Draft Management Plan for 1999/2000

A consultative document issued by the Director General of Telecommunications

February 1999

Please note that this document refers to diagrams held in separate files

Consultation

Oftel seeks the views of consumers, consumer organisations, industry and others on the proposals contained in this consultation document by 12 March 1999. There will then be a two week further period during which comments on the representations made during the first period of this consultation are invited; this will end on 26 March 1999.

Comments should be made in writing and sent to:

Richard Larking
Regulatory Policy Directorate
Oftel
50 Ludgate Hill
London, EC4M 7JJ

Tel: 0171-634 8938

Fax: 0171-634 8924
or E-mail:

Written comments will be made publicly available in Oftel’s Research and Intelligence Unit except where respondents indicate that their response, or parts of it, are confidential.

Respondents are therefore asked to separate out any confidential material into a confidential annex which is clearly identified as containing confidential material. In the interests of transparency, respondents are requested to avoid confidentiality markings wherever possible. Appointments to view written comments in Oftel’s Research and Intelligence Unit, which must be made in advance, can be arranged by ringing: 0171 634 8761 (fax: 0171 634 8946).

Internet Access

Oftel would like to set up a link between this Consultative Document and any responses places on respondents own Internet pages. Please contact Lauren Ryner at Oftel on 0171 634 8753 or by e-mail to arrange this. Confidential responses should not be sent via the Internet.

Oftel has a free e-mail based mailing list to help people stay informed about the work that Oftel is doing. Each time an Oftel document is published and placed on Oftel's web site subscribers to the list receive an e-mail informing them about the document. If you would like to join please click here.

Alternative Formats

• Copies of the full Consultative Document are available on disk.
• The Summary is available in large print, braille, and tape formats.

Foreword from Director General of Telecommunications

Oftel’s 1999 / 2000 Draft Management Plan

Telecommunications are a critical element in the UK economy and society. Oftel plays a key role in creating a competitive telecommunications market that meets customer needs. In planning its direction and work the views of relevant groups must be considered.

This consultation document seeks the views of groups interested in the development and use of telecommunications services – residential and business consumers, consumer organisations, industry players, and Government agencies and departments – on Oftel’s draft management plan for 1999/2000 which comprises:

• current and developing strategy
• draft list of specific projects and programmes for 1999 / 2000

Oftel is also working in parallel on a 3-5 year strategy. This will be produced later this year.

This consultation is designed to:

• explain Oftel’s strategy and provide an opportunity for comment
• encourage views and comments on the projects and programmes
• promote stakeholder interest in contributing on work in 1999/2000.

It is important that we receive your views to build a strategy and plan that takes account of the experience, knowledge and vision of Oftel’s key stakeholders.

I look forward to receiving responses.

DAVID EDMONDS

DIRECTOR GENERAL OF TELECOMMUNICATIONS

Contents

Chapter 1 - Oftel's strategy – past, present and future

Telecommunications – fundamental to the UK's well being
Oftel’s goal and objectives – and its current strategy to achieve them
Underlying factors – the background to regulation in telecommunications markets
Origin and evolution of UK telecommunications market
The type of industry   – impact on suppliers
                                    – impact on customers
Development of Oftel's strategy over the next 18 months
Policy principles used in current strategy
Strategy development in the short term
Developing a longer term strategy … in a changing market environment
Summary
Consultation questions on Oftel’s strategy

Chapter 2 - Proposed projects and programmes for 1999/2000

Introduction
Table: Summary of proposed projects and programmes
Consultation questions on Oftel’s proposed work
Glossary

Chapter 1

Oftel’s strategy – past, present and future

Telecommunications – fundamental to the UK's well being

1. Telecommunications networks and services play a fundamental role in the functioning and growth of modern economies and societies. The role of telecommunications is critical across a very wide range of activities: from emergency services to social services, from small business to multi-national companies, from local authorities to central government, and for every individual in their social and employment contacts. Telecommunications underpins the digital, electronic commerce based activities and new services bringing together broadcasting and IT and forming a key input to the knowledge driven economy. The telecommunications sector is also a major contributor to the UK economy in its own right – accounting for around 2% of GDP and over 200,000 jobs and with related and converging sectors it accounts for somewhere over twice these figures.

2. Oftel, as regulator of the UK telecommunications market, plays a key role in enabling achievement of a competitive telecommunications market. Oftel needs to set out clearly, so that key players – consumers, industry and investors and other parts of Government can understand and debate, the following:

• Oftel’s goal and objectives – and its current strategy to achieve them
• the background to regulation in telecommunications market
• the development of Oftel’s current strategy over the next 18 months; and
• the implications for Oftel's longer term strategy of an increasingly competitive telecommunications market and convergence with other market sectors.

Oftel’s goal and objectives – and its current strategy to achieve them

4. Oftel has as its goal the achievement of the best deal for UK telecommunications customers in terms of quality, choice and value for money. This goal is derived from and summarises its various statutory responsibilities. To achieve its goal Oftel has five high level objectives:

• promoting sustainable and effective infrastructure competition
• promoting sustainable and effective services competition
• preventing anti-competitive practices
• fair distribution of benefits of competition
• consumer protection especially where markets are not competitive.

5. Oftel is trying to achieve its goal and objectives through a three-pronged strategy:

• by promoting consumer interests through protection measures where competition is not yet effective, ensuring social obligations to certain groups of disadvantaged consumers are met and that the nation’s dependence on telecommunications services is matched with commitments to service, continuity, network resilience and protection of customer information
• through promoting competitive markets for telecommunications services that serve consumers’ interests at all levels – in local connections, long distance infrastructure and in services. This involves not only establishing a climate which encourages investment by new entrants and existing players but also encourages the provision of customer focused information by suppliers and involves overcoming barriers outside the control of individual suppliers and customers, such as the need for networks to interoperate with each other and ensuring the efficient management of scarce resources, such as numbering
• by preventing suppliers with strong market positions from acting anti-competitively.

