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16|11|04

NTS Focus Group - 26th August 2004

Meeting Notes & Actions

Agenda item (1) - Introductions

Attendance

Colin Scott	THUS (Chair)
Dominic Carney	Your Communications
Caroline Wallace	Ofcom
Clive Hillier	Ofcom
Geoff Brighton	Ofcom
Gareth Davies	Ofcom
Katherine Duncan	Band-X
Dave Simpson	Easynet
Toby Higho	Centrica
Debbie Mulloy	NTL
Ray Copeland	Opera Telecom
Tim Stephens	C&W
Andrew Wileman	Telewest
Becky Hewlett	Energis
Helen Morgan	Energis
Kath Embleton	BT
Mike Ankin	BT
Colin Annette	BT
Alex Cheetham	BT
Nancy Cox	Kingston

Agenda item (2): Ofcom Presentation – NTS Framework Re-examination Update

Ofcom provided an update presentation on the NTS Framework re-examination. A copy of the presentation has been provided along with these meeting notes.

The presentation picked up on where Ofcom left off at the last Focus Group, recapping on the six options identified and the evaluation criteria being used. Caroline Wallace explained that Ofcom had consulted with 20+ NTS Stakeholders (including ISPs, OCP, SPs and TCPs), conducted market research by having market researchers contact 500 organisations who use NTS numbers, issued a formal information request to a number of communication providers, engaged a technical consultancy (the ITT for this work has previously been circulated to the FG) to look into the issue of wholesale and retail tariffing and work has also been carried out on looking into trends in NTS number usage.

Ofcom presented some headline findings from their market research. The research indicated that only 15% of consumers were aware (unprompted) of the usual fixed line price of 0845. Nancy Cox asked Ofcom to define unprompted awareness. Caroline Wallace said that it was when no answer banding was provided within the question.

Nancy Cox said that she didn’t believe that consumers were aware of the link between local and 0845. Caroline Wallace said that Ofcom research suggested that a considerable number of consumers weren’t aware of the link.

Nancy Cox commented that the research also pointed out that only 54% of consumers were aware of the price of geographic local calls. Tim Stephens said that given geographic volumes were significantly greater than NTS, this represented a greater level of ignorance. When reviewing Ofcom’s findings on the number of consumers who thought that 0845 and 0870 calls were too expensive, Nancy commented that there was a tendency for consumers to say that things are always too expensive. Caroline Wallace acknowledged this but pointed out that she had been in correspondence with consumers and consumer-representing organisations citing NTS as another example of rip-off Britain.

Caroline Wallace said the research was designed to identify consumer perceptions of NTS rather than the truth, as with all market research. Nancy Cox said she had concerns that the regulator was too pre-occupied with perception rather than the facts.

Caroline Wallace said Ofcom wasn’t putting any more weight on this research than other pieces of work Ofcom had undertaken as part of the framework re-examination to ascertain the facts and Ofcom would see this research in context.

Toby Higho said that it would be beneficial to see the NTS benchmarked with geographic research to set the results in context. Caroline Wallace agreed, noted that this was something that Energis had requested some time ago and that this had therefore been built into the consumer market research to a degree. Caroline also said that there was evidence that consumers perceive NTS as more expensive than it actually is.

Colin Annette said that it would be useful to share the full research findings as part of the consultation document. Caroline Wallace said details of the market research project would be published in full or in part as an annex to the framework re-examination.

Caroline outlined Ofcom’s finding on why businesses choose to use NTS numbers for inbound contacts. Tim Stephens asked which individuals were asked within the businesses questioned. Caroline Wallace said that it was the person responsible for decisions to use the NTS numbers (which could be either the IT department or the marketing department).

Clive Hillier outlined Ofcom’s research into the number usage trends in the NTS market. Clive noted that NTS usage seemed to be more popular amongst organisations with larger sites.

Nancy Cox asked when organisations decided to move to NTS. Clive said that the 2001 data wasn’t yet available, but once it was, Ofcom would have a better idea of the usage trends over time.

Ofcom outlined what to expect in the consultation document. The consultation was likely to consider some analysis of the NTS termination market (triggered by NCCN 500), which could include the first stage of a market review.

