Ofcom has launched another consultation on non-geographic numbers. See the news release:

Simplified call charges to help consumers


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New proposals Ofcom is proposing simpler numbering ranges for non-geographic calls, including: Freephone (080 and 116 numbers) to be free from all telephones – including landlines and mobile phones; and Revenue sharing ranges (08, 09 and 118 numbers) to have a new, standardised structure which will spell out the charge made by the phone company and the additional charges paid to the company being called. We also will remove some of the existing confusion around the 0845/0870 numbers and reinforce the 03 range where the cost of calls are the same price as calling a geographic number (i.e. numbers staring in 01 or 02). Revenue sharing numbers When a consumer phones a revenue sharing number, the price paid is divided between the phone company, who connect the call, and the call service, who receive the call. Under the new proposals, the call cost will be ‘unbundled’ so that consumers will know exactly how much is paid to their phone provider and how much is passed on to other companies. The cost would therefore be made up of two parts: an Access Charge – a set price, in pence per minute, which goes to the phone company connecting the call (this will be set out in the consumer’s tariff package); and a Service Charge – the price, in pence per minute, paid to the terminating provider and the company providing the service.

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A representative of the Fair Telecoms Campaign will be discussing this consultation on BBC Radio Wales this morning at 6:45am (click the link to listen online).

The topic will also be discussed on the Annie Othen Show on BBC Coventry & Warwickshire at 10am this morning.

This has to be a record for Ofcom - 892 pages. Every year or two, Ofcom launches increasingly lengthy consultations that almost guarantee no engagement with the public. It has reached the stage where it is pointless for an average consumer to respond. Each consultation is followed by inaction, largely ignoring consumer concern, and shifting the problem elsewhere so that another consultation can take place at a later stage. Repeat as necessary. This regulator is out of control.

This may sound like I'm being negative but I'm not yet convinced this unbundling will make much difference.  I have only scanned the summary as the indepth consultation is obviously designed for stakeholders.

Yes, I agree that it will be more transparent but that's about it.

A company using a 0844 number now that state, "This call will cost you 5 pence per minute on a BT line, calls may vary on other landline providers and cost considerably more on a mobile".

Presumably under the new proposals this would be advertised as 'Calls cost 3ppm plus your phone company's access charge'

Now to me, the first one gives as accurate as reasonably can be description of the cost of the call per minute.

Most people don't know how much their own telecom providers charge for calls now despite that they are obliged to provide this information on their website but even now it's rare to see this as its normally buried away somewhere hard to find along with the cost of calls in general (not just to NGN ranges).

I'm guessing here but presumably the money that OCPs get from calls to 0844 (costing 5ppm now, for example) is about 2ppm and although it varies between OCPs its approximately the same.  The remaining 3ppm obviously being split between the TCP and the called party.

The only main exception to this, that I know of, is VirginMedia who charge the most for calls to 0844 numbers so VirginMedia probably get a lot more than in my example above.

Now even if Ofcom tries to make the OCPs provide information on their 'access' charge under the new proposal then there is still no guarantee that anyone will look on their OCPs website for such information because they'll probably hide it like they do now even though they aren't meant to.  That is, assuming, everyone has access to the internet to get this 'access' charge information.

I believe (although I don't want to) that most joe public wont bother with the hassle of trying to determine how much this 'access' charge is hence will just assume (or hope) that it's not far from the 'service' charge description they have seen (ie 3ppm in this example).

As for name and shame a company over their 'service charge' isn't likely to be that effective because they can just say that the TCP receives the most money and it is used for intelligent call routing etc.

The good thing is about this unbundling is that it will highlight just how much money VirginMedia get from the call compared to other OCPs.

bbb_uk wrote on Jun 23^rd, 2012 at 11:46am:

This may sound like I'm being negative but I'm not yet convinced this unbundling will make much difference.  I have only scanned the summary as the indepth consultation is obviously designed for stakeholders. Yes, I agree that it will be more transparent but that's about it. […]

I've used some terms here which you may not understand. The explanation at the end of this posting sets out what these are to help in your understanding.