7. As competition becomes effective Oftel is seeking to draw back from detailed prescriptive regulation whenever practical and where market developments allow. In these instances the constraints on market behaviour will come from

• the pressure of market forces operating between competitors
• Competition law where Oftel together with OFT will be responsible for using the powers of the new Competition Act to prevent anti competitive behaviour
• continuing, if reduced, sector specific regulation of the type set out in paragraph 5 above
• the influence of informed consumers
• industry self regulation e.g. through codes of practice and standard setting
• other government and quasi government bodies exercising statutory or regulatory powers e.g. the Data Protection Registrar in respect of telecommunications data protection regulations and the OFT re unfair contract terms in consumer contracts with telecommunications suppliers.

Click here for Fig 1 – Changes in regulatory roles as competition develops

Underlying factors – the background to regulation in telecommunications markets

9. The key underlying factor to telecommunications regulation is that competition in telecommunications will not inevitably follow from allowing new suppliers into the market – for two main reasons:

• the origin and subsequent evolution of the UK telecommunications market
• the type of industry that telecommunications is.

10. BT when privatised in 1984 inherited, from its former public sector status, a UK-wide monopoly of fixed link telecommunications services with significant implications for the introduction of competition.

11. Progress is being made to develop competition, particularly since 1992 when the BT/Mercury duopoly was ended, but it is not a short-term process. BT’s current share of the total UK telecommunications market of some £22 billion, (for fixed, mobile networks and telecommunications equipment) is around two thirds compared to an almost complete monopoly in 1984 and around three quarters in 1994.

12. Within this total BT’s position in individual markets varies: it retains high market shares (80% or more) in major parts of the fixed link residential market segment such as local calls and access but significantly lower shares in segments of the fixed link business market such as international calls (less than 40%) and national calls (around 65%).

13. The extent of competition can be illustrated as follows:

• in the provision of fixed link infrastructure to the residential market. Cable networks now pass around 50% of all UK homes and serve some 16% of UK households
• Indirect access is now available across the UK to both residential and business customers from around 50 licence holders
• The mobile market is growing rapidly with over 13 million subscribers with a range of new tariffs and services offered – such as pre-pay, and tariffs for low and high users – by the four mobile network operators which are beginning to challenge those provided by fixed operators
• Some 2 to 3 million UK Internet subscribers purchasing services from a wide range of service providers
• Satellite and cable TV have around 7 million subscribers in total with four main players.

The type of industry – impact on suppliers

15. The telecommunications industry itself has a number of features that have major implications for regulatory policy aimed at the development of competition and the advancement of consumers’ interests:

• the networked nature of the telecommunications sector requires co-operation between competitors in order to deliver services between customers who may each buy their service from different telecommunications suppliers. This co-operation need not necessarily happen even in relatively competitive networked markets and is unlikely to occur naturally where there are suppliers with strong market positions
• The significant economies of scale in the provision of telecommunications networks, especially fixed link access networks, limit the likely extent of infrastructure competition
• Significant costs are involved in the provision of infrastructure and these costs cannot always be redeemed if companies exit the market
• Most telecommunications infrastructure operators are vertically integrated and where combined with strong market positions, this has the potential for anti-competitive behaviour, especially in the face of new entry. Such behaviour may even work through the more competitive market segments of a supply chain to the disadvantage of customers.
• In the mobile market there is limited radio spectrum available which limits the number of competitors which can provide service.

Types of industry – impact on customers

16. The specific features of telecommunications also have implications for customers which in turn affects how competition is introduced and the prospects of achieving sustainable competition. Two features of telecommunications services in particular are relevant:

• the fundamental requirement for all individuals to be able to readily use telecommunications networks
• the exchange of information (voice, data, visual images) that takes place between customers.

18. The confidence customers have in being able to exercise control over information sent and received and the charges made for their calls is an important feature of telecommunications in both competitive and non-competitive markets. Increasing customer awareness and concern over these issues is evident, for example in the high level of complaints about unsolicited faxes and the increasing proportion of UK telecommunications customers that have opted for ex directory status.

Development of Oftel's strategy over the next 18 months

Policy principles used in current strategy

19. Oftel has adopted a set of principles in order to manage the process of change from monopoly to competition – these are set out below. There are tensions, however, between the different elements, which mean that the application of these principles is not a straightforward process and requires careful balancing. And there is a risk that regulation can distort the market where competition grows around the regulatory principles. The principles are as follows:

Promoting consumer interests, consumer protection and ensuring social access

• to have price controls on dominant operators where there is little prospect of effective competition to reduce prices
• to enable social objectives to be met, for example, by ensuring access to a minimum universal set of services, by encouraging the provision of services accessible to all irrespective of any physical disability, by facilitating the provision of low cost access by schools to the Internet
• to enable customers to exercise choice effectively with adequate information to enable choice
• to support customers’ right to privacy and redress in use of their data over and by telecommunications networks
• to ensure access to adequate redress for consumer complaints
• to ensure the nation’s dependence on telecommunications services is matched with commitments to service continuity and network resilience.

Promoting competition

• promoting competition at all levels in the market and encouraging infrastructure competition where possible and realistic
• promoting competition and choice in the provision of services over networks
• sustaining the incentives to invest in infrastructure and service provision by setting appropriate terms and conditions
• ensuring access rights for competitors to interconnect with networks of the dominant operator at cost based prices
• ensuring the impacts of factors outside the influence of individual customer and suppliers (e.g. standards for interoperability) are recognised and addressed to achieve pro-competitive outcomes
• to facilitate the provision of information to increase market transparency
• the adoption of a neutral approach between technologies.

Compliance

• intervention to ensure the prevention of anti-competitive practices by operators with market power
• ensuring compliance with licence conditions and agreed rules
• investigation of complaints about anti-competitive practices
• ensuring barriers to market entry are minimised
• addressing competition issues associated with management of bottlenecks (i.e. restricted customer access to services controlled by an individual supplier) and scarce common resources (for example numbering)

20. As the extent and impact of competition increases Oftel’s strategy needs to develop to ensure the best deal for consumers is achieved in a new set of circumstances. The new circumstances, as set out previously, are that the key individual markets in the telecommunications sector increasingly comprise not monopolies or duopolies but a small number of large players who account for the great majority of market activity and market power.

