|
AGENDA
10.30am
Market Research Workshop
12.30pm
Buffet Lunch
1.30pm
Meeting
1. Introduction
2. Minutes of last meeting
3.
National Leased Lines in the UK (Tim
Cross, Oftel)
4. Comparable
Performance Indicators (CPIs) (Chris Rowsell, Oftel)
5. CLI Presentation Numbers
(Frank Phillips, Oftel)
6.
Mobile Market Review (Heather Clayton, Oftel)
7. Other Issues
7.1 Regulation of BT Re-organisation
7.2 LBUP website
8. AOB
9. Future meetings: Dates and Items
5pm Close
WORKING
PAPERS FOR AGENDA ITEMS
3. National Leased Lines in the UK
4.Comparable
Performance Indicators
6.Mobile
Market Review
WORKING
PAPER FOR AGENDA ITEM 3
National
Leased Lines in the UK – Effective Competition Review
Issue
Oftel published its consultation document on national leased lines
in August 2000. This is the first stage of its effective competition
review for national leased lines. The document sets out Oftel’s
analysis of the state of competition in the provision of national
leased lines and the various policy options Oftel is considering.
Questions
to consider
Benchmarking
Question 1: Do you agree with Oftel’s conclusion that customers
of retail leased lines in the UK are not getting the "best
deal" compared to customers in other European countries and
in the US?
Market analysis
Question 2: Do you agree with Oftel’s view that retail
leased lines are a separate economic market? Please provide information
on both demand and supply side substitutability in your answer,
with data where possible.
Question
3: Do you agree with Oftel’s assessment that the retail
leased lines market is not currently effectively competitive? If
possible, please supply data that supports your answer.
Question
4: Please explain why consumers purchase retail leased lines
from BT in areas where they have a choice of operator. Does BT’s
volume discount scheme provide incentives to purchase from BT instead
of an another operator? If so, please provide any examples where
BT’s volume discount scheme may have, to some extent, influenced
your choice of operator.
Policy options
(see appendix for relevant excerpts from the leased line consultative
document)
Question 5: Do you agree with Oftel’s initial proposals
that Option 3 and Option 5, in relation to analogue services, are
the most appropriate policy options to pursue?
Question
6: Should Approach III, described in Oftel’s PCR consultation
be extended to leased lines? What are the advantages and disadvantages
of this? What practical arrangements would need to be put in place
so resellers without any network infrastructure could buy terminating
segments from BT but trunk networks from OLOs?
WORKING
PAPER FOR AGENDA ITEM 4
Comparable
Performance Indicators (CPIs)
The Future
of Quality of Service Information Provision
The Telecommunications
Industry Forum – which comprises telcos, consumer and business
user groups, and Oftel – is currently revising the Comparable
Performance Indicators (CPIs) publications. These are booklets that
provide quality of service information for the major telecommunications
operators in the UK in order to allow users to make informed decisions
when choosing telecoms service.
The Purpose
of the Review
The Industry Forum wants to ensure that CPIs are fit for purpose.
That is, that the information that is provided is what different
types of users want, presented in the way that companies want and
is provided in the most appropriate medium.
The Industry
Forum recognises that different users have different demands for
information on quality of service. Currently, the results are split
by residential (including SoHo) and business. However, it is felt
that large businesses may have very different demands to small or
medium sized businesses.
Gaining the
feedback of different sectors of the market is essential in ensuring
that CPIs are actually delivering benefits to users.
Important
Issues for Consideration
One of the most important issues is whether the parameters used
are those that users want. The enclosed questionnaire aims to capture
those areas that you believe are most appropriate. I would appreciate
it if you could take the time to fill in this questionnaire prior
to attending the meeting. We are also surveying residential consumers
and other sectors of the business market, so please respond from
your perspective as a representative of large businesses.
I will be making
a presentation at the meeting on other issues including the potential
design and medium of CPIs. Hopefully we will have an interesting
discussion on these issues. I have enclosed a copy of the current
CPI business booklet, so you can see the way the information is
presented at the moment.
I thank you
in advance for your time in completing the questionnaire.
