Contents

1. Agenda
2. List of attendees
3. Presentations

• Introduction from chair - Peter Walker, Oftel.
• Are consumers connecting? - Lucy Rhodes, Oftel.
• Internet consumers - why we are different - Erol Ziya, Campaign for Unmetered Telecoms.
• Engaging with online consumers - Allan Williams, Consumers Association.
• Trials and tribulations - Iain Begg, Campaign for Unmetered Telecoms.
• Self and co-regulation - Nic Green, Oftel.
• Telecommunications Ombudsman - Rosalind Stevens-Strohmann and Chris Rowsell, Oftel.

Introduction from chair, Peter Walker, Oftel. Click here for presentation.

Peter welcomed speakers and delegates to the 8th meeting of the OIF. Peter outlined the subject for the morning's discussion - Internet consumers, well informed and adequately protected?

Peter emphasised the importance of both residential and business consumers in the Internet market and the central role they have been given in the Communications White Paper.

Are consumers connecting? Lucy Rhodes, Oftel. Click here for presentation.

Lucy gave a short presentation, setting the scene for the morning's discussions. Lucy presented some of the latest figures on Internet access in the UK from Oftel's market research programme.

Erol presented some ideas about why Internet consumers are different to other types of consumers, the lessons that can be learnt from their experiences and the implications for industry and the regulator:

Internet consumers are different to other types of consumer. They are connected, informed and empowered. They are "ahead of the curve." Their expectations are far in advance of those who are not online.

For example;

• ISP newsgroups enable consumers to congregate and share experiences.
• News sites such as The Register mean that Internet consumers have access to a dedicated media environment that did not exist before.
• ISP review sites such as www.ispreview.co.uk and www.net4nowt.com give consumers up-to-date information about the latest ISP packages, review the good (and the bad) and provide open fora in which consumers can share their experiences.

The Campaign for Unmetered Telecomms started as a group of people involved in a newsgroup, congregated around a single issue - unmetered Internet access. CUT played an important role in promoting the issue of unmetered access and lobbying for the introduction of FRIACO ( Flat Rate Internet Access Call Origination).

In the future, groups of consumers of other products and services, for example banking, will be empowered by the Internet in similar ways to CUT - congregating in online newsgroups and becoming more empowered.

ISPs fail to understand the importance of offering creative and innovative ways for their customers to interact with them - via the very service they are providing: the Internet. ISPs must concentrate on better meeting consumers' needs and actually using their customers as assets - listening to consumers and reacting effectively.

Over the past few years, Oftel has done well in working more closely with consumers. Oftel must find new ways of interacting with consumers and must use transparency to enhance consumer power.

The situation is changing. New opportunities bring new problems. Consumers, industry and the regulator must use the power of the Internet to address these issues.

Questions

CUT has a good vision of how the Internet can provide solutions to consumer problems. However, certain methods of accessing the Internet pose a threat. For example, 3G mobile phones and television may provide consumers with limited Internet access and specific content, rather than the entire World Wide Web.

• Walled gardens are a threat to providing consumers with true Internet access. Hopefully, consumers will be able to choose whether they want the safety offered by walled garden access, or whether they want to combine this with the ability to go outside of the walled garden and access the Internet without limits.

What proportion of Internet consumers actually participate in online newsgroups?

• Probably a minority. However these issues affect all consumers, whether they want to get involved or not. Most Internet consumers do not care how the Internet works, or what a DLE is. But the Internet allows a small number to get involved in this way and to address issues that affect everyone.

What are walled gardens?

• Walled gardens give limited access to the Internet, for example 100 web sites, rather than the whole Internet.

To what extent should Internet content be controlled by walled gardens and why should people be forced to go online?

• Consumers should be wary of the commercial interests behind walled gardens - i.e. service providers giving you access to only their own and certain company's web sites. It is important that consumers are able to choose what type of access they want.

Engaging with online consumers - Allan Williams, Consumers Association. Click here for presentation (provided after meeting)

Allan talked about CA's work on Internet access and consumers and how best consumer expectations and concerns should be managed.

CA is an independent consumer organisation in the UK with nearly a million members. It is independent of government and industry, and is entirely funded by publications of consumer magazines and books, including Which?

