A statement issued by the Director General of Telecommunications

Contents

Summary
Chapter 1 Introduction
Chapter 2 The code of practice for accreditation: the PASS Code
Chapter 3 How the Oftel Price Assurance Standard works in practice
Chapter 4 The role of Analysys
Chapter 5 Responses to the consultation
Glossary
Annex A Analysys’ request for information for Stage 2 of the verification
Annex B Flow chart of application process

Summary

S.2 Oftel’s goal is to get the best deal for consumers of all types of telecoms services in terms of quality, choice and value for money. The Oftel Price Assurance Standard is another step towards achieving that goal as it will help to raise consumers’ awareness of the choices of telecoms services available to them.

S.3 The Oftel Price Assurance Standard is intended to be flexible enough to accommodate websites comparing a variety of telecoms services. These may be fixed, mobile, dial-up Internet or broadband, or indeed some other type of telecoms service; they may also include ‘bundles’ such as telephone calls bundled with access to the Internet.

S.4 The statement follows Oftel’s consultation paper published in December 2001 on Giving consumers confidence in price comparisons of telecommunications services (‘the December 2001 consultation’).

S.5 It is intended to raise awareness of the Oftel Price Assurance Standard and what it means. It is also intended to encourage web-based comparison services to apply for the Oftel PASS. The statement therefore explains the application process so that interested parties can acquaint themselves with the procedure and costs.

S.6 Chapter 1 introduces the Oftel PASS and explains how it will benefit both consumers and price comparison services.

S.7 Chapter 2 discusses the code of practice that a website must comply with to be awarded the Oftel PASS.

S.8 Chapter 3 is aimed at parties interested in applying for accreditation. It explains the application process in detail, and how much it will cost applicants.

S.9 Chapter 4 explains the role of Analysys, the consultant appointed by Oftel to check that comparative information on websites applying for the Oftel PASS is accurate and up-to-date. It also clarifies what documentation Analysys will need to see – specific details are set out in Annex A.

S.10 Chapter 5 summarises responses to the December 2001 consultation paper, Giving consumers confidence in price comparisons of telecommunications services.

S.11 Anyone wishing to apply for the Oftel PASS should e-mail: oftelpass@oftel.gov.uk

S.12 For further information, please contact the Oftel policy adviser named below:

Ritu Manhas
Oftel
50 Ludgate Hill
London
EC4M 7JJ

Tel: 020 7634 5309
Fax: 020 7634 8847
e-mail: ritu.manhas@oftel.gov.uk

 Chapter 1

Introduction

Why is Oftel launching an accreditation scheme for price comparison websites?

1.1 Oftel’s goal is to get the best deal for consumers of all types of telecoms services in terms of quality, choice and value for money.

1.2 One way to achieve this is to ensure that consumers are well informed about the costs of telecoms services available to them, whether this is for residential or business purposes.

1.3 It is therefore important that consumers should be able to compare what they are currently paying with what they could be paying to another supplier. It is also important that consumers should be able to use price information with confidence, so it must be accurate and independent.

1.4 For these reasons, Oftel is launching an accreditation scheme for websites providing price comparisons of telecoms services.

1.5 The accreditation scheme will be known as the Oftel Price Assurance Standard. Websites awarded the Oftel PASS will be able to display this logo:

How will the Oftel PASS help consumers?

1.6 Research (including a Report on consumer switching behaviour in the telecoms market published in August 2000) suggests that consumers want more sources of information to help them make informed decisions about telecoms services. In particular, there is a demand for price comparisons.

1.7 The Oftel PASS will let consumers know that a particular website is likely to be useful to them in comparing the cost of competing telecoms services. Only websites complying with a code of practice drawn up by Oftel will be allowed to display the Oftel PASS logo.

1.8 Oftel believes that pricing information should be as accessible as possible. This is why the Oftel PASS will not be awarded to websites that charge users for residential price information. Websites providing price information aimed at businesses can also apply for the Oftel PASS.

1.9 Oftel believes that the Oftel Price Assurance Standard will be in keeping with the requirements of the new Universal Services Directive, once it is implemented. This European directive is concerned with the interests of users of electronic communications networks and services. Amongst other things, it requires national regulatory authorities to encourage the provision of information to enable users to ‘make an independent evaluation of the cost of alternative usage patterns, by means of, for instance, interactive guides’.

1.10 Consumers should be aware that there is no obligation on websites to apply for the Oftel PASS. However, we believe that the Oftel Price Assurance Standard is a valuable consumer initiative and will help ensure that consumers have access to good quality price information.

