• Agenda
• Background information
• Note of Meeting

AGENDA

1.  Matters Arising from the last meeting

• Comments on the Note of the last meeting
• Membership of Group
• Others

2.  Rights and Obligations under the present Numbering Conventions.
3.  Customers’ Legitimate Expectations for Numbers.
4.  Technical/operational restrictions on customers’ expectations.
5.  Possible approaches to rules on number trading.
6.  AOB
7.  Future Meetings

• Action Points for next meeting.
• Dates

BACKGROUND PAPERS INFORMATION FOR THE 2^ND MEETING OF THE WORKING GROUP ON RULES GOVERNING NUMBER USE

Contents:

• Rules of Use under the present Numbering Conventions - paper by Rob Borthwick, Vodafone
• Number Trading Proposals - paper by the Direct Marketing Association (DMA)
• Customers' Expectations of Retention of Numbers - paper by Peter Hamilton, BT
• Number Trading Proposals - paper by Freephone User Group (FUG)

Rules of Use under the present Numbering Conventions - paper by Rob Borthwick, Vodafone

This is an examination of what seem to be the principles, rights and obligations that exist under the present Oftel Numbering Conventions.

Author: Rob Borthwick, Vodafone

Principles

Rights

Obligations

Number Trading Proposals - paper by the Direct Marketing Association (DMA)

The following sets out a series of views and comments with the purpose of creating a set of proposals about the regime for number trading from the perspective of direct marketing organisations. They also encompass organisations whose business capabilities have a commercial dependency on the telephone numbers associated with their business operations.

A distinction is drawn in this paper between ‘issue’ of a number for the first time by the Number Allocation Organisation (NAO) and issuer of the number, and the trading of a number between commercial entities and or individuals subsequently.

For the purpose of definition in this paper trading is broadly:- "the transfer, for a consideration, of the rights of use of a number or number block, independent of the physical termination of calls to that number, or of a business with which the number is associated. The transfer may be between end users, network operators, service providers, or intermediaries who have acquired those rights of use". Having stated this definition it is not assumed that the conditions of legitimate trade must, or should be the same between the various parties identified in the definition.

It is acknowledged that three types of numbers have previously been described that could have different market values allotted to them.

1. Golden numbers are numbers that are memorable because they are composed of repeated or familiar digits. They may be identified as generically memorable. Golden numbers such as 0800 1234567 will be more valuable than, say, 0800 909000.
2. ‘Choice’ or ‘Select’ numbers are numbers which may not have a generic or natural rhythm to the lay person, but which have a value to a particular organisation – for example 0800 404040 (sounds like Forte, Forte, Forte) or 0800 282820 (the sound of an owl – Guardians logo). Alphanumeric numbers also fall in this category. These ‘Select’ numbers have a greater value to the number owner because they were specially selected.
3. Sequential numbers are ‘the next available number off the top of the pile’ and are for number owners who have no interest in the layout of their number.

1. General

1.1. Charges will be levied on the issue of individual numbers in recognition of their value as a national resource. This is a given factor.

1.2. Revenue from number issues will pay for the administrative mechanisms required to allocate and manage the number stock plus an additional element to be decided to go to the Exchequer as payment for the right to use (not to own) a national, scarce resource. This is a given factor.

1.3. Until an Individual Number Allocation (INA) system exists and it’s numbering range scope is defined, trading is likely to be centred on non-geographic numbers – 08, 09.

1.4. Consideration needs to be given to 07000 (personal numbers) number trading.

1.5. Golden numbers have already been recognised as having a greater economic value than other numbers and so will cost more when issued. This is a current proposal. At present golden numbers are seen as being from the 08 and 09 ranges i.e. telemarketing applications, but numbers in the 07000 range may also apply.

1.6. The transfer or take-over of geographic, PSTN numbers from one business to another or from one individual to another at the same physical location is currently common practice. However a physical location transfer can sometimes be provided where an individual or business wants to retain a number in the same locality (geographic area code). The rules and conditions pertaining to these practices are variable, and may need to be considered in the wider rules of trading and the rights of businesses to trade the rights of PSTN number use in these circumstances.

1.7. Trading of mobile numbers is a possibility, particularly as portability exists. Trading of mobile numbers may therefore need to be included in the arrangements for a trading regime as appropriate.

1.8. It is recognised that currently numbers are allocated in blocks to Network Operators because of technical constraints that will be removed once INA has been implemented. The rules governing the trading of numbers should assume that INA is in force and should specify special arrangements to cover the transitional period until INA is fully in place.

