Whereas the Secretary of State granted to British Telecommunications on 22 June 1984 a licence (the ‘BT Licence’) under section 7 of the Telecommunication Act 1984 (‘the Act’) for the running of the telecommunication systems specified in Annex A to that licence;
Whereas by virtue of section 109 and paragraph 20 of Schedule 5 to the Act the BT Licence has effect as if granted to British Telecommunications plc (‘BT’);
Whereas the Director General of Telecommunications (the ‘Director General’) in accordance with section 15 of the Act has made modifications to the BT licence which came into effect on 29 July 1996 and 17 December 1997;
Whereas the Director General on 29 July 1996 made a direction under condition 34C.1 of the BT licence that BT shall provide Portability to a Qualifying Operator;
Whereas condition 34C.5 includes a power for the Director General to determine BT’s reasonable costs in providing Portability and the Standard Portability Charges allowing recovery of such costs, to be paid by Qualifying Operators, in relation to the financial year ending on 31 March 1998 and annually thereafter;
Now therefore the Director General accordingly determines those costs (at Schedule 1) and the Standard Portability Charges (at Schedule 2) which shall be those set out in the Schedule to this determination.
The terms ‘portability’, ‘Qualifying operator’ and ‘Standard Portability Charges’ shall have same meaning as they are given in Condition 34C of BT’s licence.
DON CRUICKSHANK
Director General of Telecommunications
Annex A Average Porting Conveyance Cost Methodology
1. System set – up costs
(This expenditure has already been incurred by BT, only a limited amount of enhanced functionality was required to ensure that different exchanges, eg, the DSN and the IN phase 1 platform are able to perform the prefix addition function)
2. Per Line set – up costs
(i) Per Line Set up costs for single line portability orders
Dated Order £7.71
(Fax and no Real Time Router)
Timed and Dated Order £9.63
(Fax and no Real Time Router)
Timed and Dated Order (out of normal hours) £123.42
(Fax and no Real Time Router)
(ii) Per Line Set up costs for block portability orders
Block portability costs for orders of 100 contiguous numbers
Dated Order £110.92
Block portability costs for orders of 10 contiguous numbers
Dated Order £23.85
3. Additional conveyance costs
(i) Additional conveyance cost under tromboning
Call types National Rate and Premium Rate Services
Routing DDSN
Total Cost (apportioned to DDSN platform) £41,013m
Total Traffic £2,143m
Total unit cost (p/min) £1.914
(ii) Additional conveyance costs under call drop back.
Call types Freephone and local Rate Services
Routing IN Phase 1
Total Cost (apportioned to IN platform) £3,710m
Total Traffic £2,515m
Total unit cost (p/min) £0.148
4. Administrative costs
(applicable to geographic portability only)
5. Average porting conveyance costs
(i) Freephone:
Total call minutes [ ]
Average cost (p/min) £0.350
Proportion originating on OLOs 16%
Average porting conveyance costs (p/min) 0.0555
(ii) Local Rate:–
Total call minutes [ ]
Average cost (p/min) £0.336
Proportion originating on OLOs 18%
Average porting conveyance costs (p/min) £0.0604
(iii) National Rate:–
Total call minutes [ ]
Average cost (p/min) £0.467
Proportion originating on OLOs 19%
Average porting conveyance costs (p/min) £0.0893
1. Charges with respect to Per Line Set-up costs
(i) Per Line Set-up
Dated Order £7.71
(Fax and no Real Time Router)
Timed and Dated Order £9.63
(Fax and no Real Time Router)
Timed and Dated Order (out of normal hours) £123.42
(Fax and no Real Time Router)
(ii) Block portability
Block portability charges: 100 contiguous numbers £110.92
Block portability charges: 10 contiguous numbers £23.85
2. Charges with respect to additional conveyance
(a) Tromboning unit cost (p/min) £1.914
(b) Call drop back unit cost (p/min) £0.148
Additional conveyance charge (p/min): (a b)/2
(charges applicable only to National Rate and
Premium Rate calls) £0.883
3. Charges with respect to the average porting conveyance
| Day | Eve | W/E | Average | |
| Freephone | 0.0734 | 0.0407 | 0.0326 | 0.0555 |
| Local Rate | 0.0800 | 0.0443 | 0.0355 | 0.0604 |
| National Rate | 0.1182 | 0.0655 | 0.0524 | 0.0893 |
1.1 On 9 April 1997 Oftel published a Statement setting out proposed modifications to all fixed operators’ licences in order to facilitate the introduction of number portability across the UK. The Statement also set out Oftel’s proposals for separate modifications to BT’s existing licence condition on number portability, to provide more detailed provisions on the portability of specially tariffed services (non-geographic numbers). Following a period of Statutory consultation, and extended discussion with operators and other interested parties, the proposed licence modification has now been incorporated into all fixed operators' licences. The amendments to BT’s licence do not alter the substance of the existing provisions by which the Director General may determine the costs and charges of providing portability.
2 Introduction
2.1 In accordance with Condition 34C.5 of the BT Licence, the Director General has determined BT’s reasonable costs in providing Portability and the Standard Portability Charges allowing recovery of such costs to be paid by Qualifying Operators. All terms used in this explanatory document have the same meaning as in the Licence Condition.
