20 December 2002

Contents

Summary

Chapter 1 – Introduction and background

Chapter 2 – Removal and re-siting of Public Call Boxes

Chapter 3 – Installation of new Public Call Boxes on the ground of social needs

Chapter 4 – Access to Public Call Boxes for people with disabilities

Chapter 5 – Incoming call barring

Chapter 6 – The extension of the payphone access charge

Chapter 7 – New classification of payphone

Chapter 8 – Summary of conclusions

Annex A – Draft Revised Guidelines agreed between Oftel and BT/Kingston Communications on the removal and re-siting of Public Call Boxes and on the installation of new Public Call Boxes to meet social need

Annex B –Glossary

Annex C – Types of Payphone

Annex D – List of those who responded to the consultation document

Summary

S.1 The provision of Public Call Boxes (PCBs) across the UK is a fundamental part of the UK’s Universal Service Obligations (USO). As the designated Universal Service Providers under the current UK regime, British Telecommunications (‘BT’) and Kingston Communications (in the Hull area) are required to provide reasonable access to Public Call Boxes at an affordable price across their licensed area. There are other PCB operators who also provide PCBs on a commercial basis.

S.2 Because of the rapidly changing PCB market, caused by increasing rates of mobile phone ownership, Oftel consulted on existing provision relating to the future regulation of PCBs. This Statement on Public Payphones (the ‘Statement’) sets out Oftel’s conclusions in relation to each of the proposals made in the consultation document.

Key conclusions

S.3 The adequate provision of PCB coverage in urban, suburban and rural areas is a fundamental Universal Service objective and is provided for in European legislation, in the licences of BT and Kingston Communications, and in the existing guidelines agreed between Oftel and BT.

S.4 In the light of the USO and of the responses received to the consultation document, Oftel’s principal conclusion is that the revised guidelines on the removal and re-siting of PCBs, as set out in the consultation document and in this Statement at Annex A, should be adopted under Condition 42 of BT's and Kingston Communications’ licence. The revised guidelines ensure a minimum level of regulation necessary where the total removal of PCB service from a particular site is proposed by BT or Kingston Communications, but maintain the current flexible regime for the removal of individual PCBs where PCB service will continue.

S.5 In some cases the revised guidelines have increased regulation (for example, by extending the period during which consultees can respond to a proposed removal), in others they have been amended in order to make the obligations clearer. Thus while the overall number of PCBs may fall within the next few years, the revised guidelines should enable better targeting of PCBs onto those groups and areas that need PCBs most. Although individual PCBs may be removed as a result of market conditions, Oftel will continue to keep the adequacy of PCB provision under review.

S.6 Oftel will also continue to ensure that BT should install additional PCBs on the ground of social need where the relevant evaluation criteria are met. It is intended that the guidelines on the installation of PCBs on the ground of social need should also be extended to Kingston Communications.

S.7 In view of the changing market conditions, Oftel considers that more regular and comprehensive information relating to PCB provision should be provided to Oftel by the PCB providers that are subject to the USO. It is therefore intended that the revised guidelines to be adopted by BT and Kingston Communications include an obligation on both operators to supply Oftel with information every six months on the number of requests for new PCBs and on the number of PCBs re-sited or removed, with reasons in each case.

S.8 Oftel intends that the guidelines as a whole, encompassing both the removal and re-siting of PCBs and the installation of PCBs on the ground of social need, will be rolled forward for incorporation into the new regime (discussed in more detail below).

S.9 Oftel fully supports the obligations imposed on operators under the Telecoms (Services for Disabled Persons) Regulations 2000, and in November 2002 wrote to all PCB operators asking them to report on their compliance with those obligations (as implemented by Condition 10 of their licences). Oftel will continue to ensure that PCB services are developed, in consultation with Oftel’s stakeholders, in a way that takes account of the interests of users with disabilities.

S.10 Incoming call barring to public payphones is not permitted under the current rules. Oftel proposed that in certain circumstances it may be desirable. Oftel has concluded that limited incoming call barring should be permitted at PCBs that are affected by forms of nuisance behaviour. At the same time, Oftel is conducting discussions with the Home Office and telecoms operators on the separate issue of how best to tackle the problem of prostitutes’ cards in PCBs.

S.11 Finally, Oftel intends to adopt its proposal that the Payphone Access Charge be rolled forward to include all qualifying payphone operators in order to ensure the maximum access to freephone services.

The new regime

S.12 There will be a new regime for the regulation of telecommunications as from 25 July 2003 in order to implement the requirements of the European Directives on communications, which came into force in April 2002. It is currently intended that the classification of payphones will change slightly with the introduction of the new regime. The new classification will seek to ensure that a clear and well defined set of payphones are subject to regulatory requirements, so that provision of payphone services and information is adequately protected under the new regime. Annex C of this Statement sets out in detail the current classification of payphones and the obligations attaching to each category. The intended classification under the new regime is discussed in more detail in chapter seven of this Statement, New Classification of Payphone.

Chapter 1

Introduction and background

Introduction

1.1 As described in paragraph 2.1 of the consultation document, there are two main categories of payphone which have been identified for regulatory purposes in the UK. These are:

• PCBs, which are situated on public land, operated under an individual licence, and to which the public has unrestricted 24 hour access; and
• private payphones, which consist of telecom operator managed payphones (which look very much like PCBs but which are situated on private land such as railway stations and motorway service stations); and independent private payphones (operated by individuals such as publicans or landlords of rented accommodation).

1.2 Annex C sets out in more detail the regulatory requirements of the different types of payphone operating in the UK.

1.3 Despite rapidly changing market conditions, PCBs remain vital for full social and economic inclusion and Oftel is determined to maintain the adequate provision of PCBs throughout the UK. The main focus of the proposals in the consultation document, and therefore of the conclusions in this Statement, is PCBs, in particular those PCBs which are provided by the designated Universal Service Providers.

Operation of existing regulation

1.4 There are currently more than 103,000 PCBs in the UK together with more than 43,000 operator managed payphones.

1.5 In relation to PCBs, there are coverage requirements imposed on BT and Kingston Communications as part of the USO; guidelines agreed between Oftel and BT on removing and re-siting PCBs, and guidelines on installing PCBs on the grounds of social need.

