Contents

Summary
Chapter 1 Introduction
Chapter 2 Consultation
Annex The statement on persistent misuse

Summary

S.1. This document introduces Oftel's Statement of policy on the persistent misuse of an electronic communications network or electronic communications service. Such a statement is required to be published in accordance with section 131 of the Communications Act 2003 ('the Act'). The 'persistent misuse' sections of the Act give powers to the Director General of Telecommunications ('the Director') to take action against persons who misuse networks or services in a way that causes unnecessary annoyance, inconvenience or anxiety, but that falls short of the commission of a criminal offence.

S.2. Oftel was not statutorily required to consult on the statement. Nonetheless, in view of stakeholder interest in the issues addressed in the statement an informal consultation on the statement commenced on 26 June and concluded on 17 July 2003.

S.3. This document contains an introductory background to the new powers, an analysis of the responses received and the statement itself, annexed.

Chapter 1

Introduction

Persistent misuse

1.1 The Act confers new powers on the national regulatory authority to regulate forms of behaviour which fall within the Act's definition of ‘persistent misuse’ of an electronic communications network or electronic communications service. The powers are set out in sections 128 to 131 of the Act.

1.2 Sections 128 to 131 of the Act assign various powers and functions to the Office of Communications (Ofcom). Because Ofcom have not yet assumed their powers and duties under the Act, the Communications Act 2003 (Commencement No.1) Order 2003 ('the Order') enables the Director to exercise Ofcom's functions for a transitional period in respect of those provisions of the Act that the Order brings into force on 25 July 2003. Those provisions include the persistent misuse powers. Hence this document refers to the Director or to Oftel rather than to Ofcom.

1.3 The new concept of persistent misuse of an electronic communications network or electronic communications service supplements sections of the Act that create criminal offences relating to the use of networks and services which have essentially been carried forward from the Telecommunications Act 1984. These offences relate to:

• dishonestly obtaining electronic communication services;
• the possession or supply of apparatus that may be used to obtain such services fraudulently; and
• the improper use of a public electronic communications network by sending messages that are grossly offensive, indecent, obscene or menacing.

1.4 Persistent misuse is a category of behaviour intended to apply to activities that, although causing unnecessary annoyance, inconvenience or anxiety to another person, are not serious enough to be prosecuted as criminal offences. The new powers are a consumer protection measure that enables the Director to take action against persons whose use of networks or services has a detrimental effect on the public interest by their imposition of various types of nuisance on other users.

1.5 There is a presumption that the powers to take action against persistent misuse will not generally be used where there is an alternative legal remedy. Hence there are a range of activities which, although they undoubtedly involve the misuse of an electronic communications network or service and cause – at the very least – inconvenience to the public, are not covered by the statement. This is because Oftel believes that other legislation provides adequate remedies to deal with them. Such activities include:

• sending unsolicited commercial email or spam (data protection legislation);
• computer hacking or denial of service attacks (misuse of computers legislation); and
• threatening or abusive communications (legislation on malicious communications).

Background

1.6 The general background to the 'persistent misuse' legislation is the implementation of the new regulatory framework for electronic communications with effect from 25 July 2003. One of the major changes that the new framework brings about is the replacement of licence conditions in individual and class telecommunications licences by a general authorisation, incorporating a set of general and specific conditions, that only apply to communications providers. In consequence the behaviour of corporate and residential end-users who do not provide communications services to third parties is no longer regulated through licence conditions.

1.7 The withdrawal of telecommunications licensing from end-users could result in an unintended weakening of the Director's ability to protect consumers. There are a number of things that users can do over an electronic communications network or service that are likely to cause inconvenience to other users.

1.8 One example is the use of automatic calling equipment (ACE), which is equipment capable of being programmed to dial a series of numbers without further human intervention. A former licence condition, which applied to all business and residential users, prohibited the use of ACE to make calls that resulted in:

• recorded messages;
• short duration or silent calls (where a call centre generates a call to a number then drops it immediately after connection because no operator is available);
• fax-scanning calls (where a call is made for the sole purpose of establishing whether a fax machine responds on a particular number); and
• fax messages,

without the consent of the recipient or the Director.

1.9 A further example is the possible misuse of calling line identification (CLI) facilities. A former condition in class licences set rules for those end-users with private network equipment that enabled them, in effect, to choose the CLI number to be associated with their calls. These rules required any number used as a CLI number to be authentic (it identified the caller), diallable (it must be possible to make a return call by using it) and must not be a premium rate number. A significant consumer protection measure would have been lost were it not possible to enforce these rules within the new framework.

1.10 There are several other ways in which a network or service may be misused (see chapter 4 of the statement). The benefit of the 'persistent misuse' legislation is that it enables the Director to take steps to protect consumers from the effects of the type of behaviour that was prohibited by these former conditions as well as from the other forms of misuse identified in the statement.

The statement

1.11 Section 131 of the Act requires Oftel to publish a statement of its general policy with respect to the exercise of its powers under the persistent misuse legislation. That statement is now published as an annex to this document. Although there was no statutory obligation on Oftel to consult on the statement it was considered fitting to expose it to an informal consultation process. One reason for this is that the types of behaviour that should be regarded as misuse and their relative seriousness is to some degree a matter of perception on which consumers should have the opportunity to make an input.

