Ofcom have published another consultation proposing to deregulate BT retail phone cost controls.

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With providers putting prices up over the last couple of years, what reassurances do we have that they won't do so in the future? Is Ofcom really living in a dream world? 

It says "average call prices have fallen by more than 50% since 1996." Perhaps that statement should have a '*' by it and a little note saying "Excludes calls to 0845 and 0870 numbers." 

It also fails to mention changes in line rental and its associated services. For those that were on BT Standard (see here), their line rental has effectively risen by 50%.

So these changes could take effect within less than six months, but 0870 will have to wait at least another 18 months. Normally I would end such a statement with a shocked face (), but it has gone beyond this. 

As gdh82 says, Ofcom are a total disgrace and apparently stand for everything that is wrong in this country. I have absolutely no faith in the telecommunications industry and regard it as just a rip-off. I would much sooner return to having only BT to supply a service, as at least you knew where you stood.

Now we have a whole plethora of outlets who consider their marketing a way of fooling the masses. Engineering a telecommunications network comes way down the list of priorities.

Free is a complete load of rubbish. I don't expect a business to give me anything for free, not least a telecoms company. I have just today received a 1 month's free support from Laptops Direct. To get support I must phone an 0870 number. 

My MP has thus far decided to ignore me with respect to the Early Day Motion put before Parliament on 0870 numbers used in government departments.

It seems to me that the concerns regarding deregulation are more to do with line rental than call costs.  Surely BT would not wish to increase there calls costs because they would lose customers to their competitors ?  Whereas further increases in their line rental (especially if hidden behind some call cost reductions) would be of concern, especially for people with a low usage/low income who would feel the increase disproportionately.

Given this then Option 3 – "a control only on BT’s basic price for line rental" sounds better than Ofcom's preferred Option 4.

Could I ask for some feedback on this ?

bbb_uk wrote on May 25^th, 2006 at 6:22pm:


Thanks bbb_uk.  Your post has highlighted to me the numerous ways in which BT can increase their prices other than the more obvious ppm of a call.

As you point out, the above increases have taken place under regulation - how does that work - are increases agreed with Ofcom first ?  Whereas if the matter was deregulated, would that mean in future  BT could increase prices as they see fit (without seeking Ofcom's agreeement) ?

So in terms of Ofcom's proposed options - would you like to see option 2 approved - continue with the existing controls ?

Finally you mentioned the BT Light User Scheme being retained.  I imagine this scheme has its positives but is it right that this is one of the few price plans which distinguishes call costs on a local and national basis ? (whereas for many others there's no longer a distinction anymore)  For me the local/national distinction  seems a relic of the past and in my response to the renumbering consultation I've called on Ofcom to abandon it so to help address the on-going misinformation regarding national rate and lo-call etc.

At just under 50 pages, this is the shortest consultation we've seen in ages. Thanks to bbb_uk for that list of price increases. I have yet to read the document, but I will be including a timeline of shameful increases that have been allowed.

I was astounded to find out about the removal of BT Standard a couple of years ago. I have been further disgusted at the way in which this privatised company has been allowed to use covert 'micro' increases in price, leaving me paying 50% more for a basic telephone line than I did two years ago. 

My draft response:

Removal of BT price regulation in the retail telephone market is ideal, but only if true competition exists and that can only exist when true price transparency exists.

Price competition does exist for telephone calls to “01" and “02" UK telephone number and to calls to locations outside the UK.  The call cost to any UK location using companies such as www.18185.co.uk,   www.call18866.co.uk and www.call1899.com are free, save for a small connection fee of 3 or 4p.    Call to Australia, Brazil, Italy and USA (to name but a few) cost  1p per minute or less, using the above alternative companies.

The above, contrasts sharply with the cost of non-geographic revenue sharing numbers used in the UK.  - that is, numbers beginning with “084x, 087x,  070 or 09".

Although full price transparency does not exist with the  “09" range of  numbers, consumers are aware that calls beginning with “09" are more expensive than normal and are not included in various call packages (like BT’s option 2 or 3) and are NOT less expensive if an alternative supplier is used. No real competition exists in the “09" range of telephone numbers, but at least the fact that they are different in cost (and treated differently) to a normal call is widely understood.

Again price transparency does not exist with numbers beginning with “084x, 087x and 070" and they are also not included in call packages etc.. In the above number ranges, lack of competition is more damaging to the consumer, as consumers are often deceived as to the true nature and  cost of calls to those numbers. Few consumers realise that the numbers are revenue sharing. No significant competition exists, or is possible by the very nature and structure of  084x, 087x and 070 numbers; telecom companies push the use of the numbers as they can make hidden profits from their use.

Price transparency would exist if all revenue sharing number, without exception, had to be located within a suitable sub-range of “09".  The “09" range can hold 1,000 million number combination. The sub-ranges could be prices from 1p to 150p/minute. A three second price announcement, would be ideal.

If Ofcom does approve deregulation of prices, ( it usually does what it likes, notwithstanding the results of consultations) then it should, in a short time scale, put forward measures to implement true price transparency and competition in revenue sharing numbers.  Ofcom should also seek undertakings from BT that they will put in place measures that aid true price transparency and not make misleading statements to help organisations deceive consumers as to the true nature and cost of calls to 087x and 084x numbers.

Ofcom’s chosen option is based on assurances from BT, but before reliance can be place upon those assurances, Ofcom should ask itself if BT can be trusted to act in the spirit and the letter of any arrangement. All BT’s domestic customers are placed on either Option 1, 2 or 3 - Option 1 is the default option.   Local and National calls cost the same for 99.9% of customers.  BT retain the almost fictional destination between local and national call costs, and calls it “the standard call tariff”. Only the comparative small number of customers on BT’s special “low user scheme” pay the so called standard rate.

We have the undesirable situation in which BT’s “standard tariff” is not the standard tariff at all, and for all practical purposes all 01/02 calls coast 3p/min or less. The existence of the largely fictional “standard tariff”,  which makes a distinction between local and national calls, allows organisations to claim that “0845 is only a local rate call”.  When I recently complained about the call cost of my local HSBC branch converting to “0845", it required quite a complex letter of complaint. In reply, HSBC was able to say that “0845" was a “local rate call” and implied that they were doing me a favour in changing from a geographical number to “0845".  The same is true for the pernicious “0844" numbers which telecom companies are increasingly persuading organisations to use, under the guise of “it’s only a local call” or is generally perceived as such.  It is ironic, that it cost me 400% more to telephone my local HSBC branch on 0845, located 15 minutes away, than to address my enquiry to the New York branch of HSBC.

It is scandalous and indefeasible that a designated category exists (09) for the use of “above normal cost” telephone calls, but is sidestepped by the use of clandestine revenue sharing in other number ranges, especially 087x and 084x..

Ofcom should not accept BT’s assurances until BT behaves in an open and honest way.   This could start with BT making an unequivocal statement that all UK calls (01/02) from landline cost the same, regardless of location, and that the distinction between “local” and “national” rate calls has been abolished.  This statement, conspicuously repeated on all bills and web sites, until it is firmly lodged, could even make BT more money, from an increased use of the telephone by consumers calling distant parts of the UK.

bbb_uk wrote on May 28^th, 2006 at 4:39pm:

bbb_uk, I understand you have had a cable line in the past. Have there been price rises on cable and what's the most basic package?

Has anyone actually looked at how the questions are worded?

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Now is it just me or is is that not one of those questions asks which of the four options you think is better?

The first question asks if there are other forms of regulation apart from those mentioned (I assume) and the second question do you agree with Ofcoms preferred option 4.

Don't Ofcom make you laugh?