Own-initiative investigation about MKD Holdings Ltd regarding silent calls

31 October 2005

Complainant: Ofcom own-initiative investigation
Complaint against: MKD Holdings Ltd ("MKD Holdings")
Case opened: 16 December 2004
Case closed: 29 April 2005
Issue: Persistent misuse of electronic communications network(s) or service(s)
Relevant instrument: Sections 128 to 131 of the Communications Act 2003

Update note - 31 October 2005

Monthly reports from MKD Holdings to Ofcom show compliance with Ofcom’s notification. MKD Holdings has also provided written undertakings committing it to complying with the new requirements announced by Ofcom on 31 October 2005.

End of update note

On 16 December 2004, Ofcom opened an investigation to determine whether MKD Holdings has persistently misused an electronic communications network or electronic communications service in accordance with section 128 of the Communications Act 2003 ('the Act').

Ofcom has now completed its investigation into the level of silent calls generated by MKD Holdings , and has concluded that MKD Holdings has engaged in persistent misuse of an electronic communications network or electronic communications services in a way that causes annoyance, inconvenience or anxiety to consumers. Such action is in contravention of section 128(5)(a) and section 128(6)(a) of the Act.

Ofcom has therefore issued a notification to MKD Holdings under section 128 of the Act. The notification sets out its failure to comply with section 128(5)(a) and section 128(6)(a) of the Act and gives MKD Holdings until 31 May 2005 to ensure that:

the Drop Rate over any 24 hour period shall not exceed 5% for each outgoing number operated by MKD Holdings for telemarketing purposes.

The notification also requires MKD Holdings to provide Ofcom with evidence of compliance with the above requirement for a three month period with the first monthly written evidence to be provided to Ofcom by 4 July 2005. MKD Holdings is required to continue providing this information to Ofcom on a monthly basis until 5 September 2005.

If MKD Holdings does not comply with the section 128 notification within the specifed periods, Ofcom may issue an enforcement notification under section 129 of the Act and/or may impose a penalty on MKD Holdings under section 130 of the Act.

Representations concerning this notification

MKD Holdings has until 31 May 2005 to make representations to Ofcom about the matters set out in the notification (please see related items)

Background

Ofcom opened this investigation in response to data submitted by MKD Holdings as part of their written commitments following a previous investigation by Ofcom.

The previous investigation was opened on 5 January 2004 to determine whether MKD Holdings' conduct amounted to a persistent misuse of an electronic communications network or service under sections 128 to 131 of the Act.

On the basis of the information received during that investigation, Ofcom concluded that the level of silent calls generated by MKD Holdings was unreasonably high. Ofcom therefore obtained written commitments from MKD Holdings, which included a commitment that the daily number of silent calls for each phone number used by MKD Holdings would not exceed 5% of the total number of daily live calls. Ofcom also required MKD Holdings to provide three reports over the following months so that Ofcom could review MKD Holdings performance. On the basis of these commitments, Ofcom closed that investigation on 30 April 2004 .

Ofcom reviewed MKD Holdings' final report, which covered its performance for the period September and October 2004. The report showed that while the number of silent calls generated by MKD overall was below 5% of the total number of daily live calls, its performance across individual numbers was variable, with silent calls in excess of 5% on certain phone numbers on certain days.

Case Leader: Tanya Rofani (e-mail: Tanya.Rofani@ofcom.org.uk)
Case Reference: CW/00803/11/04

Text published when the case was opened

Own-initiative investigation about MKD Holdings Ltd regarding silent calls

Complainant: Ofcom own-initiative investigation
Complaint against: MKD Holdings Ltd ("MKD Holdings")
Case opened: 16 December 2004
Issue: Persistent misuse of electronic communications network(s) or service(s)
Relevant instrument: Sections 128 to 131 of the Communications Act 2003

On 5 January 2004, Ofcom opened a formal investigation to determine whether MKD Holdings' conduct amounted to a persistent misuse of an electronic communications network or service under sections 128 to 131 of the Communications Act 2003.

On the basis of the information received, Ofcom concluded that the level of silent calls generated by MKD Holdings was unreasonably high. Given this unacceptable level of silent calls, Ofcom obtained written commitments from MKD Holdings which included a commitment that the daily number of silent calls for each phone number used by MKD Holdings would not exceed 5% of the total number of daily live calls. Ofcom also required MKD Holdings to provide three reports over the following months so that Ofcom could review MKD Holdings performance. On the basis of these commitments, Ofcom closed that investigation on 30 April 2004.

Ofcom has now reviewed MKD Holdings' final report, which covers its performance for the period September and October 2004. The report shows that while the number of silent calls generated by MKD overall is below 5% of the total number of daily live calls, its performance across individual numbers is variable, with silent calls in excess of 5% on certain phone numbers on certain days.

Ofcom has therefore decided to open an investigation to determine whether MKD Holdings has persistently misused an electronic communications network or electronic communications service in accordance with section 128 of the Communications Act 2003.

Sections 128 to 131 of the Communications Act 2003 gives Ofcom the power to take action against persons or companies who persistently misuse an electronic communications network(s) or service(s) in any way that causes or is likely to cause unnecessary annoyance, inconvenience or anxiety.

Where Ofcom finds that a person or company is in breach of the above provisions, it may issue an enforcement notification to the misuser. In addition, Ofcom may also impose a financial penalty on the misuser.

Case Leader: Tanya Rofani (e-mail: Tanya.Rofani@ofcom.org.uk)
Case Reference: CW/00803/11/04