Chris Rowsell
Senior Policy Adviser – Consumer Issues
E-mail: chris.rowsell@oftel.gov.uk
WORKING
PAPER FOR AGENDA ITEM 6
Mobile market
review
Oftel’s
strategy includes the principle that the level of regulation in
each different market should be proportionate to the state of competition
in each market. This requires that Oftel assess the state of competition
in a series of "effective competition reviews". The mobile
market review is one such review, others include leased lines and
the internet.
For the mobile
market, Oftel will assess whether its objective of "effective
competition benefiting consumers" is being met, and whether
- on the basis of the review – current regulation remains appropriate.
Broadly, Oftel will examine the market segment containing those
services covered by the mobile PTO licence (although Oftel will
be defining the relevant economic market more precisely).
During September,
Oftel will launch the mobile market review with a document describing
its broad scope. Prior to the launch, Oftel met various stakeholders,
including consumer representatives, network operators and service
providers, to provide information on the review’s scope and
process. The meetings were important, as all have helped to refine
Oftel’s thinking. Oftel plans to complete the review in Spring
2001.
Questions
- How good
a deal do you think large business users get in the mobile market
in terms of price, quality, choice and innovation? How do you
think this differs from SMEs?
- What data
would you be able and willing to input into the review on the
above measures?
- What impact
has the evolution of the mobile service provider market had on
the deal you get?
- How far do
price and coverage differ between providers for international
roaming, and how important an issue is roaming in your choice
of provider?
- To what extent
are special one-off deals available from mobile networks and service
providers, and what forms do those deals most commonly take (e.g.
pence per minute discounts, savings on administration)?
- How close
are Dolphin and the GSM operators as substitutes in the mobile
market?
- What mobile
issues are of particular concern to you as large business users?
Appendix
for Agenda item 3 – National Leased Lines
Excerpts
from National leased lines: Effective competition review and
policy options, Consultation document issued by the Director
General of Telecommunications, August 2000
Oftel website
address: www.oftel.gov.uk/competition/nll0800.htm
Option
3
4.16 Under Option
3 Oftel is considering regulating BT’s prices for wholesale
terminating segment services. Therefore Option 3 can be summarised
as Option 2 plus price control. BT would be required to offer wholesale
terminating segment services, at all bandwidths, to other Annex
II operators on non-discriminatory terms at cost orientated prices
which are subject to price regulation. The price regulation would
involve setting the initial prices for the services for the first
year and then construction of an appropriate network charge control
to regulate the prices for next 4 years.
Is Price
Regulation Appropriate?
4.17 Oftel believes
that there are two main issues which need to be considered in deciding
whether price regulation of wholesale terminating segment services
is appropriate.
4.18 The first
issue concerns BT’s current pricing behaviour and to what extent
its current prices are excessive such that it is making supernormal
profits. If BT’s prices were excessive this would provide a
stronger justification for imposing price regulation. Since the
wholesale terminating segment services are not currently available
it is not possible to examine the position in relation to the service
which is to be regulated. Therefore, it is relevant to consider
the extent to which supernormal profits are being made by BT on
its sales of retail leased lines. As explained in chapter 3 and
in Annex B, initial results suggest that BT may not pass all the
appropriate tests for excessive profitability but further work is
necessary.
4.19 The second
issue relates cost efficiency. One of the main advantages of imposing
price regulation in this context is that it would provide an incentive
for BT to make cost efficiencies in relation to the provision of
terminating segments. In a competitive market, firms have strong
incentives to control and reduce costs. However in the case of a
firm with market power it is possible that the firm will make fewer
cost efficiencies due to the reduced pressure to seek cost savings.
As explained in chapter 3, Oftel believes that BT is dominant in
the market for terminating segments and therefore it will not have
these incentives to reduce costs and these cost inefficiencies would
be likely feed into higher retail prices. However, if price cap
regulation is introduced this will provide incentives for BT to
make cost efficiency gains and thereby reduce retail prices from
what they might have been if only Option 3 were implemented.