The proposal is that for each tariff/package, there should be one Access Charge (AC) for all 084/087/09 non-geographic calls. This is the subject of question 10.1 which I've quoted below. So it won't matter which type of number you're dialling, the AC will be the same. Also, providers might choose to make ACs inclusive.

ACs will become another charge that people look out for, in just the same way as they do for calls to landlines and calls to mobiles now.

Thus, there will be need for long documents which list different charges for each 08xx xxx block in order to have an appreciation for the cost of a particular call. The point is that the bit of the charge that varies by sub-prefix would be declared by the user of the number (which is the Service Provider).

The Service Charge (SC) is the amount that is passed on to the Terminating Communication Provider (TCP). By definition, it is given to the benefit of the Service Provider (SP).

SPs frequently say that they don't receive revenue payments from their 08 number provider (the TCP). Where revenue payments are made, this is the excess left from the inflated Termination Charge after the TCP has taken its payment for the service it provides.

Those SPs that do not receive any direct revenue payments and do not take benefit to the value of the inflation of the Termination Charge are thereby leaving their TCP to take unearned income. This is worse and could demonstrate a lack of business nouse in "value for money" with respect to procurement.


I say "could" because it is not clear that the inflated Termination Charge exists at present anyway, and many might not understand what it is. The official SC will make clear that this exists, not only to the Caller, but to the user of the 08 number as well.

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From the consultation:

Q10.1: Do you agree with our proposal that the AC should be allowed to vary between tariff packages but that OCPs should be subject to a tariff principle permitting only one AC for non-geographic calls? If not please explain why.

To view the questions, go to the page for this consultation and view Annexes 1-7. Question 10.1 is on page 6 (which is page 7 of that PDF).

Or to view the question in context, see Section 10 which is in Part B and starts on page 96 (page 97 of this PDF). Section 10 is all about the design of the unbundled tariff.

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Explanation of terms

I've used some terms here and they refer to the parties involved when a telephone call is made. Hopefully this simple diagram of the parties involved, along with an explanation of the terms, should help in your understanding:

[ Caller ]---[ OCP ]=====[ X ]=====[ TCP ]---[ SP ]

It's important (in fact crucial) to appreciate that the phone network (as a whole) is made up of different providers which interconnect with one another. This means that any individual call should be pictured as involving two different providers.

In the diagram above, the green bits represent the caller's leg of the call, the blue bits represent the receiver's (or Service Provider's) leg of the call, and the red X is the connection between the two parties.

• OCP is the telephone company that the caller is with and the letters stand for "Originating Communication Provider". A call is said to be "originated" when a caller requests connection to a particular destination via his or her provider.
   
  
• TCP is the telephone company that provides the 08 number on behalf of the Service Provider. The acronym stands for "Terminating Communication Provider". Where the call ends, it is said to be "terminated".
   
  
• SP stands for "Service Provider" and it is the organisation that the Caller is ringing. For example, a government department, bank or insurance company.
   
  
• X is the interconnection between the caller's and receiver's telephone companies (which are the OCP and TCP, respectively. The TCP imposes a charge on the OCP, known as a Termination Charge, for onward connection. Think of X as being the demarkation point between the two parties.

For "normal" calls to landlines and 03 numbers there is a small Termination Charge. These are inflated where 084, 087 and 09 numbers are concerned and this extra bit is what the Service Charge is.

The presence of the SC affects the caller irrespective of whether the TCP pays the SP directly. The less the SP takes in direct payments, the more the TCP gets to keep on any particular number sub-range. Thus, the SC is always to the benefit of the user of the number.

The fair telecoms campaign has drawn up a guide for responding to the consultation.

Unlike the consultation itself, our guide is short an fits on two A4 pages. The consultation runs to over 900 pages, including annexes!

We believe that consumers should support the proposals of the unbundled tariff. This will hopefully bring much-needed clarity to what is happening now.

It's taken a long time to get this far, and I wouldn't disagree with anyone who says that the regulator has wasted time, but we are where we are. The changes being put forward are major and therefore perhaps justify the monumental size of the consultation. Hopefully, the regulator cannot be accused of not considering and consulting on the many aspects of the changes.

