The Panel was encouraged to read the draft Management Plan and respond to the consultation. The document could be found at the following site:

http://www.oftel.gov.uk/about/drmp1200.htm

and the consultation would last until 29 January 2001.

It was hoped the Panel could work with the project teams and supply additional information to support their work. It was felt a workshop on the general telecoms market could be repeated with the Panel in the future.

6.

The Panel discussed the main points of the presentation. The suggestion that large businesses should form a syndicate to gather international benchmarking information was met with scepticism. It was not felt that the tariffs would be available to compare, as each contract a company signed with its vendor included a confidentiality agreement preventing the disclosure of tariffs. Although suggested by OFTEL, the Panel did not want to have such clauses omitted from their contacts believing they allowed multi-tiered discussions that formed a contract specific and beneficial to each business. As well as being confidential, tariff banding was considered to be too complex to allow practical comparisons of like with like. It would be a costly exercise to put tariffs in a comparable form. The Panel felt that if standard tariffs were available, with improved definitions of tariffs and rates, then it would be easier for users to understand tariffs and make base level comparisons. Businesses had found that they needed to rely on their own due diligence to get the best rate, but this required time and effort. OFTEL argued that if large businesses invested in benchmarking they would be rewarded with valuable knowledge.

7.

The Panel felt OFTEL’s assertion that SME and large businesses shared a common philosophy towards the Internet was not entirely correct. The economies of scale for SMEs did not translate into similar savings for large businesses and the two were not comparable.

8.

The argument that large businesses could simply change operators if they were unhappy with an aspect of their vendors service was not considered a realistic suggestion. There was a cost to be incurred in the breaking of a contract, plus the internal cost of resourcing a migration to the new vendor. The ability to change was considered a practical threat for SME use but not large businesses. Although it could theoretically be used as a bartering tool with account managers at the end of the contract, the general opinion was that account management was similar across operators.

ITEM 4

Broadband

4.1

Rollout of DSL and LLU

9.

John Russell gave a presentation on the rollout of Local Loop Unbundling (LLU). The Panel was extremely concerned over the lack of information available on the possible sites for LLU and the operators interested in delivering the service. The only information available was on operators involved in LLU discussions. It was argued that businesses needed information on the likely sites and operators to ensure that the market for LLU took off and businesses could negotiate with a multitude of operators planning to enter the market. OFTEL informed the Panel that the operators had deemed the information to be confidential and would be likely to market LLU services nearer to the launch date. However, the decision on when to begin marketing services was ultimately a commercial one for the operators concerned. Operators had expressed concerns that the release of information on LLU’s footprint might raise false hopes in businesses if the plans were unrealised. OFTEL remarked that it hoped to disclose more information on LLU rollout during the planning stages. The Panel urged OFTEL to pressure operators into disclosing as much information as possible, as even a list of sites not included in the initial rollout would be useful.

10.

The Panel was informed that the LLU development process was moving forward. The sites were being provisioned with concentration on the most popular based on operators’ own priorities. At a meeting held with the industry on 18 January, operators had re-committed to the LLU process. Operators were very keen to move forward, and could give early commitments to BT for site preparation to go ahead, making the level of operator involvement clearer. It was confirmed that the cost of co-locating in sites was being examined. OFTEL had looked to other regulators, such as the United States, to see if any lessons could be learnt. Although LLU was accelerating in the UK, such discussions had assisted with understanding the problems likely to be encountered and managing expectations. OFTEL was also looking at BT’s potential sale of property and had made it publicly clear that any such sale must not hinder LLU.

11.

The Panel was interested in how the annual rental figure of £122 for provision and maintenance of a copper pair had been calculated. OFTEL explained that the annual rental was cost orientated, the normal cost of a telephone line rental being subsidised. The Panel was concerned that the cost of LLU and ADSL was looking prohibitive. OFTEL assured the Panel that initial costs would be reviewed.

4.2

Universality issues

12.

Alan Pridmore gave a presentation on the recent OFTEL consultation on implications of extending the Universal Service Obligation (USO) to broadband. During the ensuring discussion it was apparent that the Panel was a strong advocate for broadband services. It was felt that the UK was an innovative country with first class engineers and services, and access to this expertise and technology should not be denied to potential customers. The Panel felt that universal access to services delivered by broadband could benefit a broad customer base, particularly homeworkers in rural areas and users who needed to transfer information between locations and made good economic sense, including a reduction in commuting. There was also a social policy angle, in the ensuring of full access to knowledge delivered by broadband technology. Also, if customers were to be encouraged to purchase high value products, they needed to be confident that adequate use would be made of the equipment and that relied on broadband rather than narrowband access to products such as videostreaming. Concern was expressed that without universal access to broadband, sections of the community would be disadvantaged, such as those living in rural areas and certain professions reliant on broadband for the delivery of important services, e.g. medics.

13.