CA has six main roles relating to the Internet:

• Public facing work. "Which?" and "Computing Which?" gives consumers information about Internet products and services. Consumers are no longer just recipients of services but increasingly also producers of, for example, personal web sites. The magazines increasingly focus on "how to" guides as well as buying advice.
• Policy. CA liaises with industry, regulators and government, nationally as well as internationally through umbrella groups Consumers International and BEUC. Recent policy work has focused on policy on privacy online and ISP terms and conditions. CA also has statutory powers with regard to unfair contract terms.
• Leadership in self-regulation. Which? Webtrader is a self-regulatory initiative from CA which accredits and monitors compliance of 2000 Internet sites (mainly SMEs) which agree to a set of minimum standards relating to issues such as customer service and date protection.
• ISP. Which? Online provides Internet access and 5 email addresses to its customers with access to exclusive Which? content. It offers distinct research and online fora for consumers to interact in.
• Internet content. CA provides online content e.g Holiday Which? on the Virgin travel site.
• Campaigning. The Internet is used in CA's campaign work e.g. 'Carbusters.com', and in general for distributing reports e.g. http://www.which.net/campaigns/digital/digitaltv.html
  

Convergence means that the Internet is no longer a distinct technology, as it can be accessed over a number of platforms. Recent CA research found that 1 in 4 have digital TV and 1 in 4 say they will get it in the next 5 years. However, 50% of consumers have not looked into digital TV, and half of these express no interest at all. If the government is going to press ahead with analogue switch-off, then digital TV needs added value in order to encourage consumers to change. The online environment may be one way of achieving this, but the ecology of universal access is important. For example, the telephone has become a necessity and subject to universal access rules. If the Internet is to be accessible to all, this must not be achieved by offering a 'poor man's version'.

Consumer expectations need to be managed, recognising that similar standards will be demanded from similar services, regardless of the different technologies and platforms that are used for delivery. This doesn't mean simple read-across of regulation between plaftforms, but appropriate, seamlessness and transparent regulation should be the aim. Sometimes this will mean more control (e.g. direct marketing), sometimes less (e.g. content) and sometimes the same (e.g. advertising) in the online environment.

Online environments provide both new threats to consumers, and new opportunities for genuine engagement. These sometimes run in parallel e.g. personalised services with concerns over privacy and data protection. An example of effective use of consumer's postings is OnDigital. OnDigital involved individual customers who had made complaints in the development of their next generation of products and services.

Building consumer trust and confidence is crucial. Effective engagement with online consumers benefits industry and consumers. The Internet will be a key proving ground for the effectiveness of self-regulation and industry initiatives in promoting effective markets and confident consumers.

Questions

Who are the people who showed no interest in digital TV? Are they the same people who express no interest in the Internet?

• Rather than being a specific group, their motivations are similar. Either they are not aware of the advantages the technologies could provide, or simply they are not interested. Digital TV must provide value, for example in the form of Internet access, to encourage consumers to change to digital. However, to be successful, it must also instil trust and confidence.

Why are few businesses trading online in the UK? Online services are particularly important to disabled people.

• Of those businesses that do trade online, only the good ones will survive. This will result in quality of service. When businesses go online they will become aware of the global opportunities offered by the Internet and the ability to offer services across borders.
• The Internet enables consumers to buy goods and services from a global selection of service providers.
• Many businesses are unable to get financial backing from their banks to set up payment methods. This is due to the risk of online credit card fraud.

Trials and tribulations - Iain Begg, CUT. Click here for presentation.

Iain talked about the past and ongoing experiences of Internet consumers, their concerns and aspirations and the market developments that have taken place.

Consumers

• Consumers want value for money and a simple, hassle-free connection to the Internet.

Internet connection

• Developments in Internet access have seen the market move from metered calls, to local rate, unmetered and 'always-on' access.
• When setting up their connection, consumers want to know whether they will be charged for accessing the Internet, whether they can have unmetered access and if they are restricted to certain ISPs.

The Internet

• When choosing an ISP, consumers want to know exactly what they are getting e.g. if there is a time-out period attached to an unmetered access offer and what constitutes net abuse.
• There are a number of industry-wide issues that must be considered. These include consumer-level standards, better consumer protection and wider price controls (not just on BT).

The key to addressing these issues is through the effective co-ordination of developments (industry, the rehulator, government). This must include frequent reviews and up-dates on developments in the market and pro-active regulation and legislation.

Questions

Universal service. What data rates should it be necessary to access? What is the process for achieving this?

• In the future, all telecoms will travel over the Internet, though this will be an invisible process most consumers will be unaware. Connections will become permanent and what is a reasonable speed will move with time.

The European regulatory framework adds Internet access to universal service. However it does not mention specific access speeds. Do we need to specify?

• It would be important to look at individual countries' infrastructure. For example, the UK would be able to sustain a much higher data rate than Spain.
• The current minimum data rate in the UK is 2.4kbit/s. However this is based on voice, not data services.
• The new regulations allow each national regulatory authority (NRA) (e.g. Oftel) to set access speeds. A problem is that access speeds are affected by what ISP a consumer uses, as well as the equipment they are using. Oftel is in discussions with BT about the issue of DACS.

What is DACS?

• DACS (Digital access carrier system) is when one copper pair is used to support two telephone lines. Oftel hopes to see improvements in BT's use of DACS.

