As part of my efforts to improve understanding of how Oftel works and of the major items on Oftel' s agenda I am publishing this Plan which details our work programme for 1995/6 and beyond. This is the first time that Oftel has published its Plan which in the past has been produced for internal use only.
My dealings with the industry and consumers have shown a demand for more information about what Oftel does, and I hope that this Plan goes some way to meeting this. I also have a number of other measures in hand to improve transparency of Oftel's decisions and work. Over the past year we have held numerous workshops for the industry and consumer groups, organised several public meetings on issues of concern to customers and recently Oftel held its first public hearing.
Underpinning all the work in this Plan is our goal to obtain the best possible deal for the customer in terms of quality, choice and value for money. This Plan sets outs out the work that I believe is essential to meeting our five objectives which are the means by which we deliver this goal. Our work programme is divided into project work involving new initiatives or policies, and work delivering the services we provide for consumers and the industry. This Plan is not set in stone, it is flexible to reflect the fast pace of change in the telecoms market. All projects are subject to regular review. In many cases timescales are not within our control. As a consequence, many of the timescales set out in this document should be taken as indicative and may be subject to alteration.
This is in fact our mid-year revision of the Plan. In future we intend to publish our Plan annually in the Spring.
We would be interested in hearing your views - if you have any comments on the content or the structure of this Plan please let us know.
DON CRUICKSHANK
The Office of Telecommuications
50 Ludgate Hill
London EC4M 7JJ
Tel: 0171 634 8700
Fax: 0171 634 8943
CHAPTER 1. Oftel'S GOAL
CHAPTER 2. MARKET DEVELOPMENTS FACING Oftel 1995/99
CHAPTER 3. PRIORITY PROJECTS
CHAPTER 4. OTHER PROJECT WORK
CHAPTER 5. PROVIDING SERVICES TO CONSUMERS AND THE INDUSTRY
CHAPTER 6. STAFF, RESOURCES AND ADMINISTRATIVE SERVICES
CHAPTER 7. PERFORMANCE MEASURES
ANNEX A : Oftel'S ORGANISATIONAL STRUCTURE
ANNEX B : SUMMARY OF 1995/96 BUDGETS
ANNEX C: Oftel'S CALENDAR FOR THE NEXT SIX MONTHS
GLOSSARY
This Plan:
This Plan is not set in stone. It must evolve as the issues which Oftel needs to address change. For example, the shape of the industry in 1998 or 1999 is unlikely to match Oftel's view of it from 1995. It is therefore Oftel's intention that the Plan should be reviewed every six months.
This is in fact a mid-year revision of the Plan which was originally produced last Spring. In future Oftel's Plan will be published annually in the Spring.
This Plan is in seven chapters. The next chapter sets out Oftel's goal and five objectives which are the means by which Oftel delivers its goal. This is followed by a contextual chapter which outlines the key market developments Oftel believes it faces. Details of Oftel's work over the period of the Plan are set out in three chapters:
To help you keep abreast of what's coming up in the next six months, Annex C provides a calendar of key events for Oftel's priority projects. This will be updated and extended when the next Plan is published.
The Director General and his Office, Oftel, operate under statute - the Telecommunications Act 1984, section 3 setting out their main duties which are shared with the Secretary of State. Sections 3(1) and (2) specify two primary duties and eight other ones. The section offers no guidance to the relative weight to be attached to each of the latter duties.
In the light of these duties, Oftel's primary focus is on customers. That focus translates into Oftel's goal:
"To provide the best possible deal for the customer in terms of quality, choice and value for money".
By translating the goal into five highlevel objectives which Oftel's work programme (see chapters 3 to 6) is designed to support. These objectives are:
Oftel belives that its goal together with the five high-level objectives deliver its statutory duties in the most effective way.
Oftel believes it is very important that its programme of work should be addressed with as much co-operation as possible from the industry. Oftel will seek to encourage cooperation by consulting all key stakeholders on new policy proposals and ensuring transparency in regulatory decisions.
Oftel believes that the best deal for UK customers will be achieved through a fully competitive market in networks and services, in the UK, in the rest of the European Union and further overseas. For such markets contain customerorientated businesses which must provide innovative services to meet the needs of their customers if they are to survive.
In the UK Oftel will seek to remove barriers to entry and to the development of sustainable competition and to remove unnecessary restrictions on the use of networks.
Where competition is not practicable, or in areas where competition is limited in the short term, Oftel will regulate vigorously to protect customers and to prevent any abuse of market power to distort competition or gain an unfair advantage in a different market.
In overseas markets Oftel will seek to promote competition in general, and, in particular, to promote the rapid liberalisation of infrastructure in the European Union on terms which would underpin the competitive achievements made in the UK.
For customers Oftel will monitor the development of service quality, value for money, access and choice, and seek to ensure that the benefits of a competitive regime are fairly shared between different classes of customer. In particular Oftel will ensure that the future universal service regime enables all those reasonably seeking access to the telecoms network to get it at an affordable price.
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. Oftel will need to consider the implications of the Disability Discrimination Act, 1995 and liaise with DSS.
Oftel will be proactive in identifying and dealing with potentially anti-competitive behaviour using the full range of powers available as well as dealing with complaints. Oftel will monitor compliance with licence conditions and with UK competition law generally. Oftel will strengthen its procedures for dealing with alleged anti-competitive behaviour in order to achieve improved efficiency and effectiveness. It will also pursue the introduction of the proposed Anti-Competitive Practices Condition into BT's and other operators' licences.
Oftel regulates the telecommunications market, which in the UK is very successful and fast growing. It behoves the regulator not to act as a brake on that market, particularly with the radical changes expected in the industry as a result of the increasing globalization of telecoms and the convergence of the telecommunications, information technology and entertainment markets into a broader communications market. Oftel will therefore be seeking to improve its information bases and level of expertise so as to improve its clarity of vision on future developments in the market; thus enabling it to respond to regulatory needs more effectively.
Cooperation and a shared vision of where the UK market is going will be needed to ensure Oftel and the industry are effective in trying to open up markets globally. There will also need to be a shared understanding of the range of activities needed in a competitive telecoms market and who should be undertaking each task. Finally, given the complex and fast changing nature of the market, the cooperation of all involved in the industry will be needed to debate the difficult regulatory issues ahead and to ensure that anti-competitive behaviour is prevented without stifling innovation.
