Modifications to the Ofcom Metering and Billing Direction 2008

General Condition 11 (GC11) of the General Conditions of Entitlement requires providers of Publicly Available Telephone Services (PATS) with a relevant annual turnover in excess of 40m, to seek and obtain approval of their Total Metering and Billing System (TMBS) from an Approval Body (AB).

The TMBS is currently approved when it complies with either the requirements of the Oftel Metering and Billing Direction 2003 (Oftel Direction) or the Ofcom Metering and Billing Direction 2008 (Ofcom Direction). From 1 January 2011, the Ofcom Direction will be the only applicable Direction.

The Ofcom Direction includes billing accuracy standards that apply to interworking arrangements between communications providers (CPs), ie where wholesale contracts exist between two or more CPs. Under the Ofcom Direction, in these circumstances overall responsibility until now has rested with the CP that holds the contract with the end-user to ensure that the overall service meets the accuracy standards for the TMBS .

Since 2008 ABs and CPs have been working to meet the requirements of the Ofcom Direction. In doing this they have found practical difficulties in applying the rules on interworking. In particular, they have found that one party in the TMBS may use up most or all of the permitted errors (the tolerance level) under the Ofcom Direction, which has the effect of not allowing any scope for error by the other parties in the TMBS. In addition, for commercial reasons, some wholesale providers will not release information on their tolerance level to the retail provider, making it impossible for the retail provider to assess the overall tolerance level. Also, where a wholesale provider supplies more than one CP, the wholesale provider will often be unable practically to provide accurate error rate information on calls passed to a particular CP.

Members of the industry, including the ABs, put forward a proposal that the existing tolerances within the Ofcom Direction should relate individually to each CP and their sub-contractors involved in the TMBS.

We agreed that the interworking arrangements in the Ofcom Direction could not be practically applied (for the reasons summarised in paragraph 1.4) and on 17 September 2010 we consulted on a proposed amendment to the Ofcom Direction so that, in the case of interworking arrangements, the tolerance level applies separately to all CPs within the TMBS rather than just to the CP with the end user contract (the Consultation). We explained that we do not believe that this will materially change the level of protection for consumers that the Ofcom Direction provides.

Having reviewed responses, we have decided to proceed with the proposed change.

In the Consultation we proposed that approvals made under the Oftel Direction should remain valid for a further 6 months until 30 June 2011 with regard to interworking arrangements. In light of responses received, which pointed out that interworking was inextricably linked to other sections of the Ofcom Direction, we have concluded that the extension of validity of approvals under the Oftel Direction to 30 June 2011 should apply to the whole of that direction.