Present:

Panel Members
Ms Vivienne Peters American Express
Mr Conor Banstable Johnson Matthey
Mr Chris Bell BBC
Mr John Hanlon Royal Bank of Scotland
Mr Rob Gavagelia PriceWaterhouse Coopers
Mr Cliff Parker PriceWaterhouse Coopers

Vince Affleck
Ian Forsyth

Mr Glenn Morgan
Mr Stuart Lyall
Mr George Tsgarides

Item 1: Introduction
1. The Panel agreed the agenda.

Item 2: Matters arising from January 2002 Meeting
2. The Panel agreed the minutes.

3. Re: ENUM
Vivienne Peters (VP), a member of the UK ENUM Group (UKEG) as well as LBUP, gave an update on the status of the ENUM project. A trial of ENUM was planned between May and August 2002 and businesses were welcome to discuss participation in the trial. Around 500 employees were required from a business, with personal details that could be changed daily. Potential trialists would need to sign an agreement permitting the sharing of personal data and it may be difficult to get agreement from companies to participate in the trial.

4. Re: International Roaming
Elizabeth Greenberg (EG) stated that the research that was carried out between Oftel and the Office of the Director of Telecommunications Regulation (ODTR) was completed. The main conclusion was that customer awareness on the costs of International Roaming was low. The report on this study could be found on Oftel website http://www.oftel.gov.uk/publications/mobile/2002/roam0402.htm
Oftel decided to offer consumer guidelines on how customers could reduce costs when using their mobile phone abroad. The guidelines could be found on the Oftel website:
http://www.oftel.gov.uk/publications/mobile/2002/roam0602.htm

5. Re: Management Plan
Alan Pridmore (AP) informed members that their main points at the last meeting had been noted by the management plan team and had been added to the Management Plan statement. This information was printed on page 80/81 of the Management Plan:
http://www.oftel.gov.uk/publications/about_oftel/2002/mapl0402.htm

6. Re: Ombudsman
AP informed members that the Council were now processing applications for the post of Ombudsman. A lot of interest was shown in this post and it was still envisaged that timing of January 2003 would be met.

7. Re: DQ consumer issues sub-group
The first meeting had taken place on 7 February 2002 where consumer groups, operators and Oftel were present. The minutes of this meeting could be found at the following link: http://www.oftel.gov.uk/ind_groups/dq_group/index.htm

Item 3: Oftel Forum feedback
8. The last Oftel forum was held at Oftel on 25th April 2002. The topic for discussion was the new proposed EU Directives. Those present at this meeting were consumers and Operators. Vivienne Peters (VP) attended on behalf of the LBUP and gave feedback on the meeting. VP informed the group that there would be UK Regulatory change to the 1984 Telecommunications Act. These were the first changes since 1984.The EU Directives were adopted in 14 April 2002 and were signed by the council in 9 July 2002. The directives must be introduced by 25 July 2003.
The main changes introduced in the EU Directives were:
· a common regulatory framework for electronic communications networks and services;
· the authorisation of electronic communications networks and services;
· universal service and users' rights relating to electronic communications networks and services;
· access to, and interconnection of, electronic communications networks and services; and
· concerning the processing personal data and the protection of privacy in the electronic communications sector
· Guidelines on Market Analysis and the calculation of Significant Market Power

9. Action point: A member asked Oftel to investigate at what level the National Regulatory Authorities would be represented during the introduction of the European Directives.

10. The three questions that were issued to the Oftel Forum attendees before the meeting were:

a. In which area would efforts to harmonise regulation bring the greatest benefits to consumers and why?

b. What is the major opportunity which the market reviews give OFTEL for:
· deregulation
· further regulation
· to protect consumers
· to promote competition

c. Oftel is proposing that a majority of the general conditions (some 14 in total) will have a consumer protection focus, requiring operators and service providers to ensure that their consumers are, for example:
· adequately informed about services, charges and contract terms;
· provided with clear and accurate bills;
· protected from arbitrary or unexpected disconnection from service; and
· able to resolve any complaints or disputes simply and inexpensively.
Are there any other areas where Oftel needs to consider imposing consumer protection regulation as a general condition of entitlement to provide an electronic communications network or service?
How can OFTEL find the right balance between the protection of consumers and over-regulation of network and service providers?

11. The Forum broke into discussion groups to debate the questions, but VP felt that there was not enough time to discuss the questions in detail. Also the debate was considered to be confused due to the mix of residential, small and large business users represented in each discussion group. The result was little opportunity to discuss the questions from a large business perspective, as it was mainly consumer groups and Small, Medium Enterprises (SME) represented at the forum. VP also stated that question 2 could not be answered until they had seen the market review. VP proposed that large business users/LBUP members have a separate meeting with Oftel to voice views on EU directives specifically.

12. MR agreed that further meetings on EU directives with interested parties eg TUA, CMA and LBUP would be beneficial but was not sure what format this could happen. Oftel would review this proposal internally.

