Response Deadline: 6th December 2005

A more user friendly key points guide and information to assist in compiling a response will appear soon.

The summary below is mostly taken from Ofcom's website here. The full version is available to download (acrobat reader format) here.

Summary

Section 1

Ofcom’s (the Office of Communications) principal duty, in carrying out its functions, is to further the interest of citizens in relation to communications matters and to further the interests of consumers in relevant markets, where appropriate, by promoting competition. Effective competition delivers choice and lower prices to consumers as well as opportunities for new services and providers. However, consumers may need protection from adverse consequences of competition if they arise.

This consultation sets out Ofcom’s proposals for Premium Rate Services (PRS) because Ofcom identified a number of problems with the current regulation of Premium Rate Services (‘PRS’), and our report made a number of detailed proposals which, it was anticipated, would significantly reduce the scope for consumer detriment and restore consumer confidence in the PRS industry. Ofcom came to the conclusion that consumer detriment arising from PRS was considerable, and consumers would be better able to protect themselves if they were well informed.

Ofcom therefore recommended that Originating Communications Providers (‘OCPs’), assisted by Terminating Communications Providers (‘TCPs’), should take on more responsibility for handling general PRS enquiries and for dealing with number check queries. Ofcom also recommended that this should be achieved by amending the obligations on OCPs to produce a code of practice which would include the provision of practical information relating to the nature of PRS, and their costs and availability to consumers, e.g. information regarding call barring facilities, number checking etc.

The second matter to which this consultation relates is Number Translation Services (‘NTS’). NTS calls are calls to numbers identified in the National Telephone Numbering Plan (‘the Plan’) as Special Service numbers (broadly, numbers that start with 08 or 09). Ofcom has also taken this opportunity to further obligations on networks relating to the Transparency and Publication of Information in so far as those obligations relate to NTS calls. This follows further research into consumer awareness of the prices of calls to 08 NTS numbers arising out of comments received to Ofcom’s first NTS consultation, entitled “NTS: Options for the Future”, issued on 22 October 2004 . The results of this research are discussed in more detail in Section 2 of this consultation and revealed very low levels of consumer knowledge about the prices charged by OCPs for calls to 084x and 087x numbers. This is exacerbated by the lack of visibility of NTS call prices in OCPs published price lists.

The modification Ofcom proposes will require fixed and mobile OCPs to modify their codes of practice to ensure NTS call prices are given greater prominence in published price lists and in promotional material for different service packages, so that they are not hidden. The information provided should include clear statements of whether or not discount schemes apply to NTS calls.

Consultation

Ofcom is inviting written views and comments by 5pm on 6 December 2005. Ofcom will give careful consideration to all comments received during the consultation period, and in light of the comments received may give effect to the proposals set out in this summary. Ofcom expects to publish the Notification and explanatory statement in the spring of 2006.

Subject to the outcome of the consultation, Ofcom proposes that the requirement upon OCPs who originate calls to NTS and PRS to establish, maintain and comply, under set guidelines, with codes of practice on the provision of information and dealing with enquiries and to comply with the provisions of those codes, will take effect one month from the date of publication of the Notification and explanatory statement.

Section 2

Premium Rate Services (PRS) and the current regulatory regime

PRS offer some form of content, product or service via fixed and mobile telecoms lines. These may be accessed as conventional voice services or using SMS text, fixed-line telephones, PCs (eg via e-mails, the internet and bulletin boards), mobile phone or interactive digital TV. Services include TV voting lines, competitions, scratchcards, adult entertainment, chat lines, business information services, technical helplines, mobile phone ringtones and game downloads, horoscopes and interactive TV games.

UK-based PRS telephone numbers are typically prefixed by ‘09’ although similar, and in some cases identical, services are increasingly being offered on numbers outside this range, including those prefixed by ‘08’. In the case of mobile services, PRS can be accessed via short codes (usually starting with an ‘8’ or ‘6’) or via the phone’s screen menu without the need to dial a number. Directory enquiry services (on 118xxx) also fall within the definition of premium rate services for the purposes of the Act.

These services vary in cost typically between 10 pence per minute (ppm) or per call up to £1.50 per minute or per call (for BT customers - other landline providers and mobiles may charge more). In most cases the bulk of the revenue from calls to such services goes to the SPs (Service Providers which provide the number) who are responsible for the content, product or services provided or who act as resellers or aggregators on behalf of a number of such providers. The SPs are responsible for compliance with the bulk of the obligations imposed by the code of practice. The remainder of the revenue is shared by: the consumer’s telephone company (known as OCP), which receives a small fee for ‘origination’ of the phone call; and the telephone company that contracts with the SP and ‘terminates’ the call on behalf of the SP through the provision of network facilities (the TCP).

The regulatory framework and PRS

The relevant statutory provisions governing the regulation of PRS are set out under sections 120 to 124 of the Telecommunications Act. The provisions provide Ofcom with the power to set conditions for the purpose of regulating the provision, content, promotion and marketing of PRS that bind the persons to whom they are applied. Any condition Ofcom applies must be objectively justifiable, not unduly discriminatory, proportionate and transparent. It must also comply with the consultation and notification requirements.

The role of Ofcom

Ofcom’s role in the premium rate regulatory regime is to provide statutory support to the work of ICSTIS for PRS. Ofcom has the power to set conditions for the purpose of regulating the provision, content, promotion and marketing of ‘Controlled’ PRS that bind the persons to whom they are applied.