2. Arrangements and Rules of Number Issue

2.1. Any number issue regime should have a number of objectives if it is to be acceptable to businesses providing services through these numbers and, to Oftel and Government as the custodians of the resource.

The regime:

1. should not limit competition by limiting the access to numbers available for issue to a primary channel of distribution having the right to trade numbers for gain prior to allocating numbers to users,

2. should not encourage or make number hoarding attractive,

3. should allow for, and encourage the recovery of unused, or no longer required, numbers to be recovered and reissued, subject to ‘unused’ being defined,

4. should allow for the issue of numbers only where there is a legitimate need or intent to use numbers for the purpose of telecommunications services. i.e. not merely support a ‘number market’,

5. must have the primary objective of achieving a status whereby numbers should be allocated individually to network operators/service providers as required rather than in blocks. This will prevent golden numbers being unreasonably stripped out for trading gain

6. numbering administration should seek to minimise windfall gains through numbers, but should also ensure that it is possible for each number to be allocated to the number user which places the highest value on it i.e. it should be possible to request/select available numbers.

3. Porting

3.2. Porting charges and conditions of service for legitimately traded numbers should be transparent and published by all operators.

4. Individual Numbers and Block Allocations

4.1. Trading of blocks of numbers, which could be reissued as a legitimate block size should not be permitted. Any unused or available numbers should be returned to the NAO for legitimate re-issue. This might arise if allocation block sizes are reduced in due course prior to INA implementation.

5. Trading Arrangements and Rights

5.1. It is a commercial given that numbers are frequently a valuable component of the commercial value of a business operation and should, if required, be part of the business if the business is traded, and as such be tradable in their own right.

5.2. The primary channel through which individual numbers are issued and made available by the NAO to network operators should sell numbers using an agreed/regulated pricing mechanism. Sequential numbers might be sold at one price, Select numbers at a higher price, and Golden numbers might be auctioned or whatever is established following the current study group review.

5.3. Numbers recovered by primary channels would be re-supplied using the agreed primary allocation pricing mechanism.

5.4. Classes of numbers e.g. 08 09 or PSTN might have different trading rights associated with them.

5.5. Trading of PSTN numbers would obviously be limited and it might be appropriate to limit trading or permit trading only, where the number remained at the physical location, and between the person or business relinquishing the number and the person taking it over. If a number is just given up it returns to the operator. Moving a number physically in the same area code locality would be a matter for the operator to consider with the moving customer. These arrangements are much the same as at present. The main difference is the right to trade a PSTN number at the same location. This would of course need to be considered in the light of number portability rights at the same location.

5.6. In the case of non-geographic codes users would have a general right to trade the number(s) allocated to them. There would be no restriction on the price of trades however regulations would need to be issued by NAO to record and manage the transfer of user rights. A fee would be charged by the NAO for each transfer sufficient to both cover the administrative costs of switching and to discourage hoarding of numbers and a secondary number allocation market opening up.

5.7. Portability rights, arrangements and charges should be made transparent by all operators for non-geographic numbers such that trading is not subsequently, unfairly penalised. This is not to say all operators should offer the same service but a caveat emptor regime should be avoided if trading is a legitimate activity.

6. Associated Charges and Prices

6.1. Operators might wish to raise a charge to register a change of allocated user. Any such charge should be transparent and published.

6.2. It is unlikely that issue price alone would be sufficient on its own to prevent hoarding. An ongoing annual charge could achieve this, possibly with different charges appropriate to the number value – Golden, Select or Sequential.

6.3. Use defined as a function of active calls would unfairly penalise low users or numbers dormant for legitimate marketing or other business reasons.

Customers' Expectations of Retention of Numbers - paper by Peter Hamilton, BT

A customer, having been allocated a number by an operator, has an expectation that he will be able to retain that number, unchanged, for as long as he needs it. Operators’ policy is to meet this expectation as far as possible: it is recognised that number changes can involve customers in incurring expenses.

