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NUMBERING FOR CORPORATE NETWORKS

Oftel’s proposals to increase choice for large businesses

August 1997


In Oftel’s Statement on the National Numbering Scheme published in January 1997, we proposed to allocate the 05 range of numbers for a new type of service dedicated primarily to businesses with large corporate networks. During the earlier consultation, we found that the principle of an 05 business range was overwhelmingly endorsed but it was recognised that further work was necessary before the range could be introduced and potential users and other industry players needed greater detail on how the new scheme would work.

Oftel has subsequently been carrying out informal consultation with a number of interested parties and now seeks views on the proposals. We recognise that there are some important issues to be settled, in particular the number range structure, retail pricing and interconnect charging, but we remain convinced that with the right cooperation we can introduce the range by 1999. We believe companies will gain real benefits from 05. We expect the 05 marketplace to be dynamic with operators and service providers competing for 05 Firms’ business thus stimulating innovation, choice and better value for money for all users.

I commend these proposals to you and seek your constructive responses on how this new opportunity can be rapidly realised. If we succeed, we will once again show that the UK is in the forefront of opening up new choices for business and new opportunities for those that will provide service to them.

DON CRUICKSHANK


CONSULTATION

The initial consultation period will run until 8 October 1997. There will then be a further period up to 22 October 1997 during which comments are invited on any submissions made to Oftel during the initial period. A summary of questions can be found at Chapter 5. Written comments should be sent to:-

Robert Baty

Oftel

50 Ludgate Hill

London EC4M 7JJ

Fax: 0171 634 8945

Written comments will be made publicly available in Oftel’s Library unless confidential. Respondents are therefore asked to separate out any confidential material into a clearly marked annex.

In the interests of transparency respondents are requested to avoid confidentiality markings where possible. Appointments to view written comments in the Library must be made in advance (tel: 0171 634 8762/8765, fax: 0171 634 8946).

Comments can also be sent to Oftel on the Internet via Oftel’s Web site pages or by using the following e-mail address: technof.oftel@gtnet.gov.uk. Oftel can set up a link between this document on Oftel’s Web site and any comments about it placed on the respondents’ own Web site.

Please contact Cate McLaurin at Oftel on 0171 634 8752 to organise this.

Confidential responses should not be sent via the Internet.


Contents

Chapter 1 Summary and introduction

Chapter 2 Number structure

Chapter 3 Retail pricing and interconnect arrangements

Chapter 4 Other issues

Chapter 5 Summary of questions

Annex A Possible provision of a geographical based corporate number range


CHAPTER 1

Summary and introduction

1.1 As a result of the PhONEday changes of 1995, the UK now has a 10-digit Numbering Scheme ie. trunk dialling digit 0 plus 10-digit national significant number. The future policy for numbering was set out in the Oftel’s January 1997 Statement The National Numbering Scheme. The document outlined the use of the 05 range for business use and reported that the principle had been broadly supported during the previous consultation, but that a further round of consultation would be needed to refine the details before a final decision to launch the 05 range was made. This document fulfills that commitment to consult on this topic.

1.2 The concept proposed for the 05 range is that blocks of numbers will be allocated directly to companies, rather than public operators. Each company or organisation (known as 05 Firms in the rest of this document) will then be responsible for allocating sub-blocks and individual numbers to users within their private or virtual private networks. The scheme is primarily intended for firms who operate extensive multi-site private networks of their own, or who subscribe to an equivalent Virtual Private Network service, although small companies with one or a few lines are not excluded. Because corporate networks are spread across different locations the 05 numbering will essentially be non geographic. The structure of the 05 range is dealt with in more detail in Chapter 2.

1.3 However, the Corporate Numbering proposal is not just about numbering. It is a new form of service which will entail 05 Firms carrying inbound calls from the point where the call is handed over to them over their corporate networks to the destination site in their corporate networks. As such, the Public Telecom Operators (PTOs) will need to know the delivery point on the 05 Firms network and how to route and charge for such calls. This creates some novel challenges, in that in the initial stages of the market development, PTOs will not know what the long term average costs of the service will be, which will make setting tariffs and interconnect charges difficult. These issues are addressed in Chapter 3.

1.4 A number of other issues which require consultation are included in Chapter 4 and a summary of questions is at Chapter 5.

1.5 The remainder of this introductory chapter describes the various advantages which would flow from the introduction of the 05 scheme and how the service is expected to work.

Advantages of a Corporate Numbering Scheme

05 Firm benefits

1.6 The 05 range is primarily intended to allow larger 05 Firms to have their own identifiable number range to meet their telecoms needs, routing incoming external calls to individual company extensions. 05 Firms would generally be expected to relinquish their 01 (or 02) code allocations used for existing Direct Dialling In (DDI) purposes. 05 Firms could retain any freephone, local rate call or national call rate numbers that they currently use, for example for customer contact or telemarketing purposes.