Ofcom’s powers, as defined under the PRS Condition, only relate to those services which are defined as ‘Controlled’ PRS. Controlled PRS are defined more narrowly than PRS, and means PRS where the charge or rate for the call is more than 10 pence per minute other than Chatline Services which are automatically included. For the purpose of this summary, references to PRS will mean Controlled PRS only.

The role of ICSTIS

ICSTIS is responsible for the preparation and enforcement of its code of practice. The current version (Tenth Edition, as amended) of the code of practice was approved for the purposes of sections 120 and 121, and is available on the ICSTIS website do download in acrobat format here. The code of practice applies to all PRS which are accessed by a UK consumer or are provided by SPs in the UK.

The code of practice is primarily targeted at the actions of the SPs and it is their responsibility to ensure that the content and promotion of all their PRS (whether produced by themselves or by their content and information providers) comply with all relevant provisions of the code of practice.

ICSTIS has a range of sanctions that it can impose on a SP that breaches the code of practice according to the seriousness with which it regards the breach. These range from obtaining assurances about future behaviour and instructing refunds to be offered to imposing fines, barring access to services and prohibiting certain 'named' individuals from operating services for a set period.

Although their responsibilities are more limited the code of practice also places a number of general requirements and specific obligations on TCPs to assist in the enforcement of ICSTIS’ decisions by carrying out directions given by ICSTIS. These may include directions to cease dealing with particular businesses or individuals, to block access to certain numbers or services and to withhold payments to SPs in respect of particular services. Where there is evidence of non-compliance with an ICSTIS direction by a TCP, this will represent a potential breach of the PRS Condition, and ICSTIS will notify Ofcom that it considers that the relevant provider has contravened the terms of the condition.

The NTS regime - what are NTS?

NTS calls are calls to numbers identified in the Plan as Special Service numbers (broadly, numbers that start with 08 or 09). In addition, NTS includes calls to the legacy 0500 Freephone numbers, which, whilst still in use, are not listed in the Plan as they are no longer available for new allocations. Calls to 0844 04 numbers for Surftime internet access services and calls to 0808 99 numbers for FRIACO are not included. For the purposes of this document, references to NTS will mean calls to 08 numbers only.

NTS (and PRS) numbers are examples of non-geographic numbers in that the number dialled does not relate to a specific geographic location, but instead relates to a particular service. At a technical level, the NTS number dialled by a caller is ‘translated’ by the network to a geographic number to deliver the call to its destination.

Services offered using NTS numbers are similar to PRS except that prices range from free to caller up to a maximum of 10ppm (from a BT landline - can be more from other landline providers and upto 40ppm from mobile networks). Types of services include information services, some technical helplines, access to telephone banking, sales and customer service lines and dial-up pay-as-you-go Internet services.

Due to the lower prices charged for NTS calls generally the scope for consumer detriment from making long calls and from fraudulent activity is generally considered less of an issue but we do recognise that consumers can nevertheless accrue high phone bills over a billing cycle where frequent use of lower priced services is involved.

In common with PRS, NTS calls being non-geographic, offer significant advantages to providers of services especially those who operate from multiple locations. NTS intelligent routing facilities combined with increasingly sophisticated Interactive Voice Response (IVR) systems enable calls to be switched between locations on demand, i.e. by the nature of the service required or by time of day or when routes to individual destinations become congested. Calls can be re-routed automatically so as to maintain levels of service to callers. All of these facilities can be operated on geographical (those beginning 01 or 02) numbers providing the company has a compatible telephone system.

The costs of using these terminating services can also be offset by the share of the revenue from calls that some SPs receive. These incentives have prompted numbers of companies to switch from using geographic to NTS numbers for contact by consumers. The increased use of NTS numbers together with the ever decreasing link to geographic call prices has impacted on the transparency of prices for these call types.

Consultation Questions

Question 1: Do you consider that these proposals are reasonable and are likely to be effective in improving the information available to citizens and consumers about Premium Rate Services (PRS)?

Question 2: Do you consider that these proposals are reasonable and are likely to be effective in improving the information available to citizens and consumers about NTS (Number Translation Services - those numbers beginning 08x/09x) call prices?

Question 3: Do you agree that there should be mandatory guidelines for codes of practice in dealing with consumer enquiries about Premium Rate Services (09x numbers) and Number Translation Services (084x/087x numbers)?

Question 4: Do you believe there are any other options Ofcom should have considered?

Question 5: Do you agree that landline and mobile network providers’ codes of practice should be available on request and free of charge to their customers?

Question 6: Do you agree that the proposed modifications to the code of practice and Dispute Resolution and associated guidelines are sufficient to address the issues relating to NTS (084x/087x numbers) and PRS (09x numbers), described in this consultation?

Questionnaire Replies

The consulation was published on the 28th September 2005 and the deadline for responses is 6th December 2005. You can download the consultation coversheet with the questions here (Word format), or here (RTF - RichText format).

Questionnaires can can be e-mailed to Geoff.Brighton@ofcom.org.uk, or alternatively, you can post or fax to:-

Geoff Brighton
Improved Consumer Information about NTS & PRS Consultation
Competition and Markets
Fourth Floor
Ofcom
Riverside House
2A Southwark Bridge Road
London
SE1 9HA.

Fax: 020 7783 4103. Mark fax for the attention of Geoff Brighton, Improved Consumer Information about NTS & PRS Consultation.

Ofcom do not usually acknowledge receipt of your comments. Please tell them if you want any part of your comments to be confidential. Please also tell them if they can publish your comments when they receive them or whether you'd like them to wait until the consultation period has ended. It will help Ofcom if you use the consultation cover sheet when you send them your response.