There may be occasions, however, when changing a customer’s number is necessary. Such occasions include:

1. For geographic numbers, major number changes made necessary by continuing demand for numbers (eg, those changes taking place in the six areas such as London, due to change in April 2000). Such changes are mandated by Oftel after due consultation, and must be accommodated by all operators serving customers in the relevant areas.
2. Some of BT’s customers in less populated areas of the UK still retain 5-digit local numbers. It may be necessary to change these out to 6-digit local numbers (or in some cases, such as Northern Ireland, to move direct to 8-digit local numbers) if local capacity needs to be increased to meet demand, or if competition issues arise (when retention of an existing 5-digit scheme inhibits the ability of other operators to provide service in that area).
3. For non-geographic numbers (including mobiles and pagers), a migration exercise is currently underway to move many of these numbers into the appropriate part of the UK numbering scheme, as set out in Oftel’s Statement of January 1997. Thus, for example, all mobiles and pagers will have numbers beginning 07, and all Premium Rate numbers will begin 09. Whilst new numbers are now being issued from the outset in the new format, there are many numbers in the old format which will need to migrate: thus, customers’ numbers will change.
4. Customers with geographic numbers will move, physically. Residential customers move house; business customers may move their premises. If the move to a new house, or office, involves being served by a new local exchange, some operators may require a number change unless the customer is willing to pay for services such as out-of-area lines or call diversion, to enable calls made to his old number to be transferred to his new one. Non-geographic numbers are not constrained in the same way, by definition.
5. Under some circumstances, numbers may change at the customer’s behest. Such circumstances include receipt of nuisance calls: such calls may be because the customer is being subjected to genuine offensive calls, or because his number may be very similar to that of a business which receives a high volume of calls, with consequent occasional misdialling by callers to that business.
6. A customer may wish to change the price of the service he is supplying on a particular number. For example, he may wish to change the price from national rate (0870) to local rate (0845), or, in the opposite direction, to premium rate. Under these circumstances, he would have to change his number.

6 October 99

Number Trading Proposals - paper by Freephone User Group (FUG)

At the last meeting we were asked to formulate some ideas concerning Number Trading. We have had the benefit of reading Roger Gilbert’s paper on the matter (filed on behalf of the DMA) and the following summarises our view, which we would like to contribute to the discussion:

Introduction

We think that any system which is intended to impose a degree of order on number trading will need to be extremely simple and straightforward, and (given the cost of compliance with any kind of rule-based regime) will need to be free of too many prescriptive rules.

Our suggestions are therefore very short, and a pamphlet with ‘guidelines’ can be used to amplify the main principles we suggest here:

(1) Number trading – what is it?

Number trading is any commercial transaction as a result of which a person can take over a number (or collection of numbers) from another person, providing that the selling party has the right to receive telecommunication services at the number(s), and the buying party has promised and is able to receive telecommunication services at the number(s) (though not necessarily the same services, nor provided by the same operator.)

(2) Number trading – what it is not….

The system by which numbers are allocated to network operators, service providers or (once it is introduced) to individuals, by the body responsible for stewardship of the numbering system (at present Oftel) and any charges connected with that process is not number trading.

(3) The position of network operators and their subscribers

(a) Network operators cannot be prevented from making fair and legitimate charges for costs involved in facilitating number trading*, but the level of such charges cannot vary in relation to the value of any number trading transaction to the buying and selling parties.

(b) Subscribers cannot insist that particular telecommunication services are provided by any network operator where there is no legal obligation for such services to be provided.

*Where the buyer will also be changing telecom service supplier, charges for porting, in addition to a charge to facilitate trading, may be raised by either or both of the donor and recipient network operators; whether or not porting is required as well, any charge made for number trading should never be more than the charge for porting.

Commentary

(1) By keeping the principles as short and simple as this, we avoid running into too many difficulties about such issues as the types of numbers which can be traded (all of them can) and whether or not a number can form an asset of a business (since all numbers can be traded, then obviously, there are no difficulties with exceptions.)1

(2) By clarifying the difference in process between the allocation element, and any charges that might be made there, and the subsequent trading element, we avoid all the problem-solving that might be encountered around rules on allocation and how this feeds through into subsequent trading.

(3) There is no need to ‘pre-set’ the level of the market in trading subsequent to allocation. If the allocation procedure alters to admit charging levels, this will automatically affect the start-off basis for any subsequent trading. That is, if you have to pay £3,000 to get your hands on an attractive number from Oftel or a network operator or ‘Number Co Limited’, you’re hardly going to sell it for £150, unless you made a mistake about its attractiveness.

(4) The rules on stewardship and block allocation should provide the necessary discipline to avoid any need for complicated rules within the number trading market about rules for returning unused blocks etc.