21. To address these circumstances, Oftel’s strategy in the short term is to retain a three-pronged core strategy of promoting consumer interests, promoting competition and ensuring compliance but with greater emphasis on the following approaches and policy principles:

• moving towards broad behavioural rules applying to a range of players and away from prescriptive, detailed rules on individual operators (e.g. limiting the level of price increases that can be charged for a range of customer types). The Competition Act in particular is both enabling and encouraging this approach and with its full implementation from March 2000 will highlight differences and tensions between Oftel’s powers and remedies as a regulator and as a competition authority that will need to be resolved in a transparent way that meets its goal and statutory responsibilities
• recognising that the increase in competitive pressures has identified a wider range of ‘externalities’ in the working of telecommunications markets that require particular attention – for example call termination, interoperability standards, management of bottlenecks, and that the impact of regulatory rules themselves will have influenced the structure of the market with consequences for these market structures where rules are changed
• managing limited common resources in a way designed to maximise competition in areas such as numbering and encouraging facility sharing in certain circumstances
• identifying and developing a coherent approach to economic regulation across converging sectors
• raising awareness by consumers of both choice available and their rights (including rights over control of use of personal data)
• … and that this will involve greater interaction, identification and adoption of good practices by Oftel and other regulatory bodies – such as the Data Protection Registrar – in order to provide a more seamless service to consumers.

23. Examples of these developments of strategy in the short term can already be seen. As the market has developed, it has been possible to achieve changes in regulatory responsibilities away from more detailed prescriptive regulation. For example retail price control now focus on the lowest spending 80% of residential customers who account for 25% of BT’s revenues. Prior to 1997 it applied to nearly two thirds of BT revenues.

Developing a longer-term strategy ….. in a changing market environment

24. In the longer term Oftel needs to identify how far it can move towards a position of relying on competition (and competition law) in the market to achieve its goal, how far it will still need to intervene to actively promote competition and protect consumers, and how far it can enable customers to exercise their rights themselves to protect their interests. Oftel’s current view is that it will need to retain a regulatory role where:

• there are limitations to market developments identified and these limitations are likely to disadvantage customers; and
• there are social objectives such as the need to be able to contact emergency services and for services to be accessible to people with special needs.

25. As part of its work on a longer term strategy Oftel will consider further the circumstances where telecoms specific regulation will be appropriate, within the framework set by UK and EU legislation. This work would also consider the basis on which to resolve tensions between policy principles and how these will be applied in the light of market developments such as

• rapidly developing technologies including the spread of networks built to Internet Protocol (IP) standards rather than primarily for carrying voice calls
• international liberalisation of telecommunications with impact both on UK customers making international calls and on the UK telecommunications market itself
• globalisation of reach of telecommunications suppliers serving multinational companies
• integration between fixed and mobile markets
• convergence of IT, telecommunications and broadcasting
• new methods of pricing new services
• increased demand for access to local loops by competitors seeking to provide new services
• the effective completion of the majority of the cable infrastructure network
• new developments in technologies and markets bringing pressure on the current model of the vertically integrated telecommunications network operator.

26. This chapter has set out Oftel’s view of

• the importance of telecommunications to the UK and the consequent importance of achieving the regulatory goal of best deal for UK telecommunications customers
• how Oftel is seeking to achieve its goal, primarily through the promotion of consumer interests, the promotion of competition and preventing anti-competitive practice
• the special features of telecommunications that make the achievement of effective, sustainable competition a challenge
• what elements comprise Oftel’s current strategy and how the strategy is being developed in the short term to reflect developments in competition
• what issues need to be addressed to develop a longer-term strategy in a technologically converging world.

Consultation questions on Oftel’s strategy

Q1 Do you consider Oftel’s current and developing strategy to be coherent and to represent the most appropriate means of achieving its goal of best deal for the customer? If not what other approach would you suggest?

Q2 Do you consider the most relevant market developments have been identified in terms of Oftel’s work to develop a longer-term strategy?

Chapter 2

Proposed projects & programmes for 1999/2000

Introduction

1. This chapter sets out Oftel’s work in term of projects and programmes that it intends to carry out in 1999/2000 and beyond.

2. The table below lists the individual projects & programmes and is followed, in the remainder of the Chapter, by a brief description of each project. Where appropriate dates are given as to when key stages are due to be completed. The dates referred to are as follows:

• Q 1 is April – June 1999
• Q 2 is July – September 1999
• Q 3 is October – December 1999
• Q 4 is January – March 2000

Oftel 1999/2000 draft management plan

Summary of proposed projects and programmes

Projects in this section help to define and shape the overall framework within which regulation works.

A1 1999 EU review of telecommunications regulation

Project Manager: Jim Niblett

Objective: In conjunction with government departments and other authorities, to promote acceptance of the most suitable regulatory regime for the UK market as it develops.

• To help to stimulate the widest possible informed debate in the UK about appropriate objectives and regulatory provisions, by close liaison with interested parties, public presentations and otherwise, so as to assist Oftel in formulating its own views. (Publish summary of report by Q3 199/2000).

• To liase closely with the European Commission, key Members of the European Parliament and other leaders of opinion throughout the progress of the Review, submitting proposals and comments on the proposals of others as appropriate (Q1 to Q3 1999/2000).

• To exchange views with European regulatory authorities, so as to reinforce mutual understanding of each other’s positions and to co-ordinate those positions as far as possible (Q4 1999/2000).

Project Manager: Matthew Conway

Objective: To apply the experience gained from regulating the UK telecoms market to the developing international and European policy frameworks.

• Continue to develop relations with other administrations, the Independent Regulators’ Group (meetings Q3 and Q4 1999/2000) and European Committee for Telecoms Regulatory Affairs (ECTRA) (meeting Q3 1999/2000) to help improve mutual understanding and to exchange best practice on implementation of current policy.

