Contents

1.    Introduction

2.    Presentation by Oftel

3.    Open discussion

4.    Next steps

Supporting information

Supporting Information

Meeting agenda

List of attendees

Implementing Oftel's strategy: How Oftel will assess effective competition

Internet review draft kick-off statement

Internet review draft kick-off press release

New! Oftel's 2000/01 review of the dial-up Internet access market - Questionnaire for ISPs  

1.  Introduction

1.1    Peter Walker welcomed delegates to the Forum and explained that this workshop had been arranged to address Oftel's proposed Internet access market review.  

1.2    He explained that the Forum had not met for a while due to developments in the industry, taking up lots of people's time - not least Surftime and unmetered Internet access. 

1.3    Peter Walker gave a brief update on LLU and FRIACO

1.4    The Forum began with presentations from Oftel on its plan to undertake a market review, followed by a detailed discussion amongst Oftel and delegates of the proposals and any concerns or suggestions arising.

2.    Presentation by Oftel - Click here to download the presentation(ppt) (97kb) 

• Dave Simpson - Internet and ecommerce project manager
• Kenny Osborne - Statistician

A.    Dave Simpson - objectives and scope of the review.

1.    Objectives and scope.

1.1    Oftel's overriding strategy is to get the best deal for telecoms consumers.  This review will play an important role in achieving this aim by identifying whether there is effective competition in Internet access.

1.2    If competition and regulation are identified as not working effectively in a certain area, Oftel will review its position.

1.3    The review will focus on dial-up access over the PSTN.  This is how 28% of consumers and 44% of small businesses access the Internet.  The impact of broadband on the market will be explored, but it is dial-up that the review will investigate in great detail.  The review will cover residential and business usage.

2.    Review's timetable.

2.1    Delegates received final drafts of the review's 'kick-off statement' which will be published, and posted on the OIF web pages, the following week.

2.2    Oftel plans to collect information from internal and external sources during October and issue a consultation document in December this year.  A final statement, following a three month consultation period, will be issued in May 2001.

2.3    Delegates were asked to consider whether this timetable was appropriate.

3.    Measuring effective competition.

3.1    Effective competition will be measured using 3 market segments identified by Oftel: call origination; call termination; and services provision.

B.    Kenny Osborne - gathering information

4.    Sound evidence

4.1    Kenny stressed that Oftel is conscious that the information it has on the 3 Internet market segments identified was not as comprehensive as in other areas of the telecoms market.  It is crucial however that the review, and conclusions it may make, are based on sound evidence.

5.    Oftel sources

5.1    Oftel has a number of internal sources of information that will feed into the review; quarterly market information; market research; and the international benchmarking study. 

5.2    The international benchmarking study, based on results from February, has been quoted widely.  A new set of results will be available in time for the condoc in December.

6.    Improving existing estimates

6.1    Oftel is meeting with major originating operators and terminating operators to discuss the sorts of data that are available for this review.

6.2    Oftel is talking to the Office of the e-Envoy and ONS about Government initiatives to improve information availability on the Internet market.

6.3    Oftel does not have any direct authority to require ISPs to impart this kind of market information but would encourage/co-ordinate an industry-led initiative to do so.

6.4    Kenny ran through some current Oftel estimates: ISP market share; effects of unmetered access; international price comparisons; and peak access.

6.5     The OECD has published international figures this week on Internet access.  These are less comprehensive than Oftel's benchmarking study since it is based on the main incumbent of each country, but does indicate significant changes.

7.    Request for information from stakeholders

7.1    Oftel has a range of information it can use.  However, the review can only be effective if it is based on sound information. 

7.2    Delegates were asked to consider the types of information they may be able to provide and whether Oftel should be investigating further sources.

C.    Dave Simpson - policy initiates and other inputs

8.    The review will enable Oftel to step back and look at the market as a whole. 

8.1    Oftel will consider policy initiatives already underway in Oftel, such as FRIACO and Calls and Access, and consider their impact on the dial-up market.

8.2    The conclusions and findings of the review will feed into these individual projects.  Oftel assured delegates that internal communication does happen.

9.    Other inputs

9.1    Taken as a patchwork of information, Oftel hopes that the combination of all the sources mentioned will provide an accurate picture of the Internet market.

9.2    Compliance casework and consumer complaints will feed into and help create this 'bigger picture'.

9.3    Delegates were asked to consider whether they could refer Oftel to any other external sources of information.

3.  Open discussion

A number of questions and points of discussion were raised , along with the following comments:

1.    It is important to define what is 'Internet access'

• Does access to the Internet include all types of access - mobile, broadband, via set top boxes?
• Consumers need to know what they are getting when asking for Internet access.   there needs to be clarity.
• Oftel asks consumers how they connect to the Internet and notes that there is consumer confusion - an example given was of a recent Oftel study which asked consumers if they had a cable modem.  Many respondents answered yes, because they thought the term 'cable modem'  meant 'dial-up modem over telephone line provided by a cable company.'
• The review will focus on dial-up access over the PSTN, regardless of the method used.   Other methods will be considered as part of the review process to catch the full picture.