13. It was suggested that the next Forum meeting should provide scope for a broader strategic discussion on the regulation of markets. LBUP members felt they could provide Oftel with useful feedback on its approach to market reviews and the best response to non-competitive markets.

Action Point: Oftel to consider the most appropriate means of providing the LBUP with a forum to discuss the implementation of the EU Directives.

14. The minutes of the last Oftel Forum meeting (25/4/02) could be found on the following link:
http://www.oftel.gov.uk/ind_groups/oftel_forum/index.htm

Item 4: BT Pricing for Businesses
15. Keith Loader (KL) stated he was aware of discussions on BT pricing at the previous LBUP meeting. He said that BT pricing was under constant review by the Compliance Directive and that some de-regulatory measures had already taking place. For example, the 28-day rule for notification of price changes to retail services had been reduced to 1 day, allowing BT to react quickly.. Also in March 2002, following the IDD market review, Oftel reduced controls on 23 IDD routes, with a reduction on a further 23 routes expected in the future. In addition, BT had been given greater flexibility to participate in electronic auctions and to discriminate on some calls, offering discounts to large businesses with a certain amount of spend.

16. An LBUP member stated that, through contracts with BT, consumers were 'locked in' to BT for a set time period. It was queried whether this would still apply if the consumer took Carrier Pre-Selection (CPS).

17. KL confirmed that BT remained dominant in a number of markets, particularly in the provision of access. BT could abuse its position if permitted to offer bespoke packages and bundle tariffs. There was a particular concern over adjacent tariffs.

18. The Panel members reminded KL that at the last meeting they had all supported the relaxation of regulation on BT. The members would support BT's ability to offer special deals and felt they would continue to use a combination of BT and other operators. Some members asked if some of the regulation could be removed from BT especially regulations specific to large business.

19 KL stated that whilst BT remained dominant, it could not be deregulated. He also stated that BT did not need to seek Oftel's approval to offer price packages, as there were very few occasions where Oftel need to approve tariffs, and these were tariffs below cost. KL stated that there was nothing to stop BT from reducing its prices now.

20. A LBUP member agreed that some markets were competitive, eg special services, and could be removed from the regulation basket. However, regulation on other areas, eg the local loop, would need to remain.

21. AP stated that the recent Retail Market Review showed an unbalanced tariff where BT was losing money on line rental. The current work on wholesale line rental would allow BT greater flexibility to move to the real cost of line rental, probably resulting in reduced call costs.

22. An LBUP member felt that there was poor management on BT's side, especially the service structure competition and requested Oftel to look at this in more detail. Another LBUP member felt that regulation could be reduced, as there should be sufficient competition in the telecoms market. Another member stated that their company could not cost justify using BT for National tariffing.

Item 5: Failing Telcos (Maeve Gallagher, Oftel)
23. Maeve Gallagher (MG) discussed with panel members the issue of telecom operators going into administration. MG stated that this was the price of competition in the Telecom market. In these situations, MG stated that it was Oftel's objective to minimise the impact upon end users. Wherever possible Oftel looked to avoid break of service and to allow consumers to keep their originally allocated number. If that was not possible, Oftel aimed for as much notice as possible to be given to the end users.

24. If administrators are involved then Oftel do get more involved and encourage parties to share contingency plans with Oftel and BT. There were problems in the past with some operators who ceased operating without giving their customers adequate notice.

25. The issue of continuity of service was down to the Department of Trade and Industry (DTI) and it would be consulting on the issue shortly. Oftel would be investigating the issue of customers losing their number due to an operator going out of business. Currently, other operators cannot be forced to take on some or all of the customers and their numbers. Oftel was looking at licence modifications to decide if this was the best way forward. Oftel and the DTI were also looking at having a database to make it easier to port numbers.

26. MG advised that Oftel and the DTI would be consulting on these issues shortly. Oftel would be grateful to hear of any comments and ideas about short-term measures that could be taken. There were many solutions for the long term but very few solutions for the short term.

27. A panel member asked if this consultation would cover current CPS Operators as this would also be a competition issue. Another member asked if there was any representative in dealing with companies whose head office is in the States, and whether Oftel would contact the Head Office as well as the UK office. MG stated she would confirm if the consultation would also cover CPS operators. She also stated that it was mainly the DTI who dealt with International Issues. Oftel offered to supply a contact name in the DTI that LBUP members can contact.

Action Point: Oftel to provide guidance on procedures to be followed if CPSOs go out of business.

Action Point: Oftel to provide a contact in DTI responsible for assisting businesses concerned about internationally based operators in administration

28. A member stated that when Ionica folded, Oftel spoke to customers and gave them the option of porting their number to a cable operator or BT. Managing Ionica customers was manageable. If larger operators cease trading a lot of large businesses would be affected.

29. Another LBUP member thought there was an obligation on BT to take back traffic quickly and it was incumbent on Oftel to ensure that new products such as CPS were protected if providers went out of business. Another LBUP member suggested that there should be Telecom guidelines, similar to the travel industry's ABTA MG stated that where BT have been asked to assist they have assisted.

