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NTS Focus Group - 24 February 2005 - 2.15pm Ofcom

Meeting Notes & Actions

Agenda item (1) - Introductions

Attendance:

Colin Scott	THUS (Chair)
Gareth Davies	Ofcom
Caroline Wallace	Ofcom
Geoff Brighton	Ofcom
Clive Hillier	Ofcom
Dave Simpson	Easynet
Toby Higho	Centrica
Andy Martin	IV Response
Tim Stephens	C&W
Karen Wray	C&W
Andrew Wileman	Telewest
Helen Morgan	Energis
Becky Hewlett	Energis
Kath Embleton	BT
Colin Annette	BT
Rob Day	BT
Durmuid Jennings	Reality Telecom
Nancy Saunders	Kingston
Jane Edge	Your Communications
Dominic Carney	Your Communications
Michael Dixon	CMA
Mike Barford	Tiscali

Agenda item (2): Update on NTS Policy Review and the NTS Call Termination Market Review (Ofcom)

Caroline Wallace said that Ofcom wanted to update the industry on the timescales for the policy review. Responses to the consultation had been polarised, with different ideas presented for the future (and little support for Ofcom’s proposed Option 2). More work is now required and further market research will be conducted and a formal information request will be issued to NTS providers.

Ofcom intend to publish a policy statement by the end of June on the NTS review. At this time, the second stage market review consultation will also be published (distributed to European National Regulatory Authorities and the Commission).

In light of the comments received on the policy review, Ofcom are open minded about the future policy options and will wait until the additional work has been completed before making a final policy decision.

Tim Stephens asked if Ofcom were considering any other options (other than Nos. 1 – 5 presented in the consultation). Caroline Wallace said that three or four new options had been proposed and that a permutation of existing options was also being looked into. Tim asked if any of these revised options could be shared prior to June. Caroline said that Ofcom could use the NTS Focus Group (or use the NTS FG distribution list) to consult informally. No formal consultations are planned prior to June.

Dominic Carney asked if it was easy to summarise why Ofcom were not supporting Option 2 any more. Caroline Wallace said that the option didn’t receive the support from industry and other options were presented. Consumers also rejected the option (stating a preference for options 4 or 5) and by implication rejected the industry proposals.

Clive Hillier said that Ofcom needed further evidence of consumer detriment (if any) and Ofcom needed to conduct that research straight away.

Andy Martin asked if media pressure had played a part in Ofcom’s reluctance to back Option 2? Caroline Wallace said that there had been some interesting stories in the press recently. The NHS in England and Wales had banned the use of 0870 as contact numbers for GP surgeries.

Nancy Saunders asked what information was likely to be requested as part of the formal information request. Caroline Wallace said that terminating communication providers would be asked how many 08 and 09 numbers they had in use (with further details requested on adult, ported numbers and numbers supplied to the public sector). Ofcom would also request the contact details of organisations which use NTS numbers.

Nancy Saunders asked why Ofcom needed to gather this information. Caroline Wallace said that the information was required to ensure that the SMP NTS call origination obligation on BT was still effective. Caroline added that the information request would be published in draft form by the 4th of March, with three weeks provided for responses (inc. one week for comments on the draft).

Nancy Saunders asked what Ofcom were planning to ask NTS customers. Caroline Wallace said that they would be asked a number of questions, including what the implications would be if revenue sharing was removed and what their current revenue share arrangements were.

Karen Wray said that not all customers get a revenue share, so Ofcom couldn’t ask a customer that doesn’t receive a revenue share a question about revenue sharing – this would lead the market. Karen added that NTS customers often received other benefits from NTS providers (revenue sharing isn’t the only benefit provided to customers). So there may be a reason why revenue sharing wouldn’t be appropriate and Ofcom would have to consider the overall package. Toby Higho added that Ofcom would have to consider what the revenue may be used for.

Tim Stephens suggested supplying a list of customers who received a revenue share and a list of customer which didn’t.

Nancy Saunders asked if a section 135 Information Request would be valid for customers as well as communications providers. Caroline Wallace said that the possible subjects of an information request permitted under section 135 were very wide and covered end customers as well.