1.6 In relation to managed and private payphones, the obligations are set out in a class licence (the Telecommunications Services Licence), namely the provision of directory enquiries; access to emergency call services and operator assistance; and in certain situations the display of tariff information.

Oftel’s Consumer Protection Policy

1.7 The provision of payphones is part of Oftel’s Consumer Protection Policy. In July 2002, Oftel issued draft guidelines on its Consumer Protection Policy Reviews (the ‘CPPR Guidelines’) and on Regulatory Option Appraisal. Oftel’s Consumer Protection Policy includes areas where there are specific social objectives such as Universal Service, to protect groups of society whose needs would not otherwise be met by the market.

1.8 The comprehensive provision across the UK of PCBs offering services at an affordable price is an essential element of Universal Service. This requirement ensures that those people without a fixed line or mobile telephone or who are away from home are able to keep in contact and enjoy the advantages of telephony.

1.9 As discussed in the consultation document, there has been a large increase in the ownership of mobile phones. Oftel’s consumer research has found that around 73.7 per cent of the UK’s adult population now has a mobile phone, compared with just 49 per cent in 2000 and 28 per cent in 1999. There has also been clear growth in new low-cost forms of fixed telephony.

1.10 Nevertheless, these trends have not diminished the importance of PCBs to consumers who either have no fixed or mobile phone or who are away from their base and therefore unable to use their fixed line phone. Approximately 4.3 per cent per cent of homes in the UK do not have a fixed line phone, and approximately one per cent of homes have neither a fixed line or mobile phone. Most people without any phone have low incomes and for them the PCB may be their only means of telephony.

1.11 There are also other reasons for continued PCB usage mobile phone owners may still use PCBs at certain times (for example, peak rate) or for certain purposes as a complement to their mobile phone, not least for greater ease of cost control.

1.12 Therefore while increased ownership of mobile phones has had a significant impact on the level of usage of PCBs, it increasingly matters more to those people that are reliant on PCBs that there is adequate provision of them.

Universal Service Obligation

1.13 The legal basis for the Universal Service Obligation with regard to payphones is the Revised Voice Telephony Directive (98/10/EC), which became law in October 2000. That legislation defines a minimum set of services of a specified quality to which all users and consumers should have access. The detailed implementation of the Directive is left to Member States’ discretion.

1.14 The UK opted for a flexible approach to the provision of PCBs, based upon an assessment of what is reasonable in a given case. It is Oftel’s view that this more flexible approach allows considerations such as fixed and mobile phone ownership rates to be factored in to any assessment of reasonable coverage as and when that assessment needs to be made.

1.15 The provisions of the Revised Voice Telephony Directive were implemented by Condition 42 of the licences of BT and Kingston Communications. Under that condition, the two operators must maintain an operational PCB service which, amongst other things, offers free emergency access, free access to operator services, and both directory enquiries and local and national calls at geographically averaged tariffs.

1.16 Flexibility has been achieved through the existing guidelines agreed between BT and Oftel, which set out in more detail the policy and procedure behind the Universal Service Obligation, in order to provide a minimum level of regulation necessary to ensure adequate provision of PCBs throughout the UK. These guidelines are consistent with the consumer interest criteria in the CPPR Guidelines, which criteria include consumer access to telephone networks.

1.17 The flexible approach to implementing the USO as required under European law is also consistent with the relevant regulatory principles set out in the CPPR and Regulatory Option Appraisal Statement, by allowing for the minimum regulation necessary in each case and aiming for a light regulatory touch where possible. Oftel considers that the revised guidelines are appropriate, proportionate and effective.

The consultation

1.18 The consultation document (available at www.oftel.gov.uk/publications/consumer/payp1101.htm) set out the background to the payphones market in the UK, including information on the different types of payphone; payphone provision, operators and revenues; and the results of Oftel’s consumer research on patterns of payphone usage.

1.19 The consultation focused on the existing guidelines agreed between BT and Oftel under Condition 42 of BT’s licence and how, if at all, they could best be revised to ensure the continued provision of adequate PCB service throughout the UK. In particular, the consultation document proposed changes to the existing guidelines on the removal or re-siting of PCBs and on the installation of new PCBs to meet social need, including extending these guidelines to PCBs operated by Kingston Communications.

1.20 In addition, the consultation also picked up on other issues affecting payphones in the UK, including access for people with disabilities, incoming call barring, the Payphone Access Charge and the classification of payphones.

1.21 At the end of the consultation document, Oftel set out the following questions for consultees:

• Oftel distinguishes between the number of PCBs and the number of PCB sites. Is it reasonable to expect the same coverage in terms of the number of PCBs (rather than the number of PCB sites) when viewed in the light of declining usage of PCBs?

• What are your views on a possible modification to the guidelines on re-siting and removal of PCBs?

• Do you agree with Oftel’s assessment of the current criteria for the installation of new PCBs on the ground of social need?

• Do you agree that guidelines setting out the circumstances in which limited incoming call barring to PCBs is permitted should be agreed between Oftel and BT and Kingston Communications?

• Do you agree with Oftel’s assessment that requiring incoming call facilities at each and every PCB and managed payphone will place a disproportionate burden on those payphone providers forced to comply with this obligation when seen against the changing nature of the payphone market?

• Are the requirements in relation to the accessibility of services for disabled people working well in practice?

1.22 The following chapters discuss in detail each of Oftel’s policy proposals as they were set out in the consultation document and examine the responses from consultees to those proposals. Oftel’s conclusions from the consultation are then set out.

New regime and timescale for reforms

1.23 A new regime for the regulation of telecommunications in the UK will come into force with effect from 25 July 2003, as a result of the implementation of the new European legislation on communications. Under the new regime, licences will be replaced by general and specific conditions of entitlement. Oftel will shortly be undertaking a consultation exercise in relation to the implementation of the Universal Service Directive (‘USD’), including on the designation of the Universal Service Providers and the new specific conditions to be imposed on those providers. The USD requires Member States to ensure adequate provision, in terms of number and location, of public pay telephones.

1.24 Although Oftel’s policy on the specific measures to be used to implement the USD has not been finalised, it is intended at this stage that Oftel will propose that BT and Kingston Communications be designated as Universal Service Providers for the purpose of ensuring that there is reasonable access to public pay telephones throughout the UK.

1.26 It is intended that there will also be a review of the Universal Service Obligations under the new regime, at which point the guidelines will once again be considered.