Much of the work designated as priority in Chapter 3 is focused on 1995/6. It gives only a broad indication of how Oftel's priorities will shift during the period to 1999. This chapter seeks to summarise the developments in the telecommunications market over the next few years which will affect Oftel's choice of priorities and its immediate work programme. As the telecoms market is fast moving and dynamic it is important for Oftel to have a picture of how the market might develop.
Already increased competition is leading to innovative tariffing and marketing, the greater bundling of products and services and explosive growth in the mobile market. As competition develops Oftel expects and is already beginning to receive more complaints about anti-competitive behaviour from operators. These complaints tend to focus on the dominant operator's ability to distort competition particularly where the operator is vertically integrated across different markets eg the provision of network and retail telecommunications services, programme content and network services or fixed and mobile services. These developments suggest that, over the next few years Oftel will become less concerned about entry into a market dominated by one player and more concerned about identifying and regulating as appropriate, dominance wherever it occurs. These developments will also place a premium on Oftel's ability to act speedily against anti-competitive behaviour.
It is also clear that competition is going to develop unevenly across different markets. This means that Oftel will need to segment markets to a greater extent than it has before. Where competition is established, Oftel will be able to move away from detailed regulation, thereby reducing the regulatory constraints on companies. But this is likely to occur at different times in different markets. The uneven development of competition may also lead to issues about the fairness of the distribution of benefits between business and some residential customers and the spread of competition geographically. There is therefore a continued role for Oftel in protecting the vulnerable customer.
The convergence of telecommunications, IT and broadcasting means that Oftel will need to consider whether, and to what extent the current telecoms regulatory regime needs adapting to reflect the new developments. For example, Oftel will need to consider for 1998 the policy on conveying broadcast entertainment to the home and advise the Government on whether this policy should be reviewed. Oftel will expect to work more closely with other relevant regulatory bodies including the ITC, RA, OFT, DTI and DNH as convergence takes place.
It seems likely that the converging industries will continue to be dominated by a few larger players, seeking to leverage their existing strengths into new markets. The development of proprietary standards and interfaces may therefore become a major regulatory concern. The problems associated with the development of widespread infrastructure competition mean that access to networks, and the terms of interconnection will continue to be vital. Oftel's main contacts in the industry at the moment are with network operators. Oftel expects its contacts with service providers to increase, as they look to use others' networks for the provision of services.
Mergers, joint ventures and takeovers are expected to become a significant feature of an increasingly competitive market both internationally and domestically. It is anticipated such activities will be both between telephony operators and between telephony operators and others operating in a multimedia world. Such consolidation may well be desirable in fostering the development of alternative service provision, but it will obviously have competition and licensing implications for Oftel.
1998 is the deadline for liberalisation both of voice telephony services and of infrastructure in most of the European Union, although competition in member states will be at different stages for some time. Other countries are also opening up their telecommunications markets, for example the USA, and countries in Eastern Europe and South America. Oftel expects increasing globalization of telecommunications to impact on its activities in two ways. Firstly, it would expect to play an enhanced role in influencing the development of others' regulatory regimes in the light of UK experience. Secondly, it expects to have to look to its regulatory role not only in a national but also an international context to ensure that the development of international telecommunications is not hindered, but is regulated where appropriate.
The telecommunications market will continue to undergo significant change in the next few years. Oftel will therefore need to try to anticipate the way the telecommunications market is developing in order to meet the new regulatory challenges effectively. On each issue the key question will be whether it is something with which Oftel ought to deal at all and, if it is, whether the various ways in which Oftel could deal with it would encourage or inhibit innovation and new forms of competition.
This chapter together with Chapters 4 and 5 summarises the work programme Oftel is undertaking in 1995/6 and beyond. In this chapter are the 12 projects which Oftel regards as priority. Chapter 4 contains Oftel's other project work. These two chapters do not describe all of Oftel's work. They are primarily concerned with the areas of work where Oftel is proposing new initiatives or policies. There is also a significant amount of important work concerned with providing services to consumers and the industry which is not project-based - for example, dealing with consumer representations, supporting the statutory advisory committees and standards work. This work remains very important to Oftel and is briefly described in Chapter 5.
Chapters 3, 4 and 5 cover all the tasks which Oftel believes are key to achieving the five highlevel objectives by which its goal will be delivered and therefore the tasks by which its performance must be judged.
Director and projects manager - Ann Taylor
1. Price Control Review - Project leader: John Bean 1995/97
Objective - After wide consultation with the industry, consumers and other stakeholders, to decide what price control arrangements should replace the current ones when they expire in 1997. The price control regime is a key regulatory constraint, determining to a large extent the level and structure of pricing in the industry, ensuring the protection of customers where competition is not fully established, and that they benefit from the effects of competition.
Preparatory Work - Consultation with the industry on the level of competition in the market now and forecast for the price control period; comparative studies of BT's efficiency; review of cost of capital analysis; preliminary data from BT. May/December 95
Consumer Panel - Support a small panel of experts to represent the interests of residential customers during the Price Control Review. September 95/July 96
Draft First Consultation Document - Broad consultation on the overall objectives Oftel should be adopting in the review. Protection of consumers in markets where competition is not yet fully effective will be a primary focus. Development of an incremental cost approach to interconnection charges. September/December 95
First consultation document published: December 95
First Consultation - Production of a simplified document focusing on the impact of price control on residential customers. Workshops for industry and consumer groups on the consultation document. December 95/February 96
Draft Second Consultation Document - This document will have ranges of x and will incorporate draft licence modifications to BT's licence. Ongoing input from consultation process, modelling of BT's forecasts, preparation of draft licence modifications.
January/March 96
Second consultation document published: mid March 96
Second Consultation - Again a consumer document to follow the main consultation document. Public hearings to take place. March/May 96
Final Statement - To include Oftel's decisions and final draft licence modifications.
Publish: end May 96
Statutory Consultation June 96
Second stage of formal consultation To mid July 96
Licence modifications made if BT agree (or MMC reference) August 96 (if necessary)
New Price Control in place August 97
(Note: Timetable for consultation is brought forward slightly from that published in Oftel's 'Agenda' document published in July 95.)