30. Post Meeting Note
Consultation on proposals to change the framework for number portability
http://www.oftel.gov.uk/publications/numbering/2002/nupo0602.htm

Item 6: OFCOM
31. Ian Forsyth (IF) gave a presentation on the current situation with OFCOM.
Click here for presentation.

32. In response to a question on appointments, IF stated that nobody had been appointed yet, but the board was expected to be between 3-6 people, with 2 non-executive members
Stage 1 was the Tower Perrins report which was now available on the Oftel website:
http://www.oftel.gov.uk/publications/about_oftel/2001/towe1001.pdf
An organisation template was mentioned on the report and it suggests how the organisation might be set up. Stage 2 is currently taking place. It was confirmed that numerous sub-groups have been set up to look at areas where there are common issues eg licensing, policy. Consultants and one member from each organisation are represented on each sub-group. In future, consultants will need to have more discussion with the various stakeholders.

33. One member stated that he imagined that there would be a common ground in the approach to the regulatory issues. Another member stated that telecoms in general and Oftel would be the poor relation in OFCOM, which was worrying for large business telecom users. The proposed organisation template in the Tower Perris report also suggested a secondary role for Oftel.. However, it was understood that the Treasury had given Oftel extra funds to assist with its positioning. It was agreed that were a lot of issues still to be addressed.

34. AP stated that focus groups existed for the different stakeholders, and asked if these groups would be forming legislation If so, it was noted that it would be beneficial for LBUP to have an input.

Item 7: Calls to Mobile
35. John Hanlon reported back to the panel on his meeting with the Competition Commission (CC). JH felt that the CC favoured Oftel's original recommendations. He felt they would act sooner rather than later. The CC had gathered a large body of evidence to go forward and consequently the original decision date of July 11 was extended.

36. Vince Affleck (VA) reminded the Panel that when the charge controls expired in March 2002, Oftel had proposed a control of RPI - 12% for 4 years., which the mobile operators had rejected. Following their rejection of the proposed licence modifications, the matter was referred to the CC. The Commission had 6 months (although now extended) to consider the matter and make advisory recommendations
Although the entire report would not be available publicly the conclusions would be published two weeks after receipt by the DG. Oftel would look to publish information as soon as possible. Oftel are still working with the CC. There have been three meetings between Oftel and CC. Two of the meetings were formal, whilst one meeting was informal.
The two formal meetings that CC had with Oftel and the meetings they had with the Mobile operator would be published on the website:
http://www.oftel.gov.uk/press/releases/2002/pr31_02.htm. VA stated that it was difficult to know what the outcome would be.

37. A member stated that Oftel must be frustrated at how the long the process took. VA stated it was positive that an independent body was investigating Oftel's proposal.

38. JH asked if customers would receive a years back pay, if it took this length of time for the CC to complete the review. He also stated that mobile operators could delay the review further. Another member stated that the mobile operators were arguing that they needed the higher charges to support the rollout of 3G mobile.

39. VA confirmed that the CC was aware of these arguments. VA also stated that there was external movement that could affect the CC decision. The USTR in April issued an annual report on how different countries abided by different rules for mobiles. One of these rules was mobile charging. Another paper, which was issued by the regulator in the Netherlands, showed a large difference between mobile charges and termination charges.

Item 8: Feedback on PAP/INA (Alan Pridmore, Oftel)
40. Alan Pridmore gave feedback (click here for presentation) on Pre Allocation Porting (PAP) and Individual Numbering Allocation (INA).

41. AP stated that research of SMEs had been carried out and the results were awaited. (These have now been published: http://www.oftel.gov.uk/publications/research/2002/srna0802.htm) The draft Communications Bill would have provision allowing allocations by OFCOM to non-providers.

Item 9: Corporate Numbering
42. Elizabeth Greenberg (EG) explained the current situation on Corporate Numbering. EG stated that the consultation document on Corporate Numbering was drafted and was due to be issued shortly. The information received from the LBUP members' workshop on corporate numbering had been very useful and would be included in the document

43. EG explained that some of the main benefits of Corporate Numbering for large businesses were the rationalisation of networks and high mobility, as new offices would not need to seek numbers in new geographic code areas but could take numbers from the same non-geographic 05 number block.

44. The Panel expressed some concerns regarding Corporate Numbering. Some members felt it would have been better introduced before 'The Big Number' code and number change or after the introduction of ENUM. Also, members were unsure how portability would work and how calls would be carried between the PSTN and VoIP networks. The Panel stressed the importance of corporate numbering working on the VoIP network.

45. EG concluded that for Corporate Numbering to realise the anticipated benefits, it would need to be flexible in use and supportable on PSTN and IP networks. It was stressed that there was a number of outstanding issues that would be raised as part of the consultation. The Panel members were encouraged to consider the document and respond to the consultation.

46. AP stated that the when corporate numbering was reviewed in 1997, it stated that operators were not interested. EG stated that more operators are interested now than they were in 1997.

Item: 10 AOB
47. A member mentioned that the pricing of Local Rate and National rate calls was not clear. EG informed the members that this was being looked into by Oftel and a consultation was planned for later this year.