kasg wrote on Jul 24
th, 2018 at 10:02am:
What I have never understood is why the access charge for these numbers is so high, especially from mobile phones. How are these charges justified? What does it actually cost them to connect the number?
The point about the Access Charge is that, for the sake of simplicity, the principle applied to the "unbundled tariff" was that the Service Provider would declare the Service Charge and the telephone service provider the Access Charge.
Given that there is no difference in the actual effort involved, regardless of the level of the Service Charge, there is no justification for there being any difference in the Access Charge. Furthermore, the intention was to keep the arrangements as simple as possible (given that there are two separate charges being paid), so telephone companies are only allowed to have one rate of Access Charge for each customer tariff.
The telephone companies fought against this, pointing out that they commonly have to waive charges for calls to very expensive services, because these are often disputed. They wanted to have a higher rate of Access Charge for the more expensive ranges, but Ofcom refused to yield, demanding simplicity.
The end point is therefore very simple - and somewhat positive from a "SayNo" campaigner's perspective. It is clearly seen that anyone using a 084 or 087 number, with a Service Charge of up to 13p per minute, is joining the world of Premium Rate Services, with Service Charges of up to £3.60 per minute (more for DQ). The pressure on them to justify use of such a number, or abandon it if they cannot, is therefore strengthened by the fact that many, or perhaps all, callers are paying far more in incidental costs than those imposed for use of the service itself.
Those who are use the telephone for normal conversation should simply not be using a Premium Rate number. (All calls to 084/087/09 numbers are charged at a Premium Rate; some 087/09 numbers are used to provide "Premium Rate Services".) Happily, this point is increasingly getting home.
The issue of the rate of Access Charges is therefore only a proper matter for consideration by those who use and provide Premium Rate Services. In other cases the only answer is to remove the use of a number that causes the Access Charge to be incurred.
Ofcom, as it is bound to do initially, left the rate of Access Charge to be determined through "competition". Unfortunately, as is often the case with any charge that does not feature as a major deciding factor when choosing a provider, competing providers have mostly simply matched each other in an upward trend. Apart from a few "outliers", there is no competitive lowering of rates, despite the fact that this is what market theory suggests should happen.
Ofcom remains open to the possibility of intervention, and invited comments on the advisability of a cap in the original consultation. The problem with any cap is that it tends to encourage all to set their rates at the level of the cap. Ofcom must also be sensitive to the "reasonable" demands of the industry in setting the level of a cap, so it would be unlikely to make any significant difference. The issue of an Access Charge cap came up in consideration of the scope of the current multi-phase review of call costs; it is however not to be included.
I hope this explanation is helpful. It could even prompt a discussion; something which this forum has been lacking for a while.