1.11 Oftel will assess the progress of this new initiative after a year. We will then consider with OFCOM what form a more formal evaluation might take and when it would best be conducted.

Why apply for the Oftel PASS?

1.12 There are good reasons for applying for the Oftel PASS.

1.13 In order to build awareness of the Oftel Price Assurance Standard, Oftel will:

• arrange appropriate publicity, including press releases;
• provide direct links from its website www.oftel.gov.uk;
• allow accredited websites to display a specially-designed logo;
• circulate a notice to its website e-mail notification list; and
• organise links from www.cpi.org.uk, an independent quality of service website.

1.14 Oftel is recognised by the majority of the UK population. As well as giving users confidence in a website, the Oftel PASS will give the website itself the reassurance that the methodology and assumptions behind its price comparisons are sound.

How does Oftel decide whether to award the Oftel PASS?

1.15 To be awarded the Oftel PASS, a website must demonstrate that it complies with a code of practice (the PASS Code). The PASS code is set out in Chapter 2. Oftel consumer policy experts – using an independent auditor - will decide whether the website should be awarded the Oftel PASS. A successful website will then be able to display the Oftel PASS logo.

1.16 The Oftel PASS is only awarded to the parts of the website that Oftel has examined.

1.17 The Oftel PASS is awarded at Oftel’s discretion. There is no obligation upon websites to apply and there is therefore no formal right of appeal if an application is unsuccessful. However, as discussed in Chapter 3, we will allow an unsuccessful website an opportunity to apply again (but only once within the same 12 month period).

1.18 If a website is unsuccessful, Oftel will provide it with reasons. However, Oftel will not disclose to a third party whether any website has been unsuccessful and, if so, the reasons why.

What happens once a website is awarded the Oftel PASS?

1.19 On a day-to-day basis, an accredited website must deal responsibly with complaints and queries from users and telecoms suppliers.

1.20 All websites awarded the Oftel PASS must continue to comply with the PASS Code. Oftel and the independent auditor will therefore conduct a thorough review of each website every 12 months. Oftel will also look into allegations that a website is not complying with the PASS Code. If we believe a website to be in serious and/or repeated breach of the PASS Code, we may withdraw the Oftel PASS without reimbursement or compensation.

1.21 An accredited website must give Oftel advance notice of any substantial changes.

How much does it cost?

1.22 The total fee for initial accreditation will be £5000. This takes into account Oftel’s costs in operating the Oftel Price Assurance Standard but falls short of full cost recovery. Unsuccessful applicants will pay an administrative charge of either £250 or £1000, depending on how far their application gets. A fee of £3000 will be charged for the annual check and audit. The level of fees is subject to review. See Chapter 4 for full details of the charging structure.

The future of the Phonebills website

1.23 Phonebills, the price comparison scheme for residential consumers launched in 1999 with the support of Oftel and the telecoms industry, remains in place for the time being.

1.24 However, as the December 2001 consultation paper explained, the situation has changed since Phonebills was created. Phonebills was intended to meet a demand for price comparison information, and Oftel recognises that other comparison services may now be better placed to meet this demand.

1.25 Once websites have had an opportunity to consider the benefits of applying for the Oftel PASS, Oftel’s support for Phonebills will be withdrawn.

Chapter 2

The code of practice for accreditation: the PASS Code

2.1 To be able to display the Oftel PASS logo, a website must comply with a code of practice known as the PASS Code. This comprises twelve Requirements and is set out below:

The PASS Code

1. Prices and price comparisons must be accurate and up to date. They must be updated at least every eight weeks and the site must indicate when they were last updated.

2. The website must be independent of telecoms suppliers. If a website earns commission or some other remuneration from suppliers of telecoms services, it must disclose this clearly to users.

3. The website must not charge users for prices and price comparisons of residential telecoms services.

4. The website must be interactive and able to provide the user with price information of suppliers appropriate to his or her needs, eg fixed line services in the user's geographical area.

5. The website must make it clear to users by means of a prominently displayed privacy notice that it complies with relevant data protection legislation.

6. If the website facilitates ‘switching’ on-line, ie changing from one supplier to another, it must make it clear to the user what he or she is doing.

7. The layout and design of the website must take into account the needs of disabled users.

8. Users must be able to browse the website using Microsoft Explorer 4 or above and Netscape Navigator 4 or above.

9. If the website provides price information on fixed telecoms services, it must include prices of at least ten different suppliers in total, including BT and, preferably, Kingston Communications. A website providing price information on mobile telecoms services should include at least the four main mobile network operators, ie O2, Orange, T-mobile and Vodafone. For other types of telecoms services, the website must provide prices of a reasonable number of suppliers.