1.12 The statement begins by offering definitions of the two terms linked in the idea of 'persistent misuse'. It also lists and describes some examples of what Oftel believes to be persistent misuse. Subsequent sections deal with the procedural aspects of the legislation, which include the giving of notifications of persistent misuse and enforcement notifications. The statement concludes with some ideas as to what might be required of notified persons to remedy the consequences of their misuse, which can include the payment of compensation to injured parties and the imposition of penalties.

Chapter 2

Consultation

2.1 Oftel exposed the draft statement to an informal consultation process. The view was taken that a wide range of stakeholders might well have an interest in the issues covered in the statement and comments from individuals, as well as from trade bodies, user groups and industry representatives were likely to offer valuable insights.

2.2 Given the short period of time available for the consultation process the number of responses received indicates the level of public interest in the issues the statement addresses. Ten non-confidential responses were received. These were from operators (BT, the Mobile Broadband Group, Telewest Broadband), from user groups and individual users (NIACT, SACOT and Mr. Richard Emery), as well as from four bodies with a particular interest in the subject (the Direct Marketing Association, UK Data IT, the Premium Rate Association and the Telephone Helplines Association). Additionally nine individuals wrote in, either to express their general support for the policy expressed in the statement or to offer their own experiences of annoyance, inconvenience or anxiety brought about by forms of misuse. The degree of anxiety short duration calls can give rise to was highlighted by one respondent who was eventually forced to change his telephone number.

2.3 Respondents were invited to consider the following four questions:

• Do you agree with Oftel's understanding of what 'persistent misuse' is?
• Do you agree that the examples listed are representative of persistent misuse?
• Are there any other ways of misusing a network or service that should be listed?
• Do you think the sections on (a) compensation payments and (b) penalties are broadly along the right lines?

but were also encouraged to make wider comments if they wanted to.

2.4 BT’s response fully supported the policy statement set out in the consultation and made several additional points on the detail of the statement. One point was about transparency – that details of cases of misuse should be posted on the Oftel website, even if the personal details were to be made anonymous. Oftel's view is that publicising enforcement actions on persistent misuse would normally be of benefit to consumers except where there are overriding legal constraints that make this impracticable.

2.5 BT argues that there should be a specific requirement on users of ACE always to provide their CLI information. In Oftel's view such regulation would be excessive even if it were legally possible to mandate such a requirement – however Oftel will encourage users of ACE to provide CLI information that enables the recipient of a short duration call to make a return call. The availability of the caller's identity significantly reduces the annoyance or anxiety generated by a short duration call. BT also makes the point that failure to comply with Oftel's CLI Guidelines available at http://www.oftel.gov.uk/ind_grouops/cli_group/docs/CLIguide0803 should explicitly be described as a form of persistent misuse. The misuse of a CLI facility is already identified at chapter 4 of the statement as one of six general areas within which a form of behaviour may represent persistent misuse, and it is therefore unnecessary in Oftel’s view to include ‘failure to comply with the CLI Guidelines’ as a specific example of persistent misuse. The examples of persistent misuse are intended to be illustrative rather than comprehensive and will not prevent Oftel, where there is an overriding reason of public policy, from issuing a notification in respect of behaviour which is not identified by this statement.

2.6 BT’s proposal to add revenue sharing numbers to premium rate service numbers in paragraph 4.8 of the statement, on misuse for dishonest gain, has been adopted. However this needs to be qualified by an understanding that there are legitimate uses of revenue sharing numbers, such as national rate numbers, that do not constitute a form of misuse.

2.7 BT also points to the role that communications providers can play in identifying instances of persistent misuse and bringing them to Oftel's attention. Oftel welcomes such support – paragraph 5.3 of the statement has been amended accordingly.

2.8 The Mobile Broadband Group supports attempts to safeguard consumers from harm by other end-users but wants to see the development of a joint strategy by Oftel, ICSTIS and the Office of the Information Commissioner to avoid inconsistency. Mobile operators would also welcome a regular dialogue with Oftel over its exercise of the persistent misuse powers. They also agreed that research was needed to establish the relative seriousness of various forms of misuse. Some concern was expressed about the risk of malicious or fraudulent complaints under the new legislation. These points all have substance to them. They have not been addressed by the statement which seeks to set out some general policy principles - the next stage will be how to implement them in practice.

2.9 In response to the specific questions the group expressed general agreement although it thought that making calls with an intention to harass or making nuisance or hoax calls might be specified as forms of misuse. Instances of such calls require a case-by-case judgement. However these types of calls are more likely to be caught by section 127 of the Act which applies to messages that are grossly offensive, indecent, obscene or menacing and to false messages sent for the purpose of causing annoyance, inconvenience or needless anxiety. The Malicious Communications Act 1998 as amended by the Criminal Justice and Police Act 2001 also extends to communications made with intent to cause distress or anxiety. Hoax calls are a good example of where a proportionate approach needs to be adopted. They range from prank calls made with humorous rather than malicious intent to calls that can have very malign consequences, say, false allegations made to a person's employer or a misleading medical diagnosis.