2. Removal of RPI+2% constraint - Abolition of Access Deficit Contributions (ADCs) -
Project leader: Neil Feinson 1995/96
Objective: To introduce modifications to BT's licence to remove the current RPI+2% constraint on increases in exchange line rental charges and to abolish the ADC regime.
Discussions with industry and BT September/November 95
Formal statutory consultation on licence modifications mid-Dec 95/mid-Jan 96
Second period of consultation early February 96
Licence modifications made if BT agree (or MMC reference) early February 96
3. Interconnection Determinations - Project leader: Vince Affleck 1996/97
Objective: To fulfil the statutory functions placed on the Director General under BT's and other licences in making determinations. Following BT's acceptance of the accounting separation framework , a major element of the project will be to determine charges for standard interconnection services and the subsequent recalculation of these charges as the accounts for the year in question are available. Determination of operators' applications for waiver of Access Deficit Contributions to BT is also a substantial part of the workload. The project also encompasses a range of interconnection issues which have been put to the Director General for determination.
Interim Standard Consultation July-September 95
Charges 95/96
Publication (slipped) December 95
Interim Standard Consultation February 96
Charges 96/97
Publication March 96
Final Charges 95/96 Consultation August/Sept 96
Publication October 96
BT's charges for Draft for consultation December 95
International Private
Circuits
Publication March 96
Interconnection of Publication December 95
VPN/Centrex
IDD Determination for Consultation December 94
Cable Companies from 1 draft issued
Jan 94 to 1 April 95 Finalise Early 96
Determination of rates Draft for consultation March 96
payable by BT to Cable
Companies
ADC waiver requests Next tranche March 96
Mercury International Consultation Early 96
waiver
There are several other determination requests under consideration. These are logged in a determinations database which is kept up to date and is available on Oftel's Internet pages. The database is updated monthly and updates circulated to the industry. A revised print out is reissued every 6 months.
This project also covers the work of the Interconnection Policy Forum (IPF) Focus Group on New Services.
Developing approach to interconnection of new December 95 services. Report to IPF Obligations for Introduction of New Services - December 95 Discussions Conclusions March 96
Director and projects manager Christine Farnish
4. Universal Service - Project leader: Peter Westley 1995/97
Objective: To formulate future policy on Universal Service (US), including its definition, funding and delivery, consulting fully on the proposals, leading to appropriate licence modifications to ensure that policy is implemented no later than August 1997.
Publish Consultation Paper on US level, definition, funding and delivery, including proposals to achieve 'reasonable affordability' including replacement of the Light User Scheme, how to progress towards functional equivalence for people with disabilities, a possible higher level of service for schools and public access points, and detailed proposals for establishing a Universal Service Fund. December 95
Following analysis of responses and further discussion with industry and consumers, produce detailed proposal for consultation with draft licence modifications. April 96
Firm proposals for licence amendments for Universal Service - formal consultation (with time for MMC reference if necessary). June 96
New Universal Service regime to tie in with new Price Control arrangements.
To be implemented by: August 97
5. Numbering scheme review - Project leader: Alan Pridmore 1995/96
Objective: To review policy for telecommunication's numbering and the administration of the national numbering scheme, in consultation with interested parties, in order to ensure that number allocations support fair and effective competition and that customers derive maximum benefit.
Establish new industry consultative and advisory mechanisms : a new TNAB and small advisory body in place by: January 96
Review the future demand for telecoms numbers taking account of number portability, number mobility, fixed and mobile convergence, multi-media developments, advances in telecoms networks and other relevant issues; assess what information customers need, and will in future need, from telecommunications numbers; and assess the need for telecommunications numbers for different services over the next 5-10 years and beyond.
December 95-March 96
Identify the main options to meet future numbering needs, refine and evaluate the options.
March-June 96
Publish a consultative document which describes and evaluates the options and recommends a future numbering strategy July 96
Statement on conclusions and future policy December 96
Director and projects manager Sarah Chambers
6. Proposed Anti-Competitive Practices Condition - Project leader: Paul Ryan 1995/96
Objective: To pursue the implementation of the proposed Anti-Competitive Practices Condition and in the interests of certainty and transparency to publish associated Anti-Competitive Practices guidelines.
Public Hearing on Anti-Competitive Practices Condition 23 November 95
Progress discussions with operators on the precise wording of the proposed condition and associated guidelines, leading to statutory consultation on the condition and informal consultation on the guidelines. mid December 95
Second stage of formal consultation January 96
Licence modifications made if BT agree (or MMC reference). Publication of guidelines.
February 96
Director and projects manager Christopher Wright
7. Number portability - Project leader: Alex Blowers 1995/96
Objective: To agree and implement number portability on a reasonable cost basis in the UK in order to promote fair, efficient and sustainable network competition.
Statutory consultation on modifications to BT's licence following, and subject to, MMC's investigation. December 95
Issue revised functional specification, covering technical aspects of portability. January 96
Make modifications to BT's licence. Begin statutory consultation on modifications to other operators' licences January 96
Begin investigation of options and issues relating to non-geographic number portability and mobile number portability in discussion with the industry, and taking account of broader numbering policy issues. January 96
Begin determinations for number portability (subject to requests being received) under BT's licence. February 96
Complete modifications to other operators' licences February 96
Conclude determinations on geographic number portability April 96
8. Fair trading and licence enforcement - Project leader: Graeme Gordon 1995/96
Objective: To create a clearer framework for identifying and pursuing issues arising in connection with the fair trading conditions in operators' licences.
Transparency: publish consultation paper on how to make case outcomes more visible, as part of the wider transparency programme. December 95
Prepare a comprehensive package of procedural measures and guidance with a view to improving significantly the speed and effectiveness of case handling. February 96
Establish procedures for checking, reviewing and monitoring compliance with price notification under Condition 24F. March 96
Related policy issues
Trials: Publish consultation paper. January 96
Begin consultation on licence modifications. April 96
Ducts and Poles: consult with industry on policy towards sharing January 96
Migration schemes: Economic analysis of the impact of migration schemes (schemes which allow customers to switch between services provided by the same operator without incurring a penalty). Position paper by: June 96.
Director and projects manager: Caroline Varley
9. New regime for service providers - Project leader: Peter Davies 1995/96
Objective: In consultation with the industry, to develop and implement regulatory policies aimed at encouraging the growth of a sustainable competitive market in services to meet customer needs, especially value added and multimedia services.