Chapter 2

Removal and re-siting of Public Call Boxes

2.1 Guidelines were agreed between Oftel and BT in 1997 setting out the procedures to be followed by BT when seeking to re-site or remove PCBs. The guidelines were produced under Condition 42 of BT’s licence and are designed to ensure that there continues to be adequate coverage of PCBs in the UK by requiring that BT can only remove or re-site a PCB following public consultation. The guidelines also set out requirements for agreeing criteria for the installation of PCBs on the ground of social need.

Notice period in guidelines

2.2 The guidelines provide that where BT intends to remove or re-site a PCB, it must obtain relevant consents and display a notice on the PCB informing the public of the proposed change and giving details of how representations can be made regarding the proposal. A period of at least 28 days must have elapsed after the date when a removal or re-siting notice was first published before the removal or re-siting may take place. Condition 24.4 of BT’s licence requires that the notice period should be not less than 42 days.

2.3 The first proposal in the consultation document was that for consistency the guidelines be aligned with the licence condition and that the notice period in the guidelines therefore be revised to not less than 42 days.

2.4 In the responses to the consultation, consumer groups supported this proposal. BT supported the principle of a consistent approach but suggested that the 28 day period should remain, since that is the length of the period during which local authorities may comment on the installation of a PCB.

2.5 In the interests of consistency and conformity with the licence condition, it is intended that the notice period should be revised to not less than 42 days, as proposed in the consultation document. The revised guidelines (set out in Annex A) reflect this amendment at paragraph 1.1(e).

Removal of PCBs from site without total removal of PCB service

2.6 In its second proposal, Oftel invited views as to whether the guidelines should be revised to make it clear that removal of some PCBs from a bank of PCBs which falls short of the total removal of PCB service from the site will not require the consent of the local planning authority, or, if appropriate, the parish council.

2.7 In paragraph 3.5.3 of the consultation document, Oftel stated in error that as currently drafted the guidelines require consent to be sought for the removal of one or more PCBs from a bank of PCBs. In fact the existing guidelines only require consent where removal of a PCB would result in the total removal of PCB service from the site. However, Oftel considers that the revised guidelines provide greater clarity on this issue. Further, the opportunity for consultees to comment on this issue was welcomed, bearing in mind changing market conditions and the importance of this provision in the guidelines.

2.8 Most of those consulted felt that the current level and scope of PCB provision is meeting its objectives and that Oftel’s proposals looking forward will continue to meet these even though the absolute number of PCBs is likely to fall. The responses from industry, consumer and other groups showed broad support for consent only to be required where there would be the total removal of PCB service from a site, as is reflected in the existing guidelines. Respondents recognised the decline in usage of PCBs and supported the proposal that consent be linked to the reduction in the number of PCB sites rather than to the number of PCBs overall.

2.9 Some responses from consumer groups proposed further regulation. A couple of consumer organisations argued that single PCBs should be avoided, and therefore that local consent should be required for the removal of any PCB from multi-sites. The Scottish Advisory Committee on Telecommunications (SACOT) suggested that there should be an additional removal/re-siting requirement on BT/Kingston Communications to demonstrate that there is adequate and effective mobile coverage in the PCB’s catchment area. The Public Utilities Access Forum (PUAF) suggested that the guidelines should provide for a social impact assessment to be made where any removal or re-siting is proposed.

2.10 Oftel is determined to ensure that the needs of PCBs users continue to be met. However, Oftel considers that each of the above suggestions would be unduly burdensome where the provision of PCB service at the site will remain although the number of PCBs at the site will change. Some thinning out of little-used PCBs in urban and suburban areas is unavoidable over time if the PCB business as a whole is to retain its current universal coverage, but this thinning out will not impact on the provision of universal service in rural areas.

2.11 Indeed, it is unlikely that any possible amendments to the guidelines will result in large scale removal of PCB service from any current PCB sites, as it will still be necessary to go through the formal notification procedure where total removal of a PCB service is intended. In addition, where either BT or Kingston Communications propose that PCB service should be withdrawn entirely from a given site, the Director General of Telecommunications (the ‘Director General’) will retain the power to determine that the proposal will result in a failure to meet local needs and may therefore block the proposed removal or re-siting. So although one effect of the change may be to facilitate a gradual thinning out of PCBs from multi-sites, the overall coverage of the service will not be adversely affected.

2.12 It is therefore intended that revised guidelines should be adopted by both BT and Kingston Communications, which provide that obtaining the relevant consent is only necessary with regard to the removal or re-siting of a PCB where that removal or re-siting would result in the complete removal from the site of all PCB service (see paragraphs 1.1 and 1.2 of Annex A).

Multi-payment options at single PCB site

2.13 The third proposal was that, where removal of a PCB results in a site becoming a single PCB site, the site should offer both card and coin payment (‘multi-payment’) options. In addition, the Director General should be able to override a decision to remove a PCB where the removal of the PCB would result in no provision of a PCB with multi-payment options at the site.

2.14 The responses of consumer groups showed support for multi-payment options to be available for single PCBs. The Advisory Committee on Telecommunications for Disabled and Elderly People (DIEL) suggested that there should also be accessibility requirements in relation to single PCBs, to ensure compliance with the Telecommunications (Services for Disabled Persons) Regulations. This suggestion will be one of the aspects to be considered in any review of the Universal Service Obligations.

2.15 BT did not agree that multi-payment options should be required for the last remaining PCB, arguing that 93 per cent of users prefer cash and that such a measure would amount to additional and unnecessary regulation. However, Oftel considers that multi-payment options are vital where there is only one PCB at a site. As noted in paragraph 3.5.5 of the consultation document, BT’s own independent research confirms consumers’ preference for multi-payment options.

2.16 It is therefore intended that revised guidelines should be adopted by BT and Kingston Communications, which provide that where the removal or re-siting of a PCB results in there only being a single PCB at a site, that single PCB should offer multi-payment options, and that the Director General has the power to override any decision to remove a PCB where it would result in the complete removal from the site of all PCBs which have multi-payment options (see paragraph 1.3 of Annex A).

Consultation of local community groups

2.17 Oftel’s fourth proposal was that the guidelines should make specific reference to the need to consider the effect on adjoining communities of any proposal to re-site or remove a PCB. Specifically, it was proposed that in relation to removing or re-siting in Northern Ireland, local community groups should be consulted, in addition to the local planning authority.

