A consultation document issued by the Director General of Telecommunications

Contents

Summary

Chapter 1 Introduction

Chapter 2 The Payphone sector

Chapter 4 Guidelines on call barring to public call boxes

Chapter 5 Other issues

Chapter 6 Questions for consultation

Chapter 7 Consultation

Annex A Revised guidelines agreed between Oftel and BT/Kingston on the removal and resiting of PCBs and on the installation of new PCBs to meet social need

Annex C Types of payphone 34

Annex D Glossary 36

Summary

S.1 Public Call Boxes (PCBs) are payphones located on the street or in other public places. Historically, PCBs have been essential for both social inclusion and access to emergency services. They have therefore always concerned both public policy makers and regulators alike. The UK has had both thorough regulation of PCBs and a growth in provision and usage of PCBs for a sustained period during the 1980s and 1990s.

S.2 In recent years, there have been major changes in PCB usage, due to the increased ownership of mobile phones. Oftel is conducting this consultation on proposals for future regulation against the background of a changing market and the continued need for access to payphone services for vulnerable groups.

S.3 Current regulation includes

• a requirement to provide PCBs as part of the universal service obligation placed on BT, and, in the Hull area, Kingston Communications;
• guidelines on removing and re-siting PCBs, agreed between Oftel and BT; and
• guidelines and a specific target on installing PCBs that are not economic in deprived areas.

Oftel believes that the success of these measures and their future relevance need to be evaluated. Oftel also believes that other regulatory action needs to be considered in relation to payphone services and the payphone environment generally in order to address certain anti-social practices which have become associated with PCBs.

S.4 There are currently more than 97,000 PCBs in the UK together with more than 58,500 operator-managed payphones (payphones that look very similar to PCBs but which are located on private land). This is almost double the number in place in 1984 when BT was privatised, and compares favourably with comparable EU Member States.

S.5 However, increased ownership of mobile phones has had a significant impact on the level of usage of PCBs. This has in turn affected PCB revenues – BT’s PCB revenues declined by forty per cent in the period 1999-2001 and Kingston Communications’ PCB revenues declined by ten per cent per annum during that same period.

S.6 Oftel’s consumer research shows that PCBs continue to provide a key service to many people and it is important that this service is not jeopardised.

S.7 Oftel therefore proposes in this document a forward-looking framework for the regulation of PCBs which balances the new challenges to PCB providers and the continuing importance of PCBs to their users. It aims to preserve the best features of the current regulatory regime, while updating the regime in the light of current concerns.

S.8 In particular, Oftel proposes:

• a continued obligation on BT to install payphones on grounds of social need and the extension of the relevant guidelines to Kingston, but the removal of the specific target;
• new guidelines to be agreed with BT and Kingston on removal and re-siting of PCBs to improve consultation with affected parties;
• tighter monitoring of developments in PCB provision;
• Introducing limited incoming call barring to PCBs which are affected by some form of nuisance behaviour;
• further challenge to the industry to tackle the nuisance of prostitutes’ cards;
• close monitoring of the obligations placed on BT and Kingston in relation to access for disabled people; and
• the extension of the Payphone Access Charge to all PCB and managed payphones in order to achieve more widespread access to freephone services.

S.9 The consultation period runs for three months until February 18 2002. Oftel will issue a Statement on the steps, if any, which it proposes to take in March 2002.

Chapter 1

Introduction

1.1 The changing patterns in PCB usage require Oftel to give new consideration to the manner in which PCB provision is regulated and monitored in the UK. This consultation sets out a number of proposals to ensure that the future regulation reflects the needs of users whilst at the same time recognising that change in usage.

1.2 This chapter sets out background in relation to the Universal Service Obligation and Oftel’s consumer research.

Universal service

1.3 Universal service aims to ensure that telecommunications services which are used by the majority and which are important for social and economic inclusion are available to everybody on reasonable request in an appropriate way and at an affordable price.

1.4 The UK’s current level of universal service was set in 1997 for a four-year period. In July 1999 and September 2000 Oftel published consultative documents (Universal Telecommunication Services 1999 and Review of Universal Telecommunication Services 2000) reviewing that level of universal service and setting out Oftel’s analysis and proposals for the future. In August 2001 Oftel published a Statement (Universal Service Obligation 2001) setting out its conclusions following the two earlier consultations.

1.5 PCB provision forms an integral part of universal service in the UK. Put simply, the requirement in relation to PCBs is for there to be reasonable access to PCBs at an affordable price.

1.6 Some EU Member States have adopted prescriptive targets for payphone numbers (for example the Netherlands requires at least 1 PCB per 5,000 population). Instead of that Oftel agreed guidelines with BT (in 1997) on the re-siting and removal of PCBs together with criteria on the siting of new PCBs on the ground of social need. It is Oftel’s view that this more flexible approach has delivered both a more targeted level of PCB coverage in urban, suburban and rural areas and a better comparative ratio for PCBs per head of population than in many comparable Member States. The following table provides some comparisons:

1.7 Oftel does not propose as part of this consultation to conduct a formal analysis of the cost to universal service providers of providing PCBs. European law requires that there must be a net cost that imposes an unfair burden on the universal service provider before a joint-industry Fund can be established. Oftel’s view is that the universal service obligation does not represent such a burden on BT and Kingston. However, the current review of retail markets, to be completed by summer 2002, will consider the extent of any change in the ‘burden’ since the universal service obligation review and likely future developments beyond 2002.