10. The website must advise users that they may want to take other issues beside price, such as service quality, into account before making any decision.

11. If the website includes price information on ‘bundled’ offers, this information must be presented in a fair and transparent manner.

12. The website must comply with all appropriate legislation. This includes, but is not limited to, relevant consumer protection legislation.

Additional information

2.2 Consumers must be able to understand what the Oftel PASS means, and so the PASS Code has been kept as concise as possible.

2.3 The PASS Code must also be read in conjunction with the following information:

Accurate and up to date

2.4 It is important that consumers should have a high degree of assurance that prices and price comparisons provided by a site are robust. Websites must ensure that price information is updated at least every eight weeks and make it clear when the last update was carried out.

2.5 This is why Oftel has appointed an independent auditor to conduct thorough checks. However, Oftel does not guarantee the accuracy or currency of any information displayed on an accredited website. See Chapter 4 for further details.

Independent of telecoms suppliers

2.6 By ‘independent’, Oftel means that the website must provide impartial advice, not advice that is biased in favour of one or more particular telecoms suppliers. It is essential that consumers have confidence in the information provided by an accredited website, particularly if the website recommends an alternative supplier. Oftel will therefore not award the Oftel PASS to any site that it believes to be closely connected with, or influenced by a particular telecoms supplier or that advertises the services of any supplier.

2.7 The website may, however, provide hyperlinks to suppliers’ own websites. It should make it clear that the user is leaving an Oftel-accredited website and is now dealing with a telecoms supplier. Hyperlinks should be provided to all suppliers listed, not just a partial selection.

2.8 In addition to or instead of a hyperlink, the site may include a short paragraph (no more than 100 words) about each supplier, explaining what kinds of services it offers. This is to ensure that users have sufficient, relevant and impartial information to help them decide whether to change suppliers. The website must monitor the content of any wording provided by a supplier to ensure that it is not advertising or otherwise prejudicing the impartiality of the website.

2.9 If the website receives any type of payment from a telecoms supplier (and, for the purposes of this statement, this includes resellers and service providers), there must be clear disclosure on the site. However, Oftel recognises that the actual level of payment may be commercially sensitive and does not require it to be disclosed.

Interactive

2.10 The website must be user-friendly and provide price information relevant to individual users. Oftel takes the view that this means the website must be interactive, ie it must allow the user to input data to ensure that any price comparisons are relevant to his or her individual needs.

2.11 The website must be able to provide the user with price information of suppliers offering services in his or her geographical area (unless this is not a relevant or appropriate consideration, eg in the case of mobile or indirect access telecoms services). In practice, this probably means that the website should request users to input their postcode.

Data protection

2.12 As well as displaying a notice making it clear to consumers that it complies with relevant data protection legislation, the website should also allow users to opt out of being contacted for any marketing purposes. For preference, the website should adopt an opt-in approach.

2.13 By way of background, as explained in the December 2001 consultation, some websites will require users to provide personal details such as their e-mail address, postcode and how much they spend on telephone calls per quarter. If the site includes a facility to switch suppliers on-line, it may even ask for bank or credit card details. These personal details may constitute personal data within the meaning of the Data Protection Act 1998 and will therefore be subject to the requirements of that Act in relation to how that data is acquired, held and used.

2.14 The Office of the Information Commissioner enforces privacy rights in the UK. For further information on data protection and privacy rights, interested parties may wish to refer to the Information Commissioner’s website at www.dataprotection.gov.uk. The Information Commissioner’s office may be contacted on 01625 545700.

Switching suppliers

2.15 A website may go beyond providing prices and price comparisons, and ask whether a user wants to switch suppliers on-line. In this situation, it is probable that the provider is earning commission from suppliers who have agreed to enter into this type of arrangement. The Oftel PASS requires that this fact is clearly disclosed to the user on the website.

2.16 In addition, if the website does facilitate switching, ie changing suppliers, it must not engage in ‘slamming’. ‘Slamming’ is changing a consumer's telecoms supplier for some or all of their telecoms services without the consumer's full knowledge or consent Informed consent is essential. This means that the website must make it absolutely clear to the user what he or she is doing; consumers must be given full information and made aware that they are actually switching suppliers. Evidence of slamming may be used as grounds for Oftel withdrawing accreditation at any time.

Needs of disabled users

2.17 In forming a view on whether the layout and design of a website takes into account the need of disabled users, Oftel will consider whether the website:

• allows information to be displayed easily in different type sizes on the screen;
• ensures all images have a text alternative (‘alt tag’) which explains what the image is and why it is there;
• avoids busy, confusing, flashing or moving graphics;
• ensures text contrasts strongly with the background; and
• gives the number of a dedicated customer service phone line that users can call should they need assistance or more information.