1.7 An 05 Firm would be allocated numbers direct, and could therefore choose which operator(s) they wished to provide them with service and keep their numbers if they changed operator. Oftel envisages a dynamic marketplace developing with operators competing for 05 Firms’ business thus stimulating innovation, choice and better value for money for users.

1.8 An 05 Firm would have complete flexibility over how their number range was deployed over their network – numbers could be used for `mobile extensions’ or numbers could be ‘ported’ across the network. The only requirement would be for the operator responsible for handing over 05 calls to be told of any changes to the places at which handover of calls was required. The ability to use 05 numbers from 1999 would give future numbering stability and insulate companies from future area code changes.

1.9 A firm using 05 numbers would operate with the rules set out in the Numbering Conventions and would have the ability to integrate their internal company dialling plan with that used on the public network. At present, dialling codes on private networks are often in conflict with numbers that operators allocate for DDI purposes.

1.10 Inbound calls, which are currently delivered via DDI to each 05 Firm site would be carried over the corporate network to the extent desired. The 05 Firm would enter into agreements with one or more PTOs about where calls should be handed over.

Benefits for public operators

1.11 The Corporate Numbering scheme will also bring a number of potential benefits to PTOs. It provides them with the ability to serve 05 Firms with competitively differentiated services for the handling and routing of inbound calls. Where competition has in some areas been limited to the routing of outbound calls, it would be possible to offer a package covering both inbound and outbound calls. PTOs might be able to offer several different ways to route 05 calls, such as:-

  • Routing on number to the appropriate point of entry (where the corporate numbering plan has geographically significant codes)
  • Routing to nearest point of entry to network
  • Using `Intelligent Network’ analysis, calls could be routed on an individual basis to the desired point of entry
  • Integration with the company’s Virtual Private Network
  • 1.12 PTOs would compete for carrying the 05 traffic based on their service offering, price and the geographic match to the 05 Firms corporate network. No PTO would be required to offer 05 services, but BT would be required, and other PTOs expected, to carry 05 calls on an ‘any-to-any’ basis. This is consistent with Oftel’s policy on ‘any to any’ calling, published in its recent Statement on Interconnection and Interoperability April 1997; Annex B.

    Other benefits

    1.13 Callers will benefit, because they will be able to identify the 05 Firm by its unique code, irrespective of location. Charges for calls to 05 numbers will not exceed the standard national rate of the originating operator: this ‘tariff ceiling’ will be set through the Numbering Conventions.

    1.14 Finally, there will be benefits to the UK numbering system and therefore indirectly to all UK telecommunications customers. One of the main uses of existing numbering capacity, as well as major source of demands for new, is from telephone companies seeking to meet business customers’ demands for DDI. The 05 scheme will therefore help to take pressure off geographic number ranges by reducing future demand and freeing existing business numbers for reallocation. This will lead to better utilisation of the numbering space and may delay or even eliminate the need for future area code changes.

    How will Corporate Number calls be handled?

    1.15 Any description of how corporate 05 calls will be routed must take account of the multiplicity of interconnected public operators in the UK network. With outbound calls, the most important relationship is between the customer and its first network operator. Similarly, for inbound 05 calls, the most important relationship is between the last network operator and the 05 Firm’s corporate network. This is not dissimilar from the situation with freephone and local rate services where the last operator is providing services to the company who is allocated the number.

    1.16 Each 05 Firm will be responsible for choosing one, or more, PTOs to act as the service providing’ PTO (SPTO). The 05 Firm will negotiate the required ‘points of entry’ from the public network and how calls are to be handed over, eg according to code or to the nearest point of entry. Where the corporate network is particularly extensive and, subject to normal competition rules, it may be able to negotiate an attractive deal with an SPTO to reflect the fact that the 05 Firm would be bearing some of the cost that would normally fall to the public operators.

    1.17 Corporate 05 calls will be charged to callers by the originating PTOs, not those providing the routing services to the 05 Firm. As such, these originating PTOs will decide the precise tariff to be levied, but this decision must be made in conjunction with the terminating operator so as to allow an equitable distribution of income. This will be chosen based on their costs of carriage and any interconnect charges payable to downstream networks. It is expected that originating PTOs will cooperate with the service providing operators and their 05 Firms in the setting of the tariffs (see Chapter 3).

    1.18 Originating PTOs, unless they are the SPTO providing 05 services to 05 Firms, will not have detailed knowledge of the 05 Firm’s network and will route calls based on the digits following the 05 prefix which will be assigned to individual companies. From this code, the originating operator will route the call to the SPTO over the nearest point of interconnect. If no direct interconnection exists, the call will be routed via a transit operator, such as one of the long distance operators. Some smaller originating networks may choose to route all their 05 calls via a long distance operator.