Fixed line and mobile phone ownership in the UK

1.8 The level and adequacy of PCB provision needs to be considered in the round and any examination therefore needs to take account of the availability and penetration rates of other forms of telephony service which have improved markedly since 1984.

1.9 It is now increasingly the case that UK citizens have and expect direct access to either fixed or mobile phones. The latest available figures which Oftel has indicate that:

• 70 per cent of UK adults have a mobile phone;
• 93 per cent of UK homes have a fixed line phone; and
• only one per cent or approximately 250,000 UK households (which are termed as being unphoned) have neither mobile or fixed line phones – these are more highly concentrated in younger users and those aged over 75.

1.10 Of those seven per cent of citizens without a fixed line phone, Oftel research published in May 2001 indicates that approximately fifteen per cent consider the payphone as their main method of making and receiving calls.

1.11 The increased ownership of mobile phones and the proliferation of new low-cost forms of fixed telephony service has not however diminished the importance of PCBs to consumers who either have no fixed or mobile phone or are away from their base and therefore unable to use their fixed line phone. There are also other reasons for continued PCB usage: mobile phone owners may still use PCBs at certain times (for example at peak rate) or for certain purposes as a complement to their mobile phone, not least for greater ease of cost control.

Oftel’s consumer research

1.12 In November 2000 Oftel commissioned specific consumer research to examine in greater detail those patterns of payphone usage together with the expectations of payphone users in the UK. The results of the research were positive overall and indicated that the majority of users had a high degree of confidence in the level of PCB provision in the UK. The research report was published in February 2001 and titled Consumers’ use of public payphones (www.oftel.gov.uk/publications/research).

1.13 The results of the research can be summarised as follows:

• a high level of consumer confidence was reported in the public payphone system overall;
• on average, 12 per cent of adults in the UK use a PCB at least once a month, although this varies by region – in Northern Ireland the incidence is 16 per cent of adults;
• the most regular users of payphones tend to be younger, lower income groups, and those living in rented accommodation with no fixed line phone in their home;
• among regular users (using a PCB at least once a month) there are a number of identifiable groups:

• lower income users making longer calls ;
• a wider variety of callers dependent solely on payphones for all their calls;
• a similar spread of callers using payphones in conjunction with other methods (notably pre-pay mobile) primarily for cost control reasons; and
• slightly higher income users who use payphones mainly for making short, convenience type calls.

• the majority of users felt that they got value for money from PCBs, although there was some confusion over the level of payphone charges as a result of BT’s increased charges in October 2000;
• the majority of users consider the most important aspects of PCB service to be the reliability, number and location of PCBs and are in favour of retaining the current level of provision of PCB sites rather than having fewer PCBs sites with a higher standardised level of service; and
• there is comparatively little awareness of alternative PCB providers to BT and as a result the majority of users were not aware of the slight variation in the levels of services offered by different PCB providers.

1.14 More recent research conducted as part of Oftel’s Ongoing research into consumers use of fixed telecom services (August 2001) (www.oftel.gov.uk/publications/research ) revealed lower satisfaction levels among those using PCBs as their main phone than those using fixed line or mobiles as their main phones (only 84 per cent being satisfied compared with 95 per cent using fixed and mobile services). This finding is not particularly surprising as consumers increasingly gain access to fixed and mobile telephony services and therefore compare PCB services with those services. This lower satisfaction is likely to be for a number of reasons including:

• the unavoidable need to leave home to make or receive a call from a PCB (making it necessarily less convenient than a fixed residential line); and
• the inability of PCB users to control the usage by others of what they may consider to be their local PCB (for example finding the PCB occupied).

This lower satisfaction rate is not, in Oftel’s view, a comment on the adequacy of PCB provision but rather on the essential characteristics of PCBs.

BT’s organisation structure

1.15 Oftel’s view is that the corporate structure of BT does not affect the definition of the component parts of the universal service obligation which includes the provision of PCBs. As BT is implementing plans for greater delegation to "lines of business" rather than full structural separation the issue of changes due to restructuring does not currently arise.

1.16 If BT were to propose structural separation Oftel and the DTI have made clear that they will consult on the regulatory implications of any proposals for re-licensing. Any implications for the universal service obligation will of necessity be part of that consultation. For the moment, however, Oftel expects that the policy set out in its Universal Service Statement issued in August 2001, as it affects BT plc, would apply equally to a restructured BT.

Structure of this document

1.17 Chapter 2 sets out in broad terms the size of the payphone market as a whole and the number of payphones of each type.

1.18 Chapter 3 sets out in broad terms the current guidelines in relation to the removal and re-siting of PCBs and the agreeing of criteria for the installation of PCBs to meet social need, and also sets out Oftel’s proposed modifications to those guidelines including extending them to cover Kingston Communications’ PCBs. The proposed text of the revised guidelines are set out at Annex A. This chapter also sets out the current criteria for the installation of new PCBs to meet social need and sets out Oftel’s proposal to remove the target for the number of such installations.

