I've emailed money@guardian.co.uk as follows:

"Any chance of Guardian Money exposing Ofcom's latest muddle? Ofcom is failing, for the umpteenth time, to curb the 0870 ripoff. The Competition Appeals Commission has just issued a judgment that roundly condemns Ofcom's bungling over disputes between BT and the mobile phone companies. This judgement should have been widely reported, but has presumably seemed too technical for the daily press.

http://www.catribunal.org.uk/documents/Judgment_TRDs_200508.pdf

Paragraph 128, page 57, on the brown eggs analogy, is an enticing foretaste, but you need to get one of your best reporters to read the whole thing!

It follows, as Ofcom admit (in their usual inpenetrable code) here:

http://www.ofcom.org.uk/bulletins/comp_bull_index/other/disputeref/

that the hugely complicated solution to the 0870 scam that Ofcom is currently 'consulting' on, won't work. See paragraphs 2.29 - 2.31 of the current 'consultation' document:

http://www.ofcom.org.uk/consult/condocs/0870calls/0870condoc.pdf

Ofcom will be unable to hold down the price of 0870 calls to be the same as calls to honest 01 02 and 03 numbers, because the Competition Appeals Commission would overrule them again, if they tried.

The UK's telephone numbers are heading towards a complete shambles.

Calls from a landline to honest 01 02 and 03 numbers are now so cheap, that anyone who shops around can get deals offering all such calls (including the flat charge misleadingly referred to as 'line rental') for around £15 to £20 a month. Once you have such a deal, or if you are calling from a mobile phone, 'free' 0800 numbers are pointless for the consumer, and just make money for the telcos. Calls to 0870 are, and because of Ofcom's bungling will remain, expensive: typically 8 pence per minute, much more from mobiles. 0845 is still relatively cheap from a BT landline, but pointless if you have an 'all honest calls' deal, and expensive from a mobile. Meanwhile a host of other rip-off numbers are gaining ground: 0844, 0871, 0872, 0873, and the out-and-out swindles on 09. No mere human can possibly keep track of what it costs to call these, and what cut the outfit you are calling is taking."

Obviously I don't really understand all this, so it would be good if people who do understand it also contact Money Guardian - or other suitable Organs.

nicholas43, this is a very good point and one which means that 0870 being reduced to 01/02 rate may never come off (not soon anyway), even if BT and other telephone companies want to do so.

Contrary to what you might have read, the consultation itself isn't about forcing any telco to reduce its rates. It's more about providing conditions where they could do so.

The Competition Appeals Tribunal (CAT) judgement is about how much BT pays the mobile networks for calls from BT to mobiles. BT would like to reduce this and figures where decided, but the mobile networks didn't like them, so went to the CAT. The Judgement is that the way in which Ofcom decided on the figures was wrong.

The same issue surrounds the telephone companies operating the 0870 numbers. The amount BT pays to 0870 telcos is currently regulated and the proposals are to drop this and thus allow this termination payment to be reduced.


I will post a fuller explanation of how it works, the issues and the proposals soon.

SilentCallsVictim wrote on Jun 8^th, 2008 at 2:22am:


SCV,

I am interested to see that you finally appear to be beginning to acknowledge the legitimacy of some of the conclusion that other longstanding members of this forum, in particular myself and dorf, have previously reached over the motivations of the telecoms regulator.

The main problem in my view lies with how Ofcom have originally tried to tackle issue of premium priced calls by doing so only through call price announcements and only for calls to a particular number range (0870) charging a higher price than the minimum allowed to that range.

Had Ofcom instead tried to tackle the issue of NGN pricing quite differently at the outset by rounding up all phone numbers that involve any revenue share at all on to a code that makes this fact clear (either 09 or as a compromise the unused 06 for lower priced NGNs at 10p per minute and below) and then clearly educated the public on the meaning of phone number prefix codes and that only calls to numbers beginning 01,02 or 03 were normal priced landline calls then the issue could have been addressed without falling foul of the Competition Appeals Tribunal.  Especially since the current efforts of the 084/7 industry to make their numbers seems like normal rate phone numbers are actually blatantly anti competitive.

Unfortunately Ofcom instead came up only with the always absurd remedy of intervening on 0870 call prices whilst not intervening on 0844, 0845 and 0871 that raised precisely the same issues of lack of price transparency and hidden revenue share.  This was then always going to leave Ofcom open to claims of illogical, irrational and discriminatory intervention.  Whereas had Ofcom ended the illogical and meaningless separation of NTS and PRS calls in to two different categories and clearly rounded them all up in to one camp where the consumer was paying extra for the call with proper publicity of those number ranges (no need for call price announcements if it was as simple as all numbers beginnin 06 and 09) then the problem would have been satisfactorily addressed.