2.10 The response expressed some concern about the interaction of the persistent misuse powers and the draft Privacy and Electronic Communications (EC Directive) Regulations 2003 in respect of the use of ACE. To clarify as much as is possible at this stage persistent misuse is not limited to telephone calls but embraces all forms of misuse perpetrated by means of an electronic communications network or service. This cannot exclude SMS. However the statement is not directly targeting the use of ACE but, pragmatically, only instances where the use of ACE causes annoyance, inconvenience or anxiety to customers.

2.11 Telewest Broadband's response declared support in principle for the statement. It recognised the difficulties of an a priori definition of persistent misuse and made the particular point that a one-off event impacting a large number of customers would not justify regulatory intervention. This is clearly correct – a one-off event does not denote persistent misuse which requires repeated events.

2.12 Telewest Broadband identifies short duration calls generated by ACE as a key issue, especially as their incidence appears to be growing. The information that it receives some 200 calls a day about such calls demonstrates that Oftel is right to be looking for a way to reduce their number. The response also makes the same point about transparency as that reported in paragraph 2.4 above. Clearly, there is a strong desire for the persistent misuse powers not to be exercised in secret.

2.13 The response repeats the point about the role of communications providers in supplying evidence of instances of persistent misuse. Whereas all responsible network operators will be happy to co-operate, Oftel needs to be sensitive to commercial pressures and take care that requests for help take account of the urgency and seriousness of a particular problem. The point is well taken although it should be remembered that a reduction in the volume of short duration calls would lighten the pressure on providers' customer services bureaux.

2.14 NIACT supports the general principles set out in the statement but is concerned that unsolicited text messaging is not listed as an example of persistent misuse. As indicated in paragraph 2.10 above text or SMS messages are within the scope of the persistent misuse powers. However text messages are a form of electronic mail for the purposes of the draft Privacy and Electronic Communications (EC Directive) Regulations 2003 which propose specific measures for the use of electronic mail for direct marketing purposes.

2.15 SACOT expresses support for the approach set out in the draft statement. The response goes on to make two substantive points. Firstly, it takes issue with the presumption made in paragraph 1.4 of the draft statement "that the powers to take action against persistent misuse will not generally be used where there is an alternative legal remedy" on the grounds that in particularly urgent cases the normal legal process might be too slow. However this presumption is qualified rather than absolute – there is scope for a judgement to be made in particular circumstances that urgency requires the exercise of the persistent misuse powers. This may be unlikely in the most serious cases where a fine not exceeding £5000 may be deemed an inadequate penalty.

2.16 SACOT’s second point concerns the potential role that the Telecommunications Ombudsman Service Ltd might play in determining the amount of compensation payments where a communications provider is involved. This suggestion will be borne in mind when the detail of implementation is worked over; the present assumption is that persistent misusers are more likely to be end-users than providers.

2.17 Mr Richard Emery proposes that companies using ACE should be required to maintain a log of all outgoing calls available for Oftel inspection, must use a freephone or low-call CLI number and play a recorded message when the unavailability of an operator results in a silent call. In Oftel's view these are good practice suggestions for ACE users to adopt voluntarily. Oftel is reluctant to make these proposals mandatory because the regulatory burden would be excessive (a national register of all installed ACE) and disproportionate to the problem it is trying to address. Logs of outgoing calls made from call centres would be available for inspection in particular cases.

2.18 The DMA broadly welcomes the new persistent misuse powers but makes two particular points: that the stated minimum of three instances necessary to establish a pattern of repetitive behaviour is too low; and that Oftel will follow the enforcement policy of the Office of the Information Commissioner in offering advice and guidance before resorting to a formal section 128 notification. The "three instances" guidance was heavily qualified in paragraph 3.2 of the draft statement and was intended to set the lowest possible number before enforcement action might be contemplated. It does not mean that enforcement action will be automatically triggered when the threshold has been reached. The most likely approach to be taken is that enforcement notices will be a last resort in the majority of cases brought to Oftel's intention.

2.19 UK Data IT points out that the DMA Code of Practice for Automated Calling Equipment (published at www.dma.org.uk/shared/lgl_code.asp) recommends a 5 per cent upper limit on short duration calls. A compliant call centre with 100 operator positions could thus deliver up to 1920 such calls in a day, which is still a very considerable number. A suggested way of alleviating the situation is to maintain a register of numbers to which recipients claim short duration calls have been made. The numbers would be screened to ensure that no more short duration calls are made to them. Oftel welcomes any initiative by the direct marketing industry to tackle the problem of short duration calls and intends to open a dialogue with its representatives.

2.20 The Premium Rate Association's response expressed concern that some of the persistent misuse powers appear to run in parallel with those of ICSTIS and that this could be a source of confusion to service providers. It is reasonable to assume that Oftel will work closely with ICSTIS where the form of persistent misuse involves a premium rate number. The persistent misuse statement does not seek to undermine the legitimacy of premium rate services but identifies a scam where customers are deceived into unknowingly buying such services.