Colin Scott asked if the section 135 notice served on end-customers would contain the same legal warnings (highlighting a fixed fine if the organisation refused to supply the information). The notice is likely to scare customers who might not understand the context of the request.

Caroline Wallace said Ofcom would have to word the information request inline with their power (including any necessary wording), however a covering letter / email would accompany the request in an attempt to help customers understand why the information was being requested.

Agenda item (3): Update on the NTS Retail Uplift second stage consultation

Geoff Brighton said that the Network Charge Control Review consultation was due to be issued in mid-March slightly behind the Retail Uplift consultation. However, to ensure consistency between the two projects the Retail Uplift consultation had been delayed slightly. The consultation is now expected to published on the 10th of March. Geoff apologised for the delay, but said it was essential to ensure that there was consistency.

Tim Stephens asked what the outcome was likely to be? Geoff said that the 2nd consultation would contain different numbers and new values of X and bad debt figures. Karen Wray asked if Ofcom were addressing the issues posed in responses to the first consultation, or would these questions need to be asked again. Geoff said the respondents wouldn’t need to re-ask the questions as a section in the 2nd consultation document would be devoted to the questions raised in responses to the first consultation.

Ofcom Post meeting update (30/03/05) : The NTS RU 2nd consultation document was not published on 10th March. There are a number of last minute wrinkles arising with the need to align the RU CD with the NCC document (which was published on the 23rd of March). Ofcom will not be able to publish the retail uplift consultation until these issues have been resolved – the RU Consultation is expected to be published shortly.

Agenda Item (4) – Presentation from the Communications Management Association on their response to the NTS Policy Review

Michael Dixon gave a brief outline of the CMA’s position on the NTS Policy Review. Michael summarised the CMA position as follows:

Turn off revenue share on 087X
Cap revenue share on 084X
Put revenue sharing arrangement on 084X under the remit of ICSTIS

Karen Wray asked if the CMA proposed to close down 087X numbers (migrating users to 084X), or harmonise 087X arrangement with those of 084X? Michael said he didn’t have a preference and would suggest what ever was easiest to achieve.

Michael Dixon said he had received feedback from one of his members who recently changed ISP numbers and the feedback he received was that the change over was quite straight forward. Michael Barford said that from the communication providers perspective number migration was usually anything but straight forward and often resulted in significant customer churn. While individual customers may report a positive experience, overall the picture is usually quiet different.

Michael Dixon said the banning of revenue share on 087X would limit the scope for abuse on higher 08XX price points.

Nancy Saunders asked what Michael meant by abuse? Michael highlighted the example of a GPs surgery using 0870 numbers for their main switchboard. Nancy Saunders said she would caution against using the term abuse.

Andy Martin said isn’t the issue over 087X over hyped. Calls to mobile are often significantly more expensive than calls to 087X.

Michael Dixon said that some of his members who didn’t receive a revenue share on 084X services liked using 084X services (for reasons like call routing etc). Michael stated that he believed that all revenue sharing should be brought into ICSTIS control. Nancy Saunders said this would be an enormous burden and might be likened to using a sledge hammer to crack a nut. Karen Wray asked if Michael really meant all revenue share to fall under ICSTIS control (including 1ppm services)? Michael, said it may appear extreme, but he believed it was something that needed to be done.

Karen Wray said that ICSTIS charge a levy on all call minutes under their remit and this would add a significant cost burden on NTS providers and that ICSTIS may not be a practical option for the 08XX range.

Michael Dixon said he accepted that there was a practical trade off over the use of NTS numbers. For example he was currently dealing with an insurance company which uses 0870 numbers for customer support lines. Michael said while he didn’t like paying 0870 call charges when calling them, he did note that this could help them reduce their insurance premiums.

Kath Embleton said many of the problems were around voice services, not dial internet and these services shouldn’t fall under ICSTIS control.

Caroline Wallace said that ICSTIS didn’t have just one way of dealing with regulation. A number of proportionate remedies could be devised for different services. Ofcom’s principle worries centre around the hosting of adult services on 08XX, the deployment of 087X diallers and the 5 – 10ppm revenue share.

