Ofcom targets competition and consumer safeguards for 0845 and 0870 services

http://www.ofcom.org.uk/media_office/latest_news/nr_20041022

[glb]Progress![/glb] :D

But it's a little worrying that part of the consultation document is:


Quote:

Ofcom’s initial view 1.14 In this document, Ofcom is consulting on its initial views on the future of the NTS regime that: Option 2 (extended retail price competition) is Ofcom’s preferred solution as it performs best against Ofcom’s evaluation criteria (which reflect Ofcom's principal duties under the Act); and Option 2 should be combined with a package of appropriate consumer protection measures.

So it looks like they've already made their minds up!

I've just read the page Daniel linked to above.


Quote:

New BT price ceilings: 0845 (4 pence per minute) and 0870 (8 pence per minute)

What good does this do? This doesn't alleviate the key issue which is that it costs more to call companies on NGNs that GNs. It will not reduce the prices we currently pay, it's just a change of name!

Removing the link to BT prices is way overdue. Ofcom are trying to shut the door after the horse has bolted.


Quote:

...the cost of calling an 0870 number can be higher than the cost of a national geographic call.

I don't know about "can", "almost always" sounds more like it.

I would rephrase this as "The cost of calling an 0870 number cannot be lowered to the cost of calling a national geographical call."

The reason for this is because of revenue sharing. Therefore those who are paying the same for a national call and 0870 must be paying in the region of 7p/min daytime!

In my humble opinion this does not represent any progress at all, nor will it. It is quite clear that this complete statement is "Ofcomspeak" for "BT want us to do this so this is what we will do. The language and expression in fact indicates that whoever wrote this piece does not even understand what is actually happening in the present  scenario. However a number of proverbial slips have been made in this statement, and they will find later that they have to wriggle out of those!

They state "...removal of the links between BT 0845/0870 and BT local/national call rates.." They are evidently completely unaware that the previous connection for calls made via BT was already removed by their agreeing to the BT dirty trick of forcing all of their line rental customers to their Option1; for all other telco carriers no connection had ever existed, Ofcom completely failed to control the charges and in practice the rate is stuck at the total Premium costs plus a margin! (e.g. at one stage 18866 were charging 15 p per minute for all 0870 calls at all times.)

They state, there will be ".....an extended role for ICSTIS ....in 0845 and 0870 numbers...." This means in effect that they are actually admitting that these numbers must be Premium numbers, although all along they have tried to claim that they are not, and continue to avoid the issue in this statement! If they are acceptiing at last that these numbers are Premium numbers to be controlled by ICSTIS then what about queueing being banned, why are they not including PNS, 0871 and other revenue sharing numbers, and what about the contravention of the New Telephone Numbering system which firmly stated that all Premium numbers must have the prefix 09 so that consumers can see immediately which numbers are Premium?

They admit that "...NTS termination is a discrete market in which BT has significant power..." In other words they are really admitting that BT has the greatest interest in maintaining this rip-off to avoid free and fair competition, but they clearly intend to let the status quo continue!

Because I may be exceeding the quota of characters I will finish this in my next post.

Ofcom also state "Discounted call packages mean that if consumers want to contact organisations close to their homes they would often be better off making calls to geographic numbers rather than 0845 or 0870 numbers ....." What a load of rubbish! It makes no difference whether or not an organisation is close to your home. Calling a geographic number via the cheapest telco carrier will ALWAYS be cheaper - because there is no PREMIUM to be paid!

They state "Businesses like call centres may be able to obtain some revenues for receiving inbound calls...." Do they live in the same World? We know that anyone can get an NGN  and receive revenue. Those with high call volumes on 0870s are getting as much as almost 4.5 p per minute! That is why the cost of these calls cannot be competitive. They fail to face this issue completely and actually claim later that after their proposed "changes" telco carriers will be able to compete in 0845 and 0870. This is just complete rubbish. Even if as we know they are planning as always to follow the BT line they ought to at least get someone who can put forward an accurate statement of the facts as they are at present!!! Quite PATHETIC in MHO.

No matter what you think of Ofcom, please complete the official Ofcom consultation form (on the web site) and send it to Ofcom with your comments concerning 0870 and 0845 numbers.  This is the only way that Ofcom will consider your views and count it as part of the consultation process.  The number of adverse comments is important.

I agree with KK. You write to Ofcom and they just state what they're doing and don't acknowledge what you've put.

I think they need making aware of the situation in university accommodation with 0870. The system in Oxford university (see this thread) must be the worst. You dial an 0870 and when that answers you dial the extension. You get charged to hear ringing, even if no-one answers! It won't suprise me if this is the next scam 0870 numbers will be used for. It's worse than normal queuing which Ofcom say isn't a problem!

Having read the summary version of the 'Options for the Future' consultation, the penny has dropped with me.

I sum the issues up as follows:

• If the current 084x and 087x numbers were officially in the premium rate category (i.e. followed the Numbering Scheme), there wouldn't be a problem.
  
• Number translation services should be just that; tools for businesses to routes calls tidily from one number. They should cost the price of a normal phone call only.
  