Publish consultation document end December 95
Consultation period to mid February 96
Second stage of consultation end February 96
Consider responses mid March 96
Publish draft licence modifications early April 96
Statutory consultation to end May 96
Final consultation mid June 96
Modify BT's licence, if BT agree mid July 96
Implement proposals for a new tariff regime for interconnection by service providers. July 96
Provide input to relevant EU negotiations including licensing and interconnection directives.
Ongoing
(Note: The above timetable may be modified in the light of EU developments.)
10. Policy on broadcasting transmission networks- Project leader: Andy Miller Ongoing
Objective: To develop Oftel's policy on regulation of broadcasting distribution networks and seek to influence forthcoming decisions, on the implementation of digital television as set out in the White Paper on digital terrestrial television, the implementation into UK law of the digital television standards directive, and other broadcasting issues which impact on Oftel's regulatory function; and to review the future licensing of BBC and NTL (including NTL's price control provisions).
Develop proposals on the regulation of conditional access.
Input to the Broadcasting Bill/implementation of the EC TV Standards Directive.
Ongoing to January 96 and beyond
Review of BBC and NTL licences and, as appropriate, preparation and negotiation of licence modifications. Ongoing
Consideration of competition issues arising from the increasing convergence of the telecoms and entertainment markets. Ongoing
Further input, as required, to the Government's continuing review of media ownership rules.
Timing as required
Consider the policy on broadcast conveyance by national PTOs and make recommendations to the Government as to whether it should review the ban on broadcast conveyance on certain PTOs. 1997/98
Director and project manager: Caroline Varley
11. Influencing EU thinking - Project leader: Gillian Marcelle Ongoing
Objective: To ensure that Oftel has a major influence and input in the development of telecommunications policy in Europe, in order to promote UK telecoms regulatory principles and the interests of UK industry in Europe. To promote in particular the key UK themes of liberalisation, competition and effective enforcement.
Regular progress reports on negotiating status of draft EU 1998 liberalisation legislative package Ongoing
Development of policy on strategic EU issues eg convergence, enforcement, competition, multimedia Ongoing
Regular meetings/visits with key Commission officials, MEPs and member states. Ongoing
Regular meetings with UK industry to identify issues of strategic/commercial importance to them. Ongoing
MARKET DEVELOPMENTS
Project manager Anna Walker
12. Key market developments and regulatory issues facing Oftel -
Project leader: John Cluny 1995/99
Objective: To anticipate what are likely to be the key developments in telecoms and related markets over the next 4-5 years and to assess how these developments might affect the work of Oftel. To ensure that Oftel has the information and resources in place to deal with these regulatory challenges as they emerge.
Conclude interviews on key market developments (and regulatory issues) with a wide group of operators, users, consultants and other industry experts. Consolidation/analysis of findings. end January 96
Continuing series of interviews on market evolution and regulatory development. Ongoing
Establish the relevant markets and subject areas in which Oftel's future data needs will lie, e.g. market shares, service availability, efficiency measures. Consider whether the scope and market definitions of Oftel's present data-gathering activities will satisfy those needs. Recommend how best to develop the telecoms database. This will need to keep in touch with progress on the definition of markets for effective competition/price control purposes. Ongoing
As well as the 12 projects already described, Oftel is working on a wide range of other projects. Although these are not designated as priority projects, they are nonetheless important for the achievement of Oftel's objectives. Substantial resources are, and will continue to be, devoted to them to ensure they are delivered to time and to the highest quality.
Director and project manager - Ann Taylor
1. Development of Accounting Separation Framework
Objective: Project consists of a wide range of tasks to ensure that the framework of Accounting Separation of BT into six regulatory businesses and the introduction of greater transparency in derivation of costs, set in place by the March 95 licence modifications, comes into operation effectively. The Accounting Separation framework will provide Oftel with powerful tools for examining how BT allocates its costs and determines its charges. It underpins Oftel's determination work and investigation of anti-competitive practices.
Timescales:
Review form and content of Financial Statements (separated accounts) -
September 95- March 96
Consideration with BT and industry of BT's Detailed Attribution Methodology assessment -
November 95 - June 96
Guidelines on when service is competitive, undue discrimination, pricing below fully allocated cost, discrimination on quality - Public consultation: December 95
- Publish: March 96
Director and projects manager - Christine Farnish
2. Best deal for the customer
Objective: To identify the telecommunications service needs and wants of different groups of customer; to monitor and review the extent to which needs are being met; and to benchmark the quality, availability and value for money of services for UK consumers with those overseas.
Timescales:
Market research - Ongoing
Assess the geographic spread of competition in UK and test these assessments with consumer groups, individual customers and with operators themselves - March 96
Publish the results of Benchmarking research - March 96
Interviews with large UK business users - Ongoing
Obtain relevant calling pattern data from BT and provide it to consumer bodies to allow price comparisons of residential bills - January 96
3. "Consumers' Guide to Oftel"
Objective: To produce a guide for consumers on the role and work of Oftel so that telecoms users can better understand how Oftel works and can input into Oftel decision making process.
Timescale: Publish - January 96
4. Premium rate services/ICSTIS review
Objective: Subject to the outcome of the consultation exercise, to transfer responsibility for Controlled Premium Rate Services regulation from Oftel to ICSTIS.
Timescale: Consult on formal licence modifications - February - March 96
5. Comparable Performance Indicators
Objective: To monitor and review quality of service delivered by fixed link and mobile operators, and ensure useful comparative information is published so consumers can make informed choices.
Timescales:
Publication of first set of Comparable Performance Indicators (fixed link operators) provided the data is of value to customers - January 96
Progress initiatives with mobile operators to develop quality of service indicators and to address customer concerns - ongoing
6. Consumer Codes of Practice/CSU Act
Objective: To ensure all outstanding CSU Act obligations are complete, and to seek to ensure all operators delivering services to residential consumers have comprehensive Consumer Codes of Practice agreed by the Director General.
Timescale: March 96
7. Geographic de-averaging
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.
Timescales:
Draft report - March 96
Review of findings - possible second stage study - Summer 96
Director and projects manager - Sarah Chambers
8. Consideration of International Licensing regime
Objective: To review arrangements for regulation of international telecoms, with a view to promoting liberalisation, competition and transparency.
