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03|06|04

NTS focus group meeting notes and action

Meeting Notes & Actions

Agenda item (1) - Introductions

Attendance

Colin Scott	THUS (Chair)
Caroline Wallace	Ofcom
Geoff Brighton	Ofcom
Adam Kilgour	Ofcom
Clive Hillier	Ofcom
Gareth Davies	Ofcom
Rickard Granberg	Yourcommunications
Debbie Mulloy	NTL
Dave Simpson	Easynet
Toby Higho	Centrica
Richard Anderson	MCI
Alex Jennings	Tiscali
Karen Wray	C&W
Tim Stephens	C&W
Andrew Wileman	Telewest
Karen Hardy	Energis
Helen Morgan	Energis
Becky Hewlett	Energis
Mike Ankin	BT
Colin Annette	BT
Nancy Cox	Kingston
Graeme Stewart	Kingston
Clive Goodwin	COLT

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

Ofcom provided a detailed presentation on the NTS Framework re-examination. A copy of the presentation has been provided along with these minutes.

The framework will examine all NTS categories; however a priority was being placed on issues relating to 0845 and 0870. The Framework will look into market analysis on NTS Call termination, charging arrangements on the flow of money between operators, BT’s SMP call origination condition and consumer issues.

The Consultation on the framework re-examination is now expected to be published in mid- September (previously expected in January ’05)

Operators asked a series of questions relating to the Framework Re-examination:

Q	Becky Hewlett asked Ofcom if the framework re-examination was likely to address the lack of reciprocity in the current NTS regime (highlighted by NCCN 500)?
A	Ofcom said that this issue was likely to be picked up in the market analysis accompanying the framework re-examination.
Q	Karen Hardy asked if Ofcom was planning to compare consumer understanding for geo and non-geo pricing?
A	Ofcom said that no such research was currently planned, although Ofcom acknowledged that this would be a useful exercise and should serve to highlight issues which are specific to NTS. Geoff Brighton mentioned that a number of consumers had responded to the 0845/0870 consultation highlighting a range of issues (eg. www.saynoto0870.co.uk/)
Q	Debbie Mulloy asked if the Framework re-examination would cover both on and off net call origination?
A	Caroline Wallace said that the framework re-examination would look at all aspects of call origination.
Q	Rickard Granberg asked if Ofcom could change the remedies in an SMP market without reviewing the market again?
A	Ofcom said that this was possible but justification would be required.
Q	Debbie Mulloy asked if 05 corporate numbering and other types of non-geo numbering would be included within the scope of the re-examination framework?
A	Ofcom said that 05 corporate and other types of non-geo numbering (with the exception of PRS, 0844, 0871, freephone, 0870 & 0845) were considered out with the scope.
Q	An operator asked if the terms of reference for the technical part of the project would be published?
A	Ofcom said that this could be circulated. New Action: # L1: Clive Hillier to circulate the ToR for the technical part of the framework re-examination.
Q	Colin Scott asked what scope operators would have for seeking retrospection on the impact of NCCN 500 (following the conclusion of the NTS Framework re-examination and the submission of a further Competition Act complaint).
A	Caroline Wallace said that if there were a breach of the Competition Act, this would date from the pricing change, not the date of the conclusion of the framework re-examination. Operators were therefore free to submit a Competition Act complaint on NCCN 500 after the conclusion of the framework re-examination.

A discussion on the issues then followed. Colin Annette said that BT wasn’t wishing to jeopardise the future of the UK NTS market as this accounted for between a quarter and one third of switched revenues for BT. Colin said he was in the process of putting indicative pricing through an internal pricing board and it was his intention to issue a bi-lateral pricing ‘offer’ to operators. This offer would not be contractual, instead BT would look for operator feedback on a bi-lateral basis.

Caroline Wallace said that she could see the value in BT issuing pricing bi-laterally and Ofcom would be interested in seeing operator feedback. Colin Annette suggested that the feedback be copied to Ofcom. Caroline said that it appeared to Ofcom that Ofcom intervention would be required to implement NTS Futures type arrangements.

