OPERATOR POLICY FORUM: 14 December 2000

Contents:

1. Agenda for the meeting.

2. Minutes of the meeting.

3. Action Points from the meeting.

1.    Agenda

Item    -    Presented by:  (Oftel unless otherwise stated)

1.    Introduction and Action Points - Chris Kenny

2.    BT's New Structure - Chris Hobson (BT)

3.    Stakeholders Relations - Michael Richardson

4.    Metering and Billing - Bill Hawkins

5.    CPS Launch - Caroline Wallace

6.    The Communications White Paper - Ian Moss

7.    LLU Update - Trevor Wood

8.    Focus Group updates:

• NTS - Geoff Brighton
• Geographic & Non-Geographic Number Portability - Kieran MacDermott (Vodafone)
• Mobile Number Portability - Peter Roberts (Orange)
• Personal Number Portability - Jacqui Simpson (Redstone)
• ICPS - John Naughten (Viatel)

9.    Forthcoming and Recent Oftel Publications - Chris Kenny

10.    AOB

2.    Minutes

Agenda Item 1 - Introduction and Action Points

Chris Kenny advised that all of the outstanding action points had either been closed or would be discussed at this OPF

Agenda Item 2 - BT's New Structure

Chris Hobson (BT):
Presentation outlining BT’s restructuring plans.

• BT OpenWorld (Internet consumer services), BT Ingite (Corporate services), BT Wireless (Mobile), and BT Retail (Retail telephony other than Corporate) will be run as separate companies, but benefitting from group synergies under a new holding company.

• NetCo will operate most of the fixed network and be run at a distance and its management has been instructed to discount business interests of the wider group.

• BT Plan to float a 25% stake in NetCo, once the Government and regulator have approved it.

• BT hope new structure in place by the end of 2001, subject to regulatory approval.

• There were difficult issues still outstanding e.g. how the Universal Service Obligations would be taken forward.

General discussion
There were a number of questions from the floor which focussed on how NetCo would act independently of the rest of BT.

Chris Hobson (BT):
Netco will be independently managed and be judged on its behaviour under an operating licence enforced by Oftel. NetCo would be able to go for retail customers on its own. It was also confirmed that international links would remain owned by Concert. BT's fundamental drive for restructuring is to improve efficiency and no consultation with Competition Authority, OFT or EC is required.

Oftel:
There is little more information about the restructuring known to Oftel beyond that already shared with the forum. Achieving BT’s planned timetable for implementation was dependent on BT supplying detailed proposals to Oftel and DTI. However, much detailed work on the future licence structure for the new business will be required by Oftel. In particular, Oftel needs to ensure that robust mechanisms exist for imposing regulatory obligations on BT’s retail business and for protecting delivery of universal service.

Chris Hobson was invited to return in March to provide an update to the Forum.

Agenda Item 3 - Stakeholder Relations

Michael Richardson (Oftel):
Presentation on Oftel's review of public consultation and contact with stakeholders:

• Stakeholder contact has historically been built around issues such as interconnection.

• There is now a need to take a fresh look at who is affected by Oftel’s strategy and performance and identify the key stakeholders.

• Need to consider the appropriateness of various industry and user stakeholder groups which Oftel hosts. Oftel is keen to explore the possibility of cross stakeholder group working between users and telecoms providers and whether there are better ways of stakeholder contact on mass.

• Oftel also uses written consultation to seek views from stakeholders and has published thirty five such consultation documents during the year 2000 on a wide range of issues. Oftel is currently reviewing when it should consult and the time allowed for responses to be made to written consultations.

A consultation document on written and face to face consultations will be published soon.

General discussion

Views from the floor:

• Concern at lack of expertise in User Groups which industry could cross work with.

• Oftel continuing with consumer research was seen as being valuable for consumers concerns.