Timescales:
Publish consultative document on future IDD charges and related matters - end December 95
Publish UK international accounting rates with OECD countries - end December 95
Review accounting rate regime and Code of Practice - end March 96
9. Review of Mercury's licence
Objective: To review Mercury's licence with a view to deleting or simplifying some of the detailed conditions which are no longer appropriate, given Mercury's position in a multi-operator market.
Timescales:
Publish consultative document on licence changes - end December 95
Statutory consultation on licence changes - March-April 96
10. Future regulatory framework
Objective: To review and reach common Oftel position on the options for making longer-term improvements to the current regime in discussion with DTI.
Timescales:
Proposals to DTI on options for streamlining the process for modifications to a large number of licences - March 96
11. TSL Revision
Objective: To assist DTI in their reissue of a revised Telecommunications Services Licence (TSL) incorporating a number of technical and procedural amendments, together with the inclusion of CT2.
Timescale: consult by end March 96
12. Kingston
Objective: To discuss with Kingston Communications Limited (KCL) the post duopoly amendments which need to be made to its licence, and any other amendments to the licensing regime in the light of concerns expressed about the development of regulation in the Kingston area.
Timescales:
Write to Kingston with initial proposals - December 95
Meet with Kingston - January 96
Firm proposals to Kingston - April 96
13. Develop Oftel policy on public payphones
Objective: To implement Oftel's policy on public payphones to promote competition in this market. To consult individually with all PTO operators who have a public payphone condition in their licence with a view to substituting a much less regulatory condition.
Timescales:
Agree licence modifications with DTI and issue press notice - mid December 95
Complete statutory consultation - end March 96
Modify licences - end April 96
Review BT's/Kingston Communications' requirements for Public Call Box provision. Issue revised guidelines and licence modifications (ties in with universal service project - June 96
Director and projects manager - Christopher Wright
14. Fixed/mobile convergence
Objectives: To identify the regulatory issues which arise in the context of an emerging converged services market and to consider how they should be handled. To monitor the development of the converged services market and keep under review any regulatory changes which may be required to be made in the light of Oftel's overall objectives.
Timescales:
Develop a conceptual model of the development of, and issues arising from, a converged services market - March 96
Examine the interconnection issues surrounding the provision of converged services and recommend appropriate action - June 96
Develop Oftel's policy on convergence and determine what, if any, changes to current regulation need to be made - Timing to be agreed
15. Use of the radio spectrum
Objective: To ensure that Oftel is well-informed of telecoms needs for spectrum and can influence spectrum allocation policy and decisions effectively, working closely with RA and DTI.
Timescale:
Discussions with the industry about their future spectrum needs - January 96
16. Equal access
Objective: To examine the case for requiring operators who directly connect to customers to allow those customers an open choice of operators who provide services to them.
Timescale: DG to announce findings of a cost/benefit analysis and his proposals for future action - January 96
17. Directory enquiries
Objective: To develop and consult on proposals for facilitating the emergence of additional directory databases subject to appropriate consumer safeguards.
Timescales:
Review need for further consultation directly with consumers - December 95
DG to announce conclusions of consultation - January 96
Issue licence modifications for formal consultation - February 96
18. Future of mobile service providers
Objective: To ensure a fair trading environment for both independent service providers and tied service providers.
Timescales:
Publish consultation paper - January 96
Take appropriate action in relation to the mobile service provider regime (including possible amendments) in the light of the responses received to the consultation document - June 96
Director and projects manager: Caroline Varley
19. Regulation of broadband switched networks and services
Objective: In consultation with the industry, to develop Oftel's policy on a longer term regulatory framework aimed at encouraging innovative infrastructure investment (including the introduction of broadband systems) and services.
Timescales:
Publish a statement outlining proposals for regulation of broadband switched mass market networks as a follow up to "Beyond the telephone, the television and the PC" consultation document - February 96
Follow-up activity from this statement eg on the development of technical standards -
Timing as appropriate
Monitor progress of BT's "video on demand" trials - Ongoing
In the light of the decisions announced in the statement following up the consultation document "Beyond the telephone, television and PC", consider the modifications necessary to BT's licence (announcement by July 1996)*
Discussion of detailed licence modifications with BT (completed by December 1996)*
Statutory consultation process completed (by July 1997)*
Licence modifications implemented (by December 1997)*
*Note: this timetable may need to be adjusted in the light of developments in the broadband switched market.
20. Regulation of BT's Signatory Affairs Office (SAO)
Objective: To achieve direct access for independent satellite service operators to satellite capacity controlled by international satellite consortia operated under treaty to which BT is the UK signatory; and, where this is not possible, to regulate the SAO to ensure equity of treatment between BT and the independent operators.
Timescales:
Complete outstanding action and, if necessary, prepare a draft licence modification to implement the conclusions and recommendations contained in Oftel's Statement on the future operation of BT's Signatory Affairs Office
Decision on whether a licence modification to bring this activity within the regulatory regime is necessary - end December 95
If necessary, implement licence modifications - end March 96
Director and project manager: Caroline Varley
21. Influencing international thinking
Objective: To co-operate effectively with a focussed group of other regulatory bodies around the world; to learn from them and acquire international best practice; to present the lessons of the UK experience and to deliver up to date information to Oftel staff on international developments.
Timescale:
Comparative study of regulatory regimes - end February 96
Establish and consolidate relations with key foreign regulators, including the FCC - ongoing
Director and projects manager: Peter Walker
22. Customer interface regulation
Objective: In order further to promote fair competition and trading in the manufacture and supply of customer premises equipment and to promote fair competition in network services and to prevent undue linkage between these markets, consider whether to enhance PTOs' obligations to declare their customer interfaces and whether Oftel should have power to determine customer interfaces in certain circumstances.
Publish Statement on proposed changes and licence amendments - mid March 96
Informal consultation period on licence changes - end May 96
Statutory consultation - July 96
23. Apparatus approval for VPN/Centrex regulation
Objective: To provide approval routes for all customer apparatus connected to PTO provided VPN and Centrex services.