2.21 The Telephone Helplines Association (THA) asks whether the legislation will apply to malicious calls made to freephone and low-call helpline numbers. Clearly the scope of sections 128 to 131 of the Act embrace all forms of misuse over an electronic communications network or service likely to cause annoyance, inconvenience or anxiety to a person so does not exclude the particular forms of behaviour the THA has in mind. The decision as to whether an enforcement notice is appropriate to any particular case will unavoidably depend on the circumstances of that case – it would not be appropriate for Oftel to reach any generic a priori conclusions.

Annex

Statement of policy on persistent misuse of an electronic communications network or electronic communications service

Contents

Chapter 1 Introduction 13
Chapter 2 What, in Oftel's view, constitutes 'misuse of a network or service
Chapter 3 When, in Oftel's view, will misuse be viewed as 'persistent'
Chapter 4 Examples of persistent misuse
Chapter 5 Oftel policy on the formal giving of notifications
Chapter 6 The consequences of a notification
Chapter 7 Oftel policy on penalties for persistent misuse

Chapter 1

Introduction

1.1 This is the statement of general policy that is required to be published under section 131 of the Communications Act 2003 ('the Act') with respect to the exercise of powers under sections 128 to 130 of the Act. The Act refers to these powers being exercised by the Office of Communications (Ofcom). Ofcom have not yet however assumed their powers and duties under the Act. Instead, the Secretary of State has commenced various provisions in the Act in order that the Director General of Telecommunications ('the Director') (and, through him, Oftel) may carry out the functions contained in those provisions. Sections 128 to 131 have been commenced in this way, and the Director is able to act under them. This statement therefore sets out Oftel's policy which Ofcom will have to decide whether they wish to adopt.

1.2 The purpose of this statement is to offer a degree of clarity about the operation of the 'persistent misuse' sections 128 to 130 of the Act. These sections enable Oftel to issue notifications where it has reasonable grounds for believing that a person has persistently misused an electronic communications network or electronic communications service. These sections also set out enforcement procedures and penalties where there has been 'persistent misuse'. The Act lays a duty on Oftel (Section 131(4), Communications Act 2003) to have regard to the statement in exercising the powers conferred on it by the relevant sections. However the statement cannot bind Oftel absolutely in exercising those discretionary powers. Oftel may revise the statement from time to time as it thinks fit (Section 131 (2), ibid).

1.3 The statement addresses the following policy issues:

• What, in Oftel’s view, constitutes ‘misuse’ of a network or service?
• When, in Oftel’s view, will misuse be viewed as ‘persistent’?
• Examples of persistent misuse.
• What is Oftel's policy on the giving of section 128 notifications?
• The consequences of a notification.
• What is Oftel's policy on penalties for persistent misuse?

Chapter 2

What, in Oftel’s view, constitutes ‘misuse’ of a network or service

2.1 Section 128(5) sets out two definitions of what constitutes misuse of an electronic communications network or electronic communications service. A person misuses a network or service if:

2.2 In both cases the significance of the words 'likely effect' is that the effect has to be probable, not necessarily proven. The two cases may be distinguished insofar as the former requires the direct use of a network or service whereas the latter captures a wider category of behaviour which involves conduct dependent on the use of a network or service. An example of the former is where a person uses a telephone to make a short duration call (ie one where the person rings off before the called party has time to answer); an example of the latter is conduct that results in a person being led unknowingly to dial a premium rate service.

Chapter 3

When, in Oftel’s view, will misuse be viewed as ‘persistent’

3.1 To fall within the provisions of sections 128 to 130 it is not sufficient to misuse an electronic communications network or service. The misuse must be persistent; in other words it must be "repeated on a sufficient number of occasions". Section 128(6) offers two ways of determining whether misuse has been repeated sufficiently to count as persistent. The misuse must either represent:

• a pattern of behaviour or practice; or (Section 128 (6)(b), ibid)

• recklessness as to whether persons suffer annoyance, inconvenience or anxiety (Section 128 (7), ibid)

3.2 The first test is met by instances of repetitive misuse. It is well nigh impossible to define in advance what cycle of repetitive behaviour may reasonable be described as forming a pattern. This will need to be determined on a case by case basis. However any such pattern is likely to require a minimum of three instances of the conduct in question in order to be recognised as such. More generally, the episodes that compose a pattern are subject to three variables: those of number, frequency and regularity. 'x' instances of a short duration or silent call on successive days is more likely to be considered to form a pattern than '2x' instances at random intervals over a twelve-month period.

3.3 The second test requires the misuse to represent 'recklessness' on the part of the misuser. A consideration of ‘recklessness’ will require some assessment of the state of mind or subjective intention of the misuser. This will need to be determined on a case by case basis. Although it is notoriously difficult to establish what was passing through someone's head at a given moment, evidence that points to recklessness could be that:

• the mis-user was informed of the effect of his behaviour but continued with it.
• the behaviour in question is so patently annoying (eg ringing someone repeatedly in the middle of the night) that no reasonable person could not have realised it would have that effect.

