Consultee responses - key points

Oftel comments

C&W

• Oftel should re-evaluate the Comparable Performance Indicator (CPI) scheme given its cost to suppliers

• These initiatives fall under Oftel's consumer protection policy reviews timetables (see Annex D)

Centrica

- keep focus on protecting consumer where competition insufficient

- market reviews and consumer protection policy reviews should ensure this balance is observed

• recognise services side of telecoms industry is less badly hit by turbulence than network/infrastructure side

CfB and CCE

- more focus needed on informing consumers especially for those without time or resources to make an informed choice

- work on assessing consumer savings (E10) and targeting consumer info (B1) should allow best use to be made of Oftel and other resources in this area

• Oftel should try to stop suppliers reducing service quality in order to manage pressures from turbulent capital markets

DIEL

plus element of 'competition plus' remains relevant

- agreed - significant consumer protection measures remain in place

• more accurate data is needed on older and disabled telecoms consumers

Energis

identify what Energis considers to be key policy principles (pre-emptive/pro-active regulation, transparency, open access environment, horizontal market competition. Contrast with Oftel approach which is seen as too reactive and allowing BT to gain too strong a position in broadband

Oftel's strategy avoids being overly deterministic as to market outcomes. Market reviews are designed to enable a proportionate approach

• market reviews seen as appropriate as pro-active, forward looking and more efficient use of regulatory resources

- see Broadband strategy (December 2001) which sets out Oftel's approach. For current developments see relevant project manager (project A6) Wholesale access terms depend on the remedies of the market reviews, not so much by those requesting access

ICSTIS

• need to co-ordinate consumer info with media literacy work under Ofcom preparations

Development of a co-ordinated approach with future Ofcom colleagues is being undertaken.

• ICSTIS involved in SMS, interactive TV, internet as well as traditional voice services

Noted.

NIACT

• agree with focus of the plan but concerns re availability of broadband in rural areas

Noted in relation to project A6 (on broadband networks policy)

ntl

• Oftel should better understand the impact of its decisions on operators at a time of financial uncertainty

Oftel is continuing to develop its 'regulatory option appraisal' process across its work and will seek to take account of all material relevant factors to its decision making

O2

• key concern is that regulation of telcos is appropriate ie only regulate where benefits outweigh costs. Plan should only include projects where the expected benefit outweighs the detriment for not regulating - for both competition and consumer protection areas

Policy proposals are subject to regulatory option appraisals. Many of Oftel's functions are in relation to EU requirements to review markets, resolve disputes, implement Directives ie Oftel's exercise of discretion is more to do with how these exercises are carried out and outcomes that result, rather than making decisions about whether to carry out reviews etc at all

RNID

• plan should have recognised 2003 as European year of disabled people and made it key action point for plan

- Oftel recognises the importance of disability issues which are a key work package of Oftel’s Universal Service Obligation project - C3

• consider dispute resolution in 4 months should apply to resolving disagreements re provision of essential services to deaf and hard of hearing people (eg access to Text Direct, Typetalk, interactive text conversation between networks

Access to Text Direct, Typetalk, interactive text conversation between networks etc, are currently covered by USO obligations. Where Oftel undertakes to investigate a complaint or dispute about these services, the investigation will be subject to the new four month procedures.

However, the above will not apply to complaints about anti-competitive behaviour investigated under the Competition Act 1998. Oftel's target for these complaints is to resolve within 12 months (or 6 months where no infringement of the Act is identified)

• demands for less regulation by BT and mobile operators is not appropriate if they compromise service provision for deaf and hard of hearing people

SACOT

- "effective competition" is based on analysis that competition is sufficiently strong that it will continue and that competition laws and general consumer protection laws are still available. Where competition is not yet ‘effective’ Oftel may need to continue active promotion initiatives.

• insufficient done by Oftel to ensure 'well informed consumers'

- Oftel has also recently completed a review of its consumer information strategy (see Annex F) and conducts major market research to provide an evidence base for future consumer information initiatives.

• BT still dominant and prospects for further competition is limited

- BT’s market share (and Vodafone’s for mobile) across three key markets – fixed calls & access, mobile and leased lines has continued to fall reflecting increased competition in terms of market share. Despite market volatility the majority of competitors have remained in the market and overall turnover continues to grow. Market reviews to be published in 2003 will indicate progress on deregulatory competition. Introduction of Wholesale Line Rental and 3G mobile should give opportunity for increased competition.