1.19 Chapter 4 sets out Oftel’s proposals for new guidelines, to be produced under Condition 42 of BT and Kingston’s licence, related to limited call barring schemes for BT’s and Kingston’s PCBs in cases of anti-social practices being carried on in those PCBs.

1.20 Chapter 5 sets out additional proposals for the future regulation of PCBs.

1.21 Chapter 6 sets out the questions for consultation.

Chapter 2

The Current Payphone Market

2.1 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, and private payphones which are situated on private land.

2.2 Within the general term private payphones there exist 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). Annex C sets out in more detail the regulatory requirements of the different types of payphone operating in the UK.

2.3 The focus of this consultation document is PCBs together with telecom operator-managed payphones (‘managed payphones’).

PCB provision across the UK

2.4 Following the first phase of UK telecommunications liberalisation in 1984, a substantial programme of new PCB installations was carried out in the 1980s to mid-1990s. During that period demand for PCBs was still strong, especially in urban and suburban areas. In that period BT installed almost 17,000 new PCBs and the new market entrants installed more than 2,500. This was largely commercially motivated rather than the result of any need to increase coverage due to the universal service obligation.

2.5 Current provision can be summarised as follows:

• there are now more than 155,000 PCBs and managed payphones in the UK, whereas in 1984 there were approximately 77,000;
• there are approximately 97,000 PCBs in the UK for a population of 60 million;
• more than ninety-five per cent of BT’s payphones are in good working order at any given time, whereas in 1984 the figure was seventy-six per cent;
• more than 140 new PCBs over and above those installed on commercial grounds have been installed by BT under the social need criteria agreed with Oftel in 1997; and
• the number of PCBs in the UK allowing dual payment by coin in addition to card (‘multi-format payment option PCBs’) is higher than in many EU Member States. Where more than one PCB is located at a site it is more likely than not that dual payment options will be available.

Companies operating PCBs in the UK

2.6 There are currently four companies in the UK which provide PCB services. These companies are:

* All located within the Kingston-upon-Hull area.

BT and Kingston Communications are both subject to universal service obligations (BT across the whole of the UK with the exception of the Kingston area, and Kingston Communications only within the Kingston area).

2.7 The regional split of BT’s PCBs is broadly as follows:

2.8 NWP Communications and Infolines-premier are not subject to universal service obligations and may therefore install PCBs at locations of choice, subject to local planning approval. In practice this means that most of their PCBs are located in urban or suburban areas.

Companies operating managed payphones in the UK

2.9 Not all companies engaged in payphone provision are individually licensed and some, for example, operate under what is termed a class licence which does not require any pre-notification or registration. From the information available to Oftel there are approximately 58,500 managed payphones in the UK, although it is possible that there are more. The following list represents the companies of which Oftel is aware that operate these payphones:

Payphone revenues

2.10 In terms of PCBs, Oftel understands that BT’s revenues have declined by 40 per cent in the period 1999-2001, and that during the same period Kingston Communications’ revenues have declined by 10 per cent per annum and NWP’s PCB revenues have declined by 13 per cent per annum.

2.11 In relation to managed payphones Oftel understands that these are also experiencing rapidly declining revenues, with, for example, BT seeing a 17 per cent decline per annum for the period 1999-2001 and NWP as the second largest provider witnessing declining revenues of 15 per cent for the year to June 1999 and 21 per cent for the year to June 2000. There are however some areas of the managed payphone sector which are resisting this trend (for example managed payphones which are provided in hospitals) but the overall picture, as evidenced by these figures, is of declining usage and declining revenues.

Chapter 3

Guidelines on the re-siting and removal of PCBs

Background

3.1 PCB operators are currently subject to formal notification requirements where they intend the removal or re-siting of a PCB. The notification requirements differ between universal service operators (BT and Kingston Communications), which are subject to more detailed requirements, and non-universal service operators such as NWP Communications and Infolines-premier.

3.2 The approach which Oftel has taken to date – and which it is also proposing for the future – has been to agree guidelines with BT on the re-siting and removal of PCBs and to periodically review those guidelines. It is also proposed that similar guidelines will be agreed with Kingston Communications who in principle accept this approach.

3.3 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 also set out requirements for agreeing criteria for the installation of PCBs on the ground of social need.

3.4 The guidelines provide that BT must first obtain the consent of the local planning authority and, if there is one, the local Parish Council before removing or re-siting a PCB or PCBs. A notice must have been displayed at the PCB prior to any removal or re-siting and that notice must set out what is proposed together with how those opposed to the proposal may register their opposition. A minimum period of 28 days (56 days where a representation is made to the Director General) must have elapsed before removal or re-siting. The Director General may override any local agreement if he is not satisfied that local circumstances require the proposed removal or re-siting. In practice the Director General has not been asked to exercise this power.

3.5 The guidelines also cover cases where BT is required by a landowner to remove a single site PCB. In these cases, BT is also required to consult with the local planning authority, and if there is one, the local Parish Council, with a view to identifying an alternative site unless it is agreed that re-provision is unnecessary or that local needs can be met by the re-siting of an alternative PCB. As above, the Director General may override any local agreement. Again, there has been no need to use this power in practice.