• Contrasting written consultation styles should be addressed

Oftel:
There should perhaps be industry and user group cross working. However, it is agreed that industry representatives attending purely generic user forums may not be useful. Users already attend both the Oftel hosted Numbering forum and the CLI Interest Group. Operators should perhaps give consideration to inviting one of their large users to an Oftel forum to voice their problems. In short, however, Oftel does not feel it is currently getting the real voice of the user.

Written consultation styles would be covered in Oftel’s forthcoming consultation on consultation. Oftel has also recently issued a set of project management guidelines that gives guidance to project managers on consultation. The Cabinet Office recently published Code of Practice on Written Consultation and contains advice that 12 weeks should be the standard minimum period for consultation in order not to narrow the range of responses to consultation.

Best performance from OPF

Oftel:
The 'parish notice board' format of the OPF means that much of the content of the OPF could be read straight from Oftel's website. Given that Oftel is keen to make the OPF more interactive, there should perhaps be wider consultation on the agenda for each OPF meeting. The forum was asked for its views on how to achieve best performance from the OPF.

General discussion

Views from the floor:

• OPF format is not completely one way.

• 'Parish notice board' format is useful

• Too few decision makers attend the OPF.

• The round table discussion is at the OPF focus group level.

• Operators hold back at OPF due to the presence of BT.

• Oftel is generally 'too London based'

Oftel:
The format of OPF makes it more 'one way' than its predecessor, the Interconnect Policy Forum (IPF), where there was round table debate due to there being more common interest in IPF issues. Given that much of the OPF work is done at focus group level, it is important for more appropriate people empowered to make decisions to attend focus groups.

The Oftel Service Providers Forum has a wide mix of attendees and perhaps the OPF members should consider inviting key people to OPF meetings.

On Oftel being too London based, Oftel does not visit operators as much as it used and it would be pleased to consider invitations to visit operators based outside of London. Issues arose at meetings at operators’ premises that tended not arise at meetings held at Oftel.

In conclusion Oftel does need to use the OPF and its members to better effect. Appropriateness of OPF will be one of the items considered in Oftel’s consultation on consultation.

Agenda Item 4 - Metering and Billing

Bill Hawkins (Oftel):
Update on the Metering and Billing Systems Approval Project.

• Current progress has been extremely disappointing resulting in the timetable being delayed and the programme having to be revised to allow industry to complete its discussion. However, Oftel remains committed to achieving the new timetable and to pursuing the goals defined in the February 2000 Statement Ensuring telephone bills are accurate -A statement on the review of the Oftel Meter Approval Scheme for Public Telecommunications Operators. An open letter to this effect signed by Peter Walker was circulated to all industry participants in the Oftel Metering and billing Project.

• Goals of the project will be achieved by:

  • Extending scope of the scheme to include all material elements of bills as appropriate.

  • Extending the Meter Approval Scheme to all licensed operators, starting with the major operators identified in the February 2000 Statement and making it available to major service providers.

• The need to extend the scope and reach of the scheme was mainly driven by the increase of complaints to Oftel about billing and industry data such as Comparable Performance Indicators.

• The Oftel Standard for Public Telecommunications Operators’ Meter Systems (OTR 003) will also be restructured taking the key attributes of the last draft (Draft 4a) to address the scheme's wider needs.

• The key issues under consideration are:

  • Application of "materiality rule" for a level of services to be included in the approvals process.

  • Use of complaints data as an indirect measure of consumer concern

  • Bill timeliness

  • Bill delivery

  • Process based auditing

• The operation of the Scheme will be also be extended to other approvals organisations, in addition to BABT, accredited by UK Accreditation Services (UKAS) or other equivalent European National Accreditation Services.

• Once the application timetable has been completed for the major operators, tranches for lower turn over operators are planned.

General discussion

Views from the floor:

• What evidence is there that the scheme needs to be broadened?

• Extending the scope of the scheme will cause a burden on industry.

• What is the view from Europe?