• geographic averaging should apply to all services

extending this requirement to all services may discourage competition, and in certain cases where competition exists may be unsustainable from an incumbent perspective.

• favours 'integrated public policy strategy to develop and promote broadband'. No real sign of this

- Oftel has continued to work to with relevant government agencies the ACTs and industry and consumer groups to create a regulatory framework & strategy that promotes competition in broadband. The advent of Ofcom will see the management of the radio spectrum combined with the regulation of telecommunications. This will provide for even greater level of integration for broadband policy.

• lack of specific targets or measurement of these in relation to 'well informed consumers' and 'adequately protected consumers'

- Oftel's Service Delivery Agreement targets are published on Oftel’s website (Nov 2000) t and performance against these targets for 2002 will be published in Oftel's 2002 annual report

• consumer expectations (of regulation) are higher than Oftel assumes

Noted

WACT

• concerned at consumer inertia is insulating BT from competitive pressures

Consumer profiling of type set out in chapter 2 should assist Oftel in targeting actions to promote competition more effectively

Consultee responses

Oftel comments

C&W

- agree importance of incentive regulation but as complement not a substitute for a mandatory approach, and implemented in a more transparent manner to allow participation of all stakeholders

- Oftel sees ‘incentive’ regulation as an important approach in achieving regulatory objectives. However the actions of companies will have a significant impact on Oftel’s approach. Where telecommunications companies act in a co-operative way to achieve regulatory goals, the consequences may be removal of regulation. Conversely anti-competitive or other actions that hinder competition may bring about formal regulation or penalties under the Competition Act.

• structural changes to BT needed to achieve effective competition

- Oftel’s position on structured separation is set out in July 2002 response to Culture, Media and Sport committee report

Centrica

- expressed some support for detailed regulation to support services competition and for interventions in disputes where neither party has SMP

Oftel will continue to be responsive to market demands while keeping to its principle of keeping regulation to the minimum necessary

- want access to elemental wholesale services on fair and reasonable terms

- Oftel’s Access Guidelines (published Sept 2002) detail Oftel’s approach regarding access to BT’s network

• support for incentive regulation in appropriate cases with adequate fall back if incentive is insufficient

-Oftel will judge the appropriateness of regulatory options on a case by case basis, where incentives are deemed insufficient or the actions of a dominant company warrant it, more formal regulatory solutions may be appropriate.

CfB/CCE

- welcome cross-market analysis of residential customers and look forward to similar SME analysis

- Business (SME) analysis should be available in Q1 2003/4

- Oftel should align its terminology with standard Government approach for 'Regulatory Impact Assessments (RIAs)

- Oftel's Regulatory Option Appraisal approach is wider and more flexible than RIAs

• want monitoring of consumer detriment to be pro-active exercise rather than re-active response to complaints

- Methodology is currently being developed for assessing consumer savings which will be a more proactive approach to this issue

DIEL

• need to extend good work that Oftel has done for older and disabled consumers into Ofcom

Stakeholders constructive engagement with emerging Ofcom structures and policies can enhance the chances that valued initiatives will be continued

- need to complete industry code of practice on mobile services for disabled consumers

- Oftel is encouraging the production of an industry produced code of practice on mobile services for disabled consumers which will be published in 2003

- specific consumer detriment for disabled consumers needs to be considered

Oftel intends to further develop its methodology for measuring consumer detriment (project E10) and will consider this approach as part of that work

Energis

• Oftel should use market reviews to identify areas where more pro-active regulation is required, identify stakeholders concerns at time of a final determination and adopt a pro-active approach rather than resolving as disputes.

Market reviews will be used to determine regulation appropriate to market circumstances. Oftel may consider it appropriate to pursue issues raised by stakeholders within an own initiative investigation under the new Directives, as an alternative to dispute resolution

- incentives need to be transparent and proportionate and not awarded pre-emptively

- Chapter 2 highlights the importance of transparency to the effective functioning of ‘incentive’ regulation. Oftel will look at the lessons that can be drawn from incentive regulation incentives

NIACT

• welcomes Ofcom and particularly supports joined up approach to spectrum and network access to address issue of broadband in rural areas

Noted

ntl

• agree with intentions of improving regulatory processes

- Noted

- but Oftel needs to improve its performance in these areas

- Since publication of the draft management plan, Oftel has finalised its dispute resolution procedures (Feb 03) which will enable further improvements in performance

- looking ahead to Ofcom, need is for regulation that enables a competitive industry at minimum cost

- Stakeholders are encouraged to engage constructively with Ofcom as it sets out its strategy for regulation

O2

• need for evidence based regulation, Regulatory Impact Assessments

Oftel has adopted a 'regulatory option appraisal' approach (see July 2002 guidelines) which encompasses 'Regulatory Impact Assessment' requirements

RNID

• Ofcom should address problem of interference of mobile and wireless networks with hearing aids

- Regulator needs to encourage players to take responsibility for addressing concerns caused by the operation of networks without being able to mandate specific technological solutions.

