Oftel has proposed changes in the way that telecoms companies are charged for fixed number portability - that is, when a customer moves from BT to one of its competitors but keeps the same telephone number.

Oftel's draft Determination Proposed Fixed Portability Costs and Charges, published in July, proposes to calculate BT's set-up and conveyance charges for fixed portability on the basis of their long-run incremental cost (LRIC). These charges are currently set on the basis of BT's fully allocated cost (FAC).

However, in competitive markets businesses are more likely to make investment decisions on the basis of incremental costs and, therefore, charges based on fully allocated costs send out the wrong signals to potential entrants.

In addition, Oftel proposes that BT's charges for portability should be subject to charge controls set at RPI-5%.

The proposals will be finalised later in the autumn.

For further information contact Mike Galvin (tel: 020 7634 8869/e-mail: mike.galvin@oftel.gov.uk).