Michael Dixon said that customers were aware of the bad press associated with some number ranges. Caroline Wallace said that forcing all revenue sharing organisations to use 09XX wouldn’t be ideal as consumers associate 09XX expensive calls eg £1.50ppm (possibly making consumers reluctant to call low value 09XX chargebands because of perceptions of high cost).

Dirmuid Jennings said that research indicated that customers think NTS is a great deal more expensive than it actually is, so the issue centres on customer perception.

Karen Wray said that good consumer information would go a long way to help inform consumers. Caroline Wallace said she was disappointed that the industry hadn’t offered more in their responses by way of offering to help consumers gain a better understanding of NTS.

Caroline Wallace said she didn’t believe the industry warmly supported improved consumer information (eg. A new code of practice). Karen Wray said that a key theme of the UKCTA response was helping consumers have confidence in NTS and UKCTA hadn’t supported the introduction of a code of practice because there were adequate obligations available today (if enforced) which would greatly assist consumers obtaining information on NTS tariffing without the need to go down the route of establishing a code of practice.

Karen Wray said the UKCTA response was fully supportive on initiatives to assist consumers gaining access to the necessary information to make informed decisions over NTS. Toby Higho said that communication providers already have an incentive to ensure that consumers are aware of NTS tariffs. If consumers don’t know, and the costs are unexpected then they complain.

Dirmuid Jennings said that 07 represented an alternative non-geographic range to NTS and mobile was more expensive.

Toby Higho said that while 087X was in the spot light today, with further pricing pressure, 084X could come into focus over the next few years. Michael Dixon said on the other hand you might get feedback to suggest there wasn’t a problem.

Caroline Wallace said Ofcom were trying to understand the issue to establish if there really was a problem with revenue sharing per se on 08XX. Although Ofcom had received 150 consumer responses, there are many millions of NTS users in the UK. So whether these responses were representative of consumers at large needed to be understood, including whether lack of comment from consumers might be related to low awareness of how 08XX number ranges function in terms of price and scope for revenue sharing.

Karen Wray asked Michael why so many of his members use 08XX NTS numbers instead of geographic numbering?

Michael Dixon said many of members were very happy with the 08XX services they use. Many didn’t have a national network and enjoyed the routing and non-geo nature of the service. Michael said the introduction of 056 numbering may provide some of the same advantages.

Tim Stephens asked if many CMA members know about 0844. Michael said yes, and many have made use of 0844.

Dominic Carney said organisations had a choice and if they opted to use 0870, that was their choice to do so.

Agenda Item (5) – Long and Short on 0844 / 0871

Mike Barford said he was going to issue a SoR to BT seeking to implement the long and short mechanism on 0844 and 0871 (Action #P/2 Closed). Mike will get BT to check the SoR prior to submission and then circulate it to interested parties.

Becky Hewlett asked BT what would happen if operators began invoicing BT for long and short for 0844 and 0871. Colin Annette said that as the charges weren’t in contract, BT wouldn’t be obliged to pay. Becky Hewlett said that some of BT’s billing development could be tied into the INCA / CLI work, however this would delay the introduction of the long and short on 0844/71 and something would need to be established in the interim.

Colin Annette said that BT didn’t want to push it out that far and was open to offers on the date of introduction.

Becky Hewlett asked what BT was proposing to do about the over recovery of the minimum call fee experienced since the introduction of 0844 and 0871. Colin Annette said that BT was under no obligation over past traffic, however it was willing to discuss interim arrangements. Becky Hewlett asked what BT would do with an invoice for this period. Colin Annette said that BT would reject the invoice.

Becky Hewlett asked BT to re-estimate the amount over-recovered on 0844 and 0871 since the introduction of the number ranges.

New Action # R/1: BT to estimate how much BT has over-recovered on the minimum call fee on 0871 and 0844.

Mike Barford asked BT if they would be willing to accept an operator initiated OCCN on long and short for 0844 and 0871? Colin Annette said that assuming that there was an agreement over the effective date and some assumptions for the short duration periods and POLOs, then an OCCN would be acceptable.

