Working Papers
Note of meeting
Present:
Panel Members
Mr Martin Rayment BAA
Mr Glenn Morgan British Airways
Mr Brian Mulholland DSS
Mr Stuart Lyall Barclays
Mr Stuart Richardson BBC
Mr John Hanlon Royal Bank of Scotland
Mr Sean Sergent P & O
Mr Ian Clegg MEUC
Ms Christine Winter Reuters
Mr Rob Gavagelia PriceWaterhouse Coopers
Mr Andrew Goodey City London Corporation
Oftel
Alan Pridmore (AP) (Chair)
Elizabeth Greenberg (Panel Advisor) (EG)
Maura Crawford (MC)
Michael Richardson (MR)
Selena Bevis (SB)
Valsa Shad (VS)
Selina Chadha (SC)
Heather Clayton (HC)
Trevor Wood (TW)
Elixabeth Wilks-Wood (EWW)
Apologies
Mr John Pook
Ms Vivienne Peters
Mr Steve Kirwan
Mr George Tsgarides
Mr Brian Mulholland
Item 1 Introduction
1. The Panel agreed the agenda.
Item 2 Matters arising from September 2001 meeting
2. The Panel agreed the minutes.
3. Re: CPS
Members had experienced difficulty in accessing the link through
Oftel's website to the list of companies currently offering CPS
and who had indicated to Oftel that they wished to be included
on its list. The link was confirmed as:
http://www.oftel.gov.uk/ind_groups/op_policy/cpscgm/cpslistoprts.htm
4. Re: ENUM
The UK ENUM Group (UKEG) had continued to meet fortnightly and
was working on a preliminary report to be issued to the ITU in
April 2002. The report would propose a preferred framework to
facilitate ENUM implementation within the UK. UKEG had also discussed
the possibility of an ENUM trial.
5. Re: Leased Lines
Oftel had concluded its consultation on the draft Direction to
resolve a dispute with regards to the provision of Partial Private
Circuits and was considering the responses.
6. Re: Mobile Market Review
As part of the MMR, Oftel had examined the implications of SIM
locking, on which, amongst other issues, it would be consulting
in the coming months.
7. Re: Text Direct (1800)
At the last LBUP meeting, attention was brought to the need for
businesses to open access to the Text Direct service which uses
the 1800 short codes. The Panel members did not have any experiences
of the Text Direct service to report.
Item 3 BT Regulation
8. Michael Richardson (MR) discussed the current regulation
of BT with the Panel and whether the market was effectively competitive
enough to release it from some of its regulatory constraints.
The market review had so far been a reactive project, responding
to BT's request for looser controls, however Oftel was to take
a more proactive approach and attempt to identify areas where
it could possibly relax controls. Oftel asked the Panel to identify
specific areas considered competitive enough for deregulation,
to allow for example, bespoke deals for business customers.
9. The Panel felt the market had grown more competitive and agreed
that further investigation by Oftel, on areas where BT could be
deregulated, would be useful. It was argued that large businesses
were suffering from BT's inability to negotiate and compete with
other operators on pricing. The Panel felt that competing operators
fixed their prices to match or slightly uncut BT's, and would
welcome a withdrawal of regulation. Others commented that businesses
may wish to use BT for some services but had found the cost to
be considerably more expensive than with some of its competitors.
Panel members had experienced cheaper prices for calls and line
rental in countries where regulation had been retracted.
10. Some members felt that the market must be sufficiently competitive
after so many years of regulation. A lightening of controls may
lead to a spate of acquisitions and mergers but Oftel's role should
not be to artificially protect operators' positions and a consolidation
of the market should lead to the most efficient operators being
able to compete with BT.
11. A member stated that Oftel would need to ensure that some
regulation remained, in order to protect SMEs. Whereas large businesses
had the power to negotiate prices with telecom operators, SMEs
would not necessarily have that advantage. Members felt that that
it was incumbent on large companies to drive the market and for
other smaller businesses to share in the benefits.
12. The Panel concluded that large businesses were not concerned
about the extent of BT's profits provided that the service offered
was of good quality and sufficient profits were re-invested in
the network. The need for competition was recognised and it was
predicted that de-regulation could bring new players to the market.
MR informed the Panel that the project was in the focusing stage
and a consultation document was not currently planned, but depending
on discussions with other groups, Oftel may decide to consult
on the de-regulation of particular services. On the whole, the
Panel was in favour of wholesale de-regulation and welcomed the
project.
Item 4 Oftel Forum
13. MR stated that the first meeting of the Oftel Forum was held
on 2 November 2001 and was considered to have been successful
in meeting its objectives of facilitating communication between
Oftel and stakeholder groups. Panel members may have been particularly
interested in the agenda item on Oftel's work programme to March
2003. David Harrington (Director General, CMA) explained stakeholders'
key priorities in relation to Universal Service Obligation, broadband,
quality of service, OFCOM and the Communications White Paper.