In part Ofcom's actions reflect incompetence but having dealt with OFTEL and Ofcom over a number of years I think allegations of them in effect cosying up to the telecoms industry and being heavily in the pocket of that industry in fact form a far larger part of the problem.

Despite my mistrust of Ofcom as an organisation I would not advocate that anyone with an interest in the matter does not respond to the consultation.  However based on past experience I would not encourage anyone who does respond to the consultation to expect Ofcom to take any notice at all of any views that they express (or at least not if they are responding as a private individual rather than as a representative of a major commercial entity in the telecoms field).  Nonetheless a response should be made by all private individuals with an interest in the matter to once again put on the record the extent to which Ofcom then takes absolutely no notice of what the public thinks of their proposals.  This may then one day become relevant when Ofcom's activities and utter ineffectiveness as a regulator are investigated by either the Parliamentary Ombudsman and/or the EU Commission.  Unfortunately by then Ofcom's current chief gravy train merchants will have moved on elsewhere with their peerages and knighthood and will no doubt avoiding any form of consequence or sanction for so utterly failing to fulfil the remit they were given by Parliament under the terms of Section 3 (i) of the Communications Act 2003.

NGMsGhost wrote on Jun 10^th, 2008 at 4:45pm:

In the past when this has been done it has linked to some pages on the site giving advice on how to respond. Discussion on these consultations has been small, as you can see from the length of this thread.

A agree with encouraging people to respond as we have done in the past.

dorf wrote on Jun 10^th, 2008 at 11:03pm:


dorf,

I do not believe any great effort in terms of time or number of words should be invested in responding to these consultations.

However I do think we should respond to point out that all their NTS/PRS consultations are a sham and cannot be taken seriously and that whatever we the public say Ofcom will ignore us.  As they have to publish the responses on their website they won't like having lots of responses saying those kinds of things about Ofcom.

I agree it would be pointless to respond in any great detail to their proposals.  The key point in responding is to point out all the other consultations in which they and ICSTIS have previously ignored the public and that they still fail to achieve even their most basic duties like ensuring that the cost of 0845 and 0870 calls are accurately described on phone bills even though these are governed by their own General Conditions rather by ASA Advertising Rules.

I think it would be a mistake not to respond at all as they will then say everyone must be happy with their proposals.

dorf wrote on Jun 11^th, 2008 at 10:34am:

I believe we have a modestly-sized consensus on this issue. I make essentially the same argument in my draft response, although I offer detail for the benefit of those who may read it when it is published.

Just one point. The term "citizen-consumer" is an Ofcom construction that improperly conflates its two distinct and potentially conflicting duties, as detailed in Section 3 of the Communications Act. Subsections 3 (7-9) highlight the fact that 3 (1) (a and b) are separate.

Ofcom's duty to further the interests of consumers applies to all consumers of telecommunications services. This includes public and private sector organisations who benefit from using revenue sharing numbers and call centres who make Silent Calls. Only those who offer defined "premium rate services" move over to join the telcos in the role of provider rather than consumer, and thereby fall subject to Ofcom's regulatory powers. Ofcom has no specific duty to further the interests of consumers of services provided using revenue sharing numbers, nor any specific powers to use to do so.

Ofcom is responsible for having fudged the nature of its duties, partly because this gives it a get-out when challenged for not discharging them, by protesting that its powers are inadequate. This is one of the many ways in which it fails to discharge its actual statutory duties.

This is not worth a big debate and fall-out, when we are generally agreed. I would however suggest that use of the term "citizen-consumer" actually gives unnecessary comfort to Ofcom.

(If we need to settle differences on this point, this may best be done by PM.)

nicholas43 wrote on Jun 12^th, 2008 at 11:56am:

Bravo - this is the key point.

The base charge for calls to a particular network is a matter between the caller and their chosen supplier, not the person they are calling. Unless Ofcom fixed all these prices, there is no way that someone advertising a number may know what they may be when the number is called.

The uplift used to provide income or subsidy to the person called is the key point on which transparency is required in the context of this issue. If they are content for some of this to be retained by their telephone service provider, then that is a matter for them. The value must be expressed inclusive of VAT, as this is part of the cost incurred by the caller.

Transparency of the base prices is surely a matter beyond dispute. If some operators impose additional charges, over their base price, for calling revenue sharing numbers then this too must be declared. The same principle also applies where, e.g. in the case of BT and 0845 currently, there is a discount off the base price at some times.

Transparency and simplicity are sadly often contradictory.