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    CHAPTER 2

    Number structure

    2.1 There are potentially one billion numbers available in the 05 number range, with the standard 0 + 10 digit structure. To enable the efficient routing of calls within operators’ networks, the smallest block that can currently be allocated is of 10 000 numbers. In theory therefore the 05 range could be divided in blocks for companies in various ways (see Table 2.1 below). However, the way operators and corporate networks use numbers will place restrictions on the type and size of allocation. This chapter examines influences on number structure and proposes rules on allocations.

    Table 2.1

    Company Identifier Extension Numbers Size of allocation for 05 numbers Maximum amount of such
    allocations available in 05 range
    05A XXXX XXXX 100 million 10
    05AB XXX XXXX 10 million 100
    05ABC XXX XXX 1 million 1 000
    05ABCD XX XXX 100 000 10 000

     

    2.2 The numbering structure must be pro-competitive. Oftel’s policy objectives are to enable this range to be used efficiently and effectively to meet the needs of larger corporate customers and to enable them to benefit from competition and choice of telecoms service provider. This requires the 05 range to be structured in a way to give corporate customers who would like require 05 numbers the opportunity to have them and which takes account of practical network routing considerations.

    2.3 For instance, in many cases the originating operator will only need to recognise the company from the initial digits of the number dialled and then pass the call directly to the SPTO at the nearest point of interconnect. In this case the operator will only need to examine the initial code (ie 05ABC with a 1 million number allocation). The private network will then use the subsequent digits to route to particular sites and extensions within its network. However, to give 05 customers the opportunity to choose different operators to provide inbound service to different sites an allocation may need to be segmented to identify different operators. To maintain network efficiency, operators currently only differentiate for routing purposes blocks of 10 000 numbers or greater. For a number structure that enables customers to choose more than one operator for different sites, a minimum allocation size of 100 000 numbers (ie 05ABCD) therefore seems necessary.

    2.4 It is also expected that companies will wish to import existing private numbering arrangements into the new 05 range. Many corporate network numbering schemes have an internal structure of their own, typically a site code identifying a particular office’s PABX, followed by the local extension number usually 4 digits. In the case of Oftel, its site code on the Government Telephone Network (GTN) is 3828, while just the four digit extension 8XXX would be dialled on internal calls within the office. This hierarchical system of numbering is not dissimilar to the situation on the public network where the area code is omitted on calls within the same number group. Most networks operate with a four digit extension. Without significant changes to internal dialling, which would reduce the attractiveness of the 05 range, a 100 000 number allocation (ie 05ABCD X XXXX) would allow only up to 10 site codes. For some potential 05 Firms therefore a 1 million number allocation (ie 05ABC XXXXXX), with flexibility for numbering up to 100 sites without disrupting existing arrangements, will be the most attractive option.

    2.5 A further limitation on numbering structure is the need for the numbers to be analysed by networks and by customer equipment for tariffing purposes. The precise impact will depend on the tariffing arrangements for the range. Under the Numbering Conventions operators are required only to examine the 5th digit following the trunk dialling prefix 0 for tariffing purposes. This would mean for 05 that all numbers after the D-digit would need to be tariffed at the same rate. Even if the operators’ exchanges could handle the complexity of analysing further, it is unlikely that payphones and other apparatus such as least cost routing equipment could. If variable tariffs, rather than one or a limited number of flat rates, are to be possible, the minimum allocation size would therfore be 100 000 numbers. The inflexibility imposed by tariffing is one of the reasons why Oftel has rejected the idea of 05 being a geographic based range.

    2.6 Oftel considers that the 05 range will, for these practical reasons, need to be a Non-Geographic number range. Just as an 0800 freephone number gives no information about the actual geographical location of the called customer, so an 05 number would identify the 05 Firm being called but not the actual location of the called number. Thus operators and equipment such as payphones would charge a flat rate for a call to an 05 number and not take any account of distance in setting the call tariff. Chapter 3 and Chapter 4 suggest a possible tariff structure with two bands. If this were adopted the tariff would be determined on the ‘A’ digit; all allocations beyond the ‘A’ level would be for use at that stated tariff. In these circumstances, tariffing would not significantly impact on the numbering structure or allocation size.

    2.7 It is Oftel’s proposal therefore that the normal allocation to 05 firms should be:

    05ABCD XXXXX or 05 ABC XXX XXX

    depending on the size and structure of existing numbering arrangements and future demand.

    Q1 Given the restrictions imposed by capabilities of networks and the need for companies to change to 05 without significant internal renumbering, Oftel’s proposal is for standard allocations of 05ABC and 05ABCD blocks. Do you agree with this proposal?

