FCS UPDATE Non-geo calls in review
FCS CEO Jacqui Brookes provides an update on progress towards major changes concerning non-geographic call services which will affect all CPs in the value chain.
Jacqui Brookes I
n May 2010, FCS reported that Ofcom was planning a major review of non-geographic call services covering all non-geo ranges, including 03, 08, 09 and 118. The consultation was ultimately published at the end of 2010 following informal engagement with a range of stakeholders. More structured work on Ofcom’s proposals has been continuing with a view to publication of a second consultation in December. The 2010 consultation was based on a clear perception by Ofcom that the current system does not work for either consumers or industry. Ofcom noted that customers are confused about what the various non geographic number ranges mean and how much calls cost.
As a result, consumers make fewer calls and sometimes go to great lengths to contact organisations in other ways. The cost of calling these numbers is generally significantly more from mobiles and the impact of the higher cost of mobile calls is particularly pronounced for people on lower incomes who
are more likely to live in mobile-only households, and use their mobile to call essential services on these numbers. From an industry perspective, Ofcom’s view is that many of the original assumptions about the NTS regime are out of date and the model is effectively ‘broken’. Consequently, Ofcom has been subject to a series of disputes and CAT referrals on termination and interconnection rates in recent years.
In the initial consultation Ofcom set out proposals to address these problems in two main areas: Firstly, by simplifying numbering ranges. The aim is to make non-geographic numbers and their prices more intuitive. Specific proposals include making calls to 0800 Freephone numbers free from mobiles as well as landlines, encouraging the use of 03 (which is charged like 01/02 numbers and usually included in call bundles), possibly closing the 0870 range and aligning the 0844 and 0845 ranges. Secondly, by standardising call charges, either by ‘unbundling’ the access and service charges or
by imposing maximum prices for each number range which would apply to all phone companies. Ofcom’s preferred option is to unbundle, to split the charges paid to the phone company and the charges paid to the service provider so that consumers can see exactly how much they are paying, and to whom.
Consequently, when call costs are advertised, for example on a TV show, it will state clearly the amount charged to call the service (which would be added to the amount charged by the phone company). For example, ‘This call will cost £1.50 per minute plus your phone company’s charge’.
Overall, while FCS supports Ofcom’s preferred option as the best strategy, it will be complex to implement and needs to be developed carefully to ensure fair competition throughout the distribution chain. Since publication of its consultation, Ofcom has been working with industry on the costs and implications of the changes to non geo calls services. Three working groups have been set up to look at the issues raised by the consultation: • Commercial: Looking at a range of issues including AIT and fraud, access charge, charge bands and the service charge. • Technical: Looking
at questions including retail billing, number porting, service charges and Freephone origination charges. • Communications: Developing ideas as to how Ofcom and CPs could explain and promote a two tier charge for customers.
The aim is not to achieve an industry consensus in all these areas, which is highly unlikely given the diverse parts of industry involved, but to provide informed and detailed input to a second Ofcom consultation in December. Work to date has focused mainly on arrangements for the unbundling of call charges into the access charge and the service charge. However, maximum pricing has not been ruled out prior to the second consultation.
The following specific issues have been addressed by the working groups: • Migration to service charges, including the level of caps, the migration process itself and publication of the service charges. • Options for simplifying and reducing the service charge price points and the impact on CP billing systems. • The process for notifying service charge changes and how often. • Time of Day variations in charging. Should this be consistent
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across the industry? • Whether published prices should include VAT. • Arrangements for the Assumed Handover Point and Transit and whether OCP or TCPs should pay. • Whether the access charge should be expressed as a pence per minute or pence per call. • Maximum Prices and whether wholesale regulation is needed. • Porting differentials. • PhonepayPlus regulation.
Ofcom has indicated that the next consultation document will not cover higher rate tariffs for PRS, 070/ 076 number ranges, and 055/ 056 but will set out an indication of the proposed timetable for dealing with these number ranges. Potentially any implementation of changes across these number ranges could happen at the same time as for the NTS ranges to avoid any additional implementation costs.
FCS is represented at the work groups and will continue to keep its members up to date and collect feedback via regular
briefings.It is important to provide input to Ofcom on the key issues prior to publication of the second consultation in December. The Ofcom Director in charge of this review will be speaking at Comms Provider 11 on 13th October.
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