Number of suppliers

2.18 Not only must there be a reasonable spread of suppliers, but price comparisons must be presented fairly. For example, they must not in some way favour any telecoms supplier from whom the website earns commission should it introduce a new customer. If the website only includes prices of telecoms suppliers with whom it has a commission arrangement (or something similar), then this must be clearly disclosed to users.

Service quality

2.19 In addition to displaying a notice advising users that they may want to take into account other issues besides price, such as service quality, it may be appropriate for the website to include links to the following:

• the Comparable Performance Indicators for fixed services at www.cpi.org.uk;
• the mobile network operators’ call success rate survey at www.oftel.gov.uk (see the ‘Consumer Research and Initiatives’ section); and
• Oftel’s published data on complaints at www.oftel.gov.uk (see under ‘Statistics’ in the ‘Consumer Help and Advice’ section).

Comply with all appropriate legislation

2.20 It is the responsibility of the website to ensure it is aware of all its legal obligations and it should therefore take its own legal advice on content.

2.21 Most codes of practice include some element of self-regulation, and Oftel cannot reasonably be expected to check that a website complies with all relevant legislation. However, Oftel will require websites applying for the Oftel PASS to confirm that they meet this particular Requirement.

Review of the PASS Code

2.22 Oftel will review the PASS Code from time to time and, subject to the provision of reasonable notice, may amend, add or delete any Requirement; for example, Requirement 9 might be amended to reflect changes in the mobile telecoms market.

Chapter 3

How the Oftel Price Assurance Standard will work in practice

3.1 It is crucial to achieve the right balance between encouraging comparison services to participate in the Oftel Price Assurance Standard and ensuring that consumers can use accredited websites with confidence that the information is, amongst other things, clearly presented and reliable. Oftel has therefore spent considerable time and effort in finalising the application process. We have also taken on board responses to the December 2001 consultation paper, particularly with regard to ensuring accuracy and monitoring compliance.

3.2 This chapter sets out in detail how the Oftel Price Assurance Standard will work in practice – both the application process, and the subsequent monitoring of accredited websites. This information should not only help potential applicants for accreditation, but should also help consumers understand the benefits of using a website displaying the Oftel PASS logo.

3.3 Interested parties should read this Chapter in conjunction with the Process for Accreditation Agreement (‘the Agreement’), which will be available on our website at www.oftel.gov.uk/consumer/price_compare. A flow chart summarising the application process is attached at Annex B.

3.4 Oftel expects to be able to tell an applicant whether it has been successful or not within eight weeks of Oftel confirming receipt of the application.

Application process

3.5 A party wishing to apply for the Oftel PASS should e-mail: oftelpass@oftel.gov.uk

Oftel will send it a copy of the Agreement with a request for information.

3.6 The applicant should then submit the following:

• Confirmation that it accepts the terms of the Agreement.

• A cheque made payable to Oftel for £1000 (£750 of which will be refunded if Oftel decides not to progress the application to Stage 2).

• Information for Stage 1 of the verification process (see below), ie written details of how the website meets requirements 2 to 12 of the PASS Code. Oftel will also need to look at the website itself to be able to come to a decision. If the website has not yet been launched, the applicant will need to provide Oftel with access to a test or ‘dummy’ website. This must in all material respects be identical to the website that will be operated. In the interests of consistency, fairness and efficiency, all applications must be made in writing. However, at our discretion, we may discuss applications over the telephone or on a face-to-face basis with the applicant.

• (Optional) information for Stage 2 of the verification process (see below). This information will only be reviewed if the applicant passes Stage 1 and the applicant may therefore choose not to provide it at this early point in the application process. See the auditor’s information request at Annex A.

3.7 There is then a two stage verification process.

Stage 1:

3.8 Oftel will consider the application against Requirements 2 to 12 of the PASS Code. If we decide that a website is not suitable for accreditation, we will not progress the application to Stage 2 of the verification process. The applicant will be notified in writing and given reasons (at Oftel’s discretion) and will be sent a refund cheque for £750.

3.9 In certain circumstances, however, we may feel that the website needs only minor adjustment, eg use of a larger font size, in order to move to Stage 2. In this case, we will not immediately refund the £750, but will advise the applicant of the suggested adjustments and allow it a reasonable period to make them. If the applicant is again unsuccessful, we will advise it accordingly and refund the £750 in the usual way.