2.18 The Northern Ireland Advisory Committee on Telecommunications emphasised the need for community groups to be consulted. BT commented that in many instances such groups are informal in nature and representation is fluid. Oftel has therefore added the words’ ‘where applicable’ to the proposed revised guidelines in order to ensure that the relevant community groups’ consent is obtained but also that the consultation process is focused as far as possible on relevant interested and identifiable groups.

2.19 Oftel therefore intends that the provision in the revised guidelines with regard to Northern Ireland, as amended by the wording described in the paragraph above, should be adopted. This will ensure that, where applicable, the consent of the appropriate local community groups in Northern Ireland is sought, as well as the consent of the local planning authority, where the complete removal of PCB service from a site in Northern Ireland is proposed (see paragraph 1.1(c) of Annex A).

2.20 The proposal to consider the effect on adjoining communities also received general support from consumer organisations, many of which felt that community groups should be more involved in decisions on the removal and re-siting of PCBs. Some consumer organisations argued that the proposal to consult local community groups in Northern Ireland should be extended to cover local community groups throughout the UK. In relation to Scotland and Wales, SACOT and Welsh Advisory Committee on Telecommunications (WACT) respectively pointed out that the revised guidelines should make reference to ‘community councils’ rather than ‘parish councils’.

2.21 BT argued that Oftel’s proposal would be likely to result in unnecessary delays and that existing legislation should be sufficient. BT also proposed that it should not be necessary to obtain the consent of the local planning authority or, if appropriate, the parish council, for the removal or re-siting of a PCB; instead it should be possible to remove or re-site the PCB provided that BT has received no response to the notice proposing the removal/re-siting by the due date. Oftel considers that consultation with the public and obtaining the consent of the relevant local authority is a necessary minimum level of regulation, especially since, under the revised guidelines, such consent would only be necessary where the total removal of PCB service from a site were at issue.

2.22 Oftel intends that the wording of the revised guidelines should be amended to reflect the fact that in Scotland and Wales, there are ‘community councils’ rather than ‘parish councils’. This should enable the community councils in Scotland and Wales to be consulted, in the same way as local authorities and as parish councils (where they exist) in England. Paragraphs 1.1(b), 1.1(d)(2) and 1.4(b) of the revised guidelines in Annex A reflect this amendment.

Request for information on re-sitings/removals

2.23 The fifth proposal was that in order to ensure that Oftel is kept informed of the latest figures in relation to PCB removal and re-sitings, the guidelines be redrafted to provide that every 6 months Oftel sends a letter to BT and Kingston Communications reminding them of their obligation to supply Oftel with a breakdown of re-sitings and removals.

2.24 This proposal received broad support from consumer groups. PUAF suggested that Oftel should publish a quarterly analysis based on information received from operators on each removal/re-siting decision. Oftel considers that it should be kept regularly informed of the latest figures but believes that imposing a six monthly requirement on BT and Kingston Communications is an adequate and proportionate regulatory measure in terms of the provision of information.

2.25 It is therefore intended that the provision in the revised guidelines, that Oftel should write to BT and Kingston Communications every 6 months requesting a report setting out data on the number of PCBs re-sited or removed entirely and the reasons for such re-siting or removal in each case (see paragraph 1.7(b) of Annex A), should be adopted.

Chapter 3

Installation of new Public Call Boxes on the ground of social need

3.1 The second part of the existing guidelines relates to the agreement between Oftel and BT of evaluation criteria for the installation of up to 500 PCBs across the UK on the ground of social need. The onus on requesting installation of a payphone in those circumstances rests with individual local authorities.

The Evaluation Criteria

3.2 In the consultation document (Table 3.23, page 18), Oftel set out the evaluation criteria and explained how they worked in practice. Oftel proposed that the evaluation criteria for PCBs on the ground of social need, together with the guidelines on the agreeing of the criteria, should be rolled forward for a further period of five years and that they should be extended to Kingston Communications.

3.3 The existing evaluation criteria, and the rolling forward of them for five years, received general support from industry, consumer and other groups.

3.4 BT expressed support for the current evaluation criteria and confirmed that it was happy for them to continue for the next five years. BT suggested that it would be helpful to clarify which of the existing PCBs form part of the USO, in order to secure their future and so that other PCBs could be managed on a commercial basis. Oftel does not consider that it is necessary to take this additional step at this stage, where there is adequate provision of PCBs. It may be the case that in future it will become necessary to do so, but if so then BT would need to supply Oftel, or under the new regime Ofcom, with detailed information about the costing of its PCBs throughout the UK.

3.5 Some consumer groups suggested that the existing criteria should be refined in order to take account of smaller rural communities and deprived urban areas. In terms of the accessibility criteria, several consultees pointed out that measuring accessibility by walking time or distance may not account for factors such as time taken to access the PCB by a safe route and varying levels of mobility (particularly in the case of disabled and elderly people).

3.6 Oftel welcomes the views of consultees on this issue and appreciates the difficulty of evaluating criteria such as ‘accessibility’ when there are several variables to take into account in any assessment of it. Having considered the responses, and in the light of the general support for the existing criteria, Oftel is of the view that the evaluation criteria should remain the same at present, but should be kept under review going forward. The current criteria have the advantage of providing flexibility. Oftel considers that the amendments suggested, which were often conflicting in themselves, would not add to the criteria and indeed could make the criteria more rigid and difficult to apply in the future.

3.7 Oftel therefore intends that the evaluation criteria be rolled forward for a period of a further five years. However, the criteria may also be reconsidered prior to that as part of any Universal Service review. Oftel also intends that the provision in the revised guidelines (as set out in paragraph 1.5 of Annex A) on the agreement by Oftel and BT/Kingston Communications of evaluation criteria should be adopted. This includes provision for the criteria to be monitored and for changes to be made if necessary over time. It is intended that the revised guidelines, including the provision on installation of PCBs on the ground of social need, will be rolled forward and included in the new regime through the medium of the specific Universal Service conditions.

Awareness and use of the agreement

3.8 Oftel also proposed that, because of the well publicised criteria against which requests for installations are assessed, the setting of a target is no longer necessary. BT agreed with this proposal. The responses of other consultees focused on the need to raise awareness and use of the agreement rather than on targets as such. As noted in the consultation document, the present target has not spurred interest among local authorities in applying for additional payphones, nor proved operationally useful to Oftel in its monitoring of compliance with the USO as a whole or its targeting of vulnerable consumers in particular.