• Maintain and enhance the awareness within Oftel of the international agenda, and continue to improve Oftel’s effectiveness in influencing it (on going).

Project Manager: Paul Campbell

Objective: To respond in a timely and effective manner to new proposals from the Government concerning future arrangements for utility regulation.

• Contribute to the debate on the content of the future legislation (Q2 1999/2000).
• Improve Oftel’s preparedness for implementation of the future measures (Q3 1999/2000).

Project Manager: [tba]

Objective: To ensure consumer interests are promoted and enhanced through preparations for the proposed transfer of consumer functions from Oftel to a TCC.

• Review nature and scope of functions to be transferred (Q2 1999/2000).
• Review of Oftel complaint handling powers (Q3 1999/2000).
• Develop initial draft of memorandum of understanding between prospective TCC and Oftel (Q4 1999/2000).

Project Manager: Geoff Delamere

Objective: To ensure Oftel identifies and publishes its strategy and management plan on an annual basis.

• Review responses and reaction to publication of 1999/2000 strategy and management plan document (Q1 1999/2000).
• Monitor key indicators of customers’ choice of services and suppliers, quality of service obtained and value for money achieved for 1999 (prepare review document Q4 1999/2000).
• Prepare draft management plan and strategy document for 2001/2002 (Q3 & Q4 1999/2000).

Project Manager: Michelle Childs

Objective: To assess Oftel's role against likely market developments and to set out the approach and, where necessary, the rules required to enable it to perform its role.

• Identify the implications for regulation of key market changes (Q1 1999/2000).

• Develop guidelines on the application of Oftel’s high level objectives (Q2 1999/2000).

• Develop detailed rules to implement these guidelines for use internally, and discussion externally, to ensure coherent and consistent regulation.(Q3 1999/2000).

Project Manager: Peter Davies

Objective: To improve the efficiency of the licence granting and modification processes.

• Carry out a review of all outstanding licensing issues and policy changes (Q1 1999/2000).

• Work with DTI on changes to the licence modification process (Q3 1999/2000).
• Produce new licence templates for the use of the academic community and a data only individual licence (Q3 1999/2000).

Project Manager: Peter Davies

Objective: Working with DTI to ensure that all the necessary changes are made to telecommunications licences to implement the Licensing Directive.

• Complete consultation with industry and settle outstanding policy issues (Q1 1999/2000).

• Assist with the drafting of statutory instrument to give effect to licence changes

(Q1 1999/2000).

• Complete statutory process and issue texts of all revised licences to licensees (Q2 1999/2000).

Project Manager: Chris Taylor

Objective: To evaluate existing lines of communication between Oftel and its stakeholders (ie consumers, operators & service providers). To make recommendations on how to manage relationships and interfaces with stakeholders going forward.

• Internal review of current relationships and existing interfaces between Oftel and its stakeholders. (Q1 and Q2 1999/2000).
• External survey of stakeholders (Q1 and Q2 1999/2000).
• Publish results (Q2 1999/2000).

Oftel Project Manager: Jim Niblett

Objective: Working through the "Group of 3" (ITC/OFT/Oftel), to promote coherent economic regulation within the Communications sector.

• To complete a feasibility study into a common regulatory philosophy and approaches for dealing with problems of unfair competition in communications markets (Q1 1999/2000).

B. Promoting Consumer Interests

Projects in this section are focussed on promoting consumer interests recognising the special nature of telecoms for customers especially in terms of privacy and security, preventing social exclusion and preventing abuse of market power.

Promoting consumer interests: Special nature of telecoms

B1 Data protection in telecoms

Project Manager: Paul Campbell

Objective: To co-ordinate the Oftel contribution to the implementation of the Telecoms Data Protection Directive and establish schemes to enable customers to opt out of receiving direct marketing calls.

• Work with DTI on the implementation of the Directive (Q1 1999/2000).
• Establish an opt-out scheme run by an approved body (Q1 1999/2000).
• Monitor effectiveness and assess awareness of opt out scheme for customers (Q2 – Q4 1999/2000).

for the Supervision and Standards of Telephone Information Services (ICSTIS)

Project Manager: Paul Campbell

Objective: To co-ordinate Oftel policy relating to customer concerns over premium rate services and to liase with ICSTIS.

• Widen the range of services that fall within ICSTIS regulation by modification of the relevant licence condition (Q2 1999/2000).
• Achieve a reduction in the number of complaints relating to PRS numbers (Q3 1999/2000).
• Work with ICSTIS to ensure compliance with the ICSTIS Codes (Q1 1999/2000).

Project manager: Neil Buckley

Objective: To facilitate competition in the directory services market and to protect customers in the use of their directory information.

• Publish a Statement on the responses to the October Statement Provision of Directory Information Services and Products (Q1 1999/2000).
• Review directory enquiry access codes and publish a statement (Q1 1999/2000).
• Implement changes to BT’s 19989/1999 accounts, financial statements and related documentation (Q2 1999/2000).

Project Manager: Frank Phillips

Objective: To ensure that the regulatory arrangements applying to Calling Line Identification (CLI) sustain the continuing commercial development of the service while robustly protecting consumers’ privacy and data protection rights.

• Produce Consultative Document making the case for a more flexible use of Presentation Numbers enabling customers who meet certain criteria to supply numbers for CLI display to network operators, subject to appropriate safeguards (Q1 1999/2000).
• Promote the development of a Code of Practice by Service Providers setting out the framework within which they might have access to "raw" CLI for service management purposes (Q2 99/00).
• Work closely with the Data Protection Registrar on the national implementation of the CLI articles of the Telecoms Data Protection Directive (97/66/EC) (Q2 1999/2000)

Project Manager: Helen Terry

Objective: To identify Oftel’s role with respect to the emerging markets in electronic commerce and its regulation.

