Contents 
Summary
The
Determination
Explanatory
Memorandum
Summary
S.1 This document
contains a determination relating to the provision of Controlled Premium
Rate Services under sub-paragraph 22.9 of Condition 22 of all Public
Telecommunications Operator ("PTO") licences and under sub-paragraph
26.9 of Condition 26 of the class licences to run branch systems to
provide Telecommunications Services ("TSL") and to provide
International Simple Voice Resale Services ("ISVR").
S.2 The effect of
the determination under the above-mentioned sub-paragraphs 22.9 and
26.9 is to determine the amount for the charge of the Call by means
of which the service is obtained and/or the rate according to which
such Call is charged for the purposes of sub-paragraphs 22.11(a)(iii)(A)
of all PTO licences and 26.11(a)(iii)(A) of all TSL and ISVR licences.
DETERMINATION
RELATING TO THE PROVISION OF CONTROLLED PREMIUM RATE SERVICES UNDER
SUB-PARAGRAPH 22.9 OF CONDITION 22 OF ALL PUBLIC TELECOMMUNICATIONS
OPERATOR ("PTO") LICENCES AND UNDER SUB-PARAGRAPH 26.9 OF
CONDITION 26 OF THE CLASS LICENCES TO RUN BRANCH SYSTEMS TO PROVIDE
TELECOMMUNICATIONS SERVICES ("TSL") AND TO PROVIDE INTERNATIONAL
SIMPLE VOICE RESALE SERVICES ("ISVR")
WHEREAS:
(A) the Secretary
of State for Trade and Industry (the "Secretary of State")
has granted under section 7 of the Telecommunications Act 1984 as amended
by the Electronic Communications Act 2000 (the "Act") the
following licences:
i. all those licences
granted to particular persons for the running of telecommunications
systems which the Secretary of State has designated by order under
section 9 of the Act as public telecommunications systems, which shall
be taken to include licences granted to British Telecommunications
plc (see S.I. 1999 No. 2453), Kingston Communications (Hull) PLC (see
S.I. 1999 No. 2455) and any other persons operating under the fixed
voice telephony and international facilities operator licences (see
S.I. 1999 No. 2451), the cable and local delivery operator licences
(see S.I. 1999 No. 2454), and the mobile licences (see S.I. 1999 No.
2452), and any other such licences granted after the coming into force
of this Determination and the aforementioned Regulations and subject
to substantially the same terms and conditions as the aforementioned
licences (the "PTO licences");
ii. the Class
Licence to run Branch Systems to provide Telecommunications Services
granted on 8th February 2002;
iii. the Class
Licence to run Branch Systems to provide International Simple ` Voice
Resale Services granted on 8th February 2002;
(B) Condition 22.9
of the PTO licences provides that, for the purposes of ascertaining
whether a service is a Controlled Premium Rate Service, the Director
General of Telecommunications (the "Director General") shall
determine from time to time, in accordance with the procedure set out
in paragraph 22.10, an amount for the charge of the Call by means of
which the service is obtained or the rate according to which such Call
is charged or both which, when exceeded, means that sub-paragraph 22.11(a)(iii)(A)
of the definition of Controlled Premium Rate Services is satisfied.
(C) Condition 22.9
also provides that in making such a determination, the Director General
shall have regard to the prevailing standard rates for premium rate
calls of the Licensee and other licensed operators providing Controlled
Premium Rate Services from time to time.
(D) by way of a
Notice which was published on 12 October 2001, and in accordance with
the procedure detailed in sub-paragraphs (a) and (b) of Condition 22.10,
the Director General notified all Licensees, together with all interested
parties and the Independent Committee for the Supervision of Standards
of Telephone Information Services (‘ICSTIS’), that he was minded to
set the amount for the charge of the Call by means of which the service
is obtained at 10 pence and the rate according to which such Call is
charged at 10 pence per minute. In other words, the amount for the charge
of the Call by means of which the service is obtained must exceed 10
pence or the rate according to which such Call is charged must exceed
10 pence per minute in order to satisfy the definition of Controlled
Premium Rate Services as detailed in sub-paragraph 22.11(a)(iii)(A)
of the PTO licences and sub-paragraph 26.11(a) (iii)(A) of the TSL and
ISVR licences, respectively;
(E) in accordance
with sub-paragraphs (c), (d) and (e) of paragraph 22.10, the Director
General allowed a period of 28 days in which representations on the
proposals set out in the above-mentioned Notice could be made, published
those representations (except where a representation was confidential)
and allowed a further period of 14 days in which any observations on
the representations could be made;
(F) Condition 26
of Schedule 1 to the TSL and ISVR licences makes provision in terms
identical for the purposes of this determination to those made by Condition
22 of the PTO licences, as set out above.
