OPERATOR POLICY FORUM: 8 February 2001

Contents:

1. Agenda for the meeting.

2. Minutes of the meeting.

1.    Agenda

Item    -    Presented by:  (Oftel unless otherwise stated)

1. Introduction and Action Points - Chris Kenny

2. Price Control - Peter Culham

3. Mobile Market Review - Elaine Axby

4. Determination Timescales - Vince Affleck

5. Industry Guidelines: How to Complain to Oftel - Maeve Gallagher

6. NTS Pricing Ladder - Dave Mitchelson (BT)

7. Focus Group updates:

• NTS Geoff Brighton
• Geographic & Non-Geographic Number Portability - Owen Watson (Energis)
• Mobile Number Portability - Peter Roberts (Orange)
• CPS - Karen Hardy (Energis)
• ICPS - Wendy Dodd (MCI Worldcom)

8. Forthcoming and Recent Oftel Publications - Chris Kenny

9. AOB

2.    Minutes

Agenda Item 1 - Introduction and Action Points

Chris Kenny informed the meeting that due to Oftel's web site being re-designed, for a period of two weeks from 20 February statements and consultation documents only will be posted on the web site. For information on any other new publication the relevant Project Manager should be contacted.

Agenda Item 2 - Price Control

Peter Culham (Oftel)

Presentation on Oftel's Proposals for Network Charge and Retail Price Controls from 2001:

• The Oftel statement sets out Oftel’s conclusions and proposals for the future of retail price and Network Charge Controls.

Retail Price Controls

• Oftel will extend the existing price controls on BT’s residential prices as BT continues to have market power in the provision of telephony services to residential customers, although the extent of competition is increasing.

• The price controls will come into force when the current controls expire in August 2001 and will last for one year.

Retail Market Review

• Oftel will carry out a review of the calls market to assess the level of competition in the calls market in order to consider whether retail price controls will be needed beyond 2002. As competition increases and prices fall, the case for retail price controls diminishes.

Network Charge Controls

• Oftel will also continue with Network Charge Controls. The charge controls will range from RPI minus 13 per cent to RPI minus 7.5 per cent to reflect the profitability and scope for cost reductions for each interconnection service. The controls will be in place for four years from October 2001.

Draft Licence modifications

• The draft licence modifications included in the statement require responses by 16 March 2001. Oftel will seek BT’s (and Concert’s) formal consent to the proposed licence modifications by the end of March 2001. If BT or Concert reject the proposals, Oftel will rollover the existing controls and refer the matter to the Competition Commission.

Oftel

In responding to a question from the floor Oftel explained that the £424.25 charge for FRIACO at the DLE determined in Oftel’s Direction of May 2000 was based on 1998/1999 data. This charge will be rolled forward in April 2001 and the control of RPI minus 7.5 per cent will then apply to each FRIACO component from 1 October 2001 giving the charge of £333.04.

Agenda Item 3 - Mobile Market Review

Elaine Axby (Oftel)

Presentation on Effective Market Review - Mobile:

• Oftel’s Strategy is to focus on effective competition which gives the consumer the best deal. A market which is effectively competitive does not require sector specific regulation to promote competition.

• Oftel has published the initial results of its review of competition in the mobile sector, along with a range of proposals for future action.

• Oftel’s research indicates that UK consumers are getting a good deal for many of their mobile phone services. However, Oftel has a concern that competition is not yet fully effective, and consumers are not getting the best deal possible.

• If this consultation - and additional research - finds that the market is effectively competitive, Oftel will remove regulation designed to promote competition. This would include any requirement to provide wholesale airtime to independent service providers or access for indirect access operators.

• If it indicates that effective competition does not exist, Oftel will decide which operators have market power and impose appropriate regulations on those operators. This could result in two, three or even all four operators being subject to regulations that guard against anti-competitive behaviour and promote competition.

• Responses on Oftel's proposals are required by 4^th May, with comments on comments by 18^th May. A final statement on the proposals will be published in July.

General Discussion

Views from the floor

The then followed a brief discussion in which a number of questions from the floor were raised.

• On what basis did Oftel treat in the way it did the impact of Virgin Mobile as a recent entry impact on supplier behaviour?

• How does the review link in with calls to mobiles?

Oftel

The significant impact of Virgin Mobile as a recent entry is so considered by Oftel due to the in roads it has made and the shear size and brand it has brought to the market.

Outgoing mobile calls and incoming mobile calls are separate markets. However there are areas which link the mobile market review to the work on calls to mobiles and there has been a common approach to both areas of discussion.

Agenda Item 4 - Determination Timescales

Vincent Affleck (Oftel)

Presentation on interconnection disputes: new faster timescales:

Oftel has decided with immediate effect to revise its procedures to speed up the resolution of interconnection disputes from the current existing timescales followed to resolve competition disputes to a timescale where the final determination is made within the six months of receiving the original request.

Agenda Item 5 - How to complain to Oftel

Maeve Gallagher (Oftel)

Presentation on the forthcoming Oftel Industry Guidelines - How to complain to Oftel:

• Oftel will be producing industry guidelines aimed at potential complainants and which updates the December 1997 guidelines - Dealing with Anti Competitive Behaviour.