Panel members felt that universal service for broadband would be ideal in principle but recognised that cost was the drawback. There was some feeling that network operators should not be forced to foot the bill, as this would constitute a ‘telecom tax’. Instead the Government could seek alternative means of funding, perhaps partly by big businesses. An alternative example of funding was the investment in microwave technology made by Tele Greenland, Greenland’s state owned telecoms company. The investment, ensuring universal access to broadband, was recuperated within 2-3 years through on-line services.

14.

The Panel discussed the application of a broadband USO. Where the market did not already provide access, it was envisaged that the requirement would only apply to areas up to 3.5KM from the local exchange, the cost of providing wider access being prohibitive. It was pointed out that by 2002, such a footprint would allow BT to reach 70% of the population. It was suggested that the broadband USO be extended beyond BT. Cable operators could be obliged to roll out services in their franchise areas where requested to do so by the community. Also, the USO could cover suppliers of digital services, making Digital TV a medium for developing broadband services (with digital TV switchover expected by 2010).

15.

As the Panel was enthusiastic over broadband access, it was recommended that it acquainted itself with the UK Government’s intentions to ensure delivery of broadband services by looking at the e-envoy’s website: http://e-envoy.gov.uk and the White Paper.

ITEM 5

Regulation of BT Re-organisation

16.

Neil Buckley addressed the Panel on the issue of regulation of BT following the announcement of its reorganisation. Planning was in the early stages and no formal proposals for new licence applications had been made. OFTEL’s key consideration was that the Director General could still fulfil his duties, for example, the regulation of the Universal Service Obligation. OFTEL needed to ensure that an adequate regulatory framework was available and that the network and retail sides of BT worked together to ensure regulatory obligations were met. It was mentioned that some parties had a mis-guided expectation that OFTEL would instruct BT on its corporate structure. It needed to be understood that OFTEL had no jurisdiction to be involved in the planning of BT’s structure.

17.

The Panel was concerned that there had been no further clarification of BT’s plans and timescales since the announcement of its restructuring in November 2000. It was argued that businesses required information, otherwise they could not react to the changes. The Panel was intrigued to know how the re-organised BT would compete and interact with vertically integrated PTOs. OFTEL assured the Panel that it would be consulting with stakeholders on the regulation of BT once the details of the re-organisation were better known.

ITEM 6

OFCOM

18.

Neil Buckley also spoke to the Panel about the Government’s plans for the future regulation of communications. In December 2000, the Department of Trade and Industry issued a White Paper entitled A New Future for Communications. The Paper proposed that OFTEL, the Radio Authority, the Broadcasting Standards Commission, the Independent Television Commission and the Radiocommunications Agency would be brought together as 1 body know as the Office of Communications or OFCOM. The draft Communications Bill was due for publication during Summer 2001. It was hoped that OFCOM would come into being by 2004. The UK Government was in discussion with the European Union regarding the content of the Bill, which would need to meet European requirements and timescales. Whilst the UK had particular criteria in mind, it was recognised that the UK was only 1 member state out of 15 and may have to concede on some points.

19.

The White Paper proposed the establishment of a Consumer Panel to take into account the needs of users. The LBUP wished to ensure that the needs of large business telecom users were represented on the Consumer Panel. The LBUP voted that its concern should be formally submitted to the OFTEL team working on the White Paper and OFTEL assured the LBUP members that a formal submission would be made to the appropriate staff.

ITEM 7

Stakeholder Relations

20.

OFTEL announced that it would be consulting on its relations with stakeholders. The consultation would review OFTEL's use of public consultation, including its use of public fora. The views of the panel would be sought, especially on the use of seminars and public fora to establish the interests of telecoms users. The Panel was informed that the results of the LBUP members’ review had been forwarded to Michael Richardson, the manager of the Stakeholder Relationships project. Many of the issues addressed in the LBUP members’ review had direct relevance to the broader review of relations with stakeholders and it was hoped that the panel would respond to the wider consultation. Comments should be made by e-mail to michael.richardson@oftel.gov.uk

Post meeting note: The consultation document could be found at http://www.oftel.gov.uk/about/cons0201.htm

21.

The Panel was assured that the recent members’ review was conducted to ensure members were happy with the focus of the Panel and there was no intention for it to be disbanded. It was felt the Stakeholders Consultation might have an impact on the Panel but that there would still be a role for it to fulfil. It had to be remembered that project managers had a heavy call on their time and it was necessary to see how the Stakeholder Consultation and the Consumer Panel would be organised before realising the impact. The Panel was keen to align meeting agendas to OFTEL projects and consultation documents and to ensure its feedback focused on areas that would be of assistance to the projects.

ITEM 8

Mobile Number Portability (MNP)

22.