(G) the Director
General is now minded to set the amount for the charge of the Call by
means of which the service is obtained at 10 pence and the rate according
to which such Call is charged at 10 pence per minute. The Director General
has had regard to the prevailing standard rates for premium rate calls
of the licensee and other licensed operators providing controlled premium
rate services from time to time;
(H) in making this
determination, the Director General has taken into account representations
and observations received as part of the consultation process referred
to in paragraph E above, and the matters described in the Explanatory
Memorandum to this determination; and
NOW,
THEREFORE, THE DIRECTOR GENERAL, PURSUANT TO CONDITION 22.9 OF THE PTO
LICENCES AND CONDITION 26.9 OF THE TSL AND ISVR LICENCES, HEREBY DETERMINES
THAT:
1. the amount for
the charge of the Call by means of which the service is obtained must
exceed 10 pence or the rate according to which such Call is charged
must exceed 10 pence per minute in order to satisfy the definition of
Controlled Premium Rate Services as detailed in sub-paragraph 22.11(a)(iii)(A)
of the PTO licences and sub-paragraph 26.11(a) (iii)(A) of the TSL and
ISVR licences, respectively, with effect from 10.00am today,
8 February 2002.
DAVID
EDMONDS
DIRECTOR GENERAL
OF TELECOMMUNICATIONS
8 FEBRUARY 2002
EXPLANATORY
MEMORANDUM
E1. The Director
General of Telecommunications (the "Director General") has
today modified the PTO licences in accordance with section 12 of the
Telecommunications Act 1984 as amended by the Electronic Communications
Act 2000 (the ‘Act’). The modifications have replaced the previous Condition
22 with a new Condition 22 entitled ‘Controlled Premium Rate Services’
and made minor drafting changes to Condition 23 entitled ‘Provision
of Special Facilities Relating to Chatline and Message Services’.
E2. The Secretary
of State for Trade and Industry (the "Secretary of State")
has today, 8 February 2002, revoked and re-granted the class licences
to run branch systems to provide Telecommunications Services ("TSL")
and International Simple Voice Resale Services ("ISVR"). The
reason for doing so was to insert a new Condition 26 in identical terms
to that of Condition 22 of the PTO licences and to make minor drafting
changes to Condition 27 in identical terms to that of Condition 23 of
the PTO licences.
E3. The new Condition
22 widens the definition of what type of premium rate services ("PRS")
are caught by replacing the current definition of ‘Controlled Services’
with the definition of ‘Controlled Premium Rate Services’ ("CPRS").
In broad terms, only live PRS were caught by the former definition.
As a result, there was no code of practice governing the provision of
PRS other than live PRS (such as recorded PRS) that could be recognised
by the Director General.
E4. The reason why
the Director General made the above-mentioned modifications to the PTO
licences was to strengthen the regulatory regime in the PRS industry,
so that the provision of a potentially larger category of PRS (other
than simply live PRS) could be governed by a code of practice recognised
by the Director General. The Director General now therefore has more
‘backstop’ powers to require network operators to cut off such services
that are not complying with the Code of Practice administered by the
Independent Committee for the Supervision of Standard of Telephone Information
Services (ICSTIS) following it making such a request to the Director
General, if the Director General considers it appropriate to make such
a direction.
E5. The text of
the modifications and their effects are set out in full in the Oftel
Statement entitled ‘Regulation of Premium Rate Services: Licence Modification’,
which was published on 24 July 2001. The document is available via Oftel’s
website www.oftel.gov.uk).
E6. On 12 October
2001, in accordance with the procedure detailed in Condition 22.10 sub-paragraphs
(a) and (b) of the PTO licences and Condition 26.10 sub-paragraphs (a)
and (b) of the TSL and ISVR licences, the Director General published
a Notice, served a copy of that Notice on all PTO licensees and sent
a copy to all interested parties and the Independent Committee for the
Supervision of Standards of Telephone Information Services (‘ICSTIS’).