3.9 Oftel therefore intends to focus its efforts on encouraging local authorities and other relevant organisations to submit further applications to BT/Kingston Communications on the basis of the criteria, in order that the agreement is utilised as much as possible, rather than on specific targets as such. Consultees expressed broad support for raising the awareness of local authorities of the agreement between Oftel and BT, for example by informing umbrella bodies representing community groups and other significant networks such as the Citizens Advice Bureaux.

3.10 In the consultation document, Oftel proposed that it should write to the local authorities on an annual basis reminding them of the existence of the evaluation criteria for PCBs on the ground of social need and recommending that they consider the adequacy of existing PCB provision within their area. In addition, Oftel proposed that every six months Oftel would write to BT and Kingston Communications reminding them of their obligation to supply information on the number of requests made on the ground of social need together with the number of requests granted.

3.11 Both proposals received strong support from consumer groups. There was also a suggestion that Oftel should write to local community groups as well as to the local authorities on this point. Oftel considers that it would be beneficial if local authorities in the UK could themselves get in touch with community groups in order to assess particular matters, and would encourage them to do so as far as possible in order to raise the profile of this agreement where it may benefit the local community.

3.12 It is therefore intended that the revised guidelines, which make provision for Oftel to write to BT and Kingston Communications every six months requesting a report setting out the number of requests for new PCBs (including details of the areas in which such provision was requested) and whether or not the request was granted (see paragraph 1.7(a) of Annex A), should be adopted.

3.13 Oftel also proposes to write to local authorities on an annual basis reminding them of the existence of the evaluation criteria for PCBs on the ground of social need and recommending that they give thought to the adequacy of existing PCB provision within their area. Local authorities would then be at liberty to get in touch with any umbrella bodies representing community groups and/or other significant networks (such as the Citizens Advice Bureaux) that they consider could have a vested interest in this issue.

Chapter 4

Access to Public Call Boxes for people with disabilities

4.1 In the consultation document, Oftel discussed the issue of access to PCBs for people with disabilities, particularly in the light of the Telecommunications (Services for Disabled Persons) Regulations 2000 (the ‘Regulations’), which set out a range of obligations on telecommunications operators. These obligations have now been implemented in fixed-line operators’ licences as Condition 25 and in PCB operators’ licences as Condition 10. Under Condition 10, all providers of PCBs must ensure that 75 per cent of their PCBs are accessible to wheelchair users (50 per cent in Kingston-upon-Hull) and that 70 per cent provide amplification facilities.

4.2 The above obligations relating to payphones were set out in the consultation document. Oftel asked consultees to respond on the question of whether they thought the requirements in relation to the accessibility of services for people with disabilities are working well in practice.

4.3 In general, the Regulations and the prioritising of access for people with disabilities to payphones were widely welcomed by respondents.

4.4 The Royal National Institute for the Blind argued that the Regulations are inadequate for visually-impaired people and suggested that they be amended to include access criteria in this regard. While Oftel would not change the obligations imposed by Condition 10 at this stage, particularly as the existing licence regime is shortly to be replaced by a new regime implementing the EC Directives, this concern will nevertheless be one of the aspects to be considered in any review of the Universal Service Obligations. It is also worth noting that, under the present regime, providers of PCBs are required to consult with the Director General on changes to the design of their PCBs. The Director General may then take advice from advisory bodies, or bodies recognised by the Director General as representing the interests of people with disabilities, regarding the interests of particular users (Licence Condition 25.13) .

4.5 DIEL suggested that the Regulations should be extended to cover managed payphones. Oftel considers that to extend such obligations to the providers of managed payphones installed on private or commercial sites would be unduly burdensome and would risk the potential removal of payphones by those providers. Regulation of managed payphones is naturally lighter than that of PCBs because managed payphones are not provided as part of a public service; it is for this reason that they are outside the scope of the regulations and Oftel does not consider that this should change at the present time.

4.6 Oftel has kept under review the performance of PCB operators in relation to the obligations imposed by Condition 10 of their licence. Several consumer groups welcomed Oftel’s monitoring of compliance with the relevant licence conditions.

4.7 At 2 October 2002, BT could confirm that at least 75 per cent of its PCBs are accessible by reasonable means to users in wheelchairs. In terms of PCBs contain telephones incorporating additional receiving amplification, at present only 50 per cent of BT’s PCBs have variable amplification, but BT is working on a programme of upgrading its PCBs that is intended to achieve compliance and this process is being monitored by Oftel.

4.8 At 2 October 2002, Kingston Communications had not yet reached its target of at least 50 per cent of PCBs being accessible to wheelchair users and of at least 70 per cent of its PCBs containing telephones with additional receiving amplification. Kingston Communications is making efforts to ensure that its payphones comply with Condition 10 of its licence, but there are particular local conditions that make compliance onerous. Oftel proposes to have further discussions with Kingston Communications with a view to establishing a plan as to how it can best meet its obligations going forward.

4.9 In November 2002, Oftel wrote to all PCB operators asking them to report formally on their compliance with Condition 10. Oftel, and subsequently Ofcom, will monitor the responses of all operators to its request for compliance information in order to keep under review their performance in relation to the obligations set out in Condition 10.

4.10 Under the new regime, the General Condition of Entitlement dealing with payphones will continue to ensure that providers of PCBs are subject to the obligation of ensuring that 75 per cent of their PCBs are accessible to wheelchair users (50 per cent in Kingston-upon-Hull) and that 70 per cent provide amplification facilities. Oftel, and subsequently Ofcom, will seek to ensure that PCB services continue to be developed, in consultation with its stakeholders, in a way that takes account of the interest of users with disabilities.

 Chapter 5

Incoming Call Barring

5.1 In its consultation document, Oftel considered the options available to address the issue of incoming call barring to certain PCBs that are being used for anti-social practices.

5.2 Oftel distinguished the issue of incoming call barring from discussions that Oftel has had with the Home Office and telecoms industry in order to tackle the problem of prostitutes’ cards in PCBs. Oftel has no formal power to require telecoms operators to address this problem but has written to operators to discuss options of enforcement which would complement the enforcement powers of the police under the new Criminal Justice and Police Act 2001. Oftel did not make any proposals on this issue in the consultation document.