    2.8 Most corporate networks use a 5- or 6- digit scheme. However, as noted above, the Government’s Telephone Network uses a mixed 7- and 8- digit scheme and an increasing number of companies using 7-digit schemes are now emerging. In order that such number lengths can be accommodated and the 05 range is available for a significant number of companies, it would be necessary to extend the number length either to 0 + 11 or 0 + 12 digits. Such longer numbers have been allowed by the ITU since 1st January 1997, though some callers from some overseas countries might experience problems if their networks cannot handle longer numbers. As an alternative, in exceptional circumstances, for example where the migration of existing scheme into the 05 range would result in the release of a significant amount of 10 000 number blocks from the 01 or 02 ranges, Oftel would be prepared to consider allocating 05A or 05AB capacity for use as 10-digit numbers.

    Q2 In order to allow the increasing number of 7- and 8- digit private numbering schemes into the 05 structure without significant internal renumbering, Oftel proposes that number lengths in excess of 0+10 digits be allowed. Do you agree with this proposal?

    2.9 The 05 number range is primarily for corporate customers with large networks. However, so as not to exclude smaller businesses the number ranges 0509 and 0599 could be reserved for single lines to be provided in a similar way to 0845/0870 services. It is expected that, unlike the rest of the 05 range, calls to these number would be translated and routed to existing 01 and 02 numbers. Numbers would, at least initially, be allocated in blocks of 10 000 numbers to operators who would then make allocations of individual numbers to customers. These numbers would be portable. Any changes to the allocation method for 0845 and 0870, such as direct allocations from an independent body to end users, would also apply to these 05 codes. Taken with the proposals at paragraph 2.7, the provision of two codes for single number allocation should ensure that the 05 range will provide an ample supply of numbers to meet demand. This issue is explored further in Chapter 4.

    Q3 To allow all businesses to have the opportunity to benefit from the 05 identity should they choose, Oftel proposes to designate codes for single number allocation. Do you agree with this proposal?

    2.10 Firms have expressed a view that they would wish to take an 05 code but retain the geographical significance associated with 01 numbers. Oftel has considered this issue and it is clear that incorporating geographic meaning into the 05 structure would require either:

  • the analysis of up to 8 digits by networks and equipment to determine tariffing; or
  • the use of 13, 14 or 15 digit numbers
  • For these reasons Oftel does not consider it to be a practical proposition. A detailed analysis is provided in Annex A.

    Q4 Oftel believes that the 05 range must be a non-geographic range. Do you agree with this proposal? If not, how could the geographic location of 05 Firms be identified without putting an undue burden on PTOs, suppliers and users of payphones and other charging devices?

    2.11 Taken together:

  • the standard allocation of 05ABC and 05ABCD
  • the extended number length for 7- and
  • 8- digit numbering schemes
  • the codes for single number allocation
  • should ensure that 05 provides ample capacity to meet foreseeable demand and is flexible enough to meet users’ requirement for a straightforward migration of existing numbers.

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    CHAPTER 3

    Retail pricing and interconnect arrangements

    3.1 Oftel’s policy is to withdraw from detailed regulation of both retail pricing and interconnect charging consistent with the development of competition in the marketplace. However, the introduction of corporate numbering raises a number of complex issues. Calls to 05 numbers will represent a new type of service, just as Personal Numbers did.

    Retail Prices

    3.2 In the January Statement, Oftel reported that the proposed national rate tariff ceiling on 05 range was widely supported. Oftel is aware that some people are reluctant to call Personal and Mobile numbers as they view them as expensive. The policy to limit 05 tariffs to no more than standard national rate will give people confidence to call 05 numbers, and is welcomed by firms interested in moving to 05 numbers. Oftel therefore intends to adopt this policy through future Numbering Conventions governing use of 05 numbers.

    3.3 We expect the corporate numbering market to be competitive, with many diverse offerings from operators and a wide range of firms wishing to use 05 numbers. The costs of conveying 05 calls could vary widely between operators providing services, companies using 05 numbers, and individual calls on any given network. Operators will need to decide how to recover the costs of such calls in an efficient way, subject to the national rate cap. 05 Firms themselves will also have a view about what they wish their callers to pay.

    3.4 Corporate numbering provides a special challenge in the area of cost calculation. While 05 calls will be substitutes for 01 calls to the same customer, the costs of handling them will be different for a number of reasons:-

  • The 05 Firm may elect to have their inbound 05 calls handled by a different PTO from their present 01 calls, so routings and interconnect charges may differ.
  • 05 calls will, in most cases, be handed over to the 05 Firm at the nearest point to their corporate network, rather than at the distant geographic locations of their former 01 numbers. It is unlikely that any PTO has comprehensive information about the current distribution of sources of calls to a given customer’s various sites and would therefore not be able to make an accurate estimate of how total call costs would change.
  • In the early stages of development of the 05 corporate numbering market, the costs of the early adopters may not be representative of the average costs of call carriage when the market is more mature.
  • 3.5 Faced with these issues, some operators may wish to reduce risk by charging the maximum allowed national call rate for calls to 05 numbers. A uniform national rate would, however, result in an increase in total PTO revenue on handling calls, since many are today billed at the local rate. As 05 Firms would be using their own networks to carry calls to their final destination, the costs incurred by network operators should be reduced overall. Were BT to charge such a national rate, it would be likely to constitute an abuse of their market position.