• consumer profiles should cover those disadvantaged by lack of services or inaccessibility

- Further consideration will be given to analysing consumer profiles during 2003/4

SACOT

• agrees that compelling content is a major driver of residential broadband take-up

Noted

Thus

• Welcome the establishment of the compliance economic business analysis unit
• supported Oftel's accounting seperation project
• Welcome plans to liase with devolved administrations regarding plans to stimulate broadband rollout

WACT

• need more info on how Oftel and Ofcom will work together

- Oftel will work to keep stakeholders informed in the lead up to Ofcom as to how Oftel’s work programme will be incorporated into the new organisation

• concerns that method of allocating and auctioning spectrum for 3.4 GHz will minimise chances of use of spectrum for broadband in rural Wales.

- WACT’s comments have forwarded to our Ofcom partners the Radiocommunications Agency for consideration

Consultee responses

Oftel comments

C&W

- Oftel should review way NTS disputes resolved

Beyond the introduction of the new regulatory regime, Oftel also expects to explore the wider context of NTS with the aim of reducing the likelihood of disputes in the future and of ensuring that the policy basis for NTS is optimised. Oftel is still developing its plans in this area. Oftel does not consider that any changes or additional clarification are required to the description of this particular project in the Management Plan.

Centrica

• would support structural separation of BT as well as the accounting separation work that is planned (under D3)

Oftel recognises the concerns of some stakeholders regarding structural separation of BT. However, decisions about BT’s corporate structure are a matter for the company. Oftel’s role is to ensure that whatever the structure BT meets its regulatory obligations.

• welcome consolidation of activities under Compliance Management Office (D4)

Noted

- supports monitoring of markets even where declared effectively competitive

Oftel accepts the need to maintain an overview of all markets and recognised this in its market information statement published in 2002.

CfB/CCE

• specific interests notified to relevant project/programme managers

Noted

DIEL

• specific interests notified to relevant project/programme managers

- Relevant Oftel PPM’s have been forwarded DIEL’s comments

Energis

• not much evidence of Oftel being pro-active in enforcement eg lack of use of provisional orders

- While Oftel has not used provisional orders for some time it has not rejected their use (see Vanco case in Feb 2003)

- EU Directives require regulators to look pro-actively at all major electronic ie Communications markets, so this will be an opportunity to identify significant anti-competitive behaviour.

• Oftel should set out its own initiative investigation approach in detail

- Own initiative investigations are a part of the regulator's approach. However players in the market will often be first to spot possible anti competitive behaviour and the info they provide is vital to Oftel's investigation

• need to minimise public confusion between CRS and telecoms ombudsman

Noted

NIACT

• specific interests identified and notified to relevant project/programme managers

- Relevant PPM’s have been forwarded NIACT’s comments on specific projects/programmes

ntl

• need to ensure sufficient resource available for unexpected issues

(see response to C&W Q3 and 4 above)

- clarify timings of projects/programmes

- Oftel timings for project/programmes are broken down into approximations as to when project milestones will be delivered. Obviously due to a range of factors these timings can change over the course of the year

• need for proactive review of specific areas of business and BT's financial statements

-Oftel is currently implementing financial reporting obligations on BT in line with the new European Directives – project D3

• migration from existing to new licensing regime should be given greater priority

The new licencing regime is a priority for Oftel. This is reflected by Oftel’s project on the issue – E9 Ending the Licensing Regime

O2

• expected benefits from projects should be shown

Projects are grouped according to the objective they are addressing and for each project listed in chapter 3, specific objectives are given which indicate the benefit sought. See also response re O2 comment to Q1 above.

• 'monitoring' projects should be justified

The project entries for projects referred to (A8, A10, B1) give the main elements of monitoring to be undertaken and, together with the objective shown, justify the work planned.

