BT complaint against Unicom regarding conduct relating to the transfer of customers between communications providers

05 April 2007

Complainant: British Telecommunications plc (“BT”)
Complaint against: Universal Utilities Limited, trading as Unicom (“Unicom”)
Case opened: 1 September 2006
Case closed: 29 December 2006
Issue: Whether Unicom, in carrying out certain activities after receipt of a notification of the transfer of one or more line(s) of its customers to another communications provider, is/was in breach of either General Condition 1.2 of the General Conditions of Entitlement and/or section 128 of the Communications Act 2003.
Relevant instrument: General Condition 1.2 of the General Conditions of Entitlement governing the use of certain information provided in the context of Network Access arrangements and/or section 128 of the Communications Act 2003 regarding persistent misuse.

Update note: 5 April 2007

As set out below, Ofcom issued a notification to Unicom under section 94 of the Communications Act 2003 on 29 December 2006 and closed this investigation. This ‘update note’ provides a summary of developments since the investigation was closed.

Ofcom’s investigation considered two main issues:

First, BT’s original complaint raised concerns that Unicom was acting inappropriately in canceling orders from customers who wished to transfer provision of their telephone service away from Unicom to BT. In particular, BT suggested that after receiving notification from BT that lines were to be transferred, Unicom was using the ‘Cancel Other’ functionality to stop the transfer without obtaining the customer’s permission.

As set out previously, Ofcom's investigation concluded that BT's allegations regarding misuse of the ‘Cancel Other’ functionality were not supported by the evidence gathered during the investigation.

The second issue considered during this investigation was whether Unicom’s activities following receipt of transfer notifications from BT amounted to a breach of General Condition 1.2.

Ofcom has previously stated that ‘losing’ communications providers would be in breach of General Condition 1.2 if they used information obtained from BT during the transfer process to engage in marketing activity to try to retain the customer. The information received by the losing provider during the process to transfer lines is supplied for the purposes of enabling the transfer to take place and for ensuring that certain consumer protection measures are carried out. In this respect, losing providers must send ‘notification of transfer’ letters to customers which do not contain any marketing material. Furthermore, Ofcom has recently set out its views that any telephone contact made with the customer during the transfer process must also be strictly limited to verifying that the customer agrees to the transfer and, again, not contain any marketing content (see summary at http://www.ofcom.org.uk/bulletins/comp_bull_index/comp_bull_ccases/closed_all/cw_909/).

As set out in December, Ofcom considered that there were reasonable grounds for believing that Unicom was contravening General Condition 1.2 when contacting customers, both by telephone and in writing, in relation to a request to transfer to another communications provider. Ofcom therefore issued a notification to Unicom.

However, following receipt of this notification, Unicom made further submissions and representations to Ofcom highlighting the procedures it had put in place, both before and after receipt of the December notification, to ensure its notification of transfer letters and any calls made to customers were compliant with General Condition 1.2.

Ofcom has considered these representations and discussed some outstanding areas of concern with Unicom. In light of these discussions, Unicom has made further changes to its letters and to its scripts for calls made during the transfer process. Unicom has also amended its training manuals to address identified concerns and has committed to conduct routine analysis of compliance by its agents making calls during the transfer window.

Ofcom considers that the processes Unicom now has in place address the outstanding concerns about compliance with General Condition 1.2. As such, Ofcom does not intend to rely upon, or take any further enforcement action in relation to, the notification issued to Unicom on 29 December 2006. In the light of this Ofcom will not be publishing a non-confidential version of the notification as previously advised.

End of update note

Complainant: British Telecommunications plc (“BT”)
Complaint against: Universal Utilities Limited, trading as Unicom (“Unicom”)
Case opened: 1 September 2006
Case closed: 29 December 2006
Issue: Whether Unicom, in carrying out certain activities after receipt of a notification of the transfer of one or more line(s) of its customers to another communications provider, is in breach of either General Condition 1.2 of the General Conditions of Entitlement and/or section 128 of the Communications Act 2003.
Relevant instrument: General Condition 1.2 of the General Conditions of Entitlement governing the use of certain information provided in the context of Network Access arrangements and/or section 128 of the Communications Act 2003 regarding persistent misuse.

Ofcom's investigation concluded that BT's allegations regarding misuse of Cancel Other are not supported by the evidence gathered during the investigation. In relation to the use of information during the transfer process, Ofcom considers that there are reasonable grounds for believing that Unicom has contravened General Condition 1.2 when contacting customers, both by telephone and in writing, in relation to a request to transfer to another communications provider.

Ofcom issued a notification to Unicom on 29 December 2006.

Ofcom has closed this investigation. A non-confidential version of the notification is currently being prepared and will be published shortly.

Case Leader: Ruth Gibson ( e-mail:ruth.gibson @ofcom.org.uk)
Case Reference: CW/00915/08/06

Text published when the case was opened

BT complaint against Unicom regarding conduct relating to the transfer of customers between communications providers 

Complainant: British Telecommunications plc (“BT”)
Complaint against: Universal Utilities Limited, trading as Unicom (“Unicom”)
Case opened: 1 September 2006
Issue: Whether Unicom, in carrying out certain activities after receipt of a notification of the transfer of one or more line(s) of its customers to another communications provider, is in breach of either General Condition 1.2 of the General Conditions of Entitlement and/or section 128 of the Communications Act 2003.
Relevant instrument: General Condition 1.2 of the General Conditions of Entitlement governing the use of certain information provided in the context of Network Access arrangements and/or section 128 of the Communications Act 2003 regarding persistent misuse.

BT has alleged that Unicom is in breach of General Condition 1.2 by using information provided to Unicom by BT during the transfer process for purposes other than the purpose(s) for which it was provided. In particular, it is alleged that activities carried out by Unicom following receipt of such information include calling the customer and improperly using the ‘cancel other' process to prevent the customer switching to a different communications provider.

General Condition 1.2 requires that communications providers must only use information provided by another Communications Provider in the context of Network Access negotiations solely for the purpose for which it was supplied. General Condition 1.2 also requires that such information shall not be passed to any other party (for example any other department, subsidiary or partner) for whom it could provide a competitive advantage.

Section 128 of the Communications Act 2003 prohibits the persistent misuse of electronic communications networks or services.

Ofcom has opened an investigation into these allegations and will consider, during the course of the investigation, whether Unicom has contravened, or is contravening, GC1.2 and/or section 128 of the Communications Act 2003.

Case Leader: Ruth Gibson ( e-mail:ruth.gibson@ofcom.org.uk)
Case Reference: CW/00915/08/06