5.3 Oftel proposed that the existing guidelines on the removal and re-siting of PCBs be amended to set out the circumstances in which incoming call barring is permitted and the notification procedures to be complied with in advance of that call barring. Oftel would work with BT and Kingston Communications on the production of such guidelines. The guidelines would provide for call barring for limited periods to PCBs that are being targeted by some form of anti-social use, rather than blanket call barring for extended periods.

5.4 In response to the consultation, both BT and Kingston Communications stated that they would be happy to enter into negotiations on developing guidelines. BT suggested that it would be helpful for other operators to contribute to such guidelines in order to ensure consistency.

5 5 There was some support from consumer groups and others for incoming call barring. In general, consumer organisations felt that call barring should only occur in exceptional circumstances, that customers should be informed where it does occur, and that there should be a public consultation on any guidelines drafted. Some consumer groups suggested alternative solutions such as reducing the ringing volume of incoming calls.

5.6 Following the responses, Oftel intends to discuss with BT and Kingston Communications the possibility of a set of guidelines for incoming call barring. These guidelines could be added to the revised guidelines on removal and re-siting of PCBs and on the installation of new PCBs to meet social need. The guidelines could set out the limited circumstances in which incoming call barring is permitted and the notification procedures to be complied with in advance of call barring.

Chapter 6

The extension of the Payphone Access Charge

6.1 The Payphone Access Charge (‘PAC’) is a charge levied by BT’s payphones (currently 8.1 pence per minute) when conveying freephone or other indirect access calls. The charge is levied on the provider of those freephone or indirect access services and not on the user of the service.

6.2 Oftel proposed that the PAC should be extended to all PCBs and qualifying managed payphones to ensure that operators other than BT receive payment for offering access to freephone and indirect access services. Oftel hopes that this will result in more comprehensive access to those services.

6.3 There was general support for the principle that operators other than BT should offer as wide as possible a range of freephone and indirect access services. BT supports the extension of the PAC in order to create a level playing field between operators. Consumer and other groups also expressed broad support for the extension of the PAC.

6.4 Oftel has been working closely with BT and other PCB providers to establish a framework for the extension of the PAC in order to ensure that other PCB and qualifying managed payphone providers receive the benefits that BT receives. The agreement extending the PAC to other qualifying payphone operators (the ‘PAC Agreement’) was finalised in mid 2002. The PAC Agreement provides that BT will bill and collect the PAC owing to the qualifying payphone operators, since those operators have no end relationship with the freephone service providers and are therefore incapable of billing for this themselves.

6.5 BT will levy an administrative charge (payable by its own payphone business as well) for the collection and payment out of the PAC. The PAC Agreement provides that one qualifying payphone operator may act as the agent for the others for the purposes of the collection of the PAC. The use of an agent enables the qualifying payphone operators each to pay only an apportionment of BT’s administration and collection fees rather than the whole of those fees.

6.6 Discussions are continuing about payments to qualifying payphone operators under the PAC Agreement.

Chapter 7

New classification of payphone

7.1 In its consultation document, Oftel considered whether or not it would be helpful to create a new classification of payphone known as Publicly Available Payphones which would offer the same level of service as PCBs but which would not be situated on public land.

7.2 The rationale for the possible new classification was the potential confusion to users in distinguishing between PCBs and managed payphones. Such a classification would require both PCBs and managed payphones to offer incoming call facilities and comprehensive access to indirect access services.

7.3 Oftel proposed that such classification would not be necessary. The reasons included lack of evidence that consumers are confused, the fact that providers of managed payphones could be unwilling to allow incoming calls, and the danger of unduly burdensome regulation in the light of declining payphone usage. In addition, Oftel considered that the extension of the Payphone Access Charge (PAC) (discussed in more detail in chapter six) would be an alternative and more effective means of ensuring that a more comprehensive range of services is available from managed payphones.

7.4 Many consumer groups responded that in principle incoming calls should be permitted from all payphones, but accepted that in practice requiring the same level of service from managed payphones as PCBs might lead to a reduction in the number of managed payphones. SACOT suggested that Oftel introduce a requirement that all managed payphones should have an information warning to consumers that the full range of telephone services may not be available, in order to avoid any confusion between PCBs and managed payphones.

7.5 Oftel recognises the desirability of ensuring that as many services as possible are available from both PCBs and managed payphones, but is in the process of addressing this issue through the extension of the PAC, as discussed in chapter six. Oftel therefore intends not to introduce a new classification of payphone known as Publicly Available Payphones.

7.6 As noted earlier, the classification of payphones will in any case change slightly with the introduction of the new regime from 25 July 2003. Under the new regime, Oftel is likely to retain usage of the term 'PCBs' when talking about public pay telephones provided as part of the USO, and otherwise will use the term "public pay telephone" (which includes PCBs) generally. The existing classifications and obligations, as explained earlier and as set out in Annex 3, will be replaced by two tiers of regulation applying to providers of Public Pay Telephones.

7.7 It is currently intended that the term ‘Public Pay Telephone’ will be used to cover only PCBs, managed payphones and a narrow category of payphones which are currently considered to be private payphones, but to which the public essentially has access for a significant part of the day e.g. payphones in pubs and in the lobbies of buildings to which the public has virtually unrestricted access. Those payphones not included in the new definition of ‘Public Pay Telephone’ will include private payphones to which the public does not have unrestricted access such as payphones in clubs and student halls.

7.8 Under the first tier of regulation, all providers of a Public Pay Telephone must provide access to operator assistance, directory enquiry and emergency services. In addition, they must ensure that the payphone displays particular information including, eg, tariff, the address of the payphone so that it is traceable by emergency services, and an indication of whether the payphone accepts incoming calls. Under the second tier, which will apply only to providers of PCBs, further obligations will be imposed regarding procedures for removing and re-siting, reasonable geographic coverage and access for disabled people. Payphones not included in the new definition of ‘Public Pay Telephone’, including private payphones to which the public does not have regular access, will only be obliged to provide access to emergency services.

7.9 This intended new classification would therefore seek to be as deregulatory as possible (in narrowing slightly the categorisation of Public Pay Telephone), while safeguarding the important principles of access and provision of information to the general public in the regulatory regime for payphones.