The link to Oftel Forum website for minutes of the meeting was:
http://www.oftel.gov.uk/ind_groups/oftel_forum/index.htm
14. The Oftel Forum would meet approximately every three months,
with every second meeting being open to users as well as providers
of telecommunications services. The next Forum meeting was planned
for 25 April 2002 and a representative of LBUP was invited to
attend.
Item 5 Calls to Mobiles
15. Selena Bevis (SB) gave a presentation
to the Panel on the review of the charge control on calls to mobiles
and the referral to the Competition Commission (CC). Further to
the market review, Oftel issued a statement concluding that it
had found weak competitive pressures on terminating charges, which
had resulted in excessive costs and high retail prices. Oftel
had proposed licence modifications for 2G mobiles to bring in
an RPI - 12% control on termination charges. All four operators
had rejected the proposed licence modifications forcing Oftel
to refer the matter to the CC. The operators had not offered Oftel
any substantive reasons for the rejection but seemed opposed to
the principle of 'bottom line' regulation.
16. Oftel felt that Panel members might have information on mobile
use and expenses that would form useful evidence for the CC. Panel
members were strongly advised to write the Reference Secretary
at the CC with their views. It was noted that one Panel member
had already received a direct invitation from the CC to comment.
17. In general the Panel members felt that huge profits were
being made on the termination of mobile calls, which had an impact
on large businesses as they were increasingly making use of mobile
communications. It was noted that call patterns and culture was
changing, with increased use of mobiles before land lines, and
it was estimated that mobile traffic had increased by 6-8% per
annum. The Panel agreed that there was cause for concern over
the cost of calls to mobiles, with reduced tariffs offered to
closed user groups highlighting the level of operator margin.
Although the high call termination rates represented a significant
cost for businesses, it was felt that the impact was more marked
for consumers and smaller businesses, as large businesses would
have the leverage to negotiate deals. Also the Panel felt that
market forces were more likely to bring a timely result for large
businesses than results from the CC referral.
18. Panel members expressed an interest in meeting with the CC
and offering evidence. It was also suggested that Panel members
may be wish to provide a collective submission. SB would investigate
the best means for Panel members to comment to the CC and interested
members were encouraged to make their interest known to Oftel.
In order for Oftel to appreciate businesses' calling patterns,
the calls to mobiles questionnaire would be re-circulated for
members' completion.
Action Point: Panel members to inform Oftel of interest in commenting
to Competition Commission
Action Point: Oftel (SB) to re-circulate calls to mobiles questionnaire
for Panel members completion
Item 6 International Roaming
19. Heather Clayton (HC) gave a presentation
on International Roaming. HC explained that the Mobile Market
Review (MMR) highlighted the lack of competitive pressure on International
Roaming costs. Although costs on contract prices were in line
with other European countries, charges on UK Pre-Pay phones for
International Roaming were high. In order to address its findings,
Oftel has investigated ways of improving consumer awareness on
the costs of International Roaming by, for example, issuing various
press releases.
20 Members stated that information currently available on International
Roaming was not clear, with the jargon used in the literature
adding to the confusion. It was felt that operators had no incentive
to raise awareness of the high cost of roaming.
21. HC stated that Oftel was speaking to different consumer groups
to discuss ways of making consumers more aware of the costs of
International Roaming. In addition, pressure from Oftel and different
consumer groups would encourage Operators to provide their consumers
with clearer information on International Roaming.
22. Some members stated that employees in their organisations
were not aware of charges as they did not pay the telephone bill.
Others felt that users were more concerned about the signal quality
than the cost. Another Panel member's experience was that the
2000 mobile users in their company each paid their bill and then
claimed expenses.. By making employees aware of the cost of calls
including International Roaming charges, the company had saved
30% in mobile charges, although there were additional administrative
overheads to be borne.
24. Some members thought that International Roaming charges should
be regulated. HC stated that if regulation was considered, Oftel
would want it to be introduced through the implementation of the
EU Directives.
25. One panel member suggested that operators could send a text
message to their customers informing them of charges involved
when a customer is in a specific country, to raise customer awareness.
Tariff indications could be included in the welcome message from
the local provider or through a message from the UK provider and
be supported by NRA agreement. It was also suggested that large
businesses post best practice guides on their Intranets.
26. HC asked panel members to e-mail her any information they
had available and were able to share on the cost of International
Roaming for their company HC also asked for information on whether
members could renegotiate their International Roaming charges
with their mobile operator.
27. Some members said that it would be time consuming to track
international roaming activity and provide Oftel with the information.
One member's company had 3000 mobile users and international roaming
costs represented a small amount of the overall bill.
Action Point: Forward Heather Clayton's e-mail address to members.