Form of Price
Regulation
4.20 Oftel has
considered, if it were to price regulate, what would be the form
of the price regulation. A detailed discussion of these issues is
set out in Annex G. Briefly, Oftel is proposing that prices would
be regulated on a LRIC plus a mark up (to allow the recovery of
common costs) basis. Oftel is also proposing that it would place
one overall control on BT’s prices for wholesale terminating
segment services and not regulate individual prices at each bandwidth.
BT’s prices would be set on a geographically averaged basis
but BT would be allowed to offer discounts from the averaged price
in certain areas where it faced lower costs or more competition.
These discounts would not, however, contribute to BT’s obligation
to meet the overall price control. Thus, while BT would be able
to lower its charges for wholesale terminating segment services
in one geographical area, such as CLZ, it would not be able to raise
prices in other geographic areas. Therefore, consumers in non-competitive
areas will be protected from higher retail prices resulting from
higher terminating segment prices.
Potential
Outcomes
4.21 The potential
outcomes arising from Option 3 will be those that have been discussed
above in relation to Option 2, but with some important differences.
In addition, two other possible impacts are also considered below.
Alterations
to Option 2 outcomes
4.22 One of
the outcomes discussed above is increased competition in retail
leased lines which should result in lower retail prices. Under Option
3 it is more certain that this outcome will occur and it is likely
that price reductions will be greater than under Option 2. Oftel
will set the overall price level for wholesale terminating segment
services by determining the amount of common costs between these
services and other network services (such as PSTN and other data
services) which BT is able to recover from wholesale terminating
segment services. However, under Option 2 BT will be able to determine
the amount of common costs to be recovered from wholesale terminating
segment services (within constraints imposed by its licence and
the CA), and it may choose to recover a greater amount of common
costs than Oftel would allow under Option 3. If this is the case,
higher prices for wholesale terminating segment services will result
under Option 2 than under Option 3 and therefore retail prices under
Option 2 are likely to be higher than Option 3.
4.23 Inaddition,
if Option 3 were implemented the scope for BT to conduct the margin
squeeze discussed above would be reduced. The margin squeeze concerned
would be caused by BT raising the price for wholesale terminating
segment services while reducing its price for retail leased lines.
However, under Option 3 BT’s ability to raise the price of
wholesale terminating segment services would be subject to a greater
constraint than under Option 2 and therefore it is less likely that
BT would be able to impose the margin squeeze.
Cost efficiencies
4.24 It is anticipated
that the wholesale price cap for terminating segments will provide
BT with an incentive to make cost efficiency gains. Under Option
2 it is unlikely that this outcome will occur. This means that Option
3 is likely to result in lower retail prices than under Option 2.
Rebalancing
4.25 Oftel has
considered whether, if it were to regulate BT’s prices for
wholesale terminating segement services, BT would have to rebalance
its local end and main link retail prices. There are two types of
rebalancing which are potentially of concern. The first relates
to rebalancing between local end and main link prices and the other
relates to rebalancing of local end prices between different bandwidths.
In relation to the first type of rebalancing, it appears that BT’s
overall returns on local ends cover both LRIC and a markup for common
costs and also a reasonable return on capital and therefore it appears
that rebalancing between main links and local ends is unlikely.
4.26 The second
type of rebalancing is an alteration in relative prices of local
ends at different bandwidths. Oftel believes that, if the form of
price cap explained above were adopted, such rebalancing will not
be required. However, it does appear on the basis of cost information
from the top down cost model that BT may choose to make adjustments
to ensure that prices at individual bandwidth better reflect cost.
In particular BT may increase the price of 2 Mbit/s local ends and
reduce the price of kilostream local ends. If this occurred its
effect would be that 2 Mbit/s own exchange circuits and short distance
circuits may increase in price, while kilostream own exchange circuits
and short distance circuits may fall. If a different form of price
cap were adopted, where different bandwidths were subject to separate
price caps, then this type of rebalancing may be required by the
structure of the price cap. This issue is discussed further in Annex
G.