Oftel:
There is plenty of evidence and a clear decision by the Director-General, taken after extensive consultation that the scope of the scheme needs to be broadened. The number of billing problems with operators both large and small is overwhelming. Evidence shows that operators are running with complaint levels that would be too high for the approval scheme, which suggests there is a problem. Priority now is to focus on implementation. Also extending the scope of the scheme would not cause a burden on the industry as the focus of debate is to be on the standard being less complicated and easier for operators to comply with.

So far has there has not been a statement of intent from Europe on an approval scheme. The UK would not be averse for arguing for such a statement of intent, but, even if it were forthcoming, detail would have to be settled by individual NRAs. Absence of European action was not a satisfactory reason for failing to make progress in the UK on the basis of the policy already promulgated.

Agenda Item 5-Carrier Pre Selection

Caroline Wallace (Oftel) and Karen Hardy (Energis):
Update on Carrier Pre-Selection

• CPS Phase 1 was launched in respect to BT's network on 12 December 2000 following the completion of trial and Service Delivery Pilot phases in early December. Phase 1 allows for national and international calls only, 'All Calls' will be available when Phase 2 is launched. Oftel is looking forward to grater choice for consumers as a result of the launch of CPS.

• The CPS Focus Groups and Triallist Group will continue to meet. Trials for CPS Phase 2 and trails for Featurenet on CPS will commence in the new year.

• CPS Phase 2 launch is scheduled for December 2001. If operators have not been involved yet in the process they should consider becoming involved in Phase 2 as new ideas would be welcomed.

A vote of thanks recorded to all in the industry groups, especially Caroline Wallace and Karen Hardy for their work leading to the successful launch of Phase 1 of CPS.

Agenda Item 6 - Communications White Paper

Ian Moss (Oftel):
Presentation on the Communications White Paper in the context of what Oftel asked for and what is actually contained in the Communications White Paper.

• In June Oftel submitted comments to the joint DCMS/DTI Communications Reform Team about what the White Paper should contain.

• The policy proposals in the Communications White Paper are to a large extent consistent with Oftel's proposals.

• The White Paper is based upon the principles of choice for consumers through increased competition, the creation of a single communications regulator, the need for consumer input into policy making and a new balance between sector-specific regulation, competition law and self and co-regulation.

• White Paper proposes a single regulatory authority encompassing telecoms, broadcasting and radiocommunications. This framework will be administered by a single regulatory authority called Ofcom undertaking sectoral regulation (both economic and consumer protection) and content regulation. Ofcom's objective, in line with government policy objectives, is to protect the interest of consumers through the promotion of open competitive markets.

• Ofcom, will undertake the work of Oftel, the Independent Television Commission (ITC), the Radiocommunications Agency (RA), the Radio Authority and the Broadcasting Standards Commission (BSC). Importantly, Ofcom will not be simply a merger of these organisations but it will be an entirely new organisation. It will also comprise of a board rather than a single regulator.

• The government will ensure the continuation of the universal service obligation and will also ensure universal access to the Internet by 2005. It will also promote access to other communications services.

• Next steps will be to work with the existing regulators to ensure a smooth transition to the new regulatory regime. Pathfinder groups will be set up involving all the regulators at official level, building on the current arrangements for co-ordinating regulatory work.

In a response to a question on funding for Ofcom, Oftel explained that Article 8.10.4 of the Communications White Paper states:

"The costs of regulation will, as at present, be borne by the regulated industries, subject to relevant EC requirements, through transparent and proportionate mechanisms. OFCOM should also have powers to charge not only for spectrum but also for the allocation of telephone numbers to operators, including powers, where appropriate, to auction commercially valuable numbers. There will be full consultation on the detailed mechanisms and processes."

In a response to a question from the floor about the meaning universal access to Internet, Oftel explained that the Office of the e Envoy has been tasked with ensuring easy reach to the Internet at home or in the work place. The Prime Minister launched the UK Online Report and Strategy on 12 September 2000. These can be viewed on the E Envoy website at www.e-envoy.gov.uk

Agenda Item 7 - Local Loop Unbundling update

Trevor Wood (Oftel):
Update to the forum on Local Loop Unbundling.