• Define the scope of Oftel’s regulatory role in relation to electronic signature services in the light of DTI proposals for the Electronic Commerce Bill (Q3 1999/2000).
• Work with DTI to influence the EU in the formulation and negotiation of legislation relating to electronic commerce with a view to ensuring the development of a coherent framework (by Q4 1999/2000).
• Analyse the wider impact of the growth of electronic commerce and promote recognition of key issues within Oftel and in other Government departments (Q1 1999/2000).

Project Manager: Neil Buckley

Objective: To ensure compliance with the duties placed upon the Director General and the obligations imposed upon telecommunications companies by the implementing regulations.

• Initial consultation on a procedure to resolve disputes between consumers and operators (Quarter 2 1999/2000).

• Open competition to become the arbitrator or mediator (Quarter 2 1999/2000).
• Final statement on the dispute resolution procedure that is to be adopted (Quarter 3 1999/2000).

Project Manager: Malcolm Davies

Objectives: To publish guidelines relating to requirements placed on public telecommunications operators (PTOs) by the Revised Voice Telephony Directive and it’s implementation in UK law (Statutory Instrument 1580) in relation to the provision and maintenance of essential requirements in the fields of security of network operations and maintenance of network integrity.

• To establish those aspects of network design which govern the provision of operational security and network integrity (Q1 1999/2000).
• To establish examples of best practice for the maintenance and ongoing provision of operational security and network integrity (Q2 1999/2000).
• To publish guidelines which properly advise and interpret how PTO’s may satisfy the statutory requirements in relation to the above. (Q3 1999/2000).

Project Manager: Malcolm Davies

Objectives: To extend the meter approval scheme in relation to all licensed telecommunications operators and service providers through, where appropriate, licence changes to ensure customer confidence in billing accuracy and for the protection of consumer interests.

• Formulation of firm policy proposals based on earlier consultation (Q1 1999/2000).
• Publication of policy statement (Q2 1999/2000).
• Extension of scheme where appropriate to two remaining mobile operators and principal cable companies (Q3–Q4 1999/2000)

Promoting Consumer Interests: preventing social exclusion

B9 Universal service

Project Manager: Paul Campbell

Objective: To ensure delivery of affordable basic telecoms services, including payphones, to all consumers including those with disabilities.

• Undertake review of Universal Service in course of 1999 (Q3 1999/2000).
• Work with DTI to produce Regulations containing licence conditions for all PTO’s on telecommunications services for people with disabilities (Q3 1999/2000).
• Work with DTI to review the provision of telecoms apparatus for people with disabilities (Q3 1999/2000).
• Consult on policy towards the provision of mobile telephony for people with disabilities (Q4 1999/2000).
• Further Consultation on payphone regulation, possibly leading to licence modifications in 1999 (Q3 1999/2000).
• New BT "Limited Outgoing Calls" service in place by end 1999 (Q3 1999/2000).

Project Manager: Neil Buckley

Objective: To encourage telecommunications companies to offer new and enhanced tariffs for Internet access for schools, public libraries, FE colleges and citizens’ advice bureaux.

• To encourage telecommunications operators to offer affordable tariff service packages for primary schools (Q2 1999/2000).

• To identify opportunities with telecommunication operators with reference to special tariffs for Internet access for public libraries, FE Colleges and citizens’ advice bureaux. (Q1 1999/2000).

• Issue statement where appropriate on Internet access for public libraries, FE Colleges and citizens’ advice bureaux. (Q3 1999/2000).

B11 Price control review

Project Manager: Peter Culham

Objective: To prepare for and implement revised price controls for retail and network services from August 2001.

• Review of competition including differences between urban and rural areas

(Q1 1999/2000).

• Price Control initial Consultative Document (Q3 1999/2000).
• Indicative outputs of financial modelling for inclusion in second consultative document (Q4 1999/2000).
• Commission and management of efficiency study of BT (Q4 1999/2000).

C. Promoting Competition

Projects in this section aim to promote competition through enabling supplier access to networks, promoting competition in new and existing markets, through controlling limited common resources and addressing market failures to provide information.

Promoting competition: enabling access

C1 Competition in mobile markets

Project Manager: John Bean

Objectives: To review the state of competition in the mobile market and the developments in the provision of fixed mobile integrated services, and to consider what and which changes are needed in the regulatory framework to promote effective competition.

• Publish Statement on Oftel's Review of Mobile Markets (Q1 1999/2000).
• Define mobile market requirements as part of Oftel input into 1999 EU Review of the regulatory framework for a liberalised EU market (Q1 1999/2000 and beyond).
• Establish and maintain fair competition in mobile markets (including fixed/ mobile integrated markets) from networks and organisations having market power in these or related markets (ongoing).

Project Manager: Sally Trebble

Objective: To establish Oftel’s policy on higher bandwidth access infrastructure in the local loop, including local loop unbundling.

• To consult widely on the case for regulatory intervention in the development of higher bandwidth access infrastructure, leading to adoption of an Oftel policy whether to intervene and if so in what form (Q1 1999/2000).
• To develop Oftel’s policy on local loop unbundling and contribute effectively to the EU 1999 review of local loop competition (Q3 1999/2000)

Project Manager: Sally Trebble

Objective: To manage industry implementation of carrier pre-selection and resolve any outstanding policy issues.

• Develop and adopt rules for the recovery of the costs of implementing the CPS service on UK networks (Q1 1999/2000).
• Seek derogation from EU time scales for the introduction of the CPS service based on technical feasibility (Q2 1999/2000).

Project Manager: Michael Richardson

Objectives: To increase the scope for innovation and competition within the regulatory framework for service provision.

• Consider whether current regulation of operators with Significant Market Power allows service providers to offer competitive value added services over those networks (Q2 1999/2000)
• Publish guidelines on access to networks by service providers (Q1 1999/2000)
• Review the basis on which service providers are supplied with mobile airtime (Q1 1999/2000)

Project Manager: Peter Culham

Objectives: To consider the type of interconnection problems which new technologies and new services will bring.