3.4 In determining whether misuse is persistent or not, the Act makes it clear (the DTI consultation on the draft Regulations is posted at )that it is immaterial whether networks were used on some occasions and services on other occasions; that different networks or services were used on different occasions; and that the persons exposed to the misuse were different on different occasions.

Chapter 4

Examples of persistent misuse

4.1 Having analysed the reasonable grounds for believing that a form of behaviour may represent persistent misuse, it will be helpful to identify six general areas within which such forms of behaviour typically occur. There is a degree of overlap between these areas; several forms of misuse will fall into more than one category.

4.2 The examples are intended to be illustrative rather than inclusive and will not prevent Oftel, where there is an overriding reason of public policy, from issuing a notification in respect of behaviour which is not identified by this statement. Such an overriding reason would exist where, for example, a new technology or new use of technology allowed for the operation of a form of misuse not previously known to Oftel, which has the potential to cause immediate and serious detriment to consumers. In these circumstances Oftel would take the necessary measures to prevent further detriment and also initiate a revision of the statement to incorporate the new form of misuse.

4.3 The six areas are:

• misuse of automatic calling equipment;
• misuse by making silent or short duration calls;
• number-scanning;
• misuse of a calling line identification facility;
• misuse for dishonest gain; and
• misuse of allocated telephone numbers.

4.4 Misuse of automatic calling equipment

4.4.1 Power diallers offer the possibility of initiating calls to a sequence of numbers in accordance with stored instructions without the need for each individual number to be dialled in turn. They are widely used in call centres. Within a regulatory environment power diallers are more commonly known as ACE with the additional qualification that the calls are made without human intervention. In this context, this means that the contents of the call do not involve an operator or live speech.

4.4.2 Under the existing Telecommunications (Data Protection and Privacy) Regulations 1999 ('the 1999 Regulations') it is an offence to use ACE to make unsolicited direct marketing calls. An example of such a call is a recorded message, where no operator present. A similar provision, where calls do not consist of live speech, is included in the draft Privacy and Electronic Communications (EC Directive) Regulations 2003 which will enter into force on or about 31 October 2003 to implement the Directive (2002/58/EC) on privacy and electronic communications ('the Privacy Directive').

4.4.3 The concept of direct marketing that the 1999 Regulations and the new Privacy Directive rely on is very broad and applies not just to the advertisement of goods and services but also to the promotion of an organisation's aims and ideals. It therefore applies to political and charitable, in addition to commercial, organisations. However there may be types of unsolicited recorded messages sent by ACE that cause annoyance or inconvenience but which, for whatever reason, fall outside the 1999 Regulations or the provisions of the Privacy Directive.

4.4.4 Under the previous regulatory framework based on the Telecommunications Act 1984 the use of ACE for purposes other than direct marketing was regulated under a licence condition included in both individual and class telecommunications licences which applied to all communications providers and end-users running a licensed system. The effect of the condition was to prohibit the use of ACE without the consent of called parties to initiate calls that consisted of:

• recorded messages;
• short duration calls;
• fax-scanning calls; and
• fax messages.

4.4.5 As a result of consultation, it is not proposed to include a similar condition in the General Conditions of Entitlement (which will only apply to communications providers, not end-users) on the grounds that it represents disproportionate regulation and might limit the development of innovatory services which require some kind of automatic notification sent on an individual basis.

4.4.6 In its response to the consultation, Oftel explained that the provisions of sections 128 to 131 (which have the advantage of applying to end-users as well as communications providers) and the restrictions on the use of ACE in the 1999 Regulations and the Privacy Directive will provide adequate protection for consumers against the misuse of ACE. Oftel believes that the persistent use of ACE to transmit recorded messages or to make short duration calls (see paragraph 4.5) or fax-scanning calls (see paragraph 4.6) is persistent misuse within the meaning of section 128.

4.4.7 As the Oftel response also recognised, some uses of ACE offer benefits to the public. One example is the possibility of emergency authorities being able to send a recorded hazard warning to subscribers within a defined geographical area; a second is the kind of automated services offered by some communications providers that test a subscriber's line or obtain a subscriber's confirmation that a faulty line has been repaired.

4.5 Misuse by making silent or short duration calls

4.5.1 A silent call is one where a caller makes a call but then remains silent. A short duration call (hereafter a 'short' call) is one where a call is established and then immediately terminated by its originator before the called party is able to answer. The effect of either type of call on a called party is almost certain to cause inconvenience and is very likely to cause annoyance. This will be exacerbated where lack of CLI information precludes the possibility of a return call. Anxiety may also be caused, in particular when an individual has received a number of such calls over a short period, and may conclude that he/she is being specifically targeted.

4.5.2 There are a number of circumstances which give rise to silent or short calls. The most serious are silent calls made with a malicious intent to deliberately frighten or annoy the called party. In such cases, where intentionality can be demonstrated, the caller may be guilty of a criminal offence under section 127. However, there are also less serious instances, where the behaviour may more fairly be judged as mischievous rather than malicious; an act of irresponsibility comparable to ringing a door bell and then running away. In such cases, where the behaviour is repeated, action under section 128 would be justified.

