Oftel SETS OUT PROPOSALS FOR FUTURE OF UNIVERSAL SERVICE OBLIGATION

Ref :   68/00
Date : 7 September 2000

Oftel today announced proposals to ensure that all UK consumers continue to have access to basic telephony services at affordable prices following a review of the universal service obligation on BT and Kingston Communications in Hull.

The consultation document published today sets out Oftel’s proposals for the levels of universal service from September 2001, which will update the current universal service provisions.

Key proposals are:

• BT’s Light User Scheme has allowed more people access to basic telephony services and should continue;
• BT and Kingston Communications should continue to fund the universal service obligation as costs currently do not represent an unfair burden;
• BT and Kingston should continue to implement their pre-paid schemes, working with Oftel and the Government to promote them to the unphoned;
• BT will continue to provide some additional payphones in response to requests from local communities;
• The USO will not, at this stage, be extended to include mobile, data and broadband services but these areas will be kept under review.

David Edmonds, Director General of Telecommunications said today:

"Everybody has a right to basic telephone services at affordable prices.

"Increased competition in the telecoms market means greater choice for consumers and the opportunity to shop around for better deals. But the universal service obligation must continue to ensure that those on low incomes and in remote areas still have access to a basic telephony service.

"98 per cent of people now have a basic telephone service that meets their needs, whether it be fixed line or mobile. But there are still around 300,000 households who haven’t got a fixed phone or a suitable alternative.

"I believe that pre-paid schemes will meet the needs of some consumers who remain unphoned and I will ensure that these products are carefully marketed and targeted to have the greatest effect.

"Oftel has also considered the way that the telecoms market is changing and the increasing number of people taking advantage of new products and services.

"25 per cent of homes now have Internet access and I believe that this figure will grow with the increasing choice of products and tariffs available.

"Higher bandwidth services are also being launched that will deliver new high speed information services to people’s homes.

"With the rapid development of higher bandwidth services, Oftel will also work closely with government to keep the scope of the obligation and the scope for other regulatory action under review.

"Oftel’s goal is to promote the interest of the consumer. I will continue to work towards affordable access for consumers to all telecoms services."

Notes to editors.

1. The consultation document Review of universal telecommunications services is available on Oftel's website at www.oftel.gov.uk/consumer/uso0900.htm. Printed copies are available to the media from Oftel's Press Office on 020 7634 8991 and to the public from Oftel's Research and Intelligence Unit tel: 020 7634 8761. A Welsh language summary of the document is also available on request.

2. The consultation period lasts until 4 December 2000. There will be a further period of two weeks for comments on responses.

3. The objective for universal service is to ensure that those telecommunication services which are used by the majority and which are essential to full economic and social inclusion are made available to everybody upon reasonable request, in an appropriate fashion and at an affordable price. The main requirements are for BT and, in the Hull area, Kingston Communications, to provide a telephone line on reasonable request; special tariff packages to assist those people with special social needs, particularly those on low incomes, to obtain basic telephony; and disconnection procedures which provide people with adequate opportunities to pay bills.

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