Proposed changes to the guidelines

3.5.1 In practice the guidelines have worked well with only a limited number of issues having been identified by Oftel as needing either clarification or amendment as part of this review process. The issues identified by Oftel are set out below together with proposals for modifications to the existing guidelines. The proposed text of the revised guidelines is set out in full at Annex A.

3.5.2 The guidelines currently provide that a period of at least 28 days must have elapsed after the date when the removal or re-siting notice was first posted before the removal or re-siting may take place. By contrast Condition 24.4 of BT’s licence requires that the period should be not less than 42 days. It is therefore proposed that for consistency the guidelines be aligned with the licence condition and that the notice period in the guidelines be revised to not less than 42 days.

3.5.3 As currently drafted the guidelines require consent to be sought for the removal of one or more PCBs from a bank of PCBs. Oftel would welcome views on whether a requirement to obtain consent in this type of case (where, say, a bank of four PCBs is to be reduced to three or two) is unduly burdensome. The provision of a PCB service at the site will remain although the number of PCBs at the site will change. Some thinning out of urban and suburban PCBs which are little used is unavoidable over time if the PCB business as a whole is to retain its current universal coverage. In practice Oftel has received no complaints in relation to requests for removals from banks of PCBs where provision of PCB services at the site will remain after the removals.

3.5.4 Oftel invites views on whether the guidelines 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. The removal of all payphone service from a site would continue to require consent and will be subject to the Director General’s power to override any local agreement if he is not satisfied that local circumstances require such removal. Further, the Director General would be able to override a decision to remove a PCB from a multi-site where the removal of the PCB will result in no provision of multi format payment option PCBs at the site – see below.

Oftel also proposes that, where removal will result in the site becoming a single PCB site, the site should offer both card and coin payment options. BT’s own independent research confirms consumers’ preference for what are termed multi-format payment option PCBs. Oftel further proposes that in future the Director General’s power to overturn decisions to withdraw a PCB will be limited, in relation to multi-site PCBs, to cases where there will be no multi-format payment option PCBs at the site.

3.5.6 The Northern Ireland Act 1998 requires Oftel to ensure that the functions of the Director General are discharged in a manner consistent with the requirements of the Northern Ireland Act 1998. In May 2001 Oftel consulted upon its Draft Equality Scheme submission to the Equality Commission for Northern Ireland. The draft scheme set out Oftel’s proposals for discharging its new duties under the Northern Ireland Act. The principal requirements are that when Oftel carries out its functions in relation to Northern Ireland it should have due regard to the need to promote equality of opportunity:

• between persons of different religious belief, political opinion, racial group, age, marital status or sexual orientation;
• between men and women generally;
• between persons with a disability and persons without; and
• between persons with dependents and persons without.

Oftel is also required to have regard to the desirability of promoting good relations between persons of different religious belief, political opinion or racial group when carrying out its functions relating to Northern Ireland.

3.5.7 Oftel considers that the above requirements are relevant to re-siting and removal of payphones as there is potential for one community to be disadvantaged in some way as a result of PCB removal or re-siting. An example might be where a PCB is re-sited which moves it from one community into an adjoining community (although the move in terms of distance may be relatively small). Oftel proposes that the guidelines make specific reference to the need to consider the effect on the adjoining communities of any proposal to re-site or remove a PCB. It is therefore proposed that, in relation to removal or re-siting of PCBs in Northern Ireland, local community groups should also be consulted in addition to the local planning authority and, where appropriate, the Parish Council.

Data on the number of PCB removal and re-sitings

3.6 The latest figures which Oftel has in relation to requests for re-sitings and removals of BT’s PCBs indicate that most requests for re-siting or removals are at the instigation of third parties rather than BT.

3.7 In the 12 months to June 2001 the number of BT PCBs removed was 385. The reasons for the removals are as set out in the following table:

3.8 In the same period 137 brand new PCB installations were made by BT. The net loss of PCBs was therefore 248 or less than 0.25%. Except in a small minority of cases, the reasons for the loss were non-commercial.

3.9 In the same period the number of BT PCBs re-sited was 365. The reasons for the re-siting are as set out in the following table:

3.10 It is unlikely any possible amendments to the guidelines will result in large scale removal of PCB service from any current PCB sites, as the formal notification procedures will still need to be gone through where total removal of a PCB service is intended. Additionally, in cases where it is proposed by either BT or Kingston that PCB service be withdrawn entirely from a given site, 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.

Provision of information to Oftel under the guidelines

3.11 The guidelines currently set out basic information requirements (at paragraph 1.5) which provide that Oftel will receive a regular summary of requests for new public payphones, and data on re-siting and removals. They also provide that detailed documentation covering these changes in provision will be available to Oftel on demand. These provisions have worked less well in practice than Oftel would like. Oftel therefore proposes redrafting the guidelines to ensure that every six months a letter is sent to BT and Kingston Commuications by Oftel reminding them of their obligation to supply a breakdown of re-sitings and removals. Oftel considers this is essential to give the public confidence that this important part of the universal service obligation is being implemented.