• A premium rate number is a number translation service and costs a normal phone call plus a premium passed to the called party.

Why does Ofcom have to write 150 odd pages on the problem when the above sums it up?

As has been suggested elsewhere, why doesn't Ofcom introduce a number range for a NTS where the SP pays for the services they require?

Note: The consultation document 'Options for the Future' is available as a 'Plain English' 14 page booklet here. The full consultation document is here.

I think I'd prefer options 3 or 4, which would remove the revenue-sharing on 08 numbers altogether, forcing companies to either stop trying to earn revenue from calls, or to move them to 09 numbers where it is clear to customers that they are premium rate.

Ofcom want option 2, which would set the cost of 0845 and 0870 at up to 4p and 8p per minute. But isn't that approximately the cost of daytime calls already? This could mean that the calls could be more expensive in the evening, which is the only time I'd normally call them! Also, if there were various different prices for 0845 and 0870 calls, this will just confuse consumers further.

I don't believe this would create any extra competition in the market for 08 calls at all - as Ofcom point out later in the document, the revenue sharing makes it impossible for originating operators to offer any discount.

The only "advantage" would be that people would no longer be able to describe the calls as local or national rate.

I fail to see how option 2 is an improvement over the status quo!

As for the other possible measures mentioned, I think ICSTIS should regulate all revenue-sharing numbers. I also think that free call-cost advice should be played before calls are connected, but that this can be overridden by dialling a prefix (e.g. for internet calls, or for numbers you dial regularly) - just as 141 cancels caller identification.

Option 3 or 4 would not ban revenue-sharing on 08, it would just remove the 'regulated scope' for it.

And option 2 would only cap prices at 4p/8p for BT customers.

The option which would satisfy most users of this forum is the one which is dismissed briefly in the consultation document (i.e. banning revenue-sharing on 08).

By the way, why are Ofcom publishing some consultation responses even before the consultation has closed?  And why only those from individuals -- can't see one from BT for example.

If they were to ban RS on 08 numbers, would they create 09 PRNs lower than 10p? They talk about PAYG internet services and the fact that they need so-called 'micro-payments'. They would have to do something to keep ISPs in service as it's Ofcom's job.

wrote on Dec 21^st, 2004 at 2:56pm:

If they were to ban RS on 08 numbers, would they create 09 PRNs lower than 10p? They talk about PAYG internet services and the fact that they need so-called 'micro-payments'. They would have to do something to keep ISPs in service as it's Ofcom's job.

I don't think there'd be any real difficulty in creating 09 numbers at lower price points, although ideally they would extend ICSTIS's remit to cover calls below 10p per minute.  For ISP's, these could then use new 09 ranges, or Ofcom could reserve a special 08 range (0844, say) for them.

It's not just ISPs.  What about services that let you call abroad for the cost of an 0844/0870/0871 call.

Some customers opt to ban premium rate calls, whether it's from a landline or mobile.

Perhaps only use revenue sharing, if the revenue is creating a service, rather than subsidising a call centre.

That way, ISPs can carry on as normal, and we still get cheap calls abroad.

Option 2 just introduces different rates within 0845 and 0870 number ranges. Isn't this just confusing, much like 0844/0871 now? Most SPs opt for the highest rate within these ranges because of consumer ignorance.

Option 3 where revenue payments are banned (see 4.37) ECS* SPs could move to 0844/0871 but Ofcom would need to consider whether to prevent non-ECS from going to 0844/0871. Non-ECS could move to 09 if they wish (see 4.38). Why allow them to go to 09 and not 0844/0871?

Do Ofcom not want to admit that 0844/0871 are simply low premium rate?

Interestingly, 4.42 says that there is no lower limit for 09 numbers (for BT customers). Therefore, it would appear that currently TCPs and SPs prefer to use 0844/0871, presumably due to the lack of regulation and rules applied to them compared to 09 numbers.

Banning RS on all numbers apart from 09 should be implemented in the interests of consumers. ECS services should have their own range within 09. In 4.43 they say that consumers are more aware of the pricing of 080 and 09 numbers. If the numbering plan had been implemented better from day one, then maybe consumers wouldn't have this issue. The fact that 080 is free and, in contrast, 0871 is so expensive is so confusing.

With freephone numbers, how about making them just that? All across the board mobile phone providers should have to make 080 free to call.

Also, 0871 are fixed rates all the time, 0844 are a bit of both. Why not distinguish by using different prefixes? More Ofcom-non-commonsense.