3.10 An unsuccessful applicant may wish to try again. As explained in the Agreement, it is at Oftel’s discretion whether to consider a second application. There will be an administrative charge on the same terms as before, ie the applicant must submit a cheque for £1000, £750 of which will be refunded if the applicant does not reach Stage 2 of the process. In any event, Oftel will only consider a maximum of two applications in respect of the same site (or what appears to Oftel to be materially the same site) in a period of 12 months.

3.11 If we take the view that the application is now ready to move on to Stage 2, we will tell the applicant and ask it to provide the information required by the auditor. If an applicant decides that it does not wish to proceed with its application, it must notify Oftel before Oftel proceeds to Stage 2 in order to get a refund of its £750.

Stage 2:

3.12 An independent auditor will consider whether the website satisfies Requirement 1 of the PASS Code. This involves checking that the website is using accurate and up-to-date price information, and also that its methodology – the way it produces price comparisons for an individual user – is sound. In looking at accuracy, the auditor will also consider whether the prices of ‘bundled’ services are presented in a fair and transparent manner.

3.13 The auditor will require documentation from the applicant and will probably also need to visit the applicant’s office. It is essential that the applicant cooperates with the auditor and this is addressed in the Agreement. There is, however, no contractual relationship between the applicant and the auditor.

3.14 Once the auditor has completed its enquiries, it will advise Oftel whether it believes that the website fulfils Requirement 1. It is then for Oftel to make a final decision regarding accreditation.

3.15 Possible outcomes following the auditor’s recommendation to Oftel:

• If Oftel decides that the website meets all the Requirements of the PASS Code, Oftel will award the Oftel PASS. This is subject to payment (see ‘Charging scale’ below). The applicant must also agree to comply with the conditions of having the Oftel PASS (see ‘What happens once a website is awarded the Oftel PASS?’ below).

• If the site clearly does not satisfy Requirement 1 of the PASS Code, eg because it is fundamentally flawed in some way, Oftel will advise the applicant that it has not been successful. Reasons will be given so that the applicant may, if it so wishes, try again. It will, however, need to submit a fresh application, with appropriate payment, ie start the application process again. It is at Oftel’s discretion whether to consider this fresh application. In any event, and as explained in the Agreement (and above, under Stage 1), Oftel will only consider a maximum of two applications in respect of the same site (or what appears to be materially the same site) in a period of twelve months.

• If the site as it stands does not satisfy Requirement 1 but would do so subject to some straightforward adjustment, Oftel will pass this information to the applicant and allow it a reasonable amount of time (normally 28 days) to address the problem. Oftel will then decide whether, on balance, it is satisfied that the website now meets all the requirements of the Code of Practice. If Oftel is not so satisfied, then Oftel will advise the applicant that it has been unsuccessful. Again, subject to the terms set out in the Agreement, the applicant has the opportunity to submit a fresh application within 12 months of its first application.

3.16 Following a competitive tender, Oftel has appointed Analysys to conduct Stage 2 of the verification process. More information about how Analysys will carry out this work and what it needs from the applicant is set out in Chapter 5.

3.17 Oftel will not discuss an application with any party other than Analysys and the applicant itself. However, if at any point in the application process Oftel has reason to believe that a particular website is not acting in good faith, Oftel may consider referring the matter to the appropriate authority, eg the Office of Fair Trading.

Charging scale

3.18 Each applicant will pay £250 towards Oftel’s costs. This is non-refundable.

3.19 Applicants reaching Stage 2 of the verification process, ie the audit by Analysys, will pay a further £750. This is non-refundable.

3.20 In practical terms, applicants are required to submit a single cheque in the sum of £1000 made payable to Oftel with their application, £750 of which is refunded if they do not pass Stage 1 of the verification process.

3.21 However, as mentioned above, no refund will be made to applicants who pass Stage 1 but fail Stage 2.

3.22 Applicants who are awarded the Oftel PASS will pay £5000 in total, ie a further £4000 in addition to the £1000 already submitted. As explained in Chapter 1, this charge goes towards covering the costs of the Oftel Price Assurance Standard.

3.23 Accredited websites will be thoroughly reviewed after 12 months, and will pay Oftel £3000 towards the costs involved in carrying out this review.

3.24 Oftel has borne the start-up costs of the Oftel Price Assurance Standard. We therefore believe it is fair that successful applicants should pay a fee that reflects the significant costs involved in the audit process. Oftel believes that £5000 represents good value for an accreditation scheme with this level of analysis.

3.25 The charging structure will be subject to review after 1 April 2003.

What happens once a website is awarded the Oftel PASS?

3.26 Oftel’s own website at www.oftel.gov.uk has a dedicated section on the Oftel Price Assurance Standard. This will list, and include hyperlinks to, accredited sites.