Installation of new PCBs on the grounds of social need

3.12 The second part of the guidelines (paragraphs 1.3-1.4) relate to Oftel and BT’s agreeing of evaluation criteria for the installation of up to 500 PCBs across the UK on the ground of social need – in essence PCBs which would not be installed on a purely commercial or usagebased assessment as the likely revenues received would not be sufficient to cover the cost of installation and ongoing maintenance. The onus on requesting installation of a payphone in those circumstances rests with individual local authorities. The evaluation criteria relate to both urban and rural areas and were agreed between Oftel and BT in 1997. The text is set out in table 3.21 below.

3.13 The guidelines provide that the evaluation criteria will be monitored over time and that changes may be made in the light of experience. This consultation is the first formal monitoring of the evaluation criteria.

Number of installations

3.14 Since the criteria were agreed, BT has installed more than 140 new PCBs on the ground of social need following requests for such installations. The information which Oftel has indicates that approximately thirty per cent of requests are granted. The total number of requests has thus been lower than the initial target figure anticipated. To some extent, this may reflect satisfaction with the current coverage of PCBs.

3.15 To raise and maintain awareness of the criteria Oftel wrote to local authorities in September 2000 reminding them of the existence of the criteria and recommending that they give thought to the adequacy of existing PCB provision within their area. Oftel proposes doing this on an annual basis and would welcome the thoughts of consultees on further steps that might be taken to ensure the maximum level of awareness of the existence of the criteria for installing new PCBs on the grounds of social need.

Need for criteria

3.16 Oftel considers that the best means of addressing local need is through agreed criteria which provide a consistent framework to assess requests on an individual basis and which take account of likely local need and existing PCB provision. They also provide assurance to those requesting the installation of a PCB on the grounds of social need that they will receive information – which is consistent with other similar requests – on why their request has either been granted or refused.

3.17 In the event of a refusal, the matter may be referred to the Director General for a determination. The Director General may additionally make a determination of his own motion if he is not satisfied that local needs are being met. Only one such referral has been made in practice.

The criteria

3.18 The evaluation criteria together with a scoring system are set out in table 3.21. The criteria score each request according to the following three elements:

• the size of the community in the area not served by existing PCBs;
• the type of accommodation in the area – whether private owner occupier, private rented or social housing; and
• the walking distance to an existing PCB.

3.19 Where the community which is not served by an existing PCB is large; where the accommodation is predominantly social housing or private rented (where overall, the number of homes without telephones of any type will tend to be higher than for private owner occupier – see Oftel research (February 2001) referred to at paragraph 1.12 et seq above) and where there is a long distance to walk to an existing PCB (more than 15 minutes), then a request for the siting of a new PCB on the ground of social need is more likely to be granted.

3.20 As a guideline, requests which are evaluated by BT (by reference to the criteria in table 3.23) as having a score of 10 or more will normally be granted and an installation will take place. A score of nine will be borderline and may result in an installation following more detailed consideration. Only in exceptional circumstances will a score of eight or less be sufficient to warrant installation. Examples of exceptions have been where two PCBs have been installed either side of a dual carriageway (being perhaps only a few hundred metres apart) because of the danger posed by people crossing busy carriageways to use a PCB. Oftel considers that this application of the criteria is still reasonable and does not propose to seek any changes to those criteria as part of this review.

3.21 References in the criteria to walking times are taken to be references to average walking times taken by an adult walking at an average walking pace. Oftel does not consider it necessary to be more definitive in this regard.

Criteria for the evaluation of requests for PCBs on the grounds of social need

Table 3.23

3.22 Oftel believes that the criteria have shown their value and should be rolled forward for a further period of five years.

3.23 Oftel does not however consider it necessary to set a target for the number of new installations of PCBs on the ground of social need. The present target has not spurred interest amongst local authorities in applying for additional payphones. Nor has it proved operationally useful to Oftel in monitoring compliance with the USO as a whole or its targeting on vulnerable consumers in particular. Oftel believes that well publicised criteria exist against which requests for installations are assessed and that this makes the setting of a target no longer necessary.

3.24 To ensure that the information Oftel has is both up to date and comprehensive, Oftel proposes to ensure that in future Oftel is aware of the number of requests made on the ground of social need together with the number of requests granted. It is only by ensuring that Oftel has this up to date information that the Director General can make an accurate assessment of the adequacy of the level of PCB provision in the UK. To this end, Oftel proposes sending a reminder letter every six months to BT and Kingston regarding the obligation to supply this information (see the revised guidelines in Annex A).

3.25 Oftel proposes that the criteria, together with the guidelines on the agreeing of the criteria set out in Annex A be extended to Kingston Communications in the Hull area.

Chapter 4

Incoming call barring

Background

4.1 Oftel has received a number of enquiries regarding the possibility of incoming call barring to certain PCBs which are being used for anti-social practices (see below for examples). To date, there has been no formal framework for introducing such incoming call barring. Where BT and Kingston seek to cease to provide the services provided at their PCBs, their licences provide (in Condition 42) that they shall publish guidelines (after consultation with the Director) setting out the circumstances in which they shall be entitled to cease to provide Call Box services.