Option 4 where RS is removed on all 08 numbers is the only way forward. The question is, if they were do take this, how would these numbers be charged to the caller? The Ofcom document doesn't make this clear. However, 4.46 seems to sum up all the issues:

Quote:

4.46  Under Option 4, regulatory support for revenue sharing would be removed on all 084 and 087 numbers. The rationale for this more radical approach can be summarised as follows: • 0845 and 0870 calls were originally designed to enable consumers to access a range of value added services at standard local and national call rates • the concept of standard charges for local and national calls is of diminishing relevance, and the stage has already been reached at which only a small proportion of consumers pay these charges for 0845 or 0870 calls in practice; • the case for NTS call categories with retail prices linked to geographic call rates can, therefore, no longer be sustained; and • whilst there is comparatively good consumer awareness of the likely cost of calling the 080 freephone and 09 premium number ranges, there is low consumer awareness of the tariff meaning of the 084 and 087 number ranges, so it is arguably better for consumers to have all revenue sharing confined to the reasonably well-recognised 09 number range.

Why have Ofcom put option 5 in there; remove all RS on all 08 and 09 numbers? Do they have to make their document so many pages long? Now they're just being ridiculous and going to the other extreme!

I repeat what I said in my post above. The issues consumers have is that in a nutshell 084/087 have become premium rate. Ofcom can sort that by calling them that, or even better, moving 084/087 to the 09 range.

*Note:
ECS are Electronic Communication Services, eg PAYG internet and services reselling international calls.

Non-ECS are call centres and other voice services.

Why do Ofcom think that competition is everything?

Option 2: introducing price competition. For competition in a shop, the price can be varied at any time by changing the label on the shelf. There is no way for service providers to change their rates once they've chosen their number. I thought that the point of a NGN is that you should be able to keep it for life.

Businesses are naturally not interested in changing numbers every 5 minutes. Pay as you go internet is the only example of such services which started out on 0870, then 0845 and now some on 0844.

As for pricing information, how much does the price of a call concern people? Is it the same as browsing through the shops?

The only way they can have true competition is to be able to change rates whilst remaining on the same number. It appears that this is impractical, at least at the moment. If it does materialise, then there is the obvious issue of informing the caller of the cost.

Ofcourse, as we said previously, this could all be sorted by moving them to 09 numbers. This would sort out those who need the revenue and those who do not.

Ofcom has divided services up into ECS (Electronic Communication Services) and non-ECS. Would it not be better to define them as those with which the customer already has a contract/policy (eg. banks) or is ringing to purchase and those with which they do not (eg. information lines). It is the former group who are, at present, ripping us all off.

Another thought for yer all:

It seems that Ofcom favour Option 2, which is to introduce retail price competition into 0845 and 0870. In English that means different 0845 and 0870 numbers will be charged at a variety of different rates. They are trying to make them work just like 0844 and 0871.

Do you think that it was simply a bad mistake creating 0844 and 0871 so close to 0845 and 0870, respectively?

Or was it a cunning plan which would eventually lead to them changing 0845/0870's 'model' to that of 0844/0871, as is the case now if they adopt option 2? Ofcourse, had 0844 and 0871 type numbers been put in the 09 range where they belong, they would not be able to change 0845 and 0870 as they propose to do so now.

All 087X and 0845 numbers, indeed all “08” numbers except the free ones, should be charged and treated by all in exactly the same way as “01” and “02” numbers.  Revenue sharing should be prohibited in the 08 category.  All existing providers could keep their 08 numbers, but they would receive no revenue share. Telephone users would know exactly how a call was to be charged and treated.  

Any organisation who could not live with that, would need to provide themselves with a suitable and appropriately priced “09” number; a category which was set up to deal with revenue sharing.  This would also apply to internet dial up services, they would use a very low rate 09 number, no different to their present  “08” rate.

The above solution is simple and obvious; any other solution decided by Ofcom would be untenable and would raise the question as to whether Ofcom should continue to be financed by the taxpayer, as the telecom regulator, in its present form.

Totally agree, kk, hope all members (and others!) have sent in responses to the Ofcom consultation!!
Happy New Year to everbody.

That is exactly the position which the template response on  http://www.freeweb.telco4u.net./rachelf takes and provides for you to respond easily to both of these consultations.  You have only just over 3 days left to submit your responses. Please don't forget to send them.

One more point to bear in mind:

So if Ofcom get their way and implement option 2 which is to have all different pricing rates for different 0845/0870 numbers, how do they propose all the companies using the same block will come to an agreement?

For example, if numbers were to be broken into blocks of 1,000 for charging purposes, it would mean the following could all have different rates:
0845 123 4xxx
0845 123 5xxx
0845 123 6xxx

So all services starting, for example, 0845 123 4xxx would have to assume the same call rate. Does this mean that lots of companies will be forced to change their number anyway, simply to select one charged at a different rate? ::)

Why, in the hi-tech 21st century are companies forced to change telephone number for any reason? This seems to be a principal point which Ofcom's competition relies on.

Why don't Ofcom fix the consumer 'awareness' issues with 0844/0871 numbers before creating a whole load more? That would allow us to see whether consumers will understand it all.

Hang on... that would mean 0844/71 sps could 'compete' but 0845/70 could not. So why didn't Oftel just implement this framework with 0845/70 instead of creating 0844/71?  ::)

It seems as though the regulator keeps changing its mind about the direction it should be steering the ship. The end result, we have no chance of reaching our destination.

Copies of Consultation responses (inc BT's) are now posted on the Ofcom web site.