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31|05|05

NTS Focus Group - 7 April 2005 - 2pm 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
Caroline Chandan-Roels Ofcom
Anne McCardle MCI
Pilar Guerrero Easynet
Chris Pace IV Response
Tim Stephens C&W
Sandra Reid Telewest
Andrew Wileman Telewest
Helen Morgan Energis
Becky Hewlett Energis
Kath Embleton BT
Colin Annette BT
Rob Day BT
Colin Rochester BT
Nancy Saunders Kingston
Richard Anderson COLT
Sarajane Amey NTL
Fabienne Dischamps Band-X
Mike Barford Tiscali

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

Clive Hillier outlined the details of the qualitative consumer and SME research Ofcom plan to undertake over the next few weeks. The work is due to start in mid-April (finishing in mid-May). Details of the work included:

Tim Stephens asked if the mystery shopping activity would be conducted at all times of day. Clive Hillier said it would be as objective as possible with calls made at all time bands.

Clive Hillier said that Ofcom’s research had so far indicated that 25% of adult services in red-top newspaper advertisements used 087 numbers. Clive also said that a formal information request had been issued to terminating providers and that a follow-up information request would be sent out to NTS users (expected at the end of April).

Clive said that due to the extent of the planned research the NTS policy statement was now likely to be issued in July / August 2005.

Clive Hillier said that as part of the NTS Call termination Market Review, Ofcom was likely to gather additional information from the 10 or 12 largest TCPs. This would involve the collection of 2004 data (the previous request was for 2002 and 2003).

Ofcom asked the Focus Group if this request could be made informally.

Nancy Saunders requested that the request be made informally at first.

Caroline Wallace said that she appreciated that it was sometimes easier to get resources within companies if the request was made formally. Michael Barford said that a formal request often helps to focus resources.

Ofcom agreed to publish the request informally at first. The deadline for responding to this request would be sometime in May.

Ofcom said that it intended to publish the market share of BT and the second largest Terminating Communication Provider and would write to those concerned to get confirmation that this wouldn’t involve the release of confidential information.

Colin Annette asked if the 2nd largest player needed to be named. Ofcom said it would consider this issue.

Gareth Davis said that NTS issues topped the list of topic raised with Ofcom’s contact centre. NTS issues also featured heavily in the letters sent to Ofcom by Members of Parliament.

Nancy Saunders asked if it was in Ofcom’s remit to make a decision about the commercial use of NTS numbers.

Gareth Davies said that there was that argument, but Ofcom had a remit to look into the issues. Nancy said that it was one matter for Ofcom to look into it, but quite another to intervene. Caroline Wallace said that NTS itself was an intervention and that Consumers and MPs believe NTS is within Ofcom’s remit.

Chris Pace said that you can put the same technology on a geographic number, however consumers would have to pay somewhere.

Tim Stephens asked if Ofcom were considering making a judgement on the types of NTS where revenue sharing would be legitimate.

Gareth Davies said that Ofcom was collecting information to measure the scale of any issues before making any decisions.

Nancy Saunders asked if Ofcom had spoken to the call centre trade association.

Gareth Davies said Ofcom has in the past, but would probably do so again.

Gareth Davies said that Ofcom had received a big consumer response to the NTS Policy consultation, but it wasn’t going off to ban revenue sharing. The work undertaken by Ofcom would try to look into:

  1. How much consumer harm is there today?
  2. What solutions are available and how effective would they be?
  3. How much collateral damage would any of the solutions cause?

Following the consultation on the original 5 options, Ofcom's initial thoughts were that Option 3 could be discarded (seen as too difficult to implement) and option 5 might be too extreme to implement in the first instance. Option 1 wasn’t really going to take the issue forward.

Option 4 was still being seriously considered along with Option 2 (although there was no real support for this option from respondents). Ofcom was therefore considering a further 4 options:

UKCTA’s Proposal:

Caroline Wallace said that timescales involved in the retail market review were very long. Mike Barford asked what other mechanism could be used to agree a price for 0845 / 0870. Caroline Wallace said that other mechanism that might be possible would be the provisions for 0844 and 0871 services. Mike Barford said that an upper and lower limit could be set (very close together). Caroline Wallace said that could be seen as price fixing.

Chris Pace said that much of the problem with NTS charging related to the mobile operators who charged up to 300% mark-up on calling NTS numbers.

BT’s proposal:

Colin Annette said the pre-call announcement only related to instances where operators don’t charge the standard retail price (eg. The mobile freephone announcements) and was seen by BT as an optional add-on to their proposal rather than an integral part.

Ofcom’s Variant X:

Ofcom’s Variant Y:

Nancy Saunders asked if Ofcom had a preferred option. Gareth Davies said that they didn’t have a preferred option, and were awaiting the outcome of the research. If there was found to be harm, then they would lean more towards Option 4, if no harm was identified then an outcome closer to option 2 would probably be more likely.

Gareth Davis said he would welcome views, either in writing or in a meeting. Ofcom would also welcome evidence of the likely damage done by restricting or removing revenue sharing.

Mike Barford asked if Ofcom planned to consult on these options. Gareth Davies said that no formal consultation was planned, however Ofcom would be consulting with stakeholders over the next few months on the options being considered. As the policy statement is planned for July / August, there was still plenty of opportunity for substantive comments.

Chris Pace asked how long after the statement would the option be implemented.