4.5.3 The most common form of short duration call is not intentional but arises from the use of power diallers or ACE within call centres (see paragraph 4.4 above). Calls are automatically generated but in the absence of an operator to speak to the called party, the call is abruptly terminated. This type of short duration call has no malicious intent. Nonetheless, properly run call centres will strive to ensure that they do not generate more calls than their operators can handle. A persistent failure to do so may lead to the issue of a notification under section 128.

4.6 Number-scanning

4.6.1 Another example of the short call arises from the practice of number-scanning where calls are made to find out which telephone numbers, out of a range of numbers, are in service or not. As soon as a tone is received which establishes the status of a particular number the call is terminated. This activity is carried out so to develop lists of active telephone numbers. As well as the inconvenience caused to the recipient of an abruptly terminated call, such behaviour is detrimental to consumers in general by adding to network congestion without generating any revenue for providers.

4.7 Misuse of a calling line identification facility

4.7.1 CLI is a technology that identifies the number from which a call is made or enables a return call to be made. Oftel will regard the repeated forwarding of inauthentic or misleading CLI information as persistent misuse. A similar restriction was imposed on all end-users and some communications providers through a class licence condition. Where users have the ability to choose the CLI number that is forwarded (this is known as a Presentation Number), the deliberate sending of an inauthentic or misleading number from which it is not possible to identify the caller and which does not enable the recipient of a call to return a message is a form of misuse. This is without prejudice to a caller's right to preserve their anonymity by withholding their number.

4.7.2 It will also be regarded as a form of misuse to forward a CLI number that has been allocated to a Premium Rate Service provider. A return caller may suffer annoyance or inconvenience by unwittingly making a return call for which they are charged more than they may reasonably expect.

4.8 Misuse for dishonest gain

4.8.1 There are a number of activities associated with the use of electronic communications services and networks motivated by a desire for unscrupulous or dishonest gain. Although this statement will not fully describe all those that have been discovered (so as not to encourage their perpetration) and cannot describe schemes that have yet to be practised, these activities share certain common features.

4.8.2 The first feature they share is that they are primarily aimed at defrauding end-users, rather than communications providers. Although section 125 of the Act makes it a criminal offence dishonestly to obtain electronic communications services, there is no specific consumer protection measure within the Act that makes it an offence to defraud end-users by means of an electronic communications network or service. Instead end-users have had to rely on the protection offered by general legislation against theft, fraud or obtaining money by false pretences which do not easily lend themselves to suppressing the types of scheme outlined here.

4.8.3 The second feature they share is the exploitation of premium rate or revenue sharing services. The essence of the scam is that users are deceived into phoning a number without realising that it is a premium rate or revenue sharing service and so costs more than they expect. Examples of this that have come to light in recent years include:

• faxing a premium rate or revenue sharing fax number where the terminating fax machine has been set to run deliberately slowly thus increasing the duration of a call;
• the apparently personal text message that invites a return call to a premium rate or revenue sharing number;
• making a silent call where any return call connects the caller to a premium rate or revenue sharing number (this latter example is also misuse through silent calls and misuse of CLI facilities); and
• the use of recorded ringing tone to deceive the caller that charging has not yet started.

4.8.4 In some circumstances the deception that incites a caller to phone a premium rate or revenue sharing number will be a form of direct marketing and additionally subject to applicable legislation. For example, under Regulation 8 of the Electronic Commerce (EC Directive) Regulations 2002 any unsolicited commercial communication sent by electronic mail must be clearly and unambiguously identifiable as such as soon as it is received. Article 13(4) of the Privacy Directive prohibits the practice of disguising or concealing the identity of the sender of electronic mail used for direct marketing purposes. The definition of 'electronic mail' in the Privacy Directive is broad enough to apply to SMS or text messages as well as email.

4.8.5 Oftel will regard the practice of tricking callers into phoning a premium rate or revenue sharing number as misuse and if repeated, persistent misuse.

4.9 Misuse of allocated telephone numbers

4.9.1 Where end-users have been allocated telephone numbers, Oftel will regard their use in a way that is inconsistent with the National Telephone Numbering Plan ('the Plan') as a form of persistent misuse. An example would be where Personal Numbers (070) are used for anything other than Personal Numbering (as defined in the Plan) or where revenue on a Personal Number was being acquired by the end-user (in contravention of a restriction Part B of the Plan). A further example would be where Mobile Numbers (077, 078 and 079) are used for services other than those which fall within the definition of 'Mobile Service' in the Plan. In this context, the allocation of telephone numbers needs to be distinguished from the more usual case where an end-user's telephone number is sub-allocated to them by their provider. In such a case the original recipient, ie the party who was allocated the numbers by Oftel, will remain responsible to Oftel for the use of those numbers under the Numbering General Condition.