Karen Hardy said that the NTS Futures proposal wasn’t too dissimilar from the current pricing regime (i.e. pricing is set by a framework and isn’t free floating – as with the NTS Futures proposal).

Ofcom said that operators should consider the Competition Act issues of NTS Futures work as Ofcom legal advice had highlighted a number of concerns. Colin Annette said that BT’s legal advice stated that a bi-lateral discussion on pricing couldn’t be viewed as collusive behaviour as the current NTS interconnect pricing wasn’t free floating in the first place.

Gareth Davis said that any previous regulated outcome was exempt from any Competition Act considerations as it already had the necessary regulatory approval. Caroline Wallace said BT’s plan to make a commercial offer wasn’t at odds with the Framework re-examination, but Ofcom urged operators to take their own legal advice.

Karen Wray asked if Ofcom were planning to conduct a market review on NTS retail origination. Karen highlighted that the Portuguese regulator had conducted a review. Gareth Davis said that NTS retail origination was viewed by Ofcom as a cluster market with other types of retail call origination and Ofcom hadn’t got any plans at this stage to define or review the market for NTS retail origination separately.

Given the amount of discussion and interest in this topic, Colin Scott suggested that the item be included as the first agenda item at the next Focus Group. Caroline Wallace said that Ofcom would provide a full update for the next Focus Group.

Ofcom invited operators to provide written submissions on the Framework Re-examination proposals by the 18th of June – all submission are to be sent to geoff.brighton@ofcom.org.uk

Agenda item (3): Ofcom Update

Ofcom provided an update on: (1) Policy Work - & - (2) Case Work

Policy Work Update:

The NTS Retail Uplift consultation will be published at the end of June with a six week period for comments. The document will contain indicative figures for the PRS Bad Debt provision, the non-Freephone and Freephone uplift.

A statement regarding the proposed modification to the numbering plan and new application form for 08 numbers will be published in July.

The INCA CLI statement will be published at the end of June (in the second Ofcom publication window for June). This delayed publication date is a result of Ofcom receiving more information from BT on costs. Ofcom have now allocated additional technical expertise to look at the issues covered in this statement.

Case Work Update:

The final NTS POLO out-payment Determination has now been published.

The NTS Discounts case is on track to be completed within the 4 month target.

The 0845 ISP Margin Squeeze case under the Competition Act case is expected to be completed at the end of July.

Agenda item (4): 0845/0870 POLO Determination Implementation

Mike Ankin said that following the final Determination on the NTS POLO dispute (from 29th August ’03), BT’s intention was to wait for the discounts case to be resolved before seeking to implement the changes via pricing letters. Energis asked if there was any point in operators who hadn’t signed the April 1st basket change pricing letter from now signing it. BT advised that given this pricing will be superseded they saw no point in signing this letter now.

BT was asked how quickly they planned to conduct a retrospective settlement following the issuing of the final determination. Mike Ankin said BT hoped to complete the exercise within a matter of months.

NB: Following the meeting BT requested that the notes from the meeting contain the following update:

After further consideration, BT have decided that given Ofcom’s final determination regarding 0845 and 0870 NTS payments, it will seek to implement the required Operator rate changes in the Carrier Price List as soon as practicable.

To delay implementing the rate changes any further than necessary would be problematical in relation to payments for Transit calls for the additional period in question.

BT will therefore update the CPL as necessary for the period 29th August 2003 to 31st March 2004 (and as far as possible post 01 April 2004) and await the outcome of the NTS Average Discounts dispute before making any further changes.

Debbie Mulloy asked if BT were planning to issue CLI based pricing letters as well. BT confirmed that pricing for CLI based interaccounting would also be issued.