    3.6 One possible solution could be for just two tariff types to be offered for 05 calls:

  • a lower band, at or slightly above the present local call rate, which would be of use to 05 Firms who value being able to maintain a local tariff rate for their callers, or those who have extensive corporate networks where the distance to the nearest point on their network is close to the average local call distance.
  • a higher band, between local and national rate, for other 05 Firms.
  • 3.7 There could be advantages in structuring the 05 range such that different 05 codes had broad tariff significance, in order to give callers clear pricing information and to facilitate billing. Three or more tariff types cannot be ruled out, but as the number of tariff types increases, giving clear pricing information from the 05 code becomes more difficult and reduces the flexibility in code allocation. Geographic calls today only use two tariff types; local and national.

    3.8 Oftel believes that 05 Firms should be able to specify within reasonable and practicable bounds the type of tariff they wish to see applied for calls to their numbers, such as the higher or lower band. They would agree this with the service providing operator, who would then contract with other operators upstream to ensure delivery, including notification of the new codes to be used.

    3.9 Oftel expects operators to agree a broad framework for retail pricing in terms of the number of tariff bands to be used and their broad price positioning with respect to existing local and national rates. This will need to take into account any relevant interconnect charges, which are addressed below. Precise prices within these bands will, of course, be subject to normal competitive market forces. However, if Oftel were to allocate 05 codes with a tariff significance as agreed by the industry, it would expect all originating operators to respect that allocation when setting the tariff for a given 05 code.

    3.10 Given the uncertainties of the underlying costs, operators may need to review annually their prices and interconnect charges – which will in any case, for BT, be subject to the relevant price and charge controls. However, it is not expected that the overall number of tariff bands will change from year to year. Where 05 calls were made by BT customers covered by the retail price control (the lowest spending 80% of residential customers). Oftel would wish to be satisfied that prices charged for these calls were properly taken into account in the price control calculation. Some calls would be charged at a different rate to that which would have applied before the introduction of the 05 service. This would constitute a change in some controlled prices. These price charges would have to be included in the price control basket calculation to ensure that, overall BT was meeting its obligation to this group of customers. Oftel recognizes that there might be difficulties in practice in identifying the extent to which call prices had changed. There might be a need to conduct some sampling exercises in order to establish sufficient information to perform the calculation. Oftel is considering the details of how compliance would be monitored.

    Q5 Oftel’s view is that the industry should agree a framework for a small number of tariff bands which will be incorporated in the 05 code structure. Do you agree?

    Q6 Oftel believes that the two tariff bands, as described in paragraph 3.6, would be appropriate for 05 calls. Do you agree?

    Interconnect charging

    3.11 The setting of interconnect charges is not only complicated by the uncertainties of costs, as described in paragraph 3.4 above, but also by the fact that the desired interconnect charge can impose disbenefits on other parties in the call. For example, an SPTO might try to improve its profitability by raising the interconnect charge for call completion. Likewise, an originating operator might try to pass on a lower interconnect charge to increase its retained revenue. These impacts are more likely where one of the parties in the call chain has market power. Some self-regulation by the market is therefore seen as essential to ensure a successful launch of corporate numbering.

    3.12 One appropriate model for interconnect charging would be one that reflected that calls to 05 numbers would be substitutional rather than incremental in nature. This would lead to a model where the originating operator’s profitability would be maintained when 05 calls substituted for former 01 call traffic.

    3.13 Another feature of this model, would be that where an SPTO had higher costs because of the range of enhanced routing services it was providing to the 05 Firm, it should pass these costs onto the 05 Firm who benefits from the services and not passed onto the calling customer via higher interconnect charges.

    Q7 It is Oftel’s view that an interconnect model that reflected that calls to 05 numbers would be substitutional rather than incremental in nature should be adopted and that originating operators should maintain profitability as Firms migrate, and that SPTOs’ higher costs of enhanced routing should not be reflected in higher interconnect charges. Do you agree?

    3.14 Oftel would therefore expect the industry to agree an appropriate interconnect charging framework for 05 calls and enter into reasonable agreements based on it.