Dave wrote on Jun 23^rd, 2012 at 4:04pm:

The proposal is that for each tariff/package, there should be one Access Charge (AC) for all 084/087/09 non-geographic calls. This is the subject of question 10.1 which I've quoted below. So it won't matter which type of number you're dialling, the AC will be the same.

I believe this would help.


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Also, providers might choose to make ACs inclusive.

The only way for this to work is to make either line rental or pay-monthly tariffs more expensive or offer less inclusive things like minutes.  Personally, I would like the AC not to be inclusive.


Quote:

ACs will become another charge that people look out for, in just the same way as they do for calls to landlines and calls to mobiles now.

Do you mean that when, for example, a mobile provider is advertising their tariffs (inclusive minutes/texts, etc) that it is mentioned on the same page and not buried away in some pdf or elsewhere on their website like it basically is now?

This would help but if they (OCPs) bury it somewhere else like in a pdf then it will be no different than now.

Most people I know have only a vague idea of what their OCP charges for things.


Quote:

Those SPs that do not receive any direct revenue payments and do not take benefit to the value of the inflation of the Termination Charge are thereby leaving their TCP to take unearned income. This is worse and could demonstrate a lack of business nouse in "value for money" with respect to procurement.

I agree but I think most SPs do receive benefit from their 08 provider whether that is in call routing and other services.

The precise impact of the unbundled tariff will depend on how it changes behaviour.

Where organisations currently give an “honest” indication of the call cost (typically by giving only the BT pence per minute rate) and will continue to use the same number, then little will change. The amount will essentially remain the same, but it will be made clear that this is the charge that they levy in addition to what is charged by the telephone company.

There are very few who make this clear at present. Even bbb_uk has been misled into thinking that BT currently retains some of its charge, when it is prevented from doing so by regulation, which will be removed under the new regime. It is BT which is the exceptional case, not Virgin Media, albeit that the latter does have some odd ways with its charges.



With a single “Access Charge” rate to cover all non-geographic calls, there will be two effects. Firstly, telcos will be required to keep this low as a result of the transparency it will have in comparison tables etc. Even though this will only directly affect those who look at prices, there is enough competition in the market for all to benefit as a result. Secondly, the fact that it is a single figure per tariff, will mean that there is no justification for hiding it and there is some chance that those who care about costs will note and remember it.



Although provider’s telephone tariffs will still have to include extensive tables for the costs of international calls, the lengthy and complex tables of rates for UK non-geographic calls will simply disappear from individual tariff publications. There will be just one UK table which gives the bands and rates of “Service Charge” applicable to all ranges of non-geographic numbers. This will be published either by Ofcom, or by the industry body that will take responsibility for maintaining it.

The responsibility for advising the level of “Service Charge” to consumers will apply to the Service Provider and it will have to be given for each number, avoiding the need to look at complex tables of charges. The published table will only be required by the telcos for the purpose of billing and by consumers in the case of disputes.



It is my belief that the obligation to declare the Service Charge will have the most significant impact on those who could not do so. I believe that many current users of 0845 and 0844 numbers will be compelled to migrate to 03 numbers or return to geographic numbers, simply because they could not sustain or justify the open imposition of a charge on callers.

Where, for example, a 0845 number is used for a contact centre, I cannot see how one could justify a charge of 10p for a call that lasts 5 minutes when the cost of handling that call is likely to be in the region of £5. If there is any justification for charging the caller, then the charge should bear some relation to the costs involved. I am happy to make this argument, because I think it unlikely that many will adopt £1 per minute PRS numbers for these types of service.


We must also remember the impact of Article 21 of the Consumer Rights Directive, which must be incorporated into UK legislation by the end of 2013 to take effect in 2014. (See this link)


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where the trader operates a telephone line for the purpose of contacting him by telephone in relation to the contract concluded, the consumer, when contacting the trader is not bound to pay more than the basic rate.

(Article 17 confirms that this “shall apply to sales and service contracts and to contracts for the supply of water, gas, electricity, district heating or digital content”)

With an unbundled tariff in place, there can be no silly arguments based on relative call costs to suggest that 084 numbers are ever charged at “the basic rate”. The very statement that the requirement “shall be without prejudice to the right of telecommunication services providers to charge for such calls” makes it very clear that the separated Service Charge causes the consumer “to pay more than the basic rate”.