Timescales:
Oftel Update on proposals and General Variation - December 95
Further update once NTR is produced - April 96
24. Network Interoperability Consultative Committee (NICC)
Objective: To ensure the timely delivery of advice to Oftel on significant technical issues related to policy developments and stimulate continuous improvement in the effectiveness of the NICC. Issues under consideration: interconnect signalling, number portability and service provider interfaces.
Timescale: Ongoing.
25. Deregulation of Private Networks
Objective: To reduce the burden on consumers of unnecessary obligations relating to the approval, maintenance and installation of their Private Networks.
Timescales:
Oftel timescales for input to DTI for licence revisions:
New privacy condition in the Class Licences enabling the Warning Tone approval requirement to be removed - January 96
Revision of the Class Licences to remove approval requirements for indirectly connected equipment which does not interwork with the network - January 96
Consider revised arrangements for the Private Payphone charging display requirement - end 96
Review the Call Routing Apparatus maintainer regime - April 96
Director and projects manager: Alan Bell
26. Development of market information database
Objective: To collect accurate and timely information from operators and service providers on an agreed range of services, in order to meet Oftel's needs for market information and to place as much relevant information in the public domain as possible.
Timescale:
After consultation with the operators to begin publishing a selection of market information quarterly - February 96
To collect further information on Value Added Services, in order to estimate market shares for the various service providers - March 96
27. Alternatives to pence per minute charging for interconnect services
Objective: To develop a methodology for setting interconnection charges on a basis other than the current regime of pence per minute with time of day charges tied to BT's retail tariff gradient.
Timescales:
Calculate illustrate capacity based charges to put to BT for comment - December 95
Hold discussions with PTOs with the aim of agreement in principal to establish modelling work and/or practical trials. Commission research if appropriate - February 96
Explore with PTOs the technical practicality of proposed schemes for capacity based charging - March 96
This chapter provides a brief description of the wide range of services which Oftel provides to consumers and the industry which are not project based, but which account for a substantial and important part of Oftel's work.
Director: Ann Taylor
Oftel co-ordinates regular meetings (six weekly) of industry/Oftel working groups to consider current interconnection issues. The Interconnection Policy Forum provides a very valuable way of allowing Oftel to explain emerging thinking and take the industry's views on issues. Discussion covers a wide range of issues from detail of interconnection charges and how they should be set to broad policy issues. The Forum has agreed to set up special Focus Groups to deal with particular issues in depth and them report back to the Forum. The New Services Group is one of these and IDD and NTS have previously been handled in this way.
Director: Christine Farnish
Consumer complaints and enquiries
Oftel has a statutory duty to consider any complaints received which relate to telecommunications services provided or telecommunications apparatus supplied in the UK. In the region of 30-40,000 complaints and enquiries are handled a year. Oftel has a policy where practical, of allowing the public telecommunications operator concerned to consider the matter first and to resolve the dispute directly with its customer. Apart from seeking to ensure that individual customers are fairly treated and their problems resolved, one of Oftel's main objectives is to reduce the number of disputes by analysis of their underlying causes. Where an operator's policy or practice gives rise to widespread public concern, Oftel will consider whether some change is needed and, where appropriate, seek to introduce this by negotiation, or by the exercise of regulatory powers available to the Director General.
Advisory Committees
Oftel allocates separate staff and financial resources to support the work of the Advisory Committees on Telecommunications (ACTs). This support includes information gathering and research, briefing, policy analysis, servicing meetings and general administration.
The ACTs themselves are independent statutory bodies and their activities fall outside this Plan. They may, however, provide advice to the Director General, at his request or at their own initiative, on any aspect of Oftel's work and may thus contribute to the delivery of the Plan. ACTs set their own strategy and priorities. They have direct contact with the industry, with consumer representatives and with other agencies. They and their secretariats form Oftel's link to a national network of local consumer representative bodies - Telecoms Advisory Committees (TACs) - sponsored by the Department of Trade and Industry.
Live Premium Rate Service Exemptions
Oftel is responsible for dealing with applications to exempt controlled services from the provision of ICSTIS' Live Code of Practice. The Code at present requires all calls to live services be recorded and, that Service Providers make payments into a compensation fund.
Numbering
The Numbering Unit in Oftel is responsible for allocating codes and blocks of numbers to licensed operators in accordance with agreed policy as set out in the 'Numbering Conventions'; for monitoring number and utilisation allocations; for auditing the efficiency of number utilisation; and for producing regular briefing information on the numbering scheme and number allocation for the industry and others with an interest.
Director: Sarah Chambers
Oftel has the function on advising on Telecommunications Act licensing generally. The Secretary of State is required by the Act to consult the Director General before granting telecommunications licences and the Director General discharges that role in respect of the granting of and conditions to be attached to PTO and major non-PTO individual licences, including those for International Simple Resale and those based upon the class licences.
Oftel provides advice to DTI and to the public, on questions concerning licensing, licence conditions etc, and, especially, the interpretation of the two main class licences under which most private networks are run, the TSL and the SPL.
Oftel also undertakes miscellaneous licence related functions such as the annual licence fee collection exercise.
Director: Christopher Wright
Oftel has a responsibility for the investigation of a wide range of complaints from the industry and PTOs (as opposed to consumer complaints) about alleged anti-competitive practices, abuse of monopoly power or breaches of the fair trading provisions contained in the fixed link and mobile telephony operators' licences. Enforcement casework has not only changed significantly but also increased considerably over the last 18 months as the number of licensed operators has grown. Therefore a dedicated team was established recently to deal with enforcement casework which is seen as a major internal priority requiring increased commitment. The casework team discharges this function by:
securing compliance with licence conditions by taking enforcement action;
dealing with representations about licence contraventions;
identifying and dealing with licence issues arising from price, trial and other notifications;
identifying systemic issues that need policy consideration; and
identifying grounds for considering licence modifications.
Director: Christopher Wright
Oftel has responsibility for the regulation of mobile telephony, paging, mobile data and band three radio operators. It has responsibility for the enforcement of such licences as well as for the investigation of complaints and representations from within the industry and more in-depth consumer complaints which have a direct bearing on these operators' licence conditions.