    3.15 Such a framework would recognise that a small set of reciprocal interconnect charges would be needed to reflect the various situations that might arise:-

  • whether a transit PTO is involved in the connection
  • whether the originating PTO has a ‘long’ or `short’ connection
  • whether the SPTO has a ‘long’ or ‘short’ connection
  • whether the SPTO is paying the 05 Firm on terminating calls
  • 3.16 As with retail prices, we expect the industry to review charges as the market develops and cost levels become clearer. Should such self-regulation not be effective, then Oftel would consider using its fair trading powers to counter any abuses that flowed from the different market power of the various players.

    Anti-competitive behaviour

    3.17 Participants, or potential participants, in the corporate 05 market might be concerned that a dominant operator such as BT might use the introduction of 05 numbering as an opportunity to compete in an unfair way for some of the business of large corporate customers. The most obvious forms of anti competitive behaviour would be to set prices below cost as part of a predatory strategy, or to engage in discrimination, favouring customers which were either other parts of BT or which had dealings with other parts of BT.

    3.18 BT’s role in this market could be as the originating operator, the terminating operator or as the service provider interfacing with the corporate customer. If BT were acting as the originating operator, it would have little incentive to set prices for calls to 05 numbers generally below cost. Calls from BT exchange lines would be destined for all 05 networks not just those where BT was the service provider. Of more concern would be the possibility that BT might seek to charge the calling party a different price for calls to BT served 05 customers compared with that charged for calls to non BT 05 customers. Oftel’s view is that BT should charge the same rate for calls to all 05 numbers except where differences can be justified by differences in costs. This could be enforced under Condition 17 of BT’s licence.

    3.19 Where BT acts as the terminating operator, it is conveying calls as an interconnecting operator which originate on its own or other operators’ networks. BT is at present required to offer these services on a non discriminatory basis under the principles of Accounting Separation and interconnect charging. This should apply also to calls to 05 numbers.

    3.20 Where BT acts as a service provider, it might have an incentive to gain an early foothold in the 05 market by setting prices below cost. Oftel would examine any such behaviour carefully, noting that Condition 20B.15 of BT’s licence prohibits unfair cross subsidy.

    3.21 Alternatively, BT might discriminate as a service provider in the 05 market by offering attractive deals to particular customers. This might be acceptable if BT had no market power in the service provision market. However, it would not be acceptable for BT to link a deal for 05 service to any requirement to take any of its other services.

    3.22 It is possible that BT would adopt a set of charging arrangements for calls to 05 customers that were different from those that currently exist. These calls might, for example, be priced at a lower level than equivalent calls to 01 numbers. This might be seen as discrimination in favour of business customers and against other customers. But any discrimination would not be in favour of business customers compared with other customers, because the 05 tariffing arrangements relate to calls to a business customer rather than calls made by a business customer. All BT customers would then be paying prices for calls to 05 numbers which differed from prices for calls to other numbers. This would not entail discrimination in favour of any group of customers. In principle, there would be no more discrimination than that which takes place under the charging arrangements for 0800 and other types of specially tariffed services.

    Q8 In light of the above, Oftel invites comments on the scope for any anti -competitive behaviour by operators under the 05 range and the best way of dealing with any such behaviour.

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    CHAPTER 4

    Other issues

    Number Allocation

    4.1 Oftel believes that anyone who benefits from an allocation from the public numbering scheme should abide by a common set of rules to ensure resources are properly used. Firms who are allocated 05 numbers should therefore be subject to obligations to comply with the Specified Numbering Scheme, including efficiency and reporting requirements, as are others who currently receive number allocations. Oftel therefore intends to work with DTI to ensure that the relevant Class Licences are amended. This will be done along with other changes to the Class Licences that might be necessary consequential to the EU Licensing Directive.

    4.2 There are a number of existing codes in use with an 05 prefix. Initially, corporate allocations will not be made in the ranges 050, 054 and 058 until these numbers have migrated to their appropriate ranges under the new Specified Numbering Scheme. For the other decades allocations could be made as shown in the illustrative Table 4.1 below, if it were agreed that two overall retail tariff bands within the national rate cap was the most practicable way forward.If 7- or 8- digit networks were allowed, in exceptional circumstances, into the 0+10 digit structure then 05AB and 05A levels would be needed for up to ten 7-digit and one 8-digit networks in each tariff band. The 0509 and 0589 number ranges would be reserved for number translation delivery to firms who only had one or a few lines, so as not to exclude such them from the 05 number range. The operation of this service would be similar to the 0845/0870 service. In this case the 05 Firm would retain its few 01 (or 02) geographic numbers.