Nic Green, Oftel. Click here for presentation.

Nic talked about the different types of regulation that exist, Oftel's policy of appropriate regulation and the importance of less formal types such as co and self-regulation.

There are 3 primary routes to regulation - formal, self- and co-regulation.

Self and co-regulation benefit from greater flexibility. They can be established efficiently by drawing on existing systems within industry.

Oftel's policy is that regulation must be appropriate. This policy has been supported by stakeholders and is inline with changes at an EU level and with the Communications White Paper.

Self and co-regulation do not mean the establishment of large overriding structures. Working groups should be set up to help create a smooth process, providing clarity as to who is responsible for what.

Oftel's likely focus is on co-regulation, moving towards self-regulation.

Oftel proposes to link up current regulatory initiatives to encourage transparency, communication and participation and to promote effective codes of practice.

Questions

There is an assumption that the move towards self regulation requires a period of transition, rather than just finding an appropriate level. How will enforcement be provided, particularly as regulation moves away from specific licences towards more general authorisations?

• The licence framework will still exist, though having permission to enter the market will no longer be necessary. ISPs will need to abide by rules set out in general authorisations.
• Oftel has an important duty, rather than enforcement, to protect consumers. This is the real driver.

What constitutes a stakeholder?

• Industry, service providers, consumers, equipment suppliers….

Expertise in consumer groups is a problem in introducing effective self-regulation. Consumers need effective champions.

• The Communications White Paper provides an opportunity for people to lobby for the introduction of a Consumer Panel.

Whose interests does ISOC represent?

(Information provided after the meeting)

ISOC is dedicated to ensuring that the Internet is for everyone. The ISOC-E's Internet Access Working Group's objective is to provide a forum for discussion and
resolution of the issues surrounding how to ensure that all users have a choice of access, a choice of service provider, and at prices and on terms that are reasonable.

Key objectives are:

• Widening access.
• Providing additional bandwidth.
• Using basic, advanced, and innovative technologies.
• Encouraging innovation and applications.Ensuring that a range of access services and price structures are available from the whole of the industry, and which meet the diffuse needs of the consumer (individual business, home or school user, small office/home office, medium to large companies, not-for profits etc).

ISOC is generally neutral as to who provides - but wants to ensure that all should be supplying in to these markets, as well as safeguarding those who have no access (yet).

As a complementary role to ensuring access is available, it has an educational role, and aims to explain what the access options are and what they mean to the user. This is primarily in explaining the variety of access routes available and what they offer in terms of Internet facilities and services, rather than focusing on price or price structures.

ISOC-England (http://www.england.isoc.org), and full details of ISOC on http://www.isoc.org, and a full listing of organisational members (not sure about the individual members though).

Telecommunications Ombudsman. Rosalind Stevens-Strohmann and Chris Rowsell, Oftel. Click here for presentation.

Ros and Chris outlined details of Oftel's consultation to explore the practicalities and feasibility of setting up a Telecommunications Ombudsman scheme .

A consultation document detailing the scheme was issued on 15 March 2001.

The scheme will encourage extension of its membership from fixed telephone providers to ISPs.

The scheme is free to consumers who wish to make a complaint and seek compensation of up to £5000 (equivalent to a small claims court and the average claim in most arbitration schemes.)

The Ombudsman will be independent and publicly accountable.

The Ombudsman will only be available to complainants who have exhausted a company's own complaints procedure.

Questions

If a consumer is unable to get through to a company and has, as such, failed to exhaust its complaints procedure, can they still go to the Ombudsman?

• The Ombudsman will have discretion to take on individual cases such as these. Oftel's Consumer Representation section will continue its role in helping consumers to contact effectively service providers.
• FSA has an 8 week deadlock period, after which, if a company has failed to give any response, the Ombudsman can take action.
• The important issue is company's internal complaints procedures. They are often labyrinthine and impossible for consumers to use.
• The Communications White Paper calls for Codes of Practice to be established with back-stop powers for OfCom. However Oftel regulates markets. It does not have the powers to impose standard complaints procedures on companies.

The Communications White Paper is not clear about the role of consumers and citizens - in particular the social ill of illegal content.

• The Ombudsman is designed to offer consumer redress. Consumer/citizen issues are never clear. However, some citizen-focused regulations are already in existence - for example, 999 availability.
• The Ombudsman will concentrate on delivery of service rather than content issues.

Why is fax included in the scheme?

• Fax is a USO - it is classed as a service over the telephone.

Can a consumer complain about content if they feel they have been ripped-off for something that they have paid for specifically?

• No. That would be an issue of contractual obligations, rather than service delivery.

A number of delegates welcomed the Ombudsman Scheme and wished it success.

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