Ofcom will express a preferred option in the consultation document (to assist in reaching a conclusion quickly), however Ofcom remains interested in the views of stakeholders on the other options presented. The consultation is currently with the Ofcom policy executive for review and is expected to be published at the end of September, with a 10 week period for comments. A final statement is then expected to be published in February or March 2005, however a statutory consultation may also be published if required at that time (depending on the outcome of the consultation) with what would be likely to be a 4 week period for comments.

Once the outcome of the consultation exercise has been published industry implementation groups may have to be established to implement the solution.

Alex Cheetham asked if Ofcom was envisaging a varied pricing ladder for 0845 and 0870 (similar to that available in 0844 and 0871). Caroline Wallace said that Ofcom was keeping an open mind and was aware that multiple price points would assist competition, but wouldn’t help with consumer awareness / understanding.

Colin Annette said that BT thought it would be useful to host an NTS workshop with NTS FG members to review some of the issues raised in the consultation in an effort to determine where cross industry agreement could be reached and which areas are likely to be more contentious.

The NTS FG agreed that this would be a good idea. Colin Annette said that BT was able to host the meeting in early November (details will be finalised at the next FG).

Agenda item (3): Ofcom Update – Other NTS issues

INCA / CLI statement:

Geoff Brighton said that Ofcom was reviewing the responses to Ofcom’s recent statement and draft Direction on INCA/CLI (all responses have now been published on the Ofcom website). Geoff said the issue of parallel running was proving problematic as BT and operators had differing views as to how this should be achieved.

Operators had asked for a three month period of full parallel running, however BT have said that this isn’t achievable due to system limitations. Instead BT would provide operators with live data and files to do system testing prior to the system being introduced. BT is anxious to avoid two live billing systems being operational over the one period and a hard cut off would be required – however a test data pilot period would be arranged.

Cable & Wireless said that operators would require details of the file formats as soon as possible to begin systems development. BT said that the formats wouldn’t be finalised until the final direction had been published.

Geoff Brighton said that the file formats aren’t likely to change from the draft and BT should be able to begin development work now.

Dominic Carney requested that the Direction should incorporate an element of flexibility to ensure that proper system testing can be carried out.

Toby Higho said that the Direction should define a fit for purpose sign-off test to ensure that the solution met the needs of operators.

Caroline Wallace said that an Ofcom direction wasn’t the appropriate vehicle for a fit for purpose test and if operators had issues with BT’s solution these could ultimately be referred to Ofcom as a dispute. If necessary, the final Direction could be amended with respect to the NCD end-date should any issues arise prior to the cut off date.

Geoff Brighton suggested that the Direction would have a cut off date, however this would enable operators to introduce INCA CLI billing sooner if everything was available. Ofcom suggested building an element of fat into the Direction, deferring the final cut off date for several months to enable system testing to be carried out and allowing the system to be introduced smoothly. FG members accepted this as a way forward.

Colin Scott asked if Ofcom had reached any conclusions on the issues of BT’s costs (as many operators had expressed disappointment at the way Ofcom had proposed to allocate these). Geoff said that Ofcom would not comment at this stage.

NTS Retail Uplift:

Ofcom said the NTS Retail Uplift consultation had now closed and that four responses had been received (non-confidential responses would be posted on the Ofcom website). The final statement on the NTS Retail Uplift would be likely to be issued in mid November.

0845 / 0870 Margin Squeeze:

Ofcom said that this case had now been closed (the final decision was published on the 19th of August) and that a no grounds for action decision was taken. Details of the case have been published on the Ofcom website and all questions relating to the dispute should be referred to the case manager (Richard Thompson).

Debbie Mulloy asked why this case took so long to complete. Ofcom said that no one present was aware of the detail of the case but the length of time taken to resolve the case reflected the complex nature of the issues involved.

NTS Discounts from the 1st of April ’04:

A final Determination is expected to be published w/c 30th of August.

Agenda item (4): PPP Charging

Colin Annette said that following the publication of the final statement on PPP BT had to resolve the issue of PPP double charging on NTS calls (in situations where NTS numbers were translated back to BT geographic numbers – only one PPP charge should be paid).