Caroline Wallace said that it would depend on the Option chosen, but an appropriate amount of time would be allowed (a change to the numbering plan would also result in a further statutory consultation).

Mike Barford asked if Ofcom were considering any other options, other than those presented.

Gareth Davies said that only those options presented were being considered. Caroline Wallace added that if a new option emerges, Ofcom would engage with the industry and Ofcom were interested in industry ideas as none of the current options really stand out.

Andrew Wileman said that because Option 2 was identified in the original consultation as the most likely outcome, Telewest tailored its response to that outcome. Now that Option 2 is no longer preferred, Telewest may have made different comments.

Caroline Wallace said that Ofcom intended to publish details of its market research and were always happy to receive comments.

Becky Hewlett asked if Ofcom could provide more detail around the options than information contained within the slides.

Mike Barford said the industry was likely to have lots of questions on the options. Colin Annette said that a workshop on options might be a good idea.

New Action: # S/1: Ofcom agreed to organise and host an NTS Option workshop for FG members (Post Meeting Update: Workshop set up for the afternoon of Tuesday the 10th of May @ Ofcom).

Helen Morgan asked if interim measures were still being considered (to aid the transition from the status quo to the new regime).

Caroline Wallace said that if an interim measure was required then it would be investigated, however many of the implementation difficulties were still present with an interim solution.

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

Geoff Brighton said that the NTS Retail Uplift Charge Control and PRS bad debt surcharge consultation document had been published and was available on Ofcom's website at http://www.ofcom.org.uk/consult/condocs/NTSfin/ccp/ntsruprs.pdf

Colin Annette asked if the Retail Uplift would be influenced by the volume forecast work being conducted as part of the Policy Review elsewhere in Ofcom. Geoff Brighton said that the RU work was independent of the Policy Review, but if there was a material change then Ofcom was prepared to consider it.

Agenda Item (4) – BT’s proposed PPP Billing Solution (BT)

Colin Rochester outlined the alternative PPP model being developed in conjunction with the industry. Details will be circulated within two weeks via BT Commercial Managers. Kim Allan within BT is dealing with the project development.

Model: incoming traffic with CLI in BT range is likely to have started life as IA, CPS or NTS - for which BT has charged PPP origination. Therefore such incoming calls which attract an EBC charge (geographic BT terminating or transit) should have the PPP element of this charge suppressed.

This will suppress a second PPP charge for IA, CPS, translated NTS traffic where the CP initially sent the call by BT is charged PPP and then sends the call back to or via BT which would have incurred a second PPP charge.

For calls resulting in more than two legs the PPP charge will be suppressed for the calls when re-entering BT, i.e. odd-numbered legs from leg 3 onwards, assuming CLI is not changed.

As CLI in BT range does not necessarily mean a BT line due to number portability, a more accurate measure would check for ported numbers in the CLI.

To simplify matters prefixed traffic is ignored, as this is likely to mean a third operator in the loop and it is not clear who should have the PPP charge suppressed.

To simplify matters it is assumed that it is always the second PPP charge which is suppressed; this means for non-0844/0871 NTS transit it is the range holder who benefits rather than the IA/CPS operator.

Colin said that the methodology would result in BT paying out ~£5.0M in PPP charges, when number portability is considered this is reduced by £0.5M.

Tim Stephens asked if the ‘C’ leg of NTS call would result in a PPP charge. Colin said the methodology would ensure that only one PPP would be charged.

Agenda Item (5) – Update on INCA/CLI implementation (BT)

Colin Rochester said that a new release of the INCA/CLI guide had been released (31st March ’04 – previously circulated to the NTS FG distribution list).

New EBC test data would be circulated by July. Transit stats containing unrealistic data would be issued by July, with realistic data issued in September.

Agenda Item (6) – Long and Short on 0844 / 0871

Colin Annette said that Mike Barford and Becky Hewlett had met with BT after the last NTS FG. A methodology had been agreed where a weighted average of long/short rates would be used (deriving a blended interconnect rate). This could be developed into full long and short in the long term if desired.

The effective date on the OCCNs (which BT is expected to issue in the near future) will be pre-Christmas ’04.

If operators are uncomfortable with blended rates then they should notify BT within 2 weeks.

Agenda Item (7) – Review of remaining outstanding actions

# R/1: BT to estimate how much BT has over-recovered on the minimum call fee on 0871 and 0844.
  Closed: see agenda item 6- BT to issue retrospective OCCN.

Agenda item (8) – Any Other Business

Mike Barford said that following discussions at the Focus Group over interaccounting for NTS number portability, Mike had issued BT with a draft SoR. He was awaiting feedback from BT before formally submitting the SoR. Mike confirmed that the SoR would be submitted before the next FG. Colin Scott agreed to put the item on the next FG agenda.

New Action # S/2: Colin Scott agreed to put NGNP interaccounting on the next FG agenda.

Caroline Wallace said that she was leaving Ofcom within the month to take up a new post and that this would be her last NTS Focus Group. On behalf of the Focus Group, Colin Scott thanked Caroline for her work on NTS over the past two years and wished her well for the future.

Date of Next Meeting

Thursday 19th May 2005 – 2.00pm
Ofcom – Riverside House, London

Remaining Focus Group meeting dates for 2005:

Summary of New and Outstanding Actions:

# S/1: Ofcom agreed to organise and host an NTS Option workshop for FG members
# S/2:

Colin Scott agreed to put NGNP interaccounting on the next FG agenda

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