• The first trial site in Leeds has now been handed over to other operators and good progress has been made with Battersea and Edinburgh sites. BT has now completed initial surveys on all of the 361 of the sites selected by Oftel in the first round.

• The results of the second round of bidding for space in BT’s exchanges have been made available to operators and a total of 360 sites have been selected. Under the second round operators began submitting bids for allocation under new procedures on 7 December.

• Oftel issued a determination amending the terms of the ‘Bow Wave Process’ document so that the ‘Initial three rack allocation’ method is used as the method for allocating co-location space in BT’s exchanges as part of the ‘Bow Wave’ demand management process.

• Relevant recent and forthcoming publications: Local Loop Unbundling - Proposed Determination of the Terms of an Access Network Facilities Agreement was published in November. Access to bandwidth: Shared access to the local loop was published in December.

• The European Parliament and Council Regulation 2887/2000 on unbundled access to the local loop comes into force on 1 January 2001.

Agenda Item 8 - Focus Group Updates

NTS

Geoff Brighton (Oftel):
There has not been any recent NTS Focus Group recent meetings given the pre-occupation with Friaco and other NTS specific determination requests. However, a summary of the current key issues was given.

IN dip
Oftel is becoming concerned at a potential threat to the limited numbering resource arising from OlOs seeking differing routing plans for calls to different services terminating on numbers with their 1k Friaco allocation. Apparently BT’s IN dip has only be set up to differentiate calls to 1k blocks. Where an OLO requires different routing plans they are required to seek separate number blocks.

This may not be a huge problem for many but where it arises it is clearly wasteful of the numbering resource. Oftel believes that if OLOs are required to pay a not-insubstantial charge for IN functionality they should receive the full product. This could mean grooming to single numbers where necessary. Apparently BT is conducting a feasibility study into this but Oftel believes single number grooming is achievable and may be necessary.

NTS Discounts
Oftel has received a referral from BT of a dispute over its proposal to increase NTS discounts from 11.75 to 16.8%. A number of OLOs have rejected BT’s OCCN. We are looking into the charge and into how such disputes can be avoided in future.

Every time BT revises discounts upwards as a result of increases in the number of customers signing up to discount schemes, OLOs object to the resultant decrease in POLOs. Discounts are a fact of life and have to be reflected in NTS charges as the amount of retail revenue BT receives from its customers falls. The only alternative being a formal reduction in retail prices. There are two alternative courses of action open to OLOs:

1. is for OLOs to use their new NTS discretion by increasing their POLO by seeking new retail price points from BT. This is a clumsy solution however and one that may need to be enacted each time BT revises its discounts.

2. is for OLOs to be able to exclude their services from BT’s discounts altogether. This would require the allocation of separate, with and without discounts, number blocks to each price point. Currently BT allocates these only at 10k granularity. Oftel believes this again is wasteful of the numbering resource and may not align with the current numbering conventions which require 1k granularity. BT’s off-line billing systems should be capable of discriminating to 1k and we will be discussing this with BT.

This solution may not be practicable for services on the old 0845 etc ranges where there may not be sufficient spare numbers to allocate for services without discounts.

NTS D&C – BT/CWC
Oftel has been dealing with a determination regarding OLO specific NTS Ds and Cs referred by Cable and Wireless. Our draft decision has been issued to the parties for consultation.

The dispute was treated as being specific to the parties and only responses from them will be considered.

Without discussing the merits of either case the decision confronting Oftel was clear. Either it will grant CWC its D which automatically entails retrospection to October 1997 or reject it and let new NTS control OLO D’s going forward. Some form of halfway compromise would have no legal or regulatory justification. However, we also considered that given the polarisation of the position of the parties, a decision either way carried a strong risk of an appeal. We therefore tried to anticipate the line an appeal judge may take. This was that despite conditional offers from BT no formal agreement was made regarding OLOs D and that in the absence of such an agreement between BT and CWC or the industry as a whole, then there was no basis to grant CWC its D and that no retrospective payments were due.