 Chapter 8

Summary of conclusions

8.1 In summary, following the responses to the consultation, Oftel proposes to take the following action in relation to the provision of PCBs.

8.2 Firstly, it is intended that revised guidelines on the removal and re-siting of PCBs should be adopted by BT, and that these guidelines should be extended to Kingston Communications. The revised guidelines are set out in Annex A to this Statement. It is currently intended that they will be incorporated into the new regime by reference in the specific Universal Service conditions. The revised guidelines provide for the following:

• a revised notice period of not less than 42 days, to align the guidelines with BT’s licence;

• that obtaining the consent of the local planning authority, or in England the local parish council (if it exists) and in Scotland and Wales the local community council, is only necessary with regard to the removal or re-siting of a PCB where that removal or re-siting would result in the complete removal from the site of all PCB service;

• that where the removal or re-siting of a PCB results in there only being a single PCB at a site, the single PCB must offer multi-payment options, and the Director General has the power to override any decision to remove a PCB where it would result in the complete removal from the site of all PCBs which have multi-payment options;

• that in the case of the removal or re-siting of a PCB in Northern Ireland, the consent of the appropriate local community groups is sought as well as the consent of the local planning authority; and

• that Oftel should write to BT and Kingston Communications every six months requesting a report setting out data on the number of PCBs re-sited or removed entirely and the reasons for such re-siting or removal in each case.

8.3 Secondly, it is intended that revised guidelines in terms of the installation of new PCBs on the ground of social need should be adopted, to provide for the following:

• that the evaluation criteria and the guidelines on agreeing the criteria apply to Kingston Communications as well as to BT; and

• that Oftel should write to BT and Kingston Communications every 6 months requesting a report setting out the number of requests for new PCBs, (including details of the areas in which such provision was requested) and whether or not the request was granted.

8.4 Oftel will keep under review the performance of PCB operators in relation to the obligations set out in the Telecommunications (Services for Disabled Persons) Regulations 2000 and will seek to ensure that PCB services continue to be developed, in consultation with Oftel’s stakeholders, in a way that takes account of the interest of users with disabilities. In particular, Oftel will liase closely with Kingston Communications to determine how it can best meet its obligations under the Regulations going forward.

8.5 Oftel intends to work with BT and Kingston Communications on the production of guidelines for incoming call barring. It is intended that such guidelines would set out the limited circumstances in which incoming call barring is permitted and the notification procedures to be complied with in advance of call barring.

8.6 Oftel has now finalised arrangements for extending the Payphone Access Charge to qualifying payphone operators other than BT, and discussion are continuing about payments to the qualifying payphone operators under the PAC Agreement.

8.7 Oftel does not intend to introduce a new classification of payphone known as Publicly Available Payphones, although there will be new terminology for payphones under the new regime coming into force on 25 July 2003.

8.8 In Regulatory Option Appraisal terms, Oftel considers that the net increase in regulation resulting from the above conclusions imposes a relatively small extra burden on operators, which is outweighed by the potential benefit to consumers who are likely to be some of the most vulnerable in society.

 Annex A

Revised guidelines between Oftel and British Telecom/Kingston Communications on the removal and re-siting of PCBs and on the installation of new PCBs to meet social need

Removal and re-siting of public call boxes

1.1 British Telecom (‘BT’)/Kingston Communications (‘Kingston’) shall not remove public call box service from a site unless:

a) local circumstances require the removal or re-siting of the public call box;

b) BT/Kingston has obtained the consent (in writing) of the local planning authority and in the case of England, the local parish council (if one exists), and in the case of Scotland and Wales, the local community council;

c) in the case of Northern Ireland, BT has, where applicable, obtained the consent (in writing) of the appropriate local community groups;

d) a notice has been displayed on the public call box in question (the ‘notice’) informing the public of the proposed change and giving details of how representations may be made to:

1) the local planning authority;
2) in the case of England, the local parish council (if one exists), and in the case of Scotland and Wales, the local community council;
3) in the case of Northern Ireland, the local community groups;
4)the Director General of Telecommunications (the ‘Director’); and

e) a period of at least 42 days (or 70 days where a representation has been made to the Director within 42 days) after the date when the notice was first posted has elapsed.

The Director shall be entitled to make a determination overriding any decision by BT/Kingston to remove or re-site a public call box where he is satisfied that local circumstances do not require the removal or re-siting of the public call box in question.

1.2 The requirements set out in paragraph 1.1 shall not apply where BT/Kingston wish to remove or re-site a public call box from a site where such removal or re-siting would not result in the complete removal of public call box service from that site.

1.3 The Director shall not have the power to make a determination over-riding a decision of BT/Kingston to remove or re-site a public call box in the circumstances set out in paragraph 1.2, except where the removal or re-siting of the public call box in question would result in the complete removal from the site of all public call boxes which have multiple payment options. In considering whether to make a determination in such circumstances, the Director shall take into account the reasons put forward by BT/Kingston for removal/re-siting of the public call box in question. Those reasons should be supplied to the Director at least 42 days before the proposed removal/re-siting date.

1.4 Where BT/Kingston are required to remove a public call box from a site on the instruction of the landowner on whose land the public call box is situated or some other person with the power to issue such an instruction, BT/Kingston shall consult with:

a. the local planning authority;
b. in the case of England, the local parish council (if one exists) and in the case of Scotland and Wales, the local community council; and
c.in the case of Northern Ireland, where applicable the local community groups

to establish how the local community may continue to have reasonable access to public call box service.

BT/Kingston shall provide public call box service at an identified alternative site unless BT/Kingston obtain the agreement in writing of the local planning authority that it is not necessary to provide public call box service at an alternative site, or that it will be sufficient to re-site another local public call box.

The Director shall be entitled to make a determination overriding such an agreement where he is satisfied that it is necessary to provide another public call box at an alternative site.

In the event that the local planning authority and BT/Kingston fail to agree, either party may make representations to the Director who shall then make a determination resolving the matter.

Installation of public call boxes

1.5 BT/Kingston and Oftel shall agree a set of evaluation criteria to identify the relative merits, in terms of community needs, of the provision of new public call boxes which have been requested, so that such requests are fairly and consistently handled. These criteria shall be monitored by Oftel and changes may be made over time. The objective will be to ensure that the reasonable needs of local communities for public call box services are met. In the event that a request for a public call box is not granted by BT/Kingston, and if the Director is satisfied that the reasonable needs of the local community are not being met, the Director shall be entitled to make a determination requiring that a request for public call box service be granted, whether or not the local authority has made representations to the Director.