Implementation
4.27 If Oftel
were to implement Option 3, it is anticipated that it would set
the initial wholesale pricing rules for wholesale terminating segment
services which would apply until October 2001 and thereafter an
appropriate network charge control would come into effect. To the
extent that this price regulation can be satisfactorily implemented
by way of a direction under the ICD, rather than by a specific licence
condition, the Director General may pursue this route. Alternatively,
the price regulation would be implemented as part of any licence
modification required to implement the future PSTN charge controls
according to the procedure as set out in section 12 of the Telecommunications
Act 1984 (TAct).
Option
5
4.30 The final
policy option is safeguard retail price caps on BT’s prices
for retail leased lines. A safeguard price cap is a price control
which prevents those price levels from increasing by more than the
inflation rate during the period of the control. The purpose of
such a price cap is not to be a binding constraint on the prices
controlled, because it is implemented where Oftel expects competiton
to the service to become effectively competitive during the price
control period, but rather to provide a safeguard for customers
in case this judgment proves to be over optimistic.
4.31 As explained
in chapter 3, Oftel’s review of effective competition in the
provision of retail leased lines suggested that it was not competitive.
Accordingly, Oftel does not believe that retail safeguard caps on
their own are an appropriate form of regulation to introduce. However,
Oftel has considered whether they may have a role if Option 2 or
3 are implemented. In particular Oftel has considered whether the
existing caps on analogue and digital up to 64 kbit/s, due to expire
in July 2001 (subject to the rollover provisions) should be retained.
As explained above, Oftel believes that if Options 2 or 3 are implemented
this should lead to increased competition in retail leased line
services and therefore BT’s prices of those services will be
constrained. However, Oftel has considered whether these competitive
pressures are likely to be sufficient in the case of analogue and
small digital services.
Analogue
Circuits
4.32 As discussed
in chapter 3, to date there has been virtually no entry by OLOs
into the provision of analogue services and the price cap has been
binding on BT’s prices. Oftel believes that in the future,
given the availability of appropriate wholesale inputs, it is possible
that OLOs may begin supplying analogue services and therefore competition
may be a sufficient constraint on BT’s prices for analogue
circuits. However, analogue circuits are a declining segment of
the market and therefore operators may choose not to enter into
the provision of these services. It is difficult to predict what
will happen and therefore in order to protect consumers Oftel believes
it would be appropriate to retain the safeguard price cap on analogue
services throughout the UK. Of course, if competition does develop
the price cap will not be binding on BT’s prices and therefore
the regulation does not appear to be disproportionate to the competition
concerns identified.
Digital Circuits
up to 64 kbit/s
4.33 As discussed
in chapter 3, there has only been limited entry by OLOs into the
provision of digital circuits up to 64 kbits and the existing safeguard
cap has not been binding on BT’s prices. As in the case of
analogue services Oftel believes that in the future, given the availability
of appropriate wholesale inputs, more entry will occur and competition
should constrain BT’s prices. However to date entry by OLOs
has been limited even in areas, such as CLZ, where OLOs have their
own access networks which may suggest that even with the appropriate
wholesale inputs available OLOs may not supply these bandwidths
to a significant extent. Therefore there is a risk that competition
will not be sufficient to constrain BT’s prices. However, given
that this is a growing segment of the market, on balance Oftel believes
that the safeguard cap is not appropriate.
Implementation
4.34 If Option
5 were to be implemented this would be done by means of a licence
modification according to the procedure set out in section 12 of
TAct.
Future Option
– Introduction of Resale of end to end leased lines
4.35 In Oftel’s
recent Price Control Review ( Price control review, Oftel, March
2000) (PCR), Oftel asked about the impact on competition from the
existence of resellers of BT’s services. Oftel discussed how
the competitive impact of resale depends to a large extent on the
terms on which resellers are able to gain access to BT’s network.
At present, Annex II operators purchase network interconnection
services from BT at charges based on BT’s costs, whereas resellers
not deemed to have Annex II status purchase services from BT at
charges based on BT’s retail prices. The difference between
the prices offered to Annex II operators and resellers essentially
represents BT’s profit margin, which is significant. One of
the options in the PCR (Approach III) proposed that resale of BT’s
network services could offer greater opportunities to increase competition
if charges to resellers were not based on BT’s retail prices.