A copy of the draft determination has been e-mailed to Telewest on request, with the agreement of BT and C&W. If any other operator wishes to see the draft please contact Geoff Brighton. The final determination when made will be published on the Oftel website with a summary in the Competition Bulletin.

NTS Links
A decision in this has been reached although the determination has been delayed due to a legal point raised at the 12th hour. Oftel has written to all the operators referred by BT to give them the opportunity to offer any comments before the draft determination is issued. It is now expected that the determination will be published towards the end of January.

Retail uplift
The sheer number of recent and current issues has imposed the delay in completing this exercise. A decision is close on the method and figure it produces but may need at least one more meeting with BT before publishing findings for consultation.

Transit
The issue of NTS transit has caused some confusion over who is responsible for paying of the transit charge. This has led to one terminating operator rejecting BT’s transit invoices. The position is as follows.

1. the question of who is responsible for transit under ‘new NTS’ is not helped by BT’s policy as transit operator of taking payments from originating operators and paying these in full to terminating operators and subsequently seeking payment for transit from the terminating operator. This, I believe is a factor of its billing system which cannot distinguish between BT and ONO originated traffic it terminates on TNOs services.

2. transit charges are included in the retail price for calls both for old (0845 etc) and new NTS calls. Given that old NTS prices are fixed where transit is used must result in a lower POLO to the terminating operator. Whether this is deducted by BT before paying POLOs or sought later is irrelevant.

3. Under new NTS originating operators should set retail prices sufficient to cover their unregulated retention, BT’s transit and the required POLO.

4. In all cases terminating operators will receive a sum from BT which includes both the transit charge and POLO. BT will have overpaid TNOs and is justified in seeking its transit charge from them.

If this position is unacceptable to TNOs then Oftel can only suggest BT opt out of the cascade billing process. It is not a bank handling money owed by ONOs to TNOs who do not have agreements with eachother and receives no payment for this function. It is simply transiting calls, a service for which it seeks only its regulated charge. BT could simply take its transit charge and leave ONOs and TNOs to settle NTS payments between eachother. Which is preferable

ONO Transit Links

One final issue surrounds payment for transit links from ONOs to BT following BT’s links proposal. Regardless of Oftel decision over the BT proposal it would not be practicable for ONOs to obtain payment from TNOs for links carrying traffic to the transit operator. No interconnect agreements exist and BT can not be expected to handle payments for 3^rd parties. If ONOs feel they are not recovering these costs they should be factored into their NTS retention which, as you know, is not regulated.

Colin Scott (Thus):
Can other network operators (OLO)terminating NTS calls could specifiy to BT that they only wanted to receive BT originated calls and refuse calls transited by BT from other originating operators?

Oftel:
It would be unreasonable for customers of an OLO to be deprived access to NTS services that BT customers enjoy. This especially if the OLO is willing to originate the calls. The OLO would get the blame for being unable to provide a service over which it had no control and may lose customers as a result through no fault of its own. This would clearly not consistent with promoting competition in the access market that non-dominant operators should be denied the capability of offering an 'any to any' service (if they so wish) without investing disproportionately in potentially uneconomic amounts of direct interconnection with terminating operators.

GEOGRAPHIC & NON-GEOGRAPHIC NUMBER PORTABILITY

Owen Watson:
BT has provided sample bills and reports in support of their enhanced Non-Geographic Number Portability Transit product. Operators have confirmed that this meets their needs. BT has indicated that once the enhanced NGNP-T product is launched, they will almost certainly seek to withdraw the existing product.

Pre-allocation Portability group have effectively completed the ITT for the database as part of Phase 2. This has been forwarded to Oftel for comment. Operators are concerned that whilst Oftel does not "require" that this product be supplied, there has been insufficient explicit support to allow development work to take place internally. Recognising that some Operators maintain concerns over network integrity the group remains committed to launching Phase 2 PAP once the necessary reassurances have been received.