Chapter 5

Oftel policy on the formal giving of notifications

5.1 Section 128 authorises Oftel to issue a notification to a person where it has reasonable grounds for believing that a person has engaged in persistent misuse of a network or service. This power is limited insofar as the Secretary of State may make an order that behaviour of a specified description is not to be treated as a misuse of an electronic communications network or service where there is an appropriate alternative means of dealing with it (Section 128 (8), ibid). There is a general presumption that a notification will not be given where an alternative legal remedy is available, although this needs to be balanced by an awareness of the provision (Section 130 (8), ibid) that allows for the imposition of a penalty under the 'persistent misuse' powers in respect of the same conduct for which a person is also liable for an offence under sections 125 to 127 of the Act.

5.2 The notification must include the following elements (Section 128(2), ibid):

• a determination that a person has persistently misused an electronic communications network or electronic communications service;
• a specification of the use that Oftel considers persistent misuse; and
• a specification of the period within which the notified person may make representations.

5.3 Because Oftel views the 'persistent misuse' legislation as being principally directed at consumer protection, its policy on issuing notifications will generally be consumer-driven. It is expected that representations made by consumers will be one of the most likely ways in which instances of persistent misuse are brought to Oftel's attention. In addition, the overview that communications providers have of network activity makes them particularly well placed to pick up on instances of high-volume misuse of which isolated consumers may only have a single experience. Oftel welcomes such cases being brought to its attention by communications providers. Where Oftel receives complaints it will need to investigate them to ascertain whether there is sufficient evidence to provide reasonable grounds for believing that persistent misuse has occurred.

5.4 The determination will need to refer to the evidential basis that supports the occurrence of persistent misuse. As the notification is required to be given to the person who is responsible for the misuse it will also be necessary for Oftel to establish the identity of the persistent misuser. As a point of clarification, it will not be possible to take action under this legislation against a communication provider over whose network or service the persistent misuse takes place, unless the communication provider itself is responsible for perpetrating the misuse. A provider over whose network silent or short duration calls are made cannot be made responsible for those calls.

5.5 The specification will describe the actual behaviour that constitutes persistent misuse supported by the grounds for believing that this behaviour is likely to give rise to annoyance, inconvenience or anxiety.

5.6 The specification of the period during which the notified person may make representations must not normally be less than a month but may be as short as seven days, in urgent cases. An urgent case is one where the misuse is both continuing and causing a degree of harm that requires it to be stopped as soon as is practicable (Section 128(4), ibid).

5.7 Whether or not the misuse is continuing is a matter of fact; the degree of harm that it is causing is necessarily a matter of judgement. The factors that would tend towards a shorter period for representations are the scale of the misuse, the number of consumers on whom the misuse is impacting and the degree of detriment caused. An example of an urgent case might be where ACE is being exploited to send a high volume of recorded messages seeking to influence voting in a TV phone-in.

Chapter 6

The consequences of a notification

6.1 Once the period allowed for the making of representations has expired, Oftel has three options:

• it can issue an enforcement notification to the misuser under section 129 of the Act;
• it can impose a penalty under section 130 of the Act; or
• it can issue an enforcement notification and impose a penalty.

6.2 An enforcement notification is appropriate where Oftel is satisfied that (Section 129(2), ibid):

• The person who has been notified under section 128 (the notified user) has persistently misused an electronic communications network or service.
• The notified user has not, since the giving of the notification, taken all the steps that Oftel considers appropriate to ensure that the misuse is ended and not repeated.
• The notified user has not, since the giving of the notification, remedied the consequences of the notified misuse in a manner that Oftel considers appropriate.

6.3 The enforcement notification imposes a requirement on the misuser to take the necessary steps:

• to end the misuse and not repeat it; and
• to remedy the consequences of the misuse.

It will impose clear and enforceable obligations on a misuser and allow a reasonable period for compliance with them.

6.4 The Act makes compliance with an enforcement notification a duty of the notified person (Section 129(5), ibid), and enables Oftel to enforce that duty through civil proceedings which may lead to an injunction, a requirement for specific performance of a statutory duty or any other appropriate remedy or relief (Section 129 (6), ibid).

6.5 In order to remedy the consequences, a misuser may be required to pay the person who has suffered the effects of misuse an appropriate sum of money. In determining what is an appropriate amount in the circumstances of a particular case Oftel may take account of how much is required to provide compensation for the loss and damage suffered, and/or for the annoyance, inconvenience or anxiety experienced.

6.6 A policy on quantifying compensation payments needs to recognise that in many cases of persistent misuse there will be no pecuniary loss or damage, say in the case of silent or short duration calls or where there has been misuse of ACE. However a degree of annoyance, inconvenience or anxiety will invariably be present. A second consideration is that even where a quantifiable loss has been registered, the sums involved may be negligible, say, where someone has been tricked into making a £5.00 premium rate call. Even where loss or damage has been suffered it is arguable that the 'victim' feels that the irritation or inconvenience experienced was more traumatic than the actual loss sustained, and merits compensation at a higher level. Oftel is likely to hear such claims sympathetically.