Isobel Brown
Freephone User Group
28 September 1999

MEETING NOTE
Rules Governing Number Use Working Group - 8 October 1999

Time & Place: 9:00 am at Oftel
Meeting called by: Oftel
Meeting chaired by: Claire Milne (Independent telecoms consultant)

Oftel representatives:
Alan Pridmore
Mark Whitbread

Attendees:
Lesley Bulman (ntl)
Rob Borthwick (Vodafone)
John Chaplin (FUG)
Richard Cox
Roger Gilbert (DMA)
Steve Smith (DMA)
Bill Crane (BT)
Paul Rosbotham (CWC)
Noel Scanlon (Worldcom)
Owen Watson (Torch)
Andrea Dworak (Energis)

Apologies:
Michael Dixon (TMA)

1.  Matters Arising from the last meeting
Two comments were made about the wording of the note of the September meeting. The note has been changed and sent out to Group members.

C Milne mentioned that Keith Rayward of World Telecom had contacted her in his capacity of chairman of the European Calling Card Services Association. She invited him to make a written submission, which would be circulated to the Group. It was agreed that he would be welcome to become a full member of the Group should he wish to do so.

2.  Rights and Obligations under the present Numbering Conventions.
The Group discussed the correspondence between R Borthwick and C Milne, especially the relative merits of anecdotal and rigorous research evidence. The Group consensus was that both types of evidence had some merit.

R Borthwick summarised the main points of his paper, which divided the present Numbering Conventions into Principles, Rights and Obligations. He found the Principles general and unarguable. He pointed out that the Obligations far exceeded the Rights.

Other Group members queried whether Principle 9, "Operators are obliged by their licences to ensure that their numbering plans are compatible with the Conventions and this ensures that their plans are also mutually compatible", (part of A 1.3) was unarguable. There was no clear consensus.

The group was not clear on whom the obligations referred to in this paper fell. The group noted that the Numbering Conventions were likely to have more obligations than rights, because they were created from a "what operators must do" perspective.

One of the operators on the group was concerned at a suggestion by one of the user groups that this meeting could usefully discuss how rules governing use might be incorporated into contracts, because that type of discussion required legal expertise, which the group does not have. The group agreed that, despite that, the group could safely discuss how a set of rules might conceptually fit into the contractual scenario, for example whether the whole or only a part of the rules might be reproduced in contracts.

A user group suggested that the standard class licence (TSL) could be adapted for this purpose but another member .

was unsure how the TSL might be used for this, because he understood that TSLs were not closely policed.

It was agreed that once the group’s output was complete, the Numbering Conventions would benefit from review and possible restructuring to avoid duplication and remove any unnecessary provisions.

The group invited Alexander Grom (from Oftel), who is currently reviewing the Numbering Conventions, to attend their next meeting to comment on the possible impact on the Conventions of the group’s recommendations.

3.  Customers’ Legitimate Expectations for Numbers.
N Scanlon reported that his paper was not yet complete but he had, as a precursor, undertaken a small statistically unrepresentative but interesting local research on customer expectations about telephone numbers.

The forty-or-so domestic users he interviewed had very few expectations. The twenty-or-so small business users he had spoken to mentioned high prices, nuisance calls, usefulness of branding premium rate services for clarity. They also said they would be unlikely to retain a number if charges were introduced unless a competitor might obtain it instead.

He agreed to prepare a written report of this research for the next meeting.

4.  Technical/operational restrictions on customers’ expectations.
B Crane recapitulated the main points of P Hamilton’s paper on operator constraints on customers’ retention of telephone numbers.

One of the user groups believed a user’s right to retain a tariff level was especially sacred and should be made clearer.

One of the operator representatives thought Para 4 did not apply to all operators and should be changed to make this clear (amended version is attached). One of the consumer representatives felt that Para 4 gave the false impression that the constraint was of an operational, as opposed to a commercial nature. BT replied that the constraint was in one sense commercial but to overcome this constraint was so financially unfeasible (i.e. the costs of it would drive prices so high) that it was effectively an operational restriction.

The group discussed the problem of some operators not allowing porting outside the donor networks. Feedback on this was referred to Oftel’s Compliance directorate.

It was asked to be noted that the papers this group discussed at the meeting are not policy or the result of discussion but a snapshot of present practice. Nor should they be seen as the group’s wishes for the future.

5.  Possible approaches to rules on number trading.
R Gilbert presented his paper on the user perspective on number trading. He pointed out that this was intended as a rough proposal serving as a starting point for discussion.