• Review of Number Translation Services (NTS) interconnection charging principles – statement (Q1 1999/2000).
• Develop Oftel model of Asynchronous Transfer Model (ATM) interconnect (Q2 1999/2000).
• Charging arrangements for interconnection of Internet Protocol(IP) networks – statement (Q2 1999/2000).

Promoting competition: in new and existing markets

C6 Internet

Project Manager: Helen Terry

Objective: To identify and monitor emerging issues arising from developments in the Internet industry and assess their regulatory implications.

• Development of regulatory framework to encourage competition in Internet access in terms of costs, availability and speed.

Project Manager: Frank Phillips

Objective: To ensure that the regulations applying to the approval of Customer Premises Equipment (CPE) serve the interests of consumers by maintaining the conditions in which a competitive CPE market thrives and do not inhibit the timely availability of innovative products.

• Work closely with the DTI on the Regulations implementing the new Radio and Telecoms Terminal Equipment (RTTE) Directive (Q2 1999/2000).
• Manage the transition between the existing apparatus approval regime derived from the Telecoms Terminal Equipment Directive (91/263/EEC, consolidated as 98/13/EC) and the new framework based on the RTTE Directive (Q3 1999/2000).
• Issue General Approvals based on suppliers’ declarations for non-radio equipment supporting new network services (Q3 1999/2000).

Oftel Project Manager: Jim Niblett

Objective: In co-operation with other members of the Group of Three, Independent Television Commission, Office of Fair Trading & Oftel) to develop regulatory policy in relation to Oftel’s statutory responsibilities in respect of broadcasting and related markets.

• To review conditions for delivery of broadcasting services through broadband networks (Q3 1999/2000).
• To consider problems of interoperability in respect of digital television receivers and to propose appropriate remedies (Q2 1999/2000).

• To review existing guidance relating to conditional access / access control and to Electronic Programme Guides (EPGs); and to revise as appropriate (Q3 1999/2000).

Promoting Competition: controlling limited common resource

C9 Access to the Radio Spectrum

Project Manager: Valerie Jervis

Objective: To influence Radiocommunications Agency (RA) and Department of Trade and Industry (DTI) polices to ensure that spectrum allocation policy and the implementation of spectrum pricing proposals promote economically efficient use of the spectrum and reflect the needs of the telecoms industry and users arising from growth and from the emergence of new technologies, services and customer demands.

• 3^rd Generation – Contribute to the policy development by Radiocommunications Agency (RA) and department of Trade and Industry (DTI) re the 3^rd generation mobile market and the auction of spectrum. (Q2 1999/2000).

• Broadband Radio Access. To contribute to the forthcoming consultation and probable auction for broadband radio access by RA and DTI. (Beginning Q1 1999/2000).

• Fixed links – Review access to fixed link radio spectrum and explore alternative methods of managing the spectrum to ensure the promotion of competition and continued availability of fixed links for the development/delivery of new services. (e.g. mobile/broadband access) (Q1 1999/2000 onwards).

• To contribute to the response on the European Commission Green paper on Radio Spectrum Policy. (Q1 1999/2000)

Project Manager: Alan Pridmore

Objective: To promote the efficient management of numbers by operators through number charging; to ensure transparency and extend customer choice and rights in numbers through the introduction of direct allocations to end users from a central numbering body.

• development of a methodology for number block charges and of rules on number allocation and on rights of use (Q1 1999/2000 onwards).
• input into necessary legislative changes (Q2 1999/2000 onwards).
• develop of implementation plans (Q3 1999/2000 onwards).

Project Manager: Ray Thornton

Objectives: To ensure the efficient and fair effective allocation of the numbering resource, in a pro-competitive manner.

• Overseeing the National Code and Number Change project (Q4 1999/2000).
• Develop new Access Code structure (Q2 1999/2000).
• Determine the future of freephone numbering (Q2 1999/2000).
• Develop structure for wide area code numbering (Q3 1999/2000).
• Annual audit of allocations and number usage (Q4 1999/2000).
• Influence of EU and international numbering policy (Q1–4 1999/2000).

Promoting Competition: addressing market failure

C12 Providing and facilitating better information for customers

Project Manager: Geoff Delamere

Objective: To enable telecoms customers to be better purchasers through access to better information.

• Fixed link industry publication of price comparisons for residential customers (Q2 1999/2000) and fixed and mobile comparable quality of service measures (fixed – Q1 & Q3 1999/2000, October 1999; mobile by Q4 1999/2000).
• Develop independent Website to provide telecoms purchase advice information sources for small businesses (Q2 1999/2000) and enable Large Business Users Panel to play a catalyst role in policy and market development (Q1, Q2, Q3 meetings).
• Identify and publish customer awareness and take up of telecommunications services through market research and benchmarking surveys (by Q4 1999/2000).

Project Manager: Malcolm Davies

Objectives: To implement policy on interoperability at network and customer interfaces. To ensure that the Network Interoperability Consultative Committee (NICC) work programme outputs are consistent with Oftel’s policy framework. To work closely with and support the work of six diverse industry groups and their associated technical task groups within NICC. To facilitate and support the migration from UK to EU interface and interconnection standards and to support other work of the Network Futures Group.

• Completion and publication of Determination that BT has Interface Control

(Q1 1999/2000).

• Completion and publication of Guidelines on Interconnection and Interoperability (Q1 1999/2000).
• Obtain agreement from the UK Public Network Operators to a Memorandum of Understanding covering the seven year plan to achieve the necessary migration of UK C7 (UK version of CCITT Signalling System NO 7) to ETSI ISUP C7 (The European Signalling Interconnection Standard). (Q2 1999/2000).
• Facilitate the creation of a comprehensive Industry based working group of Public Network Operators to manage the above migration programme. (Q2 1999/2000).

compliance

Project Manager: Tim Kuypers

Objective: To monitor anticipated key developments in telecoms and related markets over coming years and to analyse their input on Oftel’s work. Disseminate these findings enabling Oftel to effectively adapt its role accordingly.