6.7 It is not appropriate for Oftel to propose an ex-ante tariff of compensatory payments in advance of applying this legislation. The intention is that over a period of time a scale will be developed that is internally consistent and will offer a degree of expectation. The reason for this is that the amount of compensation will have to be weighed according to the factors of a particular case and should be proportionate to the distress that has been experienced. Clearly, where misuse has given rise to anxiety the compensation would normally be greater than in cases that have only caused annoyance or irritation. Another factor is the individual susceptibility of the person experiencing the misuse. It might be reasonable to assume that silent or short duration calls made to a rugby club bar would have a less distressing impact than similar calls made to an individual who is vulnerable as a result of their age or state of health.

6.8 Individual susceptibility will normally be a less significant factor when it comes to quantifying the compensation payable for misuse that has caused annoyance or inconvenience. A person does not deserve more compensation simply because they are irascible by nature. In these cases Oftel will need to be guided by a normative concept of the average or reasonable individual. In assessing the level of compensation due, Oftel would in general expect to follow ordinary principles of law relating to damages. Oftel will also seek guidance, where applicable, from comparable compensation claims passing through the civil courts.

Chapter 7

Oftel policy on penalties for persistent misuse

7.1 As either a supplement or an alternative to the section 129 enforcement notification, Oftel will be able to impose a penalty on a persistent misuser, once the period for making representations has elapsed. Oftel may also impose a cash penalty where a notified misuser has contravened a requirement of a section 129 enforcement notification. Additionally, the Act (Section 130 (8), ibid)allows for the imposition of a penalty where a person is liable for an offence under sections 125 to 127 of the Act (these sections relate to the offences of dishonestly obtaining electronic communication services, possession or supply of apparatus which may be used for dishonestly obtaining such services, or improper use of a public electronic communications network).

7.2 The Act sets £5000 as the upper limit for such a penalty, although this amount may be changed by order of the Secretary of State (Section 130 (9), ibid). Oftel is required to determine an amount, which is both appropriate and proportionate to the misuse(Section 130(4), ibid) . In making such a determination, Oftel must have regard to:

• any representations made by the notified misuser;
• any steps taken by the misuser to bring the misuse to an end and not repeat it; and
• any steps taken by the misuser to remedy the consequences of the misuse.

7.3 Clearly, where a misuser has taken the necessary measures to bring the misuse to an end and agreed to pay an appropriate level of compensation, this argues for a penalty toward the lower end of the scale or even no section 130 penalty at all. Conversely, failure to do these things aggravates the misuse and argues for a higher penalty.

7.4 Where Oftel thinks that the imposition of a penalty is justified, it will take account of three factors in setting the appropriate level of penalty that will invariably be present in any case of persistent misuse. They are:

• the degree of persistency;
• The number of people exposed to the misuse; and
• The seriousness of the misuse (Section 130(5), ibid).

7.5 There are varying degrees of persistency. Acts of misuse repeated ten times or one thousand times may both count as persistent but, other things being equal, the second example merits a higher penalty.

7.6 Oftel will also need to take into account the number of people affected by the misuse. Where ACE is used to send a recorded message it seems reasonable that the greater the number of people targeted the higher the penalty should be. Moreover, because the 'persistent misuse' powers are framed with a view to the protection of individual consumers, it would be inappropriate to apply a 'percentage' approach. Where a large call centre generates, say, 200 short duration calls a day, it will not be a mitigating factor that these calls represent only three per cent of the call centre's output. From the standpoint of an individual who has received such a call, there is little comfort to be drawn from the knowledge that 97 other people did not. In this context, it is also worth drawing attention to the provision that makes it immaterial whether the persons who are the victims of any misuse are different on different occasions (Section 128(7)(c), ibid). It will not be a defence to say that each person only received a single recorded message.

7.7 The seriousness of persistent misuse will be a key factor in determining a section 130 penalty. However the development of a calibrated scale of seriousness involves a degree of subjective judgement and Oftel recognises that people will have differing perceptions of how various forms of behaviour should be ranked. Oftel intends to commission research into users' opinions in this area, not only on the forms of behaviour that should be treated as persistent misuse but also on their relative gravity.

7.8 However there are some objective elements which Oftel will take into account. Is this the misuser's first offence or do they have a previous history of persistent misuse? Other things being equal, repeated acts of misuse deserve a higher penalty. (For the avoidance of doubt, a persistent misuser may be notified more than once). What was the misuser's intention? There is a clear line to be drawn between accidental misuse, such as a mistakenly programmed fax machine making repeat calls to a wrong number and a scam motivated by greed. Has the misuser done everything required of him by the enforcement notification? Has good faith in making amends been demonstrated?

7.9 Aside from these considerations, many of the factors discussed in the section on compensation, as set out in paragraphs 6.6 to 6.8, will also come into play. How great is the damage done? Where does the misuse fall on the spectrum of distress that extends from inconvenience (I have to stop what I'm doing to get up to answer a single silent call) through irritation (I answer the phone several times to hear a caller chortling, who then rings off) to anxiety (I have recently emerged from an abusive relationship and receive several silent calls a day - I no longer feel safe in my new home)?

7.10 Although it is not possible, until confronted with the specific circumstances of an individual case of persistent misuse, to be more prescriptive about the exercise of Oftel's section 130 powers, the intention is that these powers will be exercised in a way that is consistent over a period so that a tariff structure will become apparent that has been shaped by the above considerations.