Cost-based charges for resellers similar to those enjoyed by Annex
II operators, may increase the scope for competition from resale.
4.36 Approach
III could be extended to leased lines if Options 2 or 3 were adopted.
This would mean that resellers should be able to obtain BT’s
end to end leased lines at the equivalent price of the Annex II
price for terminating segment and retail priced trunk segments.
This arrangement might enable resellers to place increased competitive
pressure on the retail prices of leased lines, particularly if it
were possible for resellers to purchase the trunk segments from
other carriers.
4.37 If Approach
III of the PCR is adopted in the future price control regime and
if Option 2 or Option 3 were adopted, it is anticipated that Approach
III would be extended to leased lines. The final statement of the
leased lines review and the next statement of the PCR would co-ordinate
any application of Approach III to leased lines.
Conclusion
and CBA
4.38 In this
chapter Oftel has discussed the various policy options which it
is considering in the light of its conclusions of its effective
competition review set out in chapter 3. On balance it is Oftel’s
view that the most appropriate policy option is likely to be Option
3. This option will result in proportionate regulatory action. Option
3 targets regulation on the relevant wholesale market, namely the
market for terminating segments, which Oftel believes is the barrier
to the development of effective competition in the provision of
retail leased lines. Option 3 also appears to offer the best propsect
of lower retail prices and creation of appropriate incentives for
BT to make efficiency gains. In addition to the qualititive assessment
of the various policy options Oftel has attempted to quantify, so
far as possible, the costs and benefits which would occur if the
main policy options, namely Options 2, 3 and 4, were implemented.
This cost benefit analysis (CBA) provides further evidence to suggest
that Option 3 appears to be the most appropriate policy option to
adopt.
Notes
of meeting of the Large Business User Panel
Present:
Panel members
Linda Parker
PriceWaterhouseCoopers
Rob Gaveglia
PriceWaterhouseCoopers
Andy Goodey Corporation
of London
Martin Rayment BAA
Chris Bell
BBC
Vivienne Peters American Express
Janet Parkinson EDS
Oftel
Alan Pridmore (Chair)
Elizabeth Greenberg (Panel Adviser)
Maura Crawford
Tim Cross
Chris Rowsell
Rosalind Stevens-Strohmann
Frank Phillips
Heather Clayton
MEETING LARGE
BUSINESS USER PANEL
| ITEM
1 |
Introduction |
|
| 1. |
The
Panel agreed the agenda. |
|
| ITEM
2 |
Matters
arising from March 2000 meeting |
|
| 2. |
The
Panel agreed the minutes. |
|
| 3. |
Oftel
had re-considered the value of limited market research to gauge
telecom markets. It had concluded that the isolated circulation
of questionnaires to the Panel would not give a reliable indication
of the demand for corporate numbering, and the action to do
so was discontinued. It was brought to the Panel’s attention
that Vivienne Peters and John Pook were part of the TMA subgroup
addressing corporate numbering. |
|
| 4. |
Oftel
informed the Panel that there was little to report from the
industry working group on mobile number portability. Further
updates would be made once the new porting processes were finalised.
A presentation on mobile Internet services would also be considered
at a future meeting. |
|
| 5. |
A
Metering and Billing Workshop and Seminar was held on 18 April
2000, followed by a Workshop to review the Oftel Metering and
Billing Standard on 26 June 2000. A further meeting of the working
group was scheduled for 15 September 2000. It was noted that
Linda Parker was present at the April workshop. A summary of
the April and June workshops had been posted on the Oftel website
at the following web address: http://www.oftel.gov.uk/meter/meet/meet0800.htm
The billing
studies questionnaire had been posted on the LBUP website:
http://www.oftel.gov.uk/largebus/BillingStudiesQuest.htm
Panel
members were encouraged to complete and return the questionnaire
to egreenberg@oftel.gov.uk
|
|
| 6. |
The
Panel was informed that Oftel’s project managers had been
contacted with a view to including items on the LBUP agenda.