Mike Barford said that these assumptions need to be agreed straight away. Mike agreed to set up a call in the next week with interested parties to discuss the issue. Becky Hewlett agreed to circulate a list of short duration periods for individual price points (the POLOs would be the same as 0845, but the short duration periods would change for individual price point). Tim Stephens said he would prefer to use the same short duration period as 0845, but use different POLOs – this would be easier to accommodate on many billing systems. Tim agreed to circulate the short duration POLOs for 0844 and 0871.

Agenda Item (6) – NTS number portability with BT

Mike Barford summarised the issues as follows:

When BT exports an NTS number to a Terminating communications provider, BT’s termination rate is higher than the TCP rate used to bill for the traffic (BT over–recover).

When BT Imports an NTS number from a TCP, BT charges the TCP more in a POLO than the TCP receives for terminating the call. BT therefore over-recover and leave the TCP out of pocket.

Mike says these problems are inherent in the number portability arrangements and they must be changed to create a level playing field to prevent BT from profiting.

Geoff Brighton said that he had received a response from Warwick Izzard on action #Q/2 (Geoff Brighton agreed to forward the question of how to resolve the issue of BT charging APC and the TWIX charges in cases where a calls is exported to a recipient to Warwick Izzard (numbering portability manager at Ofcom) to help identify which forum was best placed to resolve this issue).

Geoff said that he had contacted Warwick who believed the recorded action had been confused. Warwick provided the following explanation:

Warwick confirmed that The recipient would pay APC and transit charges where the donor and recipient do not have direct interconnect i.e. calls to ported numbers are routed via a transit operator between the donor and recipient for which provision had been made in the functional specification for portability.

On addressing the different question on the discrepancies caused by different termination rates, Warwick explained that this had arisen shortly after the implementation of mobile portability in 1999 and had been subject to a determination, long since elapsed, by Oftel. However, an explanatory document surrounding this is at http://www.ofcom.org.uk/static/archive/oftel/ind_info/numbering/mnpdetre.pdf which may be of interest. Warwick explained that from a portability policy perspective the cause of the problem lay in the deployed onward routing or indirect solution for number portability. Ofcom had consulted on alternative solutions eg. a central database/direct routing approach which included an economic assessment suggesting that the costs of such solutions outweighed the likely benefits (see http://www.ofcom.org.uk/consult/condocs/uk_numb_port/). Responses have been received (see link) but we have not yet published a policy statement but expect to do so in March 05.

Mike Barford said that he would prepare a SoR and submit it to BT in an attempt to resolve this issue. Mike said that he had discussed the issue with BT and BT was going to look at the SoR in the context of all traffic, not just NTS.

Agenda Item (7) – Review of remaining outstanding actions

#Q1:	All Focus Group members to send Ofcom NTS volume forecasts (and details of how the methodology used to compile the forecast) by the 27th of January.
	Closed.Geoff confirmed that some NTS FG members had sent in forecast volumes. These were less pessimistic than BT’s forecast volumes.
#Q/2	Geoff Brighton agreed to forward the question of how to resolve the issue of BT charging APC and the TWIX charges in cases where a calls is exported to a recipient to Warwick Izzard (numbering portability manager at Ofcom) to help identify which forum was best placed to resolve this issue. Closed
#P/2	BT to come back to the Focus Group with timescales for implementing the long/short mechanism on 0844 and 0871.
	Closed – Mike Barford has agreed to draft a formal SoR to capture the requirement & BT have indicated that they will accept OCCNs from operators (once the principles have been agreed)

Agenda item (8) – Any Other Business

No issues were raised.

Date of Next Meeting :

Thursday 7th April 2005 – 2.00pm Ofcom – Riverside House, London

Remaining Focus Group meeting dates for 2005:

19th May
30th June
11th August
15th September
27th October
8th December

Summary of New and Outstanding Actions:

# R/1

BT to estimate how much BT has over-recovered on the minimum call fee on 0871 and 0844.