4.2 Oftel proposes that existing guidelines on the removal and re-siting of PCBs (which it is proposed will be amended as set out in Chapter 3) be further amended to set out the circumstances in which incoming call barring is permitted and Oftel will work with BT and Kingston Commuications on the production of such guidelines. Oftel does not propose at this stage setting out the detail of those guidelines but would welcome the views of consultees on the principle of producing such guidelines.

Why call barring is necessary

4.3 The following are actual examples where Oftel has been asked to advise on incoming call barring:

• at PCBs located in residential areas which are being repeatedly called late at night with either the intention or effect of causing nuisance or annoyance to people living close to the affected PCBs;
• where it is suspected that a PCB located close to a school is being called by persons with convictions for offences against children;
• where a PCB is being used as a contact point for prostitutes or any other enterprise who have advertised the PCB number as a contact number; and
• where it is suspected that a PCB is being used as a contact point for suppliers of controlled substances.

4.4 Oftel is aware that incoming calls to these PCBs are a valuable amenity to many PCB users. Against this, Oftel must also consider the wider social issues, some of which are identified above. In weighing these, Oftel does not therefore propose blanket call barring for extended periods, but rather call barring for limited periods to PCBs which are being targeted by some form of anti-social use. Oftel also believes that such call barring may in many cases serve to increase the local amenity of the PCB over time.

4.5 Oftel therefore proposes to draw up guidelines (to be drafted following this consultation) to be agreed with BT and Kingston setting out in greater detail the circumstances where incoming call barring may be introduced and the notification procedures to be complied with in advance of that call barring.

4.6 Oftel is also aware of the sensitivity of this issue to other telecommunications operators who may see it as potentially open to abuse by restricting the ability of their subscribers to call certain PCBs under certain circumstances where incoming call barring is in place. Oftel does not however consider that the potential for abuse is sufficient to justify not proceeding with the drafting of guidelines and Oftel will consult interested parties on those guidelines.

Prostitutes’ cards in PCBs

4.7 The proposal to permit limited incoming call barring to PCBs is quite separate from discussions which Oftel has had with the Home Office and the telecoms industry in relation to steps which the industry might take to help tackle the problem of prostitutes’ cards in PCBs. The Criminal Justice and Police Act 2001 creates a new offence of placing prostitutes’ cards on or in the immediate vicinity of a public call box and this may be extended to other street furniture such as bus shelters and street lamps should the need arise. The Director General has made clear his support for the creation of this new criminal offence and welcomes the news that a number of early arrests have been made under the new Act since it came into force in September 2001.

4.8 Oftel has written to the telecommunications operators advising them of the new legislation, and seeking their proposals for steps which they might take to complement the enforcement powers which the police now have. One possibility is the modification of operator subscriber contracts to prohibit subscribers from placing their numbers in phone boxes for the purposes of advertising the services of prostitutes. Failure to comply could result (following proper investigation) in incoming calls being barred to the subscriber’s number. Oftel is considering publishing a list of companies who have taken this step and those who have refused to do so.

4.9 It should however be noted that Oftel has no formal power to require telecommunications operators to take action to assist in tackling the issue of prostitutes’ cards.

Chapter 5

Additional proposals for the future regulation of payphones

5.1 This chapter sets out Oftel’s current thinking on a number of additional PCB issues.

5.2 Oftel has previously indicated that the distinction between PCBs and managed payphones results in potential confusion to users who may not distinguish between the two types of payphone and might therefore expect the same level of service from both. A possible way around this has been the proposal for the creation of a new classification of payphone known as Publicly Available Payphones. These new payphones would offer the same level of services as PCBs (managed payphones, it should be noted, are currently not required to offer incoming calls or comprehensive access to indirect access services although many in fact do so). However, the Publicly Available Payphones would not be situated on public land.

5.3 In view of the changing nature of the payphone market as evidenced by declining use and higher levels of mobile phone ownership, Oftel now doubts whether such a regulatory reclassification is necessary. The following reasoning explains this revised view:

a) there is little evidence to demonstrate that consumers are confused by the different services available from PCBs and managed payphones and Oftel’s research cited above in Chapter 1 supports this view;
b) Oftel is currently working with payphone providers to extend the Payphone Access Charge (PAC), more detail on which is set out below, which it is hoped will ensure that a more comprehensive range of services are available from managed payphones;
c) it may prove problematic to increase the obligations on providers of managed payphones situated on private land who may not want their payphones to, for example, allow incoming calls; and
d) as payphone usage is declining it would be burdensome to require the provision of additional services with their attendant costs when the available evidence indicates that consumers are not confused by current levels of provision.

5.4 Oftel considers that it would be disproportionate to require non-universal service operators to offer incoming calls. To require this facility might also have the effect of accelerating the decline in those payphone providers’ revenues and may in turn encourage the removal of non universal service operator PCBs and managed payphones which Oftel considers would be undesirable.

5.5 Oftel would welcome the views of consultees, in particular whether they agree with this conclusion.

The extension of the Payphone Access Charge

5.6 The Payphone Access Charge (PAC) is a charge levied by BT’s payphones (currently 8.1ppm) 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. Without the PAC, BT’s payphone business would receive no revenue for calls made to those freephone or indirect access services.