2.2 The determination and the Licence provisions under which it is made follow the modification of BT’s Licence to allow for the extension of number portability to non-geographic services. The new Licence Condition was incorporated into all fixed operators' licences in December 1997.
3 BT’s Reasonable costs
3.1 Schedule 1 to the determination contains the Director's General's determination of the reasonable costs incurred by BT in the provision of portability, under each of the cost categories identified in the licence condition. Condition 34C.5 states that the determined costs shall be based on BT’s fully allocated costs (FAC) unless some other cost basis has been substituted for the purposes of determinations made under Condition 13 of BT’s Licence. At present there is insufficient information to determine non–geographic portability charges using long run incremental costs (LRIC) as the basis, the determined costs are therefore based on FAC (Fully Allocated Costs). Condition 34C.5 (b)(ii) identifies the following categories of costs:
System Set–up costs: Costs incurred in the course of making network and system modifications, configurations or re–configurations, including adapting or replacing software. Also, the costs incurred in testing functionality within the new systems and in conjunction with Qualifying Operator's systems;
Per Line Set–up costs: Costs incurred in the provision of switching and administration with respect to each ported number;
Additional conveyance costs: Costs incurred in the use of resources used in effecting the switch processing required to set–up each ported call, and the provision of switch and transmission capacity for any part of the duration of each ported call. These are defined as being costs additional to the cost of conveyance of non-ported calls from the Applicable Systems to the Operator's system;
Administrative costs: (applicable to Geographic portability only)
3.2 In addition, the Director General may in respect of any individual item of cost determine into which category of cost it falls, and if it can not reasonably be categorised as any of the above, the director may determine whether and to what extent the licensee may reasonably recover such costs. The Director general considers that the following items of cost do not fall into any of the above categorisations;
Number block portability: – At present BT processes block portability orders using an interim solution. Each portability order for a number block – predominantly blocks of 100 – is broken down into individual orders for each number. As a result, portability orders for number blocks incurs approximately the same resources as that used in processing a portability order for the equivalent amount of individual numbers. However, there are some scale economies since orders for number blocks are processed in one single activity.
Average porting conveyance costs: – These are the transit costs incurred by the donor operator in conveying calls originating ‘off–net’ to a recipient operator. This process is essentially the same as the donor operator acting as a transit operator in the conveyance of a non–ported call.
4 System Set-up costs
4.1 System Set–up costs are those costs incurred by each operator in order to ensure that the network and management systems can provide portability. This expenditure has already been incurred by BT, indeed, much of the functionality used to convey non–ported non–geographic calls is also used in the conveyance of ported non-geographic calls. A limited amount of enhanced functionality was required to ensure that various different exchanges, eg those forming part of BT’s Number Translation Services platforms, are able to perform the prefix addition function.
5 Per Line Set-up costs
5.1 These costs relate to the provision of switching and administration of each ported number, for example, the costs of changing the number record on the respective platform, and the administrative processes involved. These costs may vary according to the type of switch, the methods of interfacing with the recipient operator and whether the number is a number originally allocated to BT or, one which is 'return porting' to another operator. For the purposes of single and number block portability, it can be assumed that only one type of switch is re-configured to enable porting. Hence, costs will not vary as a result of number records being altered over different switches. The technology used to interface with other operators does however, have a more significant effect on the overall costs.
5.2 Under geographic portability, BT already deploys a service referred to as 'Real Time Routers', this enables the customer to be disconnected from the donor network and connected to the recipient network with the same number at the same time. Real time routers are not currently provided for in non-geographic number portability although a similar functionality is provided by means of implementing orders according to both time and date.
5.3 In terms of order processing for geographic portability BT sometimes employs EDI (Electronic Data Interchange) to interface with other operators. This facility is not currently available for processing non–geographic portability orders, however, the differing methods of processing portability orders are still under discussion in industry forums and according to the potential volumes of orders EDI may be used in the future. In the interim, both the processing and actual implementation of non–geographic portability orders are relatively labour intensive. Per Line Set–up costs are incurred for three basic order types:
6.1 These are defined as being costs which are additional to the cost of conveyance of non-ported calls from the Applicable Systems to the Operator’s system. In terms of non-geographic portability this has sometimes been referred to as the ‘prefix addition’ charge. The additional conveyance cost category recognises that in some cases calls to ported numbers are tromboned; tromboning occurs when there is an additional loop in the call path to a ported number which continues for the duration of the call. Tromboning is essentially a feature of BT’s hierarchical network, although calls to numbers which are ported from some of the other operators’ networks would also need to be tromboned.
6.2 A refinement of the tromboning solution is a facility referred to as ‘call drop back’. Call drop back facilitates signalling between the various platforms used in actually routing the call. This obviates the need to hold open a call path from the DMSU to the DSN for the entire duration of the call.