As a result, the CPI and mobile market review items had been
included. Contact between the project managers and the Panel
would be maintained. |
|
| ITEM
3 |
National
Leased Lines in the UK |
|
| 7. |
Tim
Cross gave a presentation on the National leased lines: Effective
competition review and policy options Consultative Document,
August 2000. The document set out the results of Oftel’s
effective competition review of national leased lines, which
had considered the competitive position of the wholesale and
retail leased line market. It also explained the terminology
used in the discussion of a typical leased line, which was critical
to an appreciation of the market. The review looked at ‘top
down’ and ‘bottom up’ models for the cost of
leased lines and analysed the difference between the 2 sets
of costs. It was acknowledged that analysis had been restrained
by BT’s fully allocated cost accounting system, however
Oftel was comfortable with its general conclusion that the retail
price for leased lines was too high. The consultative document
identified key policy proposals and highlighted 3 favoured options.
Panel members were encouraged to submit a response to the consultation,
which closed on 27 October 2000. |
|
| 8. |
The
Panel felt that the questions posed by the consultation were
in the right direction but were not the correct questions from
a practical point of view. A diagram featured in the presentation
and the consultative document, explaining the terminology used
in the leased line relationship, was seen as too simplistic.
It presented the relationship as 2 local ends, rather than the
reality of pieces of copper connected to different termination
points. The Panel felt the lack of infrastructure competition
allowed BT to take advantage of inconsistencies in its pricing
strategy. For example, BT charged for 10 yards of interconnection
cable from a termination point as a local end, even if the termination
point was on-site. The diagram ignored such scenarios. Oftel
acknowledged the diagram worked for most types of circuit but
did not cover locally provided leased lines. |
|
| 9. |
Panel
members anticipated that LLU would have a significant impact
on the lower bandwidth leased line market. It was felt that
through LLU, businesses would be able to obtain 2 copper ends
at vastly cheaper prices than currently available. However,
it was suggested that the LLU cost model was not consistent
with the price models for leased lines. Oftel explained that
there was more consistency in the approaches if the ‘bottom
up’ model for leased lines was used. The Panel felt it
was difficult to assess without knowing the level of return
on retail overhead. In general, the Panel members expressed
concern over the analogue and ‘copper end’ markets. |
|
| 10. |
One
suggestion from the Panel was that BT offer OLOs ‘wholesale
plus’ prices for leased lines to OLOs. The OLO would then
pass the same price onto large businesses. The OLO would make
a profit from the other services offered to the customer. Large
business customers and OLOs would then benefit from a competitive
market without the need for intrusive regulation. |
|
| 11. |
Panel
members reported that in the leased line market, BT did not
always promote its best value or most appropriate products,
such as its full range of analogue circuits. Also, since BT
had revised its pricing structure, the adaptability of products
had been reduced. For example, BT had ceased to provide linkcable
with varying numbers of pairs. The Panel wondered whether a
customer lobby would gain Oftel’s involvement in ensuring
that desired products remained available from BT. |
|
| ITEM
4 |
Comparable
Performance Indicators |
|
| 12. |
Chris
Rowsell, CPI Project Manager, gave a presentation on the recent
revision of the CPI booklets. Since their launch in 1995 a larger
number of operators had become involved and an improved presentation
format was required. A new contractor had been employed who
had made interim improvements to the layout, including the presentation
of information in portrait format. However, a more radical review
of the CPIs was planned. The CPIs were funded by the industry
and there was no charge for a booklet. One of the issues to
be considered was whether funding for improved CPIs should be
financed by making a charge for the booklets. The CPIs were
a combination of market research data and factual information.