Operators have been reminded that they have licence conditions that require them to offer interconnect where it is reasonably requested. There have been concerns expressed that some range holding operators may be forcing requesting operators to use transit products, rather than implement full interconnect where it does not exist. The extent to which a request to provision interconnect purely to provide number portability may be regarded as reasonable will need to be judged carefully by operators.

The new GNP E2E Process Manual is on the Oftel website. The gatekeeper is Sue Georgiou of Thus.

OLOs have confirmed that they will ensure that their consumer facing staff are fully up to date with the current rules around number portability. There have been concerns raised about incorrect information being given to consumers that have resulted in solutions being implemented outside of the current rules. This is generally limited to the voluntary aspects of GNP such as mobility.

A workshop session on resellers in GNP took place on the 13 December. No details were available at the time of writing this report.

The NGNP E2E Process Manual is in the final stages of collation and approval. It is expected that this will be launched on 1 February 2001, with the changes becoming effective by 2 April 2001.

A briefing note has been issued to the Process, Commercial and Order Desk meeting attendees detailing the operational shut down over the Christmas and New Year periods. Details are available on request.

The NP Group awaits the forthcoming consultation on the Functional Specification on for Number Portability with interest. We understand that this will be a full consultation. We will be particularly interested to see the inputs of consumer groups.

Kieran MacDermott of Vodafone has now stepped down as the Chair of the Number Portability Group. Thanks are due to Kieran who has supervised the amalgamation of the GNP and NGNP groups. The new Chair is Owen Watson of Energis. Contact details are given at the foot of this report.

Phil Warren of C&WC is now Chair of the Process Group.

Contact details:

Owen Watson
Energis plc
3 Victoria House
Manor Road
Leeds
LS11 5AE

Tel 0113 298 6598
Fax 0113 298 6662
Mob 07800 121185
owenwatson@energis.co.uk

PERSONAL NUMBER PORTABILITY

There was no update from the Personal Number Portability Focus Group.

MOBILE NUMBER PORTABILITY

Peter Roberts (Orange):
Update on Porting Charge

Vodafone have confirmed that their tied service providers' porting admin charges will be reduced to zero. BTCellnet, one2one, Virgin and Orange are already committed to £0 for porting charges. Independent Service Providers retain their £30 guideline for porting charges. A further review on porting charges will follow as part of MNP2

MNP2 Update
The negotiations with the vendor for the development of the web system on behalf of all four network operators have failed. The Contractual Procurement Group (CPG) need to re-tender resulting in the target delivery of the web system slipping to Q3 2001.

Following a review the MNP2 Project board has proposed to the OPF-MNP-FG the following:

• Deliver MNP2 full system spec in September 2001

• Do not pursue an interim solution (MNP2 without the web sysytem)

• Develop an MNP3 for delivery in 2002 with customer expectations being the foundation for the development of the solution.

• The MNP-FG also tasked the Operational Review Group with evaluating operational feasibility of web-less MNP2 as an interim and as a contingency.

Roadmap - MNP 3

• Start work one MNP2 specced to vendor

• Customer research (possibility of Oftel involvement)

• Deliver by the end of 2002

• MNP2 solves existing customer problems

• MNP3 moves mobile porting forward

The next MNP-FG meetings will take place on 3^rd January 2001 and 31 January 2001.

ICPS

There was no update from ICPS Focus Group

Agenda Item 9 - Publications

Chris Kenny advised the forum of the following forthcoming Oftel publications:

• The Oftel Management Plan (statement)

• National Leased Lines (statement)

• LLU pricing (determination)

• Shared Access to the Local Loop (statement)

• Calls to Mobiles (consultation document)

• Mobile Market Review (consultation document)

• Internet Access Market Review (consultation document)

• Carrier Pre Selection Charges (determination)

• BT Price Control (statement)

• Consultations (Consultation document)

• Joint OFT/Oftel statement on E Commerce.

Agenda Item 10 - AOB

3.   Action Points