6.3 It is anticipated that BT will route calls in two ways, at least for the period covered by this determination:
7 Average porting conveyance charge
7.1 Calls that originate off-net of the donor’s network, ie on another operators network, and are destined for a ported number on the recipient’s network are effectively using the donor operator as a transit operator. At the moment BT and other operators are unable to determine whether a call to a ported number originated on or off-net, nor can existing interconnect and billing systems accurately record all the transit elements involved in the routing of the call. As a result some form of averaging is necessary to ensure that any donor operator acting as a transit operator is able to recover any transit costs incurred in the routing of a ported call.
7.2 A fuller account of the methodology used to calculate the average porting conveyance charge is given in Annex A. Previously Oftel has been providing interim determinations of the average porting conveyance rate for individual operators. Using the average transit rates and the model set out in Annex A, operators can now determine their own average porting conveyance rate.
8 Standard portability charges
8.1 Condition 35C.5 (a) provides for the Director General to determine the Standard Portability Charges which allow for the recovery of reasonable costs incurred by the licensee in providing portability, these are set out in schedule 2 of the determination. The Standard Portability Charges take account of the principles of cost recovery outlined in paragraphs 35C.5 (b) to 35C.5 (d).
(b) such Additional Conveyance Costs incurred in utilising non-geographic call drop back signalling functionality (see para 6.2).
In accordance with the principles of cost recovery set out in Condition 35C.5
(c) Additional Conveyance Costs can only be recovered for calls to ported national rate and premium rate service numbers.
8.2 In addition, the Director General may under the terms of paragraph 35C.5 (d) (ii) determine how any additional categories of costs should be recovered. In relation to number block portability, the Director General considers that these costs are similar in nature to those incurred in Per Line Set-up and that the recipient operator should bear these costs. The determination allows BT to recover a Standard Portability Charge in respect of Number Block Portability.
8.3 As regards the average porting conveyance rate, the Director General considers that a transit charge would be incurred anyway if operators were to use a transit operator to convey non-ported calls – a transit charge may therefore be made for the call whether it is to a ported or a non-ported number. The Director General considers that BT may recover these costs in the normal manner. However, it is necessary to average this charge in order to overcome the limitations in BT’s interconnect and billing system.
A.1 These are the transit costs of conveying calls received from an originating operator that are destined for a ported number on a recipient operator’s network. The average porting conveyance charge is applied to all non-geographic ported calls. The charging formula is based on existing transit rates and the proportion of non-geographic traffic (calls) that orginate ‘off-net’. An illustrative example of how the Average Porting Conveyance Charge is calculated is set out below.
Example of Calls to Freephone
| Cost p/m | No. of minutes | Total | |
| Single Transit (eg, a = 0.155) | a | v | a*v |
| Double Tandem Short | b | w | b*w |
| Double Tandem Medium | c | x | c*x |
| Double Tandem Long | d | y | d*y |
Average = (a*v)+(b*w)+(c*x)+(d*y) = AV
A.2 This average is then applied to the tariff gradient to yield the appropriate day, evening and weekend rates for calls to ported numbers. For example, if AV from above is equal to 0.350 then we have the following:Z
| Day | Evening | Weekend | Average | |
| Tariff Gradient | 1.323 | 0.733 | 0.587 | |
| Average Conveyance for NTS Transit | 0.463 | 0.257 | 0.205 | 0.350 |
| Day | Evening | Weekend | Average | |
| Average Porting Conveyance
Charge (p/m) |
0.0734 | 0.0407 | 0.0326 | 0.0555 |
Costs associated with extra routing and processing required within an operator's network in order to pass the call to the operator to which the called customer has ported.
Average Porting Conveyance costs
This is an average of the conveyance (transit) costs incurred by an operator who is conveying a call which did not originate on its own network onto an operator to which the called customer has ported.
Call Drop Back
A method of providing Number Portability which involves signalling messages between the various exchanges used in routing the call and removes the need to trombone the speech path.
DMSU
Digital Main Switching Unit: an exchange located at the trunk/transit layer of BT’s network.
DSN
Derived Services Network: a separate overlay network of switches and transmission links accessed from BT’s DMSU (transit) network which is used to provide non–geographic services.
IN
Intelligent Network: an overlay computer system providing intelligence to control telephone calls separate to embedded switch intelligence.
Non–Geographic Number
These are numbers which are used to identify a type of service rather than a geographical location. These services are also referred to as Specially Tariffed Services and include freephone , local rate, national rate and premium rate numbers.
NTS
Number Translation Services: the process associated with the routing of a non-geographic number to a network termination point, eg, the number is translated from its non- geographic format into a geographic or mobile format to enable it to be terminated at a geographic location or at a mobile termination point.
Number Block
A series of numbers (usually sequential).
Number Block Portability
The facility which enables a customer to transfer from one operator to another and retain their number block or, a series of numbers from within a number block.
Number Portability
The facility which enables a customer to transfer from one operator to another and retain their number.
Per Line Set-up costs
Costs incurred in amending switches and administration records to enable a customer to port their number.
Porting, Ported
Keeping the same number when transferring from one operator to another.
System Set-up costs
Costs incurred in establishing the technical and administrative capability to provide number portability in a telecommunications network.
Tromboning
Tromboning occurs when there is an additional loop in the call speech
path to a ported number which continues for the duration of the call.