Oftel was seeking from the Panel feedback from a large business
point of view. |
|
| 13. |
Chris
Rowsell sought feedback from the Panel members on the profile
and usefulness of the CPIs to large businesses. Whilst half
of the attendees were aware of their existence, only 2 members
had read them. Opinion was that visibility was low. The general
message from the Panel was that CPIs should be of great benefit
to residential users and SMEs if given a higher profile, but
were not needed by large businesses. They could possibly be
used as a reference tool and to negotiate better quality of
service, and may influence some decisions, but only if data
was kept separate from residential statistics. The medium to
large business telecom user was more likely to depend on service
level agreements with telecoms companies and decisions on performance
would be contract based. It was doubted whether the type of
statistics reflected in the CPIs would be of any use to the
large business user. Quantifiable data such as the time taken
to deliver services would be more beneficial. Another issue
for large businesses was the collective grouping of different
types of operator, such as Colt and MCI WorldCom, whereas a
presentation that reflected the different types of service would
have been more useful. |
|
| 14. |
The
Panel went on to discuss the use of CPIs in general. It was
suggested that CPIs could be combined with the top 10 complaints
received by Oftel’s Consumer Representation Section. This
would help to uncover customers’ worries and dissatisfaction
with telcos and shed light on reasons for churn. The inclusion
of an audited set of telcos’ own complaints was also discussed.
The Panel agreed that the new look CPIs were an improvement,
making the information easier to understand and more instantly
appealing. An easily navigated Internet version was suggested.
It was felt that once the radical review of the CPIs had been
completed, there should be a big publicity relaunch and perhaps
an advert on the back of telecoms bills. |
|
| ITEM
5 |
Dispute
Resolution Procedure – ADR subgroup |
|
| 15. |
Rosalind
Stevens-Strohmann explained to the Panel that in accordance
with Regulation 37 of Revised Voice Telephony Directive (RVTD)
an industry funded ombudsmen would be set-up to address disputes
between telecoms users and fixed telecom operators. The Alternative
Dispute Resolution (ADR) scheme needed to be put in place by
1 June 2001. Rosalind stressed the benefits of including a member
of LBUP to ensure large business user interests were represented.
The subgroup would be of approx 8 people and would be meeting
every 2/3 weeks from October to December. It would be chaired
by Oftel and would also include telco representatives. It was
hoped that the same people would attend all meetings to ensure
consistency. It was envisaged that the industry representatives
would do most of the work outside of the meeting and the meetings
would be used to review the work packages. Panel members were
asked to consider representing LBUP on the subgroup. |
Oftel
to contact all Panel members with details of the subgroup and
request nomination
Panel
members to consider being part of the ADR subgroup by 20/09/00
|
| ITEM
6 |
CLI
Presentation Numbers |
|
| 16. |
Frank
Phillips led a discussion on the implementation of type 3 presentation
numbers. Further to negotiations with operators Oftel had made
charges to the implementation policy contained in the February
statement. As a result, the ability for businesses to transfer
authorisation to use type 3 presentation numbers between networks
had been approved in principle. The Panel was asked to consider
the draft Code of Practice (COP) which clarified responsibility
for type 3 presentation numbers and comment on whether it was
workable or appeared over cumbersome. Oftel encouraged businesses
to approach their operators for type 3 numbers, as action would
hopefully assist in the implementation of the COP. The Panel
felt the intentions of the COP were good, but a number of technical
rather than regulatory problems had arisen, causing implementation
of presentation numbers to be poor. The Panel felt consideration
of real implementation problems would be valuable. It was suggested
that Panel members follow the discussions of the CLI interest
group on the following website: http://www.oftel.gov.uk/cligroup/index
The website contained meeting notes and reference documents,
including the draft COP. |
Panel
to offer comments on the COP to Frank Phillips. |
| 17. |
The
Panel members were particularly concerned that technical problems
were affecting the ability to implement presentation numbers
correctly. An issue concerning VPNs’ inability to send
DDI CLIs once the call broke out of the VPN was raised. The
use of presentation numbers should avoid the risk of Anonymous
Call Rejection (ACR), however it appeared DDI CLIs could not
be obtained from a VPN or the GTN. Panel members had reported
the issue to BT and were seeking an upgrade to reduce the instances
of ‘number unobtainable’ being sent out. There was
a concern, as it was believed many businesses would opt for
ACR. Also, the Panel saw the purpose of CLIs as allowing a call
to be traceable, but without DDI CLI, it was difficult to leave
a meaningful CLI with a customer. With a large business, the
call could have been made from any site, and a return call to
a type 3 presentation number was likely to be a meaningless
call. |
|
| ITEM
7 |
Mobile
Market Review |
|
| 18. |
Heather
Clayton spoke to the Panel about Oftel’s review of the
competitiveness of the mobile market. Reviews of telecoms markets
were conducted every 2 years to ensure that the level of regulation
was proportionate to the effectiveness of the competition in
that market. The review covered the 4 mobile operators and Dolphin.