He summarised his main points:

• the need to be clear about the context in which number trading might work, e.g. pre- or post-INA, reduced-size block allocations, openness of allocations/reservations, golden number availability
• the shape the proposed National Allocation Organisation, his preferred end-game outcome, would take
• 08/09 numbers only or 07000 and other 07 numbers too?
• need to guard against unfair advantages;
• discourage number speculation for its own sake;
• prevent attractive number stripping;
• clear porting options and open information on ported numbers.

The the issue of what would happen if operators went out of business was raised. This possibility required any rules to include how numbers routed by operators that failed would be routed thereafter. It was suggested by another member of the group that this was an emergency situation that should be covered in a separate contingency plan, not in a paper about proposals for number trading rules.

The issue of what rights the caller of numbers might be given was raised. For example, the right to have a line or number sterilised for a certain time before re-use, so as not to be charged for calling wrong numbers, especially those for services of a significantly different type. C Milne offered to provide a short extract of the relevant passages from the ICSTIS Code of Practice for the group’s information, and in case it was felt that these passages had any wider relevance.

The issue of customer confusion over similar non-geographic numbers was raised.

J Chaplin summarised the Freephone Users’ Group paper on number trading.

It was noted that this paper referred to limiting types of trading that might be thought to be unacceptable but did not propose how this should be done.

One user group believed the answer lay in simply permitting number trading with little or nothing by way of rules. Number hoarding would be prevented by general good husbandry practice, relying in particular on modest recurrent charges for holding numbers. A consumer representative suggested the definition of number trading should be based on "use" of the number in a network; another user suggested that, in the number charging scenario, it could be based on whether a number was being paid for. Several other members feared that the probably low charge for non-attractive numbers would not discourage paying for numbers that were not in use, so number trading on this basis would be likely to encourage inefficient use.

The operators within the group believed number trading was certain to bring some stockpiling of unused numbers, because any business entailed holding some stock to offer customers. One of the users saw no reason, especially because trading was already commonplace, why inefficient use would increase with the advent of official number trading.

The group consensus seemed to be that number trading seemed likely to serve as an extra incentive for holding numbers that were not in service. Although this may not cause huge extra problems, the danger of it makes setting rules worthwhile.

A consumer representative suggested that the differences between geographic and non-geographic numbers and services necessitated separate rules for each type.

The user groups expressed concern that number trading could create an artificial demand for numbers that increases scarcity and drives up the price. The group warned Oftel to be ready to use its regulatory powers to preserve easy access to numbers and fair competition.

Oftel acknowledged that the operation of the number trading market would need to be monitored, at least in the initial stages.

The group discussed the implications of subsequent or secondary trading. Some members saw the rest of the world’s number traders as potential predators and Oftel might like to consider strictly limiting which companies or user groups would be permitted to trade in numbers.

This led to a discussion on Pre-Allocation Portability and Charging for Individual Number Allocation.

A user group urged Oftel to impose regulation in the final event, not to allow market forces to dictate entirely. He also stressed the users’ confusion about: 1. the technical side of the problem; 2. Oftel’s regulatory stance.

One of the operators queried what would happen in cases of disputes over which company has rights over a number. It is possible that rights should be shared in some circumstances. Disputes have already arisen with ported numbers.

Action Points

Noel Scanlon:
To prepare a written report of his small-scale customer research on expectations in numbers.

Claire Milne:  To prepare a short paper highlighting areas of conflict between the legitimate expectations of numbers for calling and called parties.

Lesley Bulman:  To prepare a short paper explaining Pre-Allocation Portability and how it might affect rules of use of numbers.

Alan Pridmore:  To draft a paragraph on number trading to fit into the Numbering Conventions

Bill Crane:  To prepare a paper on the issues to be addressed where number stewardship is disputed over ported numbers.

6.  Any Other Business

‘Use it or lose it’
L Bulman asked what the latest status was on the suggested ‘use it or lose it’ rule that was suggested in Oftel’s May 1999 statement on Number Administration. A Pridmore explained that the difficulty with this rule is to find a definition of "use" that carries a sufficient disincentive from stockpiling numbers while at the same time not discriminating unfairly against some users and being easily enforceable.

Numbering Forum
The next Numbering Forum meeting, which is an open-access meeting, is scheduled for January 2000. The date has not yet been set. The date will be posted on the Oftel website as soon as one is set.

Future meeting dates
2:00 pm 11 November 1999
2:00 pm 9 December 1999

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