Director: Caroline Varley
Oftel undertakes a significant amount of on-going compliance work in relation to broadband cable, individual SMATV and individual satellite licences, for example, monitoring compliance with build obligations and taking necessary action where obligations are not met; issuing determinations requiring licensees to provide public emergency call services; regulating the supply by licensees of customer apparatus; and monitoring licensees' funds for meeting liabilities. In addition Oftel's work in this area includes providing advice to the DTI on the issuing of new licences, providing advice to the ITC on the award of Local Delivery franchises and processing applications for satellite master antenna television (SMATV) systems.
Director: Caroline Varley
Oftel undertakes the following international work, in addition to that already described in earlier chapters:-
Providing briefing on international telecommunications policy developments, country briefs and standard briefs on international organisations.
Active participation in the international telecommunications policy community through representation at a range of international meetings, conferences and other fora.
Liaison with other branches of Government on international matters, primarily the Department of Trade and Industry.
Overseas visits by senior Oftel officials.
Receiving overseas visitors from developed and developing countries and co-ordinating Oftel's provision of technical assistance to Eastern and Central European countries. Programmes are arranged for nearly 100 overseas visitors a year.
Director: Peter Walker
Oftel undertakes activities on the regulation of private networks and telecoms standards. It administers the schemes for terminal apparatus approvals, registered installers and designated maintainers. Activities include issuing Site Specific Approvals, General Approvals, and General Variations to enable equipment to be connected where there is no alternative approval route. In this domain Oftel liaises with other interested parties (DTI, BABT and BSI) and participates in UK and European fora such as ETSI, ACTE and TRAC.
Oftel also has responsibility for the PTO Meter Approval Scheme whereby PTOs' metering and billing systems are approved by BABT.
Oftel also participates in European and other voluntary standards making activities, in particular ETSI and DAVIC in order to promote consistency with regulatory policy.
Director: Alan Bell
Oftel is responsible for ensuring that BT complies with the terms of the price controls covering its retail prices. BT notifies Oftel of its proposed price changes and how they conform to the agreed price control arrangements and these are scrutinised for accuracy and compliance. Oftel undertakes detailed financial and economic modelling on which the price controls are set. In addition to monitoring retail pricing, Oftel also undertakes the determination of interconnection charges using accounting and economic data as appropriate.
An increasing amount of Oftel's work relates to assessment of anti-competitive behaviour, identifying the appropriate markets and providing the economic and financial data to determine whether behaviour is likely to damage competition. Establishing the appropriate accounting basis for the provision of financial data relating to various parts of BT's business is a key function within the general aim of improving transparency and market confidence.
As Oftel's focus has shifted from BT to the wider UK telecoms market major new areas of work concern collection of data on the UK telecoms market from all operators and the presentation and publication of the data to a wide audience. Oftel has an increasing need to understand better the strategies and opportunities open to UK operators and with this in mind there is an explicit programme of work designed to pull together data on particular companies, the impact of regulation on their strategies and the future development of the market drawing on the telecoms market data.
Director: David Redding
Press Office
Oftel's press office currently produces about 60 press releases per year and briefs journalists to ensure that changes in the regulatory regime are understood and reported fairly to the public. It arranges the Director General's interviews on television, radio and with journalists. Over 50 publications are produced each year. These publications are designed and produced by press office staff using desk top publishing techniques to minimise cost. Printing is arranged and managed through commercial printers. Four issues of Oftel News are written, produced and distributed. The press office maintains distribution lists and arranges distribution of material. Oftel's presence on INTERNET is managed and designed through the press office. A steady flow of statutory and recruitment advertising is arranged.
Library
The Library maintains the Public Register of licences and approvals. Enquiries, totalling around 1,200 per month, involve distribution of materials and the sale of Oftel publications and licences.
Director: David Ingham
Legal staff are responsible for the legal input required in the course of the project and other work carried on by Oftel. Legal work includes providing legal advice (somethimes using Counsel), drafting legal instruments (in particular licence modifications) and instructing Counsel in relation to references to the MMC and litigation. Many of Oftel's individual projects result in licence modifications and legal staff as part of the project teams, are closely involved in the formulation of policy prior to the drafting stage.
This chapter outlines the staffing, resources and administrative infrastructure which support Oftel's work programme.
Director and projects manager: David Smith
Oftel is pursuing a number of initiatives aimed at promoting the efficient and effective working of the department and improving its use of its most important resource its staff. There are two specific projects on staffing - one on personnel policy and the other on training.
Personnel Policy Project - Project leader: Ros Saper
The Civil Service White Paper "Continuity and Change" published in July 1994 proposed far reaching changes to the way the Civil Service is structured, organised and managed. The White Paper changes are likely to have an impact on Oftel's ability to recruit and retain staff and so, in addition to meeting the White Paper requirements, Oftel's own personnel management policies will be reviewed to ensure that it maintains the relative competitiveness of the department in the market for good quality staff.
Objective: To maintain and further improve Oftel's use of its most important resource - the staff of the department - and to continue to develop a managerial, performance-based approach whilst making Oftel a satisfying and rewarding place in which to work.
Senior Civil Service
To tailor the central arrangements for the new Senior Civil Service to meet departmental needs, determine individuals' pay within the new pay structure and invite staff to sign a personal contract. By Spring 96
Other Grades - Pay delegation from April 1996
To put into place transitional arrangements for local pay pending the introduction of new pay and grading arrangements in 1997. By Spring 96
Other Grades - Full Pay & Grading Delegation from April 1997
To carry out a full review of Oftel's pay and grading systems and to introduce new arrangements most suited to meeting the needs of the department. By Spring 97
Investing in People
Staff at every level have frequently stressed the importance of training and development as a means of equipping people to do their jobs more effectively thereby assisting Oftel to achieve its objectives.
Under the Training Project (see below) a dedicated training service is being set up to provide high quality, cost effective training which will be accessible to all staff. Training will be customer focused and business driven.
The training provided will primarily be of a job related nature, concentrating on the changing skills required as Oftel itself changes to meet emerging needs. Development opportunities will be available in the form of personal development courses, an open learning facility, project related opportunities and where appropriate through externally delivered courses.
Hand in hand with the Training Project, Oftel intends to work towards the Investors in People Standard. The Standard will provide a framework for improving performance through a planned approach to setting and communicating objectives and developing people to meet these objectives. It will also provide a comprehensive benchmark of best practice against which Oftel can audit its policies and practice in staff development. On top of this, the Standard will assist in developing a culture of continuous improvement thus helping Oftel achieve higher levels of performance.