3.27 Any website that is awarded the Oftel PASS must:

• Display the Oftel PASS logo. It must be made clear that the Oftel PASS relates only to the part of the website that Oftel and Analysys have checked. The logo must not be used in a misleading manner and the website must not in any other way misrepresent what having the Oftel PASS means.

• Incorporate a short statement explaining what the Oftel PASS means (this statement will be specified by Oftel). The website must also include a hyperlink from the Oftel PASS logo to the appropriate part of the Oftel website.

• Ensure that it continues to comply with the PASS Code.

• Deal with any complaints and queries responsibly, and assist Oftel with any enquiries.

• Co-operate with the annual review and provide any information requested by Oftel and/or the auditor.

• Notify Oftel at least eight weeks in advance of any significant changes.

 Chapter 4

The role of Analysys

4.1 It is important that consumers should be able to use websites bearing the Oftel PASS logo with confidence in the pricing information on offer.

4.2 Oftel has therefore appointed Analysys Consulting Limited (Analysys) to check whether price information, both the underlying tariffs and the price comparisons calculated by the website, is accurate and up-to-date. Analysys has considerable expertise in the field of telecoms tariffs, and its appointment illustrates the value that Oftel places in the Oftel PASS initiative. Analysys currently runs the Phonebills website: this is managed as a separate project.

4.3 In the context of the Oftel PASS, ‘accuracy’ has a broader meaning. It encompasses the question: does the website actually do what it claims to do? And does the website give a realistic view of costs for an individual user? Presentation of data – prices and price comparisons - is key to establishing a website’s trustworthiness and usefulness, and the website’s price comparison model should be based on a rigorous methodology. Analysys is under contract to Oftel to conduct thorough checks.

4.4 Details of the information that Analysys needs from an applicant are set out at Annex A. As explained previously, Analysys will only examine those applications passing Stage 1 of the verification process.

4.5 Analysys will consider, amongst other things, the following:

• how tariffs are collected, inputted and interpreted;
• how bundled packages are treated;
• what assumptions are made, eg about average call length and a typical basket of calls;
• how price comparisons are calculated, eg by looking at the applicant’s software; and
• what processes are in place to deal with complaints from users.

4.6 In most cases, in addition to reviewing the applicant’s documentation, Analysys will need to conduct a site visit. This clearly requires the applicant’s co-operation. Once Analysys has completed its audit, it will advise Oftel whether, in its opinion, the applicant satisfies the requirement that price information is accurate and up-to-date. It is, however, Oftel’s decision whether or not to award the Oftel PASS.

4.7 Websites awarded the Oftel PASS must co-operate with any further audit or review, including the annual monitoring review, that Oftel may request Analysys to conduct.

Chapter 5

Responses to the consultation

5.1 Oftel received responses to the consultation paper published in December 2001 from:

Broadsystem Ventures Ltd
BT
Consumer Council of England
Centrica
Digenus
DIEL (Advisory Committee for Disabled and Older People)
Magenta Systems Ltd
Ocean Solutions Ltd
One 2 One (now T-Mobile)
Orange
Scottish Advisory Committee on Telecommunications
uSwitch

5.2 These responses were, on the whole, helpful and, in devising the Oftel Price Assurance Standard, we have taken on board many of the comments made.

5.3 The consultation paper raised some specific queries and comments on these are summarised below:

What are the alternatives to web-based tariff information, and how would they work in practice?

5.4 Some of the respondents felt quite strongly that, because not all consumers have access to the Internet, accreditation should not be limited to websites. Other types of comparison service, for example pricing factsheets, should also be included.

5.5 Other respondents argued that because of the fast-moving nature of telecoms, paper-based information would quickly become outdated.

5.6 Oftel has decided that the Oftel PASS should be awarded only to websites. Our view is that it would be extremely difficult for any other type of service to present comprehensive, accurate and up-to-date price information in a way that is relevant to a consumer and easy for him or her to understand. And at present, it is not possible to offer a comparable level of interactivity in any other way.

5.7 One respondent referred to in-store databases, used by some mobile phone retailers, which provide price comparisons. However, these databases are only accessible to consumers who actually visit the particular stores. It is also impossible for Oftel to monitor how in-store sales staff interpret the results produced by the database and advise visitors.

5.8 The telecoms market is dynamic and complex. This is a direct result of innovation and competition. There are literally hundreds of different telecoms suppliers offering a huge range of services and packages, eg indirect access, text messages and broadband. This means that telecoms tariffs are extremely complicated for consumers to work out and compare, far more so than energy tariffs. Unlike gas and electricity, the price of telecoms services is not always based on the number of units used; for example, charges may be based on distance, time of day or type of package. Telecoms prices also change frequently.

