loddon wrote on Dec 27^th, 2010 at 7:10pm:

Ofcom's proposal is the unbundling of charges imposed by telephone companies (those which originate calls) and Service Providers (the recipients of calls). At the present time, a single charge is published for calling any given number from any given originating provider.

Service Providers will then be able to give accurate pricing information: "Calls cost 5 pence per minute plus your telephone provider's network charge".

nicholas43 wrote on Dec 29^th, 2010 at 8:40pm:

The cost of any call is set by the telephone provider that the caller subscribes to (that is, the originating provider). In order for the call to be connected, the originating provider must pay the receiver's telephone company (the terminating provider) a fee known as a termination charge.

The call charge therefore made up of the termination charge plus whatever mark-up the originating provider wishes apply. In an ideal world, the mark-up on a 084 call would be the same as on 01/02/03 calls and thus, the premium or subsidy to the called party would be transparent.

Dave wrote on Dec 29^th, 2010 at 9:16pm:

Perhaps "very simple" would be better than "ideal". Those who benefit from inclusive packages covering "Geographic Rate" calls are perhaps pleased that telephone charges are not as simple as some may wish them to be.

Trying to picture what's going off by simply considering how one's call charges are split between the parties leads to much misunderstanding. In the days when there was a single telecommunications network operator (BT or GPO) then that may well have been helpful.

Today's telecommunications system works by operators (communications providers or CPs) interconnecting with one another. A CP functions as an OCP (originating CP) or TCP (terminating CP), depending on whether its customer is the caller or receiver, respectively.

OCPs act in the interests of their customers (the callers) and TCPs act in the interest of their customers (the receivers).

OCPs charge the customers (callers) a retail price for calls and then pay OCPs the termination charge. Retail price is therefore set by with OCPs knowing that their outgoing is the termination charge.

TCPs receive a higher termination payment for 084 numbers than 01/02/03 ones, and what service(s) this goes on is up to the call recipient (the user of the number). Where the recipient is paid revenue directly, this is merely cash-back for that service(s).

Thus, revenue payments are just an effect and turning them down has no effect on the subsidy taken from one's callers. Indeed, anyone who operates a 084 number and declines any offer of such revenue is permitting its provider to keep it. That would be like being offered a discount on a particular product or service and then turning it down.

It is therefore the selection of a particular 08 number by the user that is the deciding factor in the benefit or subsidy that it derives from callers.

Thus, OCPs don't voluntarily (for want of a better word) share some of the call charges with the company being called (either directly or indirectly). If a single OCP doesn't wish to pay, then its customer won't be able to call the respective 08 numbers.


BT call charges for 084x (and 0871/2 and 09) numbers are regulated such that its retail prices are near enough equal to the amount it must hand over to TCPs. That is, it can only put a tiny mark-up on these calls and part of Ofcom's proposal is the removal of this regulation.

Excoriator wrote on Dec 30^th, 2010 at 10:50am:


A man after my own heart, Excoriator.   I agree with your comments about this paper as well as the basic principle that charging callers for using 0843/4/5 and 0870/1/2 is basically a scam.   Callers are not the customers of the phone companies, the organisations using 08 are, and it is those organisations who should pay for the special facilities and services provided by the 08 number services (NGC services as Ofcom call them).

loddon wrote on Dec 30^th, 2010 at 11:11am:

It has long been established that Premium Rate Services can be provided, e.g. on 090, 118 and 070 numbers, given that the cost of calling is advised. This principle is embedded in the Communications Act 2003. It is however fair to argue that this facility should be withdrawn and that any necessary change to legislation be introduced by a government that stands firmly opposed to extending regulation of commercial activity.

Ofcom now believes that the way in which the cost is advised must be simplified and that this revised approach be extended to cover 084 and 087 numbers, under the title "Business Rate" and with a cap on the level of the "Service Charge".

The key proposal is that the "Service Charge" and "Access Charge" elements be unbundled. The former is to be advised by the service provider, remaining constant for each number regardless of how one calls. The latter is to be advised by the telephone company, to apply to all Business / Premium Rate numbers called under the terms of the relevant telephone service contract. Presently, the aggregated BT charge is all that can be reliably advised by service providers.

Ofcom has to secure the agreement and compliance of all stakeholders as it seeks to further the interests of consumers of telecoms services, including users of Premium and Business Rate numbers, and has to ensure and demonstrate that it is acting within the bounds of its limited regulatory powers. This is why the arguments have to be made at length. I concur with the view that the document is poorly presented, however I am more concerned with the outcome, than the fact that Ofcom falls well short of what we may wish to be.