    Table 4.1

    Rate Number range Protected ranges Number of 05 Firms:
    up to ...
    Digits (extension numbers) Structure
    Lower 50 0500-8 500 8 00
    10 000 000
    5 or 6 05 + 9
    509 None 7 0509 + 7
      51 None 1 000 5 or 6 05 + 9
      52 None 1 000 5 or 6 05 + 9
      53 None 1 000 7 or 8 05 + 10 or 11
      54 541 9 00 7 or 8 05 + 10 or 11
    Higher 55 None 1 000 5 or 6 05 + 9
      56 None 1 000 5 or 6 05 + 9
      57 None 1 000 5 or 6 05 + 9
      58 0585/0589 8 00 7 or 8 05 + 10 or 11
      59 0590-8 None 9 00 7 or 8 05 + 10 or 11
    599 None 10 000 000 7 0599 + 7

     

    Q9 Oftel proposes that the 05X digit should indicate the overall tariff band and that behind each 05X decade there should be similar length numbers. Do you agree? Do you have alternative suggestions for the 05 sub-structure?

    Technical Issues

    4.3 A number of commentators have noted that in the 05 scheme the corporate private network is playing a similar role to a PTO in the termination of calls. They suggest that such 05 Firms should meet specified quality standards so that callers are not disadvantaged. Other suggest that special interface arrangements might be necessary to make arrangements most effective.

    4.4 For some time now, many large corporate users have routed their outbound traffic extensively over their corporate networks and this has been subject to regulation by the voluntary Network Code of Practice (NCoP). This self-regulatory approach has generally worked well. Oftel therefore believes the best way forward would be to invite the Network Interoperability Consultative Committee (NICC) to make further changes to NCoP to include any technical and quality recommendations that might be appropriate for 05 calls. The NICC would be asked to ensure that 05 Firms were consulted and involved in this work.

    Q10 Oftel proposes that any technical or quality issues flowing from the 05 proposals should be handled by the NICC making appropriate additions to the existing Network Code of Practice. Do you agree?

    Intermediate parties

    4.5 Oftel believes that it should be acceptable for associated 05 Firms within a ‘closed user group’ to share one 05 code and network delivery arrangements. The question then arises as to whether third parties could receive allocations of 05 numbers in order to run ‘05 networks’ on behalf of groups of 05 Firms, who might have no connection with each other other than being serviced by that third party.

    4.6 It is not clear to Oftel that such a proposition makes economic sense for organisations other than licensed PTOs themselves, as the lack of Relevant Connectable System status of 05 number holders would make it difficult for them to compete with PTOs. To allow PTOs to receive 05 numbers on behalf of a group of 05 Firms who might have no association with each other goes against the principle that 05 numbers should be allocated directly to users, not PTOs. Therefore Oftel believes that PTOs should only provide 05 services on behalf of groups of 05 Firms within recognised `closed user groups’, where the group and not the PTO would own the rights to the 05 code.

    Q11 Oftel believes that 05 numbers should normally be allocated directly to users. However, to allow the provision of services to a group of 05 Firms with `closed user groups’, Oftel proposes to allow allocations to PTOs in these circumstances. Do you agree with Oftel’s analysis concerning third parties’ use of 05 numbers?

    Calling Line Identity

    4.7 Calls generated from corporate networks using 05 numbers would display the 05 number in the Calling Line Identity. This could lead to difficulties to those, such as 999 operators who need to know the geographic identity of callers. One proposal to solve this problem would be for the full 05 number to appear in the Presentation CLI field in the call set up message, while the Network Number CLI field would use a 01 geographic number, since it is this latter Network Number that is made available to the 999 operator and the emergency authorities. It would be necessary for this 01 number, when called, to reach the switchboard of the company at that location.

    Q12 Oftel proposes that the Network Number CLI field would use an 01/02 geographic number while the Presentation CLI field would show the 05 number. Do you agree with this proposal? In particular, do PTOs and emergency authorities support this proposal, or are there alternative options? What is their preferred solution?

    Charging for Number Allocations

    4.8 Oftel is separately reviewing the issue of whether charges should be levied on those who receive number allocations, in order to encourage efficiency and economic use of the number resource and in order to recover costs of numbering administration. This review will include possible arrangements for 05 numbers as well as other number ranges.

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    CHAPTER 5

    Summary of questions

    Q1 Given the restrictions imposed by capabilities of networks and the need for companies to change to 05 without significant internal renumbering, Oftel’s proposal is for standard allocations of 05ABC and 05ABCD blocks. Do you agree with this proposal?

    Q2 In order to allow the increasing number of 7- and 8- digit private numbering schemes into the 05 structure without significant internal renumbering, Oftel proposes that number lengths in excess of 0+10 digits be allowed. Do you agree with this proposal?

    Q3 To allow all businesses to have the opportunity to benefit from the 05 identity should they choose, Oftel proposes to designate codes for single number allocation . Do you you agree with this proposal?

    Q4 Oftel believes that the 05 range must be a non-geographic range. Do you agree with this prposal? If not, how could the geographic location of 05 Firms be identified without putting an undue burden on PTOs, suppliers and users of payphones and other charging devices?