1.6 BT/Kingston shall liase with local planning authorities to ascertain details of major new housing developments. BT/Kingston shall then survey existing payphone provision in the area to ensure that such new housing developments will be adequately served.

Information to be provided to Oftel

1.7 With effect from 1 January 2003, BT/Kingston shall supply Oftel every six months with a report setting out:

1. the number of requests for new public call boxes (including details of the areas in which such provision was requested) and whether or not the request was granted; and
2. data on the number of public call boxes re-sited or removed entirely and the reasons for such re-siting or removal in each case.

Oftel will send a reminder letter to BT/Kingston shortly before the report is due.

Annex B

Glossary

Freephone number: A number which can be reached free of charge to the caller often beginning 0800 / 0808.

Indirect access: Where a customer’s call is routed and billed through operator A’s network even though the call originated on the network of operator B.

Managed payphone: Payphones installed on private or commercial sites but which are operated under contract by a payphone operator who pays the landowner a fee and collects the revenues and carries out maintenance.

Payphone: A telephone which requires prepayment for calls via coins, calling cards, phonecard or credit/debit cards.

Payphone Access Charge (PAC): An additional charge paid by freephone and indirect access operators to PCB and managed payphone operators to cover the cost of providing and maintaining those payphones and for the use of the exchange line (the cost of which is normally covered by line rental).

Public Call Box (PCB): A payphone situated on public land to which the public has unrestricted 24 hour access and which is currently operated under an individual licence.

Types of payphone under the current regime

C.1 The following paragraphs set out in greater detail the two main categories of payphone operating in the UK under the current regulatory regime for telecommunications.

Public Call Boxes (PCBs)

C.2 These are defined as call boxes to which the public has unrestricted access at all times and are normally situated on public land (such as street pavements). There are currently more than 103,000 PCBs in the UK. There are currently four main PCB operators in the UK (BT, Kingston, NWP Communications and Interphone Public Networks (previously Infolines Premier)) who are all individually licensed under the Telecommunications Act 1984. The services available from these PCBs are broadly similar, but are subject to the following minimum requirements to provide:

• free 999/112 emergency calls;
• access to a directory enquiry service;
• facilities for disabled people (enabling the use of the payphone by users of hearing aids and allowing access to an agreed percentage of PCBs to wheelchair users);
• display of call charges including the minimum charge payable for connection of a call; and
• access to an operator service.

C.3 PCBs are subject to formal notification requirements where they are intended for removal. These notification requirements differ between universal service operators (BT and Kingston Communications) and non-universal service operators such as NWP Communications and Interphone Public Networks. The notification requirements to which BT and Kingston Communications are subject, as Universal Service Operators, are discussed more fully in the Statement itself.

Private payphones

C.4 Under the current payphone regime, the general term ‘private payphone’ consists of two sub-divisions: telecom operator managed payphones (which look very much like PCBs but which are situated on private land such as railway stations and motorway service stations); and independent private payphones (operated by individuals such as publicans or landlords of rented accommodation).

Telecom operator managed payphones (managed payphones)

C.5 There are in excess of 58,500 managed payphones across the UK.

These are payphones which are usually located on private or commercial land but which are managed by a telecommunications operator (such as BT, NWP Communications or Interphone Public Networks) on behalf of the landowner. Maintenance is normally carried out by the telecommunications operator, and the operator will usually pay the land owner a fee for the siting of its payphones on the landowner’s land. The level of the fee will in most cases be related to the revenues or expected revenues to be received at the site. Managed payphones are often very similar in appearance to PCBs (although they are not likely to be sited in actual boxes or kiosks) and will in many cases be branded in the same way where they are being provided by telecom operators which also provide PCBs. Managed payphones are typically sited on railway stations, motorway service station forecourts and in shopping malls.

C.6 In many cases managed payphones will offer the same or very similar services to PCBs and, as indicated above, those companies providing PCBs will also in most cases be in the business of providing managed payphones (although it should be noted that not all managed payphone providers are in the business of providing PCBs).

C.7 As managed payphones are located on private land, the landowner may require some amendment to the ‘standard’ services offered by managed payphone providers (but cannot require that the minimum level of services which are to be provided pursuant to a licence obligation are departed from). For example, BT’s managed payphones will in most cases offer incoming call facilities (in line with BT’s PCBs) unless the land owner requests that those incoming call services are not offered.

C.8 A regulatory distinction is drawn between BT-provided managed payphones which are operated under BT’s main Public Telecommunications Operator (PTO) licence and managed payphones operated by other telecom operators or service providers which are run under a class licence or general authorisation termed the Telecommunications Services Licence (TSL). The distinction is of little significance for the purposes of the consultation or this Statement.

C.9 Removal of managed payphones is not covered by formal notification requirements and they may be removed at the landowner’s discretion subject to any agreement which may exist between the land owner and the payphone provider.

Independent private payphones

C.10 Independent private payphones are operated by individuals such as publicans or landlords of rented accommodation. They include payphones in pubs, clubs and students halls of residence. Independent private payphones are currently operated under the TSL class licence, which obliges providers to ensure that the payphones provide access to directory enquiries, emergency numbers and operator assistance.

Annex D

List of those who responded to the consultation 

	Respondent
1	Mencap
2	Right Honourable Peter Mandelson, MP
3	Advertising Standards Authority
4	Institute of Directors
5	Mr. Michael Bond
6	Scarborough Borough Council
7	The Civic Trust
8	Mr. Brian Hunt
9	Royal National Institute for the Blind
10	Scottish Advisory Committee on Telecommunications
11	Advisory Committee on Telecoms for Disabled and Elderly People (DIEL)
12	Telephone Helplines Association
13	British Telecom
14	Consumer Communications for England
15	Welsh Advisory Committee on Telecommunications
16	Sefton Metropolitan Borough Council
17	Northern Ireland Advisory Committee on Telecommunications
18	Public Utilities Access Forum
19	Whitby Town Council
20	Kingston Communications
21	Manchester City Council
22	Royal Borough of Kensington and Chelsea
23	Trafford Metropolitan Borough (acknowledgement of receipt only)