There is no reason why responses that totally reject the underlying principles of the proposals could not be submitted. I sense however that the views being expressed go much deeper, addressing the whole nature of Ofcom's role and the legislation under which it operates.


For myself, I disagree with the views quoted above. I believe that it is perfectly proper for a caller to pay for services delivered by telephone through their telephone bill, if they are properly advised of the cost. Whether the caller is prepared to pay the price in return for whatever service is delivered is a matter between them and the person called. (I do not believe that this is necessarily related to the benefits of any particular technology, nor that any third party could make the necessary determination about what is a fair price for a particular service.)

I see Ofcom as seeking to improve the situation with "Premium Rate" numbers and to create such a situation where it has not previously existed, with "Business Rate" numbers. I wish to do all I can to see that this comes about effectively and properly. The published proposals are the only ones under consideration at present; I see a serious prospect of them delivering some good effect and am keen to make this as strong as possible. I accept that some wish to reject them out of hand.


It is for those who believe it is improper to use the revenue sharing mechanism as a means of causing those who use a service to contribute towards, or pay in full for, the cost of providing it to argue their case. I have always seen the issue as being about transparency of pricing, rather than the fundamental principle of charging for services through the telephone bill. I firmly believe that if the additional cost of calling certain numbers were made clear, then in cases where a charge was improper or could not be justified it would have to be withdrawn. I believe that if the Ofcom proposals were enacted then public services and most customer service lines would have to migrate to Geographic Rate numbers, so that the cost of these services would have to be met by taxpayers and customers in general.

I accept that there are issues with achieving transparency, however I believe that these are worth addressing and that the Ofcom proposals provide a sound basis for discussion of how this may be achieved. It may be helpful to our discussion if we could distinguish between those who argue that price transparency could not remedy the situation with NGCS and those who wish to discuss the Ofcom proposals.

Many thanks, SCV, for the only understandable explanation I've seen anywhere.

In principle, I think micropayments via telephone bills are a bad idea, because it is totally opaque who is paying whom how much to do what. Moreover, the user has no clear contract with the service provider, and no clear means of redress when the service screws up.

I take the point that, for example, conference calling via an 0844 number is a useful service. However, I think it would be better if access was via a geographic number, and users had to have an account with the service provider which they settled by other means. I even think that dupes who want to waste their money voting for X-factor etc should call a geographic number, and be transparently billed by the TV company. The same goes, as another example, for enquiries about visa applications, which often seem to be on an extremely expensive 09 number.

In practice (unless someone here knows better), Ofcom doesn't have the power to ban micropayments. So, in my opinion, constructive responses need to be focussed on making the regime as transparent as possible. I like the idea of forcing originating providers to state clearly the huge charge they make for calls to NGNs, compared to the marginal price of zero they all offer for calls to geographic numbers. I'm still muddled about forcing service providers to state the termination price, because it leaves opaque the split between the service provider and the provider of the NGN.

Suppose everyone calling (for example) an 0845 number is told, every time, something on the lines "We [BT] charge you 11p plus 2p a minute to call this number, and the outfit you are calling charges 5p a minute on top of that [which they have to share with the provider of the 0845 number?]". Consumer rage might lead more banks etc to use geographic numbers.

Does Ofcom envisage that the originating and terminating providers' charges must be explicitly itemised on bills? Can't see this mentioned in the consultation documents, but life is too short to read all of the documents!

I will put in a response to this consultation listing all the numerous previous occasions when OfCoN promised action and then did nothing including most notoriously over 070 PNS numbers where they specifically committed to changing them to 06 numbers to stop the scammers making people think they were mobile numbers only to change their mind when the most important scammers no doubt leaned on a couple of good friends on the OfCoN board about all that lovely lolly they were about to lose.

However I will not expect any significant changes to be made as a result of this consultation that will stop any of the scams or make it more obvious what you are being charged to make a call.

I'm sure that FLEXTEL and their similarly slime like commercial allies are limbering up even now to run their previous arguments that it is far too difficult to reprogram burglar alarms and personal medical emergency buttons to these new simplified number ranges and/or that call price announcements for non standard priced numbers cannot be allowed because it will affect their automated dialling equipment.

So hence the current morally bankrupt status quo will remain in place after we have all worn ourselves our responding to yet another sham of an OfCoN consultation.  The only possible circumstance in which this will not take place and actual change will occur is if this consultation has actually become about due to pressure on OfCoN to hold it in the first place by ministers with the current coalition government.