Oftel was in the process of meeting with various consumer groups
and collecting data on prices, trends, availability of information
etc. Data had been collected from SMEs and feedback was being
sought from large businesses via the Panel members. Any data
that the Panel could provide would be appreciated. The anticipated
result of the review was that the mobile market had the potential
for, but had not yet achieved, effective competition. |
|
| 19. |
The
Panel discussed their experiences of competition in the mobile
market. It was agreed there were problem areas, particularly
with roaming and porting. The cost of roaming, both inward and
outward from the UK, plus the availability of information on
the costs were cited as areas worth considering in the review.
There was some concern that collusive pricing was hindering
competition, causing operators to effectively discriminate against
each other with high call termination rates. It was felt difficult
to find an operator that offered quality in all areas, those
that offered good tariffs might have a poor approach to customer
service and fault resolution, and vice versa. It was felt some
mobile operators were better geared to the needs of corporate
customers. It was generally agreed that the cost of using mobiles
was still too high and the quality of service did not match
the expense. It was established that corporate customers benefited
from some special unpublicised deals from operators, but it
was felt that the level of discount did not sufficiently reward
corporate customers for the size of order and operator loyalty. |
|
| ITEM
8 |
Other
Issues |
|
|
20.
8.1
|
Regulation
of BT re-organisation |
|
|
At
the time of the meeting, there was little to report to the Panel
on the regulation of BT following its re-organisation. Any changes
to Oftel’s regulation of BT would be publicised as part
a consultation. The issue would be re-visited by the Panel once
the position was clearer. |
|
| 21.
8.2 |
LBUP
Website |
|
|
Maura
Crawford spoke to the Panel about the new website for the LBUP.
An introduction to the work of the Panel, a set of meeting minutes
and the billing studies questionnaire had already been posted
at the following address: http://www.oftel.gov.uk/largebus/index. The website
had a section available for general access, plus a closed user
group section for Panel member access only. The closed section,
which was currently under construction, would contain working
papers and documents of a sensitive nature, which would seek
Panel member’s input into formulating policy. Once launched,
individual case sensitive passwords would be sent out to Panel
members. It was hoped to construct a chatroom for Panel members
in the future. Feedback on the website was welcomed. |
|
| ITEM
9 |
Any
Other Business |
|
| 22.
9.1 |
Feedback
on Workshop |
|
|
It
was agreed that the concept of a workshop was a good way to
share ideas and develop best practice. Attendees at the morning
Market Research workshop reported that it went well even though
the attendance was low. However it was felt that the deliverables
were not entirely clear, and those present expected some result
from the feedback given. |
|
| 23.
9.2 |
BT
market research |
|
|
It
had come to the attention of some Panel members that an independent
research organisation had been seeking market information from
large businesses on behalf of BT. It appeared the organisation
was seeking views on a range of new BT products. It was also
reported that BT had offered, for a fee, the use of members
of its staff on a placement basis, to manage order placement,
faults and billing. Some Panel members had already negotiated
the use of BT experts as part of their contracts. |
|
|
Future
meetings |
|
| 24. |
Date
of next meeting: |
|
|
- 18
January 2001, 11am at Oftel, 50 Ludgate Hill, London EC4M
7JJ
|
|
| 25. |
Suggested
topics for next/future meetings: |
|
|
- Regulatory
effects of BT re-organisation
- Oftel
viewpoint on how to regulate the converged industries of
telecoms/IT/broadcasting
- Mobile
Number Portability Process
- Mobile
Internet services
- Implementation
of CLI presentation numbers
- Update
on E-Commerce/Internet/Bandwidth presentation concentrating
on ADSL
- Possibility
of inviting DTI to speak about SPAM and the E-Commerce Directive
|
|
|
 |