Training Project - Project leader: Jo Peel
Objective: To meet the training needs of staff by obtaining training from a wide range of sources, including tailormade programmes or individual courses designed either inhouse or in association with external providers. Training will focus much more on the changing skills needed as Oftel itself changes to meet emerging challenges.
Develop and present Training Strategy and obtain approval. November 95
Recommend framework for evaluating training and implement December 95
Establish staff training records. February 96
Implement training strategy. Ongoing
Updating Oftel's Information Technology and Systems
Oftel has invested in a modern networked Windows-based IT system and, over the period of this Plan, will seek to implement an Information Systems Strategy which provides a framework for the planning, management and delivery of information systems and technology to meet Oftel's needs.
A single communications network, enabling users to communicate with each other and share information is already in place. The next key phase of development will be to provide a system to support the key operational functions of the department. Evaluation projects will also be undertaken to test the feasibility of other systems identified in the Strategy.
Oftel's total net financial provision for 1995-96 is £9,464,000. The gross total of £9,743,000 comprises running costs of £9,295,000 together with other current expenditure and capital expenditure provisions of £294,000 and £154,000 respectively. Provision for
Appropriations in Aid (receipts which can be netted off expenditure) totals £279,000. A summary breakdown of Oftel's gross budget for 1995-6 is given in Annex B.
Total net expenditure over the period 1996-97 to 1998-99 based on the outcome of the 1995 Public Expenditure Survey is as follows:
Budget Expenditure Plans £'000
1995-96
£'000
1996-97 1997-98 1998-99
Total Net 9464 9094 9006 8833
Expenditure (2.5%) (2.25%) (2.0%)
GDP deflators
Baseline (1994 Plans) 9324 9281 9291
Actual Variance -230 - 275 - 459
Percentage Variance -2.5 -3.0 -4.9
Oftel's expenditure plans have been adjusted following this year's Public Expenditure Survey Settlement and reflect sizeable reductions based on the 1994 baseline agreed with the Treasury. For 1996-97 and 1997-98 a reduction of £126,000 and £124,000 respectively is also included due to the efficiency scrutiny on the management of the Civil Estate.
The infrastructure and support services required to run Oftel are provided by Personnel, Recruitment and Training Unit (PRTU), Office Services Unit (OSU), Finance and Accounts Unit (FAU) and Information Technology Unit (ITU).
Excluding projects outlined above, priorities for 1995/96 are to develop and introduce full personnel desk instructions covering Oftel's recruitment activities, to introduce revised performance pay arrangements for Grade 6 staff, to finalise a new accommodation occupancy agreement with the Crown Prosecution Service, to procure and introduce a computerised assets register, to improve office furniture through the provision of specialist IT furniture and to set up an IT help desk database system.
Oftel has in place a number of indicators to measure its performance. This chapter outlines the various performance indicators used by Oftel. They fall into three groups:
Oftel has in place the following work programmes designed to measure the extent to which it is providing improved choice, quality and value for money for customers:
Oftel regularly tests the extent to which consumers in the UK are getting the best deal through its developing programme of market research, combined with a detailed analysis of consumer complaints and enquiries it receives. This provides objective data on the consumers' view of the extent to which their needs are being satisfied.
Improved choice
Improvements in choice are being monitored through the benchmarking and consumer choice projects. The former is comparing the availability of services to UK business customers with that available to users in other leading countries. The latter will assess the extent to which different groups of customers (customer segments) are benefitting from competition in different telecoms services (market segments). Oftel has drawn up a list of six customer segments (global businesses, large businesses, small and medium sized businesses, "comfortable" residential, "less comfortable" residential and unphoned households) to assess how effectively competition is working for each of these groups.
For each of these segments Oftel will assess the extent to which there is effective competition for the following telecoms services (market segments):
These segments should not be regarded as definitive. Markets can change over time, for example, as technology changes. They will therefore be subject to ongoing review.
Improvement in quality of service
This is being, in part, addressed by the benchmarking study above but also by the developments in the quality of service provided by UK operators (see project in Chapter 4 on Comparable Performance Indicators).
Value for money
Comparisons to assess whether the UK customer is better served than customers in competitive economies are difficult. Oftel intends to rely principally on OECD studies, where Oftel contributes to and influences the methodology used, and the benchmarking work, which is also comparing the value for money of telecoms services used by UK business customers with those elsewhere.
Oftel has in place a number of targets and timescales for its work with external clients, including telecoms operators and telecoms customers.
Handling correspondence
Oftel is developing a correspondence database to enable it to deal with correspondence more efficiently. Oftel also maintains a determinations database of interconnect determination requests. This is updated monthly and updates are circulated to the industry. A revised print out is reissued every six months. The database details are also available on Oftel's Internet pages.
Dealings with telecoms operators
'Doing Business with Oftel' sets out a number of performance targets for Oftel's dealings with complaints by operators about the practices of other licensed operators:-
Consumer complaints and enquiries
The Consumer Representation Section (CRS) has targets for case handling; conducts periodic customer satisfaction surveys; and monitors how often the CRS changes the position of the operator concerned. The current performance targets for consumer complaints and enquiries made to Oftel are:-
From January 1996, the following improved performance targets will be introduced for dealing with consumer complaints and enquiries:
Premium rate service exemptions
Premium Rate Services Section has targets for processing exemptions:
Equipment approval applications
The Approvals Section has targets for processing approval applications. For example, for Contractor Approvals, it issues 90% of maintainer approvals within 5 working days of receipt of a recommendation from a certification body. This Section has also set targets for the enforcement of:
to send in 95% of cases, an initial letter notifying users of their statutory obligations within 5 working days of receipt of an alleged breach.
Technical enquiries
Oftel's Technical Section has set targets for dealing with external technical enquiries. Any information promised as the result of a telephone enquiry will be provided within 5 working days. For written enquiries an acknowledgement will be made in 3 working days, an initial response made in 10 working days and a substantive response made in another 5 working days (after receiving necessary information from other sources).
Numbering allocations
The Numbering Unit has the following performance measures/ timescales which are set out in the 'Numbering Conventions' for handling numbering allocations:
Performance on these measures is reported on in the Numbering Scheme Manager's Annual Report.
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