5.7 Oftel has worked closely with BT and other PCB providers to establish a framework for the extension of the PAC to all PCBs and qualifying managed payphones in order to ensure that the benefits which BT receives are received by other PCB and qualifying managed payphone providers. The result of extending the PAC in this way will be to ensure that those other operators receive payment for offering access to freephone and indirect access services which, in turn, should mean that more comprehensive access to those services will be available from all PCBs and managed payphones should the providers of those payphones choose to make them available.

5.8 Oftel anticipates that the extension of the PAC will be achieved without the need for formal Oftel intervention although should such intervention prove necessary Oftel will be swift to act.

5.9 Oftel would welcome the thoughts of consultees on the desirability of wider access to freephone and indirect access services from PCBs and managed payphones.

Access to PCBs for disabled people

5.10 Oftel is aware of the importance of access to PCBs for disabled people and was therefore fully supportive of the Telecommunications (Services for Disabled Persons) Regulations 2000 (the ‘Regulations’) which set out a range of obligations on telecommunications operators, certain of which relate to payphones.

5.11 The Regulations require:

• BT to ensure that by 2 October 2001 at least 75% of its PCBs are accessible by reasonable means to users in wheelchairs;
• BT and Kingston Communications to ensure that by 2 October 2002 at least 70% of their PCBs contain telephones incorporating additional receiving amplification;
• Kingston Communications to ensure that by 2 October 2002 at least 50% of its PCBs are accessible by reasonable means to users in wheelchairs;
• NWP and Infolines-premier to ensure by 2 October 2001 at any time at least 75% of their respective PCBs are accessible by reasonable means to users in wheelchairs; and
• NWP and Infolines-premier to ensure that by 2 October 2002 at least 70% of their respective PCBs contain telephones incorporating additional receiving amplification.

5.12 Oftel considers that the Regulations, which implement the requirements of the Revised Voice Telephony Directive insofar as they relate to telecommunication services for disabled people, are a major step forward in ensuring that the interests of disabled people are properly taken account of. The obligations which the Regulations place on UK payphone operators go some way further than the obligations placed on payphone operators in many other EU Member States. For example in Germany, there are no specific requirements placed on telecommunicationss operators in relation to services for disabled people over and above those provided for in general enactments.

5.13 Oftel will keep under review the performance of PCB operators in relation to the obligations set out in the Regulations and will seek to ensure that the positive improvements in the provision of PCB services for disabled people are maintained on a forward looking basis. To this end Oftel will require PCB operators to report formally on their compliance with the Regulations in October 2001 and October 2002.

Chapter 6

Specific questions for consultees

Comments are invited on all aspects of this document and also on any issues which Oftel has not addressed but which consultees feel should be considered. However, consultees are encouraged to give particular consideration to the following:

Questions arising from chapter 1

1 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?

Questions arising from chapter 3

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

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

Questions arising from chapter 4

4 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?

Questions arising from chapter 5

5 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?

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

Chapter 7

Consultation

How to make comments on the questions raised in this consultation document

7.1 Oftel is publishing this consultation document so that interested parties may comment on the issues which it addresses. The closing date for submitting comments is 18 February 2002.

7.2 Where possible, comments, and comments on comments, should be made in writing and sent by e-mail to david.parsons@oftel.gov.uk. However, copies may also be posted or faxed to the address below. If any interested parties are unable to respond in one of these ways, they should discuss alternatives with the Oftel manager named below:

David Parsons
Oftel
50 Ludgate Hill
London
EC4M 7JJ

Tel: 020 7634 8746
Fax: 020 7634 8893

e-mail: david.parsons @oftel.gov.uk

Further copies of this document

7.3 Paper copies of this document, and alternative formats such as large print, Braille, disc and audio cassette can be made available on request. Please contact Oftel's Research and Information Unit by phoning 020 7634 8761 or by sending an e-mail to infocent@oftel.gov.uk.

Publication of comments made by stakeholders

7.4 On this occasion, Oftel is not programming a formal period during which interested parties may comment on the responses made by others. Nevertheless, in the interests of transparency, all non confidential comments and comments-on-comments, will be published. Respondents should separate out any confidential material into a confidential annex which is clearly identified as containing confidential material. Oftel will take steps to protect the confidentiality of all such material from the moment that it is received at Oftel’s offices. However, in the interests of transparency, respondents should avoid applying confidential markings wherever possible.

7.5 Non confidential responses can be viewed on Oftel’s website in the Publications section under Responses to Oftel consultations. They can also be viewed at Oftel’s Research and Information Unit. Appointments must be made in advance by phoning 020 7634 8761 or sending an e-mail to infocent@oftel.gov.uk.

e-mail notifications

7.6 Oftel has a free e-mail based mailing list to help people stay informed about the work that Oftel is doing. Each time an Oftel document is published and placed on Oftel’s website at www.oftel.gov.uk, subscribers to the list receive an e-mail alert. To register, please go to the What’s New section of the website and access the electronic form.