• Deliver regular presentations on key players strategy (Q1–Q4 1999/2000).
• Operationalise the market data and analysis intranet site (Q1 1999/2000)
• Prepare a regular newsletter detailing market developments that have relevance to Oftel’s day to day work (Q1–Q4 1999/2000).
• To keep under review mechanisms to ensure market information is readily available to all staff in Oftel (Q1 1999/2000 onwards).

suppliers/investors

Project Manager: Chris Woolford

Objective: To manage the collection of accurate and timely information from operators and service providers on an agreed range of services, in order to meet the need for market information from within Oftel and from customers and suppliers of telecommunications services.

• Continue collecting quarterly data from fixed link and cellular operators and cellular service providers on the current range of services and publish summary information in the quarterly and annual Market Information publications. (Publish Q1–Q4 1999/2000).

• Expansion of the data collection exercise to encompass the full range of telecommunications services particularly in relation to data traffic and other value added network services. (Q2 1999/2000).

• Investigate options for enhancing the Market Information publication, particularly in respect of improving timeliness and seeking to publish electronically. (Q2 1999/2000).

C16 Raising awareness of customer opportunities and rights in telecommunications markets

Project manager: [tba]

Objective: To ensure customers awareness of choices available and confidence in telecommunications markets is increased.

• Identify areas of existing customer rights re telecommunications e.g. re privacy (Q2 1999/2000).
• Research areas of customer awareness of rights and demands for protection (Q3 1999/2000).
• Prepare and implement measures to raise customer awareness using media and other publicity channels (Q4 1999/2000).

D. Compliance: protecting consumers

Compliance work involves a significant proportion of reactive case working. While overall case handling timescales are set, these apply in relation to, deadlines for which depend on individual circumstances and so in the majority of instances there are no specific target dates set out in the programmes listed below.

D1 Consumer representation programme

Project Manager: Bernice Head

Objective: To ensure Oftel fulfils its consumer representation role through efficient and effective handling of consumer complaints and enquiries (c.50,000 a year]

• Establish a scheme to publish summaries of complaints received (Q1 and Q3 1999/2000).
• Identify areas of consumer concern which need to be pursued with PTOs with a view to removing root cause (on going).
• Feed back consumer views into Oftel policy development (ongoing).

Programme Manager: Terry Walker

Objective: To provide support advice and guidance to the ACT network to ensure timely and effective policy advice from the committees to Oftel, and to promote consumer interests both within and outside Oftel.

• Co-ordinating committee activity in liaison with CCE (Consumer Communications for England (CCE), Communications for Business (CfB), Committee for Disabled and Elderly (DIEL) and the territorial ACT Secretaries for Scotland, Wales and Northern Ireland and Chairs Liaison Group, ensuring committee members receive appropriate support, and maintaining effective administration of committee membership processes and running costs (Q1–Q4 1999/2000).

• Identifying policy issues and appropriate action for the committees to pursue in the light of Oftel’s work programme, government policy and industry activity, and through consultation with consumer bodies; and representing ACT views to Oftel, government, press and other organisations (Q1–Q4 1999/2000).

• Contributing as required to other Oftel projects, including development of a Welsh Language Scheme for Oftel (Q1–Q4 1999/2000).

Project Manager: Terry Walker

Objective: To consult publicly on a Welsh Language Scheme for Oftel and to submit a Scheme to the Welsh Language Board for approval. The Scheme outlines how Oftel will implement a policy of conducting public business in Wales on the basis of equality of treatment for English and Welsh language speakers.

• Consultation on a draft Scheme (Q1 1999/2000).

• Consideration of responses and submission of final draft to the Welsh Language Board for approval (Q2 1999/2000).

• Implementation of the Scheme including establishment of systems for monitoring and progress reporting (Q3–Q4 1999/2000).

Compliance: preventing anti-competitive practices

D4 Financial information systems project

Project Manager: Gavin Greenfield

Objective: To ensure that Oftel receives and is able to request and receive appropriate and timely information derived from BT’s financial and management systems of sufficient quality and quantity to address and deal effectively with competition cases and fully address regulatory reporting requirements.

• Monitor and evaluate compliance with regulatory financial reporting requirements as set out in BT’s Licence (ongoing).
• Assess and examine the processes, systems and procedures used by BT in preparing and delivering financial information requested by Oftel as part of regulatory of competition investigations (ongoing).
• Promote and review developments and enhancements to the accounting methodologies used by BT (ongoing)

Programme Manager: Vince Affleck

Objective: To facilitate competition in the market for international telecommunications and to ensure fair-trading in relation to the provision of international and interconnection services and in relation to BT’s retail prices.

• To monitor the development of international services and facilities including intra-EU cross border traffic (ongoing).
• To investigate breaches of licence conditions relating to the provision of international and interconnection services and facilities (ongoing).
• To ensure network inter-operability and deal with associated technical issues arising (ongoing).
• To monitor the introduction by BT of new tariffs, for both wholesale and retail services, and to deal with applications for consents, trials, determinations as appropriate and deal with competition concerns arising (ongoing).

Programme Manager: Mohinder Mahi

Objective: To facilitate and ensure that compliance casework is dealt with effectively and expeditiously in accordance with laid down procedures and to monitor casework quality on an ongoing basis in order to achieve operational excellence in this area of work.

• Introduce internal casework procedures (Q1 1999/2000).
• Operate an internal casework quality monitoring system (ongoing).
• Prepare and implement a compliance plan to ensure that Oftel and telecommunication operators discharge their respective compliance and monitoring obligations (ongoing).

Programme Manager: William Lea

Objective: to ensure that Oftel’s casework and associated procedures respond effectively to future regulatory and market developments both at the UK and European level

• Regularly review developing competition issues for potential proactive inquiries (ongoing).
• Publish guidelines on application of the Competition Act in telecommunications (Q1 1999/2000).
• Ensure Oftel and industry are prepared for introduction of Competition Act (Q4 (1999/2000).

Programme Manager: William Lea

Objective: To ensure that licensing casework and licence enforcement on regulatory and competition issues is handled effectively in a timely manner.