• Primarily the guidelines are being updated as during 2000 Oftel gained new powers under the Competition Act. The way in which Oftel analyses possible anti-competitive behaviour and the extent of competition in markets has followed more closely the disciplines used by competition authorities. In addition, new guidelines are needed to reflect Oftel's encouragement for self and co-regulation.

• The guidance will summarise procedures which OFTEL follows to investigate complaints and the type of information which should, wherever possible, be provided by complainants to OFTEL when a complaint is first made.

• Although comments would be welcome on the guidelines there will be no formal consultation.

General discussion

Questions from the floor

• Does Oftel establish precedents when considering complaints?

• Does concurrency mean that the Director General will increasingly use powers under the Competition Act?

Oftel

When a complaint is considered, precedents set by previous similar investigations may be taken into account and can act as an indicator on how Oftel will react to other such complaints.

Concurrency allows Oftel to apply the powers under the Competition Act using expertise and knowledge of the relevant markets. It is the Competition Act which Oftel will increasingly use.

Agenda Item 6 - NTS Pricing Ladder

David Mitchelson (BT Pricing, Policy and Design)

Presentation BT Chargeband Developments for NTS Services:

• BT has introduced the NTS Pricing Ladder following responses to an Industry Briefing seeking OLO requirements. The Oftel statement on NTS dated December 1999 created the potential for new chargebands and was the main driver for the introduction of the Pricing Ladder.

• The NTS Pricing Ladder replaces the previous available price points.

General discussion

Oftel

As terminating operators providing NTS are now able to set the termination charge they want for their services and so determine the retail prices at which their services are made available to customers, there is a need for certainty on the application of NTS discount rules.

BT

This is currently the subject of discussion within BT and BT will respond in due course.

Agenda Item 7 - Focus Group Updates

NTS

Geoff Brighton (Oftel) reported that due to FRIACO II determination, the NTS Focus Group has not met since the last OPF.

GEOGRAPHIC & NON-GEOGRAPHIC NUMBER PORTABILITY

No update from the Geographic & Non Geographic Number Portability Focus Group was given.

Oftel

There has been recent discussion at PNO-IG on number portability congestion and the need for a definition of requirements for the next phase of number portability. Oftel will be chairing a specific meeting on this and will invite technical experts from NICC / PNO-IG and number portability commercial groups.

MOBILE NUMBER PORTABILITY

Peter Roberts (Orange)

Report on behalf of the Mobile Number Portability Focus Group:

Operational Activity - Operational Review Group

• A "web-less" launch for Phase 2 was considered as a possible contingency but not as an interim solution since there would be insufficient shelf life before the whole solution is launched to justify the estimated 5 months of preparation and additional costs.

Operational Activity - Tech Forum

• Issues raised included subsequent ports, signalling capacity, sending receipt of files & process.
• Actions accepted and proposals developed for ongoing improvement including capacity forecasting reviews, send/receive process improvements & redistribution of existing SLAs on escalation.

Strategic Activity - MNP-FG

• Oftel has agreed to provide non financial market research assistance to the Focus Group to provide feed into customer requirements for MNP3
• Oftel's Large User Business Panel was also considered to be of value in the research phase and possible participation will be followed up.

MNP2 Project activity

• Memorandum of Understanding (MoU) was signed with vendor for the MNP web system in December

• Signature of the final contract between the system vendor and the four mobile network operators is imminent.
• A public announcement on the launch of the MNP web system is expected in and the end of February.
• Very much on target for MNP2 delivery in September 2001.

CPS

Karen Hardy (Energis)

Reported on behalf of the ICPS Focus Group:

Phase 1

• CPS Phase 1 was launched in December 2000, however, there were still some outstanding issues from the trial which were due to be resolved and tested during January 2001.

Launch of Phase 2 and Featurenet

• There will be one more meeting of the current Triallist group in its current format. This is because new triallists are required for Featurenet and the new functionality associated with phase 2 and a new Triallist group chair is also required. An e-mail will be circulated to CPS Commercial Group concerning issues around future CPS trials & triallists

Pilot phase

• Post pilot phase call routing problems were discovered. Customers received BT bills for calls expected to be carried over CPS. There were two separate causes identified in different technologies but the problem has now been resolved and the lesson learnt for the next pilot phase.

Transaction billing

• There is now a useable format for BT's transaction billing for CPS.

Process Improvement Group

• A representative of the Service Providers forum will be invited to attend future CPS PIG meetings following such a request to Oftel from the Service Providers Forum.

Oftel

Oftel emphasised that volunteers for triallists are needed for Featurenet.

ICPS

Wendy Dodd (MCI Worldcom)

Reported on behalf of the ICPS Focus Group:

Agenda Item 8 - Publications

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

• Final Direction on BT to provide single tandem FRIACO (direction)

• Oftel's use of Public Consultation (consultation)
• Open Access (statement)
• Alternative Dispute Resolution (consultation)
• Revised Numbering Conventions (consultation)
• Calls to Mobiles (consultation)
• Internet Access Market Review (consultation)
• How to complain to Oftel (industry guidelines)
• Oftel's Welsh Language Scheme (statement)
• Access Network Facilities Agreement (statement)

Agenda Item 9- AOB