BT was asked if they would change the NTS Calculator to reflect the changes to short duration. Mike Ankin confirmed that a new pricing calculator would be published on the BT Wholesale website. Mike said that the new POLOs applying between 29 August 2003 to 31 March 2004 (given a POC count of 69) would be:

Daytime 4.9663 ppm
Evening 1.9697 ppm
Weekend 2.0917 ppm

(Please note – due to an error in the original calculation, the figures presented above are slightly different to those read out at the meeting).

Agenda item (5): PRS Chargeband Limit of £1.50

Colin Scott said that THUS was aware of considerable demand from service provider customers for a £2 per minute charge band on the PRS pricing ladder. Colin said that he was aware of the existence of the New Services Focus Group (NSFG) and that a higher rate PRS trial of £2.50 & £5 had been discussed since 2000, however there hadn’t been any significant movement. Given the lack of time to discuss the issue, Colin suggested that the issue be considered at the next FG. THUS, Kingston, Cable & Wireless and Your Communications expressed an interest in taking the issue forward. NTL said that it had a number of concerns about extending the ladder. It was agreed that the issue would be debated at the next NTS FG.

Agenda item (6): Review of Outstanding Actions

#K1:	Mike Ankin agreed to investigate if BT would permit other operators to charge a different rate for non-BT originated minutes in section 1.12 of the BT CPL.
	Closed- Mike Ankin said that BT couldn’t provide this product due to technical constraints. Mike said that BT was also awaiting the outcome of the INCA/CLI statement.
#K/2:	All operators to provide feedback to Dave Simpson on questions 1 -3 below relating to the application of the ‘squirreling’ option for distributing the minimum call fee: What interest arrangements should cover the over-recovered amount prior to it being distributed to operators? What was an appropriate trigger level amount for the money to be distributed to operators? What date should this new arrangement commence from?
	Carried Forward

Agenda item (7) – Any Other Business

Nancy Cox said that Kingston wasn’t currently covering its call origination costs (for traffic originating in the Hull area). Kingston believes it is correct to recover these additional costs (derived using their Regulatory Accounting standards – which have Ofcom approval) from terminating operators. Nancy said that Kingston was proposing three options to recover these costs:

BT have different rate for Hull originated traffic
Twix only transit – Kingston have contracts in place with every terminator (and interaccount with them directly) and BT is only used for transit (ie. twix only transit).
Kingston applies a surcharge on all terminators (which would require contracts with every terminating operator).

Nancy asked that all terminating operators consider these options for the next meeting and that the issues be included within the next FG agenda. A copy of Kingston’s proposals in slide format is associated with these meeting notes.

Cable and Wireless asked if BT had got an answer yet on how number portability arrangements would work in light of NCCN 500. New Action: #L/2: Mike Ankin agreed to provide an answer for the next Focus Group.

Date of Next Meeting : Thursday 15th July – 2pm Ofcom – Riverside House, London

Other meeting Dates for 2004:

Thursday 26th August
Thursday 7th October
Thursday 18th November

Summary of New and Outstanding Actions:

#K/2:	All operators to provide feedback to Dave Simpson on questions 1 -3 below relating to the application of the ‘squirreling’ option for distributing the minimum call fee: What interest arrangements should cover the over-recovered amount prior to it being distributed to operators? What was an appropriate trigger level amount for the money to be distributed to operators? What date should this new arrangement commence from?
#L/1	Clive Hillier to circulate the ToR for the technical part of the framework re-examination.
#L/2	Mike Ankin to explain how number portability issues/pricing will be handled following the release of NCCN 500.

#K/2:

All operators to provide feedback to Dave Simpson on questions 1 -3 below relating to the application of the ‘squirreling’ option for distributing the minimum call fee:

What interest arrangements should cover the over-recovered amount prior to it being distributed to operators?
What was an appropriate trigger level amount for the money to be distributed to operators?
What date should this new arrangement commence from?

#L/1

Clive Hillier to circulate the ToR for the technical part of the framework re-examination.

#L/2

Mike Ankin to explain how number portability issues/pricing will be handled following the release of NCCN 500.