Consultation criteria

7.7 Oftel considers that this document meets the Cabinet Office code of practice on written consultation documents. The code is reproduced below for convenience. If you have any comments or complaints about this consultation process please contact:

Robert Jex
Oftel Co-ordinator for the Code of Practice
Oftel
50 Ludgate Hill
London EC4M 7JJ
e-mail: rob.jex@oftel.gov.uk

tel: 020 7634 5340
fax: 020 7634 8943

1 Timing of consultation should be built into the planning process for a policy (including legislation) or service from the start, so that it has the best prospect of improving the proposals concerned, and so that sufficient time is left for it at each stage.

2 It should be clear who is being consulted, about what questions, in what timescale and for what purpose.

3 A consultation document should be as simple and concise as possible. It should include a summary, in two main pages at most, of the main questions its seeks views on. It should make it as easy as possible for readers to respond, make contact or complain.

4 Documents should be made widely available, with the fullest use of electronic means (though not to the exclusion of others), and effectively drawn to the attention of all interested groups and individuals.

5 Sufficient time should be allowed for considered responses from all groups with an interest. Twelve weeks should be the standard minimum period for consultation.

6 Responses should be carefully and open-mindedly analysed, and the results made widely available, with an account of the views expressed, and reasons for decisions finally taken.

7 Departments should monitor and evaluate consultations, designating a consultation co-ordinator who will ensure that all lessons are dissmeninated.

Annex A

Revised guidelines agreed between Oftel and BT/Kingston on the removal and resiting of PCBs and on the installation of new PCBs to meet social need

Removal and resiting of public call boxes

1.1 BT/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 the local Parish Council (if one exists);
c) in the case of Northern Ireland, BT has 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 the local Parish Council (if one exists),
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:

a) consult with the local planning authority;
b) consult with the local Parish Council (if one exists); and
c) in Northern Ireland consult with 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 liaise 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 [XXXX] BT/Kingston shall supply Oftel every six months with a report setting out:

1. (a)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. (b) 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

Licence Condition 24 of the Public Telecommunication Operator and PCB operator licences

Public Call Box Services

24.1 At any Public Call Box at which the Licensee provides Call Box Services or permits Call Box Services to be provided the Licensee shall ensure that such services shall comprise all Call Box Services and shall take all reasonable steps to ensure that such services shall continue to be provided until such time as such Services shall cease to be provided in accordance with Condition 24.4.

24.2 The licensee shall install and take all reasonable steps to keep installed in all Public Call Boxes at which it provides or secures the provision of Call Box Services, apparatus enabling persons using hearing aids designed for use in conjunction with Telephones of the kind installed in Public Call Boxes to use such hearing aids when voice telephony services are provided at Public Call Boxes.

24.3 The licensee shall display and take all reasonable steps to keep displayed prominently in or on all Public Call Boxes at which it provides or secures the provision of Call Box Services a notice specifying in relation to those services:

a) the minimum charge payable for connection of a call;
b) the means by which the charge may be paid by reference to the particular coins and other means of payment by credit card or otherwise;
c) the amount of charge payable in respect of Messages conveyed within the United Kingdom by reference to the duration of the call, the distance over which the Message is conveyed and the time or day when the call is made or alternatively the number which may be called free of charge from that Public Call Box which will provide this charging information by means of a recorded announcement;
d) the location of the Public Call Box sufficient to enable it to be located as swiftly as practicable by the Emergency Organisations;
e) that the Licensee or other person whose name, address and telephone number in either case is specified in the notice will deal with any complaint which is made to them;
f) that Public Emergency Call Services are available at the Public Call Box without incurring any charge; and
g) whether or not the Services include the connection of calls to the Public Call Box where the call has not been initiated in the Public Call Box.

24.4 Except where Condition 42 applies to the Licensee, the Licensee shall be entitled to cease to provide or to secure the provision of all (but not some) of the Call Box Services provided at a Public Call Box only if it has installed prominently in or on that Public Call Box and has taken all reasonable steps to keep so displayed for the period mentioned below a notice specifying:

a) that the Licensee is proposing that such services shall cease to be provided there on expiration of the period mentioned in the notice not being less than 42 days commencing with the day on which the notice is first displayed; and
b) the name and address of the Licensee,

and such period has expired.

Annex C

Types of payphone

The following paragraphs set out in greater detail the two categories of payphone operating in the UK which are the subject of this consultation document:

PCBs: 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 four main PCB operators in the UK (BT, Kingston, NWP Communications and Infolines-premier) who are all individually licensed under the Telecommunications Act 1984. The services available from these PCBs will be broadly similar, but will be subject to the following minimum requirements to provide:

• free 999/112 calls 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.

The text of the Public Call Box Services condition from BT’s licence is set out at Annex B. It is identical to that appearing in the other PCB operator licences.

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 Infolines-premier. Notification requirements are considered in more detail in Chapter 3 of the document.

Telecom operator managed payphones (managed payphones):

There are in excess of 58,500 such 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 Infolines-premier) 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.

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).

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). An example already referred to in the consultation document would be BT’s managed payphones which 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.

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 Service Licence (TSL). The distinction is of little significance for the purposes of this consultation document.

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.

Annex D

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 operated under an individual licence.