Peter Roberts, Chair of the MNP Focus Group, spoke to the Panel about the history of, and improvements to, the mobile porting process. MNP was launched in January 1999 and the process was designed to be available to the least resourced service provider and was thus conducted via phone and fax machine. It quickly became apparent that problems with MNP stemmed from the administrative process, for example, a port could be rejected if a fax machine was out of toner or paper. OFTEL convened an industry group to conduct a review of the MNP process. Its objectives were to shorten the time taken to port, ensure porting took place on the agreed date, communication between all parties was improved and the cost to the customer was addressed. After a period of industry negotiation, it was agreed to upgrade the phone/fax process to a web based process and make some central improvements to the speed, accuracy and robustness of the process. The negotiations with a third party vendor had broken down, but following a re-tender, a further organisation had been found and a memorandum of understanding had been signed. The result was a process referred to as MNP2. It would be launched during the Q3 2001 and although a year late, it would achieve the objectives set. The best results would be for ports of less than 25 customers. The porting process would be reduced to 5 days and customers would be given assurance as to when the port would take place. For bulk porting, the process continued to be restrained by the capability of the least resourced service provider. Porting timescales remained up to 25 working days but should the port be between 2 heavily resourced service providers, the timescales could be reduced to possibly 5-10 days. The most significant improvement was that corporate telecom managers would be given a guaranteed porting date.

23.

Peter Roberts also talked to the Panel about plans for further improvements to the process to be known as MNP3. It was recognised that the environment for porting numbers, and the telecom industry’s sales and distribution areas, would change allowing different routes for the channelling of the process and moving to customers managing their own accounts online. By the end of 2002 a customer and sales driven process would be needed. The industry group had begun scoping the task and would be looking for the specification to get joint agreement from the operators and support from OFTEL by August 2001. The MNP Focus Group would appreciate the opportunity for the Panel to input into the market research and scoping tasks to be conducted in the planning of MNP3. Workshops and market research were planned for March/April 2001 with conclusion by May 2001. Panel members were invited to arrange individual meetings with Peter Roberts via OFTEL to discuss their experiences of porting and suggest ways the process could be improved. Some members put their names forward at the meeting. Other members wishing to help scope the way mobile porting processes are to be improved should put your names forward via OFTEL.

Panel members to contact OFTEL if they wish to arrange individual meetings to discuss MNP with the Focus Group

24.

The Panel was disappointed that the improved process had taken so long to instigate and had little benefit for large businesses. It appeared in practice that large businesses with 1000s of numbers to port would agree transfer schedules for groups of up to 25 numbers at a time. The Panel was concerned that an industry agreed compensation for missed porting dates had not been considered, although Service Level Agreements would be built around each part of the porting process. It was acknowledged that the main reasons for porting failure were administrative and contractual and were the fault of the service providers, particularly the donor SP, rather than the network operators. An industry agreed best practice for donors was requested. The Panel wished it to be recognised that the problems involved in transferring least cost routing acted as a disincentive to porting. Users had lobbied OFTEL to look at tariffing and requested that the industry looked at it as part of MNP3.

ITEM 9

Dispute Resolution Procedure – ADR Subgroup

25.

At the time of the LBUP meeting, the subgroup was still formulating the procedure to be proposed in a consultation document and some grey areas remained. The ADR ombudsmen would look at issues below a certain level with the aim of bringing disputes to a speedy conclusion. OFTEL’s Consumer Representation Section might work as a filter for the ombudsmen, however, businesses would be encouraged to facilitate a resolution, as use of the ombudsmen would incur a cost. The Panel realised that the introduction of the ombudsmen was to ensure that the UK complied with its obligations under the Revised Voice Telephony Directive. However it was felt that OFTEL should implement the procedure more fully by extending the procedure to include mobile networks. OFTEL urged the Panel not to concentrate on the RVTD aspect too closely and agreed that the inclusion of mobile networks would be beneficial, however, it preferred mobiles to be involved on a voluntary basis. The Panel was concerned that voluntary inclusion may result in some operators signing up whilst others ignored the procedure. OFTEL felt that customers would need to look for a hallmark showing inclusion in the ADR scheme. Regardless, the Panel requested that OFTEL approach the DTI to seek the inclusion of mobiles in the ADR procedure. OFTEL noted the suggestion and urged the Panel members to include the request in their responses to the consultation.

OFTEL to forward to the DTI the Panel’s request that mobile networks be included in the ADR procedure

26.

AOB

ITEM 10

European Directives

It was suggested that a session on European directives might be of interest to the Panel, for example, an item on the European numbering code +388. The Panel felt there was a danger in believing that European Directives only affected European businesses, when their impact was far reaching and influenced UK work. It was agreed that OFTEL would place a list of Directives on the Closed User Group section of the LBUP website and the Panel could provide feedback on the worth of discussing the directives at future Panel meetings.

OFTEL to post a list of European Directives on the LBUP closed user group website and seek comments from the Panel on those to be discussed at future meetings

27.

Future Meetings

ITEM 11

Date and location of next meeting:

28.

• Wednesday 25 April 2001
• OFTEL, 50 Ludgate Hill, London EC4M 7JJ

Suggested topics for next/future meetings:

29.

• Leased Lines Statement
• Mobile Market Review Consultation Document
• Calls to Mobiles Consultation Document
• Local Loop Unbundling
• Broadband/Central Government
• Allocation of Radio Spectrum
• European Numbering on +388
• European Directives
• Possibility of inviting DTI to speak about SPAM and the E-Commerce Directive