5.9 Oftel is committed to ensuring that consumers can compare prices easily and with confidence. We recognise that not everyone has access to the Internet at home. However, we are working hard to ensure better value for money and greater choice of services for consumers who want to get online. Together with UK online, the national campaign to help everyone in the UK get the most out of the Internet, Oftel has recently produced a useful consumer guide, How to access the Internet at home.

5.10 There are now many public places, such as libraries and Internet cafes, where consumers can access the Internet, and Oftel will be working hard to raise consumer awareness of the Oftel Price Assurance Standard.

How should sites offering information on business telecoms services address the requirement to provide accurate and up-to-date prices?

5.11 Most of the respondents who expressed a view felt that the accreditation scheme should not be limited to price comparisons of residential services. Small and medium sized businesses also need access to price information, particularly as many disabled people are self-employed.

5.12 However, it was pointed out that telecoms suppliers do not always adhere to standard price lists when dealing with business customers. There is often scope for negotiation. Oftel recognises that, unless telecoms suppliers are willing to provide websites with non-standard tariffs (and they are not obliged to do so under the applicable legislation), websites will only be able to obtain and display price information that is in the public domain.

5.13 Oftel agrees that the Oftel Price Assurance Standard should be flexible enough to accommodate price information aimed at businesses as well as residential consumers. Websites may charge users for this information; as one respondent pointed out, a website may need to charge for business price information to be able to provide free residential information.

Where a provider is earning commission from a telecoms supplier, what level of disclosure should be made to the consumer?

5.14 There was general agreement that, if a website gets commission or some other form of remuneration from a telecoms supplier, then it must disclose this to all users by means of a notice. However, the rate of commission (or other form of remuneration) may be commercially sensitive and need not be disclosed.

Should sites which do not require consumers to input data, such as postcode and types of calls typically made, be able to gain accreditation?

5.15 Most of the respondents who expressed a view said that websites that simply list prices without an element of interaction with the individual user should not be accredited.

5.16 Oftel recognises that there are non-interactive websites that provide very comprehensive price information. However, the Oftel PASS is intended to signal accessibility, as well as accuracy. Users should have some assurance that an accredited website is easy to use and will help them to compare prices of competing services.

5.17 Therefore, to be eligible for the Oftel PASS, a website must allow the user to input data to ensure that any price comparisons are relevant to his or her individual needs.

If a site provides prices of fixed telecoms services, is it reasonable to expect it to include prices of at least ten suppliers, including BT?

5.18 There were no specific objections to this proposal. Oftel also believes that websites should include the prices of Kingston Communications, which, like BT, is required to provide telecoms services in a particular area (Hull, in the case of Kingston – BT’s obligation applies to the rest of the UK).

5.19 Oftel is concerned that price comparisons must be presented fairly. For example, they must not in some way favour any telecoms supplier from whom the website earns commission should it introduce a new customer. If the website only includes prices of telecoms suppliers with whom it has a commission arrangement (or something similar), then this must be clearly disclosed to users.

If a site provides prices of mobile telecoms services, in addition to the four main network operators, should it include prices of service providers? If so, which ones?

5.20 One respondent pointed out that there are numerous mobile service providers offering a wide range of tariff packages, and that the four main mobile network operators are already recognised brands with comparisons available in-store from high street retailers.

5.21 Oftel agrees, and hopes that some websites comparing prices of mobile services will include one or more service providers. But we do not think it is appropriate to mandate this. Oftel must be careful that it is not seen to be ‘promoting’ a particular service provider in some way. However, consumers may be more inclined to use websites with a larger spread of suppliers.

Glossary

Analysys – Analysys Consulting Limited, the consultant appointed by Oftel to check whether websites comply with the requirement that prices and price comparisons must be accurate and up to date

Applicant – a website making an application under the Oftel Price Assurance Standard

Consumer – anyone using or requesting a telecoms service in the United Kingdom

OFCOM (the Office of Communications) – the single regulatory body to be created to regulate the communications industry, replacing Oftel, the Radiocommunications Agency, the Radio Authority, the Independent Television Commission and the Broadcasting Standards Commission

Oftel Price Assurance Standard – the name of Oftel’s accreditation scheme for price comparison websites

Oftel PASS – what Oftel awards under the Oftel Price Assurance Standard to successful applicants

PASS Code – the code of practice that websites must comply with in order to be awarded the Oftel PASS

Slamming - changing a consumer's telecoms supplier for some or all of their telephone services without the consumer's full knowledge or consent

Universal Service Directive – Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services

Website – unless otherwise stated, a website providing price comparisons of telecoms services

Annex A

Analysys’ request for information for Stage 2 of the verification process

General information

Please provide a short description of the nature of the price comparisons you offer, including any particular service focus you have (eg low cost international calls), and the main target market for your website (eg business market for mobile telephony).