The Consumer Rights Directive does not apply to public sector service providers or their agents (e.g. NHS GPs). The clear separation of the Service Charge will however ensure that the government takes a clear line on how it raises money from citizens. If it wishes continue to impose or permit a charge on access to NHS services by telephone, on those enquiring about their taxes, benefits or state pensions and on those seeking help getting work, then it must be clear and open about this.

I personally think it unlikely that the present government would be prepared to argue that this is a valid way of addressing the deficit, however we will shortly be able to see it address this point directly.



The fair telecoms campaign is engaged in drawing these forthcoming provisions to the attention of those who will be governed by them. We see every reason for both private and public sector organisations to come to terms with the reality which will shortly be reflected in regulation and take the necessary steps now, rather than being dragged kicking and screaming into doing the right thing.

If you need a non-geographic number, but cannot justify imposing a charge on those who call it - switch to 03 NOW

bbb_uk wrote on Jun 23^rd, 2012 at 4:37pm:

Quote: Also, providers might choose to make ACs inclusive. The only way for this to work is to make either line rental or pay-monthly tariffs more expensive or offer less inclusive things like minutes.  Personally, I would like the AC not to be inclusive. [quote]ACs will become another charge that people look out for, in just the same way as they do for calls to landlines and calls to mobiles now.

Do you mean that when, for example, a mobile provider is advertising their tariffs (inclusive minutes/texts, etc) that it is mentioned on the same page and not buried away in some pdf or elsewhere on their website like it basically is now?

This would help but if they (OCPs) bury it somewhere else like in a pdf then it will be no different than now.

Most people I know have only a vague idea of what their OCP charges for things.[/quote]
ACs will mainly be "per minute" charges. I say "mainly" as there are a few "per call" charges, so I assume that "per call" ACs might come into existance, although that's just a guess on my part.

ACs will be expected to be advised at point of sale and on bills and so on.

How will it work in practice? I'll guess the vast majority will fail to state the prices or will inadvertantly mangle the wording to hide the costs.

http://www.google.com/search?num=100&q=0845+AND+"local+rate"+OR+"lo-call+rate"+

Nearly every telecoms provider still erroneously refers to 0845 numbers as "local rate" or "lo-call rate" many years after this became untrue.

Look back in another five years and I'd expect the vast majority to still have that wording. Ofcom can write 800 page documents or 8000 page documents but there's no way they will be able to force 700 000 websites to adopt new wording. They haven't got the manpower to begin checking yet alone send out a load of letters and emails.

catj wrote on Jun 24^th, 2012 at 1:03am:

How will it work in practice? I'll guess the vast majority will fail to state the prices or will inadvertantly mangle the wording to hide the costs. http://www.google.com/search?num=100&q=0845+AND+"local+rate"+OR+"lo-call+rate" Nearly every telecoms provider still erroneously refers to 0845 numbers as "local rate" or "lo-call rate" many years after this became untrue. Look back in another five years and I'd expect the vast majority to still have that wording. Ofcom can write 800 page documents or 8000 page documents but there's no way they will be able to force 700 000 websites to adopt new wording. They haven't got the manpower to begin checking yet alone send out a load of letters and emails.

You make a very good point.

Ofcom would not itself apply this regulation anyway. The only way it could do it directly is by extending the legal definition of PRS to cover 084, so that PhonePay Plus would have to define and enforce the rules - this is nonsense.

There are however a number of ways in which the requirement could be brought into effect with the necessary degree of regulatory support and enforcement.


Most organisations will follow an acknowledged standard. The principle of using BT rates with a qualification has been adopted widely, even though it is widely misleading. The reference to "local rate" is still present in the published National Numbering Scheme, even though the context in which it is given is now irrelevant.

I believe that it is largely a matter of getting the right practice accepted - there will always be those who will set out to lie and deceive. The problem is that there is an implicit deceit in current accepted practice, which is followed by those with no ill-intent, who simply know no better.

The fair telecoms campaign response to the Ofcom consultation (currently being drafted) will