    Q5 Oftel’s view is that the industry should agree a framework for a small number of tariff bands which will be incorporated in the 05 code structure. Do you agree?

    Q6 Oftel believes that the two tariff bands tariff bands, as described in para 3.6, would be appropriate for 05 calls. Do you agree?

    Q7 It is Oftel’s view that an interconnect model that reflected that calls to 05 numbers would be substitutional rather than incremental in nature should be adopted and that originating operators should maintain profitability as Firms migrate, and that SPTOs’ higher costs of enhanced routing should not be reflected in higher interconnect charges. Do you agree?

    Q8 In light of the above, Oftel invites comments on the scope for any anti -competitive behaviour by operators under the 05 range and the best way of dealing with any such behaviour.

    Q9 Oftel proposes that the 05X digit should indicate the overall tariff band and that behind each 05X decade there should be similar length numbers. Do you agree? Do you have alternative suggestions for the 05 sub-structure?

    Q10 Oftel proposes that any technical or quality issues flowing from the 05 proposals should be handled by the NICC making appropriate additions to the existing Network Code of Practice. Do you agree?

    Q11 Oftel believes that 05 numbers should normally be allocated directly to users. However, to allow the provision of services to a group of 05 Firms with ‘closed user groups’, Oftel proposes to allow allocations to PTOs in these circumstances. Do you agree with Oftel’s analysis concerning third parties’ use of 05 numbers?

    Q12 Oftel proposes that the Network Number CLI field would use an 01/02 geographic number while the Presentation CLI field would show the 05 number. Do you agree with this proposal? In particular, do PTOs and emergency authorities support this proposal, or are there alternative options? What is their preferred solution?

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    ANNEX A

    Possible provision of a geographically based corporate number range

    1 Some companies have expressed a view that they would wish to take an 05 code but retain the geographical significance associated with 01 numbers. Oftel has considered this issue, but does not consider it to be a practical proposition for the reasons set out below.

    2 Suppose that one decade of the 05 range, say 050, were reserved for geographic purposes. If the resulting numbers were to identify both the 05 Firm and the charge group location, then two possible formats could be used:-

    Format A

    050 < Firm identifier><charge group identifier><local corporate number>

    or Format B

    050<charge group identifier><Firm identifier><local corporate number>

    3 In both cases, it should be assumed that the charge group identifier would be 3 digits, (there are currently 638 01 charge groups). However, note that the identifier ought not be the same as the existing charge group codes, otherwise such 05 codes would not be independent of 01 numbering changes. Also, it would be unwise to replicate the mixed length of present numbering group codes.

    4 It should be assumed that the company would want a consistent 05 Firm identifier in each relevant charge group, otherwise it would not be an actual 05 Firm identifier. A geographically based system might have wider appeal to smaller companies, including perhaps companies who are based only at one or two sites, for whom the 05 code would have advantages of independence from 01 number changes and also the possible ‘cachet’ of a special business number. At least 100 companies would want such a code (thus needing a 3-digit company identifier). Oftel considers it more likely that at least ten thousand (4-digit company identifier) or indeed over 100 000 (5-digit company identifier) firms could want such numbers, and it would be prudent to plan on that basis.

    5 With Format A, the charging analysis would require inspection of at least 8 digits after the initial ‘0’ prefix, more than either PTO exchanges, payphones or other charging equipment could cope with (the present limit is 5 digits). Format A must therefore be rejected.

    6 In contrast, Format B does enable charging analysis within 5 digits. However, there would be implications for overall number length. Most companies using DDI employ a 3- or 4- digit numbering scheme. Indeed, firms with 3 digit numbers usually share a four digit scheme (Oftel, for example, uses a 4-digit local number (8700) but always with the leading digit 8). In order to accommodate such 4-digit numbering schemes, the overall length of the 05 number would need to be 13, 14 or 15 digits long, depending on how many firms might require such numbering capacity.

    7 Consider a company who presently has a DDI range in Birmingham. Its current number might look like:-

    0121 CDE XXXX (11 digits total, but 7 digits only for local callers)

    In order to move to a geographically significant 05 number, they would need to move to either:-

    050 YYY ZZZ XXXX (13 digits for all callers)

    050 YYY ZZZZ XXXX (14 digits for all callers)

    050 YYY ZZZZZ XXXX (15 digits for all callers)

    where YYY is the charge group and ZZZZ is the company identifier.

    8 Oftel believes that in these circumstances there would be limited demand for such lengthy numbers. However, reactions to the above analysis would be welcome.

    Company identifier Extension numbers Size of allocation Maximum amount of such for 05 Firm allocations available in 05 range

    O5A XXXX XXXX 100 million 10

    05AB XXX XXXX 10 million 100

    05ABC XXX XXX 1 million 1 000

    05ABCD XX XXX 100 000 10 000


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