Software systems

Please identify the modelling environment(s) in which your price comparison model is built (eg Excel spreadsheets, Access or SQL database, general purpose programming language). If more than one such tool or environment is used, please indicate the role of each in your model.

Wherever possible, your submission for accreditation should be accompanied by a copy of your model (or model components) in electronic format (for example, by email or on CD).

Examples of any input/output templates, or mechanisms used to transfer data between different modelling environments, would be particularly useful.

Model methodology

We require a complete and detailed description of the calculations you perform in producing the results presented to users of your Website. This description must include (as a minimum) details of how your model:

• estimates usage levels ie how it specifies how much consumers use the service (for example, calling patterns detailing the number of calls made, the type of call (such as international calls, dial-up Internet access, calls to mobile), the assumed duration of these calls, and whether peak or off-peak);

• incorporates tariff information received from operators and service providers (such as pence per call minute, call set-up charges, monthly rental charges);

• determines which operators/service providers offer service in the geographic region where the Website user resides;

• calculates the final user spend on a call (for example the inclusion of call set-up fees or minimum charges, call charge caps, varying billing units);

• models the various types of discount schemes offered by operators and service providers (such as calling circles, inclusive "free" minutes or reduced rates for "on-net" calls) which affect the consumer’s overall bill;

• makes bill comparisons across multiple tariff/discount combinations – please describe how the bill comparison calculation is carried out (for example, cheapest operator only, comparison to user’s existing provider/package).

Please indicate whether your bill/call price comparisons include or exclude VAT.

Data handling processes

Please describe the processes by which input information (such as tariff data) is incorporated into your price comparison model and, in addition, how the resultant pricing or billing results are transferred onto your Website. Your description should include (as a minimum) the following information:

Tariff input

• From where/whom do you obtain information about tariffs and discounts?

• In what format (electronic, paper-based) does the tariff information arrive to you from your sources?

• Please describe the physical process by which you convert the tariff information provided by your sources to the tariff information used in the model (for example, this could involve re-entering information at a keyboard or involve an automated computer-based process).

• In what ways do you have to re-cast the information provided into a different data structure compatible with the input structure to your own price comparison model? Please describe how this re-casting is carried out and any assumptions you need to make.

Usage levels

• What are your sources of information about usage levels?

• In what format (electronic, paper-based) does this usage information arrive to you from your sources? 

• Please describe the physical process by which you convert the usage information provided by your sources to the usage information used in the model (for example, this could involve re-entering information at a keyboard or involve an automated computer-based process).

• In what ways do you have to re-cast the information provided into a different data structure compatible with the input structure to your own price comparison model? Please describe how this re-casting is carried out and any assumptions you need to make.

Price comparison model

• Do you make use of more than one kind of modelling environment to price calls/services and carry out bill comparisons? If so, please describe how data is transferred between these environments.

Model output

• Please describe the physical process by which output information from your price comparison model is transferred to your Website. For example, is the process purely electronic or is some manual intervention required?

• If the output of your price comparison model undergoes further manipulation (for example, in order to display bill comparison information to users in a particular format), please explain what additional calculations are performed.

• What information (if any) do you feedback to operators?  

Management systems

• Please identify any formal quality management systems (such as ISO9001) you have in place within your organisation.

• What is the mechanism for obtaining tariff/discount package updates from operators and service providers? Is this request made on a regular basis or do you rely on your sources to provide updates when they consider it appropriate?

• With what frequency do you update core input information (tariffs, discount structures, usage profiles) in your price comparison model? Is this a regular event or triggered by tariff changes, etc?

• Who in your organisation receives and manages tariff/discount information and the relationship with operators and service providers? What sort of records are kept of source tariff information and the history of systems updates? Who is responsible for carrying out tariff/discount updates?

• How often do you review/update your usage profile information and assumptions? What would drive you to consider changes to your usage profiles?

• How often is the price comparison model itself upgraded (for example, to incorporate new functionality to cope with innovative discount schemes)? What steps do you take to manage and document version control as you update your price comparison model?

• What systems do you have in place to record changes to usage profiles and tariffs?

• Please describe how you determine the additional information contained on the Website which reflects the objectives, scope and limitations of the price comparisons you provide.

• What systems do you have in place to capture and respond to queries from customers?

Annex B

Flowchart of application process