• Establish central resource point for all licensing inquiries (Q1 1999/2000).
• Consolidate streamlined approach for dealing with regulatory licence enforcement cases (ongoing).
• Ensure competition casework follows best practice and procedures (ongoing).

Programme Manager: Don Wilson

Objective: To ensure efficient and effective case-handling in relation to advice on mergers and joint ventures and conduct of competition investigations.

• Investigate allegations of anti-competitive behaviour under the Telecommunications Act, the Competition Act and other relevant legislation and secure compliance, including through formal enforcement action (ongoing).
• Timely, quality advice to relevant competition authorities on qualifying mergers and joint ventures in the telecoms sector (ongoing).
• Pro-active identification of regulatory and competition issues arising from casework (ongoing).

Project Manager: Tony Lavender

Objective: To provide input and advice on a range of technical issues related to Oftel objectives including millennium date change, telephone based public warning systems and the government telephone preference scheme (GTPS).

• Review of industry readiness for Year 2000 (Q1–Q2 1999/2000).
• Review of contingency arrangements for Year 2000 (Q1 1999/2000).
• Restate Oftel’s work for GTPS and telephone based public warning systems (Q1 1999/2000).

Project Manager: Tony Lavender

Objective: To create a more focussed compliance culture within the regulated telecommunication industry through better communication and understanding of the developing market and regulatory regime.

• Set an industry wide compliance forum (first meeting by Q1 1999/2000).
• Achieve active participation at the forum of licensed operators (ongoing).
• Agree and implement casework processes more relevant to current product development times (by Q4 1999/2000)

Programme Manager: James Tickel

Objectives: To ensure fair trading in the provision of multimedia services in the UK, such as Internet access and digital broadcasting, and in related markets such as leased lines through appropriate enforcement of regulatory and competition rules in these areas.

• Rolling programme of competition investigations into complaints of potential breaches of licence conditions or competition legislation in the provision multimedia services in the UK.
• Rolling programme of pro-active enquiries into new multimedia services and other market developments to assess whether the pricing of these services and of inputs into these services conforms with the regulatory and competition rules.
• Further investigation and appropriate action emerging from the conclusions, recommendations and industry and user feedback on the recently completed investigation into the provision of leased lines in the UK. (Q1 1999/2000).

Consultation questions on Oftel’s proposed work for 1999/2000

Q3 Do you consider the above list of projects and programmes are the most appropriate ones for Oftel to be carrying out in 1999/2000 ? If not what subject areas should be included or excluded?

Q4 Which projects or programmes are of most interest to you or your organisation?

Glossary of terms

ACTs – Advisory Committees on Telecommunications.

ATM – Asynchronous Transfer Mode – the internationally agreed basis for broadband ISDN. A technology that enables all types of information (data, voice and video in any combination) to be transported by a single network infrastructure.

C7 – a modern signalling system, based on standards set by the CCITT (the former name of the world telecommunications standards-making body), for the transfer of messages between entities in telecommunications networks that enables the setting up, routing and clearing of calls and the transfer of other relevant information related to the operation of these networks. The C7 signalling system is used for the transfer of such messages between different networks as well as within individual networks

Calling Line Identity (CLI) – A facility that enables identification of the number from which a call is being made.

Customer premises equipment (CPE) – Sometimes referred to as customer apparatus or consumer equipment, being equipment on consumers= premises which is not part of the public telecommunications network and which is directly or indirectly attached to it.

DfEE – The Department for Education and Employment.

DTI – The Department of Trade and Industry.

ECTRA – European Committee for Telecommunications Regulatory Affairs. ECTRA is the main European forum for the discussion of regulatory issues, set up within the framework of the European Conference of Postal and Telecommunications Administrations (CEPT).

Electronic Programme Guide (EPG) – software in the receiver which takes data on programmes and displays these in the form of an on-screen guide. The guide displays information about what is on now and next on each channel as well as future programmes. Viewers may also be able to use the on-screen menus to order pay per-vie services or to access interactive services.

IP – Internet Protocol – packet data protocol used for routing and carriage of messages across the internet.

Interoperability – the technical features of a group of interconnected systems (>systems includes equipment owned and operated by the customer which is attached to the public telecommunication network) which ensure end-to-end provision of a given service in a consistent and predictable way.

ITC – Independent Television Commission

Narrowband – A service or connection allowing only a limited amount of information to be conveyed, such as for telephony. This compares with broadband which allows a considerable amount of information to be conveyed.

NTS – Number Translation Services – describes a range of specially tariffed services, primarily used for telemarketing, which include 0500/0800 Freephone, 0345/0645/0845 local call fee access, 0870/0990 national call fee access and 08xx/09xx Premium Rate Services. These services are offered at specific price points in order that customers calling from any fixed network will know that the quoted retail price is the maximum they will be charged for calls to a particular number range.

OFT – Office of Fair Trading

Premium Rate Service (PRS) – Services, including recorded information and live conversation, run by independent service providers. All calls to these companies are charged at a higher rate than ordinary calls to cover the companies' costs in providing the content of the call and the operator's cost for the special network facilities needed.

Public Switched Telephone Network (PSTN) – The telecommunications networks of the major operators, on which calls can be made to all customers of the PSTN.

Public Telecommunications Operator (PTO) – Network operators with powers granted by the Secretary of State for Trade and Industry under the Telecommunications Act 1984 to enable them to install their systems on public and private land, property etc.

RA – The Radiocommunications Agency

Radio Spectrum – The range of wavelengths used, for example, for broadcasting radio, terrestrial television and satellite television. Usable wavelength ranges from about 100 KHz to about 400 GHz although there are as yet no broadcasts above about 12 GHz.

Universal Service (US) – A provision in some Telecommunications Act licences requiring the licensee to provide certain services to all specified persons. For example, BT is currently required to provide basic voice telephony and certain other established telecommunications services to anyone who may reasonably request them.

Vertical integration – where a single company is active in more than one stage in the production and supply of a good or service eg where a network operator also provides enhanced services which are carried over the network or supplies the consumer equipment needed to access services it provides.