Colin said that this might prove problematic because it was difficult to identify calls which would route back to BT geographic numbers. Colin said that Cable & Wireless may have a proposed solution to the issue.

Colin Scott suggested a conference call on the subject.

New Action: # N/1- All operators to contact Colin Scott if they are interested in joining a conference on the issue of PPP double counting in NTS.

Colin Scott asked if the forthcoming PPP credit note from BT would include NTS minutes.

BT said that the PPP credits in September wouldn’t include NTS minutes. The PPP adjustment for NTS would be wrapped up in the full NTS retrospection exercising following the publication of the NTS Discount Determination.

Mike Ankin said that the Retail Uplift decision (now expected in mid-November) may not be included within the first round of NTS adjustments (only 29th August ’03, Discounts and PPP would be included).

Colin Scott asked when the circuit price changes announced in the PPP statement would be effective from / notified. BT said that they were likely to be applied from the 1st of July ‘04, however no notification date had been set.

Agenda item (5): Review of Outstanding Actions

#K/2:	All operators to provide feedback to Becky Hewlett on questions 1 -3 below relating to the application of the ‘squirreling’ option for distributing the minimum call fee: 1) What interest arrangements should cover the over-recovered amount prior to it being distributed to operators? 2) What was an appropriate trigger level amount for the money to be distributed to operators? 3) What date should this new arrangement commence from?
	Carried Forward
#L/2	Mike Ankin to explain how number portability issues/pricing will be handled following the release of NCCN 500.
	Colin Annette said that the current arrangements in place now would apply. Tim Stephens said this was likely to result in a significant BT over recovery on NTS numbers ported from BT and a pence per minute loss on minutes ported to BT (discouraging number portability) as operators would have to pay out at the higher NCCN 500 rates. Colin Scott said the principles around number portability only allowed for an operator to pay out what it received in revenue and that BT shouldn’t be billing an operator more money than they would receive as their POLO. Debbie Mulloy said that the Average Porting Conveyance (APC) charges levied by operators would have to be increased to balance out this anomaly. Tim Stephens said that the APC wasn’t designed for that purpose. New Action N/2: BT to confirm what arrangements are currently in place for NGNP (ie. what rates are used by BT for number exports and imports – the operator’s NCD or CPL section 1.06 rates).
#M1	BT to discuss the issue of an industry technical workshop on NTS INCA/CLI billing internally and let operators know if one will be held.
	Closed – BT agreed to host a workshop. BT will await the publication of the final Determination before organising the event.
#M2	BT to come up with proposals / standard paper work to enable operators who using INCA / CLI pricing to reject / accept rates on an operator by operator basis.
	Closed – BT confirmed that from this point forward operators who interaccount on INCA CLI rates would be issued OCCNs with CLI rates. BT said that it was looking into an exception based system (where the CPL was updated with generic tables and where an operator didn’t interaccount using generic pricing, those numbers would also be listed in section 1.12 & 1.02.

Agenda item (8) – Any Other Business

Nancy Cox said the Kingston Operator Specific NTS recovery letter was being finalised and would be issued to operators shortly.

Date of Next Meeting :

Thursday 7th October – 2pm Ofcom – Riverside House, London

Other meeting Dates for 2004:

• Thursday 18th November

Summary of New and Outstanding Actions:

#K/2:	All operators to provide feedback to Becky Hewlett on questions 1 -3 below relating to the application of the ‘squirreling’ option for distributing the minimum call fee: 4) What interest arrangements should cover the over-recovered amount prior to it being distributed to operators? 5) What was an appropriate trigger level amount for the money to be distributed to operators? 6) What date should this new arrangement commence from?
#M/1	BT to discuss the issue of an industry technical workshop on NTS INCA/CLI billing internally and let operators know if one will be held.
# N/1	All operators to contact Colin Scott if they are interested in joining a conference on the issue of PPP double counting in NTS.
# N/2:	BT to confirm what arrangements are currently in place for NGNP (ie. what rates are used by BT for number exports and imports – the operators NCD or CPL section 1.06 rates).