2.    Should the review include mobile Internet access (both conventional dial up, and WAP services) ?

• Oftel is carrying out a separate review of the mobile market - the timetable for which is similar to the Internet review: 
  Oftel's 2000-01 review of the mobile market
• The Internet review will discuss mobile Internet access but the focus will be on dial-up.
• WAP technology is not necessarily a substitute for full Internet access.
• The review should consider all types of Internet access - irrelevant of how you get it

3.   Are Oftel resources being taken away from other projects, such as FRIACO and unmetered access, for this review?

Oftel:

• Other projects will not suffer.
• This review is very worthwhile - it will enable Oftel to look at the bigger picture, rather than concentrating solely on specific projects.
• This review will be headed by staff from Oftel's Regulatory Policy Directorate.   Issues such as LLU and FRIACO are being driven by Oftel's Compliance Directorate - although there are crossovers.
• Much of the information that will be used in measuring competition is already available to and within Oftel.  The review will include making use of already available resources.
• The review will help establish stronger relations between Oftel, consumer groups and industry stakeholders.

4.    Will the review be steered by what Oftel considers is going to happen to the market in two years?

• Oftel: The review makes an assumption that there will be a dial-up Internet access market in a couple of years time.  If others consider this to be an inappropriate assumption then they should put forward their basis for changing the scope.
• This type of prediction would be very difficult to make in such a fast moving area.
• A joint OFT/Oftel report on ecommerce, to be published soon, does consider the future state of the market.

5.    The review's timetable is too long

• The market could be very different by May next year.  Reporting what the market was like 6 months ago could be a waste of time.
• Oftel: If major events occur between now and May 2001, these will be reflected in the consultation document and final statement.  One outcome of the review will be a recommendation as to when to repeat the exercise.
• Rather than a rolling review, Oftel plans to undertake a 'snapshot' of the market.   Behind this (formal) review will continue Oftel's programme of regular surveys and compliance casework - which will feed into the review.

6.    Consumers and businesses use a variety of methods to access the Internet.  Individuals, and particularly businesses, use a variety of methods to access the Internet, switching between them throughout the day.  This review should look at the Internet as a resource, rather than in terms of telecoms.

• Oftel: The review will look at consumer research and how people access the Internet.
• Oftel: The review should not look at trends in what methods of access are being used, but rather identify those areas in of regulatory interest to Oftel.

7.    What is the Government's role in promoting and achieving Internet access at low costs? 

Oftel:

• Oftel is a government department but independent of ministerial control.
• One of the Government's targets is to make the UK the best environment in the world for ecomerce by the end of 2002.
• Oftel's objective is to get the best deal for the consumer in terms of choice, quality and value for money.
• Oftel has assisted Government in certain circumstances - for example in rolling out cheap Internet access for schools etc.

8.    Should the review consider new methods of Internet access?   For example, mobile and set top boxes?

• Internet access via mobile phones and television has the potential to squeeze out competition as one service provider emerges steals the market share and companies gain joint dominance.
• Oftel: Vertical integration is not always a bad thing and can bring consumer benefits.   However, where there is market presence, the reverse is true.
• Oftel is part of a debate across regulatory authorities about joint dominance.
• The Oftel review of the mobile market will address this issue.

9.    Oftel:    Is the information out there?   Do people have concerns?

• There needs to be a more established framework for ISPs to report statistics.
• Requiring information from ISPs is outside of Oftel's remit.  The ONS and e-Envoy's office are addressing this issue.
• Practical difficulties, such as double counting and unmetered access, will be considered by the review and in the methods used for collecting data.
• Information from ISPs and operators is crucial if Oftel is to achieve an accurate and consistent view of what is going on to capture the whole market.

10.    Oftel:     Are there other sources Oftel should consider?

• The review should consider consumer initiatives.
• Oftel carries out a quarterly omnibus survey of 2000 residents.  The next set of results will be released next week. 
• Information about the surveys is on the Oftel web site - delegates were invited to make suggestions on what questions should be asked.
• Information from consumers and data gained from businesses will be analysed to see whether they can be reconciled.  Oftel recognises the importance in obtaining accurate, consistent, data.

11.    The review should look at barriers to consumers  and service providers switching suppliers

• Oftel's consumer surveys ask consumers about switching service providers
• Annex 1 of the kick-off document includes absence of barriers to consumers switching suppliers as an indicator of effective competition

12.    Standard form to ISPs, requesting information

• Oftel will develop a standardised form to email to industry requesting data for the review. 
• A template will be posted on the web site for people to use..

4.  Next Steps

4.1    The kick-off document will be published on the web site next week.

4.2    Delegates were asked to consider whether they would like to meet again to discuss the review - either before or after the publication of the condoc in December.

4.3     Delegates were invited to email any comments and information they have to Lucy Rhodes by e-mail

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