The Notice informed all licensees, interested parties and ICSTIS that
the Director General was minded to set the amount for the charge of
the Call by means of which the service is obtained at 10 pence and the
rate according to which such Call is charged at 10 pence per minute.
In other words the amount for the charge of the Call by means of which
the service is obtained must exceed 10 pence or the rate according to
which such Call is charged must exceed 10 pence per minute in order
to satisfy the definition of Controlled Premium Rate Services as detailed
in sub-paragraph 22.11(a)(iii)(A) of the PTO licences and sub-paragraph
26.11(a)(iii)(A) of the TSL and ISVR licences, respectively.
E.7. This would
mean that there would be two types of calls which would be caught by
the definition of CPRS (subject to the other two conditions in the definition
set out in Condition 22.11(a) of the PTO licences and Condition 26.11(a)
of the TSL and ISVR licences being satisfied), namely:
- a call is charged
at a "rate" (that is the total cost is determined by call duration)
and that "charge rate" exceeds 10 pence per minute. This is irrespective
of duration. For example, a service charged at £1 per minute would
be captured under this determination whether or not the call lasted
for five minutes or five seconds (as it is still charged at a "rate"
above 10 pence per minute);
- a call is not
charged at a "rate" (that is the call charge is a single drop charge
i.e. not time-dependent) and that call cost exceeds 10 pence.
E.8. In proposing
the amount and the rate specified, the Director General had regard to
the current prevailing standard rates for premium rate calls of the
licensees operating under the PTO licences. The Director General noted
that while premium rate calls are available at a rate of less than 10
pence or 10 pence per minute, this is not standard practice, and that
the vast majority of premium rate calls would be offered at a price
in excess of 10 pence or 10 pence per minute.
E.9. In accordance
with sub-paragraphs (c) to (d) of Condition 22.10 of the PTO licences
and Condition 26.10 of the TSL and ISVR licences, the Director General
allowed a period of 28 days for representations to be made, published
those representations (except where the representations were confidential)
in such a manner as he considered appropriate for the purpose of the
bringing them to the attention of the licensees, interested parties
and ICSTIS, and then gave a further period of 14 days for observations
on the representations. Then having considered all representations and
observations made, on 11 January 2002 the Director General published
a draft determination setting out that he was minded to set the amount
for the charge of the Call by means of which the service is obtained
at 10 pence and the rate according to which such Call is charged at
10 pence per minute, together with an explanatory memorandum setting
out the reasons for that draft determination. In accordance with the
procedure detailed in Condition 22.10 sub-paragraph (f) of the PTO licences
and Condition 26.10 sub-paragraph (f) of the TSL and ISVR licences,
the Director General sent a copy of the draft determination to all PTO
licensees and ICSTIS, allowing a period of 14 days in which to comment
on the draft determination
E.10. The Director
General received two comments during the consultation period allowed
for comments on the draft determination.
E11. Cable &
Wireless ("C&W") commented that the determination may
capture certain services within the scope of CPRS regulation unintentionally,
such as those services charged at local rate if of relevant duration.
The Director General does not consider that such services will be caught,
however (see paragraph E6 above regarding which services are now caught
by the definition of CPRS in Condition 22.11(a) of the PTO licences
and Condition 26.11(a) of the TSL and ISVR licences).
E.12. A representation
was also received from the Premium Rate Association ("PRA")
which did not comment on the amount for the charge of the Call or the
rate according to which Call is charged as set out in the draft determination,
but expressed opposition to the further extension of the current regulatory
regime for PRS without further explanation of the reasons behind the
modifications to the licences (as referred to in paragraph E1 above).
E.13. The Director
General notes that the views expressed by the Premium Rate Association
are of a general nature, and relate more to his decision to modify the
PTO licences in order to extend the PRS regulatory regime, rather than
to the draft determination. In any event, the Director General considers
that there is no need for further explanation of the reasons behind
the modifications to the PTO licences, in particular given that consultation
on the future regulation of the PRS industry has been ongoing formally
and informally since 1999.
E.14. Having
considered the comments received, therefore, and having regard to the
current prevailing standard rates for premium rate calls of the licensees
operating under the PTO licences, the Director has now decided to make
the Determination contained in this document.
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