CHAPTER 7: SECURING A FAIR DISTRIBUTION OF BENEFITS TO CUSTOMERS

INTRODUCTION

This chapter describes Oftel's work to secure a fair distribution of the benefits of competition between different groups of customer.

Oftel is concerned to ensure that all customers receive a fair share of the benefits of competition regardless of how much they spend, where they live, and whether they are a business or residential customer. It should be noted that the Director General has a particular duty to promote the interests of consumers who are disabled or of pensionable age. Much of Oftel's work to get a better deal for all customers will help these groups.

Universal service is a central plank in ensuring a fair share of benefits between customers. Oftel will continue its work on Universal Service to have in place new arrangements by Summer 1997 to ensure affordable access to basic telephony for all those reasonably requesting it regardless of where they live. Geographic averaging of BT's prices will continue for all services covered by the Universal Service definition thereby ensuring that customers throughout the UK are able to benefit from BT's lower prices in response to competition.

Oftel will continue to monitor the development of service quality, value for money, access and choice, through market research surveys; and benchmarking studies to compare the deal UK customers are getting with those overseas (see Chapter 10 on performance measures).

PRIORITY PROJECT

1. Universal Service - Project manager: Christine Farnish
- Project leader: Peter Westley

Project objective: To develop policy and implement effective arrangements to secure the funding and delivery of Universal Service in the UK in a fair and transparent way, in harmony with emerging European legislation.

Fit with Oftel's objectives: Universal Service is central to Oftel's objective of securing a fair share of the benefits of competition between different groups of customers. Universal Service will also protect customers with affordability problems, special needs, or those in remote rural areas.

Define service levels to ensure reasonably affordable access for all, including possible revision/replacement of the Light User Scheme June 96

Define service levels for Universal Service funding of customers with disabilities By June 96

Keep under review Disability Act developments for telecommunications services Ongoing

Review Public Call Box policy and changes needed to secure reasonable access

review complete by June 96

Revise cost estimates for proposed Universal Service provision July 96

Develop Universal Service Funding Body proposals, in consultation with the industry

April to September 96

Publish consultation document with draft licence modifications November 96

Review responses March-April 97

Statutory consultation on licence modifications (to tie in with timing on Interconnection Directive implementation) June 97

Establishment of Universal Service Funding Body July 97

Monitor and review September 97 onwards

PROJECTS

2. Geographic de-averaging - Project manager: Christine Farnish
- Project leader: Geoffrey Delamere

Project objective: To identify the nature and extent of the relationship between BT's and other operators' telecommunications services' costs and geographic factors such as distance, population density, nature of terrain. To study the relationship between BT's local call areas and cost. To review the results and consider future policy options.

Fit with Oftel's objectives: This study is important if Oftel is to be able to take informed decisions on the need to sustain its policy for BT to offer tariffs at a geographically averaged rate across the UK for new and advanced services. Oftel will wish to ensure policy decisions support the development of effective competition for these services. Oftel's policy on geographic averaging of tariffs for services defined as universal services will however, remain, in order to protect consumers.

Report on geographic factors influencing costs June 96

Review of findings June- July 96

Informal discussions with the industry August-October 96

Possible second stage of study: more detailed research on specific issues

December 96 onwards

3. Education superhighway services - Project manager: Christine Farnish
- Project leader: Andrea Konrath

Project objective: To investigate ways in which advanced superhighway services can be made available to educational establishments across the UK at affordable and predictable tariffs.

Fit with Oftel's objectives: This project supports Oftel's objectives of securing a fair distribution of benefits amongst different customer groups. Consultation has identified unmet needs for reasonably affordable and predictable telecommunications tariffs by the educational community.

Issue statement on the way forward. May 96

Set up an Educational Advisory Group involving Oftel, DfEE and representatives from the educational community and the telecommunications and IT industries. May 96

Review tariff offerings and advise the Director General on any regulatory changes needed.

July 96

Review Oftel's continuing role July 96

Consider feasibility of a voluntary scheme based on Universal Service principles to secure affordable superhighway services for educational establishments. November 96

Agree next steps December 96

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