QUALCOM

• Qualcom felt that the most important challenge was to ensure effective market competition, especially in relation to the widespread availability and access to new technologies

Noted

RNID

• specific interests in projects notified to relevant programme/project managers

Relevant PPM’s have been forwarded RNID’s comments on specific projects/programmes

• mobile text telephony has now been developed by one mobile operator, should be available from all mobile operators

Access to Text Direct, Typetalk, interactive text conversation between networks etc, are currently covered by USO obligations. Where Oftel undertakes to investigate a complaint or dispute about these services, the investigation will be subject to the new four month procedures.

However, the above will not apply to complaints about anti-competitive behaviour investigated under the Competition Act 1998. Oftel's target for these complaints is to resolve within 12 months (or 6 months where no infringement of the Act is identified).

The current draft General Conditions require all mobile operators to provide text access to text rely services by 31/12/03

SACOT

• welcomes establishment of Telecoms Ombudsman

- Noted

WACT

• need to establish priorities given likely slippage under move to Ofcom

• In the lead up to Ofcom, Oftel is actively working to minimise any potential ‘slippage’ in its work programme. This is being done through Oftel’s transition teams, senior management and through consultation with PPMs to ensure the appropriate prioritisation of work.

Consultee responses

Oftel comments

C&W

• Special licence fee for calls to mobile Competition Commission case should be charged to participants only and Oftel should notify operators in advance

• The Competition Commission incurred expenses in carrying out its ‘calls to mobiles’ investigation. Oftel is required to recover the costs of this investigation from licence holders resulting in the issue of a 'special fee' to licensees. Consultees have requested advance notification whether there is likely to be any similar special fees for 2003/4. This is difficult to predict as Competition Commission investigations result from licensees rejecting licence modifications and so are not initiated by Oftel

Centrica

• support increased spend on staffing, and surprised at low provision for litigation

• Oftel’s litigation budget in the past has proved adequate for the work it has had to undertake. However if circumstances should warrant it, Oftel can access additional litigation funds where appropriate.

Energis

• any activity that could attract additional fees should be identified

• see response to C&W comment above

NIACT

• urge that more should be spent on consumer representation

The issue of adequate consumer resources will be an issue that Ofcom will need to address

ntl

• concerned at cost of consumer information initiatives at a time of economic crisis within telecoms industry

• Oftel views consumer information initiatives as essential in helping consumers make informed purchasing decisions. Oftel has recently updated its consumer information strategy and is looking at ways to minimise the cost of the Comparable Performance Indicators programme.

need reconciliation of licence fee letter and budgeted costs

O2

• welcomes more modest increase in 2003/4 budget compared to higher increases in previous years but concerns this will be overspent. Oftel needs to increase its competition law expertise.

• Oftel has since 2001, been sending its staff, (policy advisers, case work officers, lawyers & accountants) on a post-graduate course in Competition Policy to increase Oftel staff’s knowledge of competition law and policy issues.

A3)

Access to radio spectrum

C10)

Approval of dispute resolution procedures

E11)

Better information on companies and markets

A9)

Carrier pre-selection

E1)

Communications Bill

E12)

Communications Code and funds for liabilities

B2)

Comparable Performance Indicators

A4)

Competition in broadcasting markets

A2)

Competition in mobile markets

D4)

Compliance Management Office Programme

D2)

Compliance Casework & dispute programme

C2)

Consumer codes of practice

C4)

Consumer representations

C9)

Data protection in telecoms

E6)

Developing international relations

A8)

Directory Inquiries Implementation

E9)

Ending the Licensing regime

A1)

EU Market reviews programme

D1)

Financial Information Systems

E2)

General Conditions of Entitlement

E8)

Implementation of the new EU Directives

D3)

Implementing Accounting Separation under the new Directives

E4)

Industry data collection

C8)

Input to other consumer protection legislation

A5)

Internet policy and narrowband access

C5)

Metering and billing approval scheme

A11)

Network interoperability

E5)

Network Analysis and Modelling programme

C6)

Network Resilience, Business Continuity and Emergency Communication Programme

A10)

Number portability

A7)

Numbering

E10)

Oftel Strategy implementation

B1)

Raising consumer awareness

E3)

Research into consumer views

E7)

Stakeholder relationships

A6)

Strategy and development & implementation of Broadband networks and services

C7)

Supporting the Advisory Committees on Telecoms

B3)

Tariff transparency

C3)

Universal service obligation

C1)

Wholesale Line Rental