Item 7.1 Management Plan
28. Geoff Delamere (GD) gave a presentation
on the Oftel Management Plan. AP informed GD that BT de-regulation
was discussed earlier in the meeting. Michael Richardson informed
panel members earlier that there was not a specific project on
BT de-regulation and the Panel questioned why such a project had
not been included in the Management Plan.
29. GD stated that there was a project in the management plan
that would review certain licence conditions. GD stated that some
consumer groups were worried about taking regulation away while
other groups, like the LBUP, would like to remove regulation.
31. GD asked members to suggest specific areas that they would
like deregulated, so Oftel is aware of them. GD stated that it
was helpful that requests for BT deregulation comes from organisations
other than BT. He also stated that the EU directives would introduce
some competition changes.
32. A few members stated that there was an issue of timing on
output and process of management plan eg Calls to Mobiles. Some
members felt that Oftel's three-month consultation process was
too lengthy for effective decision making.
33. GD stated that Oftel would consider views from different
stakeholders, and noted comments on Consultation Document timescales
and speed of implementing changes. GD stated that Oftel was also
governed by government timescales on the consultation process,
but such controls were now less rigid.
Item 7.2 Ombudsman
34. Rosalind Stevens-Stroham (RSS) gave an update
on the Telecom Ombudsman. She informed the Panel that an Implementation
Working Group (IWG) was established to take work forward. Access
to the Ombudsman Scheme would be limited to residential consumers
and small businesses. It was proposed that £5000 would be
the maximum value of award that the Ombudsman would be able to
make .
35. It was confirmed that the IWG would appoint a Council and
the Council would appoint an Ombudsman. An Independent Chair was
selected and the position for an Ombudsman was recently advertised.
The Ombudsman would be responsible for the scheme and its success.
The Council members would be appointed according to the Nolan
principle and would be a balanced mix of experience taken from
industry and consumer groups.
36. RSS confirmed that Oftel's Consumer Representation Section
(CRS) would still have an important role to play but claims would
go to the Ombudsman as soon as possible.
37 The Panel agreed that the Ombudsmen should reflect the multitude
of skills necessary to reach speedy dispute resolution and in
particular, that a technical board should be enlisted. RS would
take the suggestion of a technical board to the Ombudsman.
Item 7.3 Local Loop Unbundling
37. Elizabeth Wilks Wood (EWW) gave an update
on the current situation with Local Loop Unbundling. EWW stated
that a number of measures had been introduced to reduce costs,
increase choice and to ensure services delivered. The main changes
in LLU since the last update were in Access Control, Backhaul,
Price Investigations and Site Clearance/Asbestos removal.
Access Control was where Oftel determined that operators could
have unescorted access to BT's exchanges in the same way as contractors
acting on behalf of BT, in order to carry out maintenance on their
equipment. Oftel has determined that this would be possible.
Price Investigations: Oftel's investigation into the pricing of
BT's co-location services was concluded. In general, the prices
were found to be cost-oriented. Some prices were found to be too
high and proposals were made to change the charges.
Backhaul: LLU Backhaul describes the link between operator's equipment
at a BT exchange and an operator's point of interconnection with
BT's own network. Oftel published a draft direction proposing
that BT be required to provide Backhaul services at a cost oriented
price.
38. EWW confirmed that 100 orders had been placed and the build
progress of 160 loops had been connected. The trial of the new
"in-curtilage" product (where operators locate their
equipment outside of the exchange building but inside the exchange
grounds) was Progressing.
39. For 'shared access' Oftel had set an annual rent of £53
plus a connection charge of £117 per shared loop. The final
prices were lower than those originally proposed and the rental
charge was below the EU average.
40. A Factsheet on LLU was available on Oftel's website and was
updated monthly. All LLU sites that had been built and completed
were listed on the factsheet. The link to the factsheets was:
http://www.oftel.gov.uk/publications/local_loop/llufacts/index.htm
Item 7.4 Directory Enquiries
41. Maura Crawford (MC) informed members that the Directory
Enquiries (DQ) service would open to competition later in 2002.
A
DQ consumer sub-group was set-up to address any consumer issues.
LBUP members were asked to send a representative to attend the
first meeting.
42. A panel member expressed an interest, as he wanted to know
how information would be displayed at DQ call centres and how
accurate this information would be in the future as the information
was not always accurate in the past.
The link for the DQ consumer sub-group was: http://www.oftel.gov.uk/ind_groups/dq_group/index.htm
Item 11 AOB
43. ADSL
A member stated there was very little technical information available
on ADSL to potential business users. He would like to know where
to raise issues that he had on ADSL.
44. Oftel stated that there was a technical forum on ADSL between
BT and other licensed operators. The link to the ADSL factsheet
was: http://www.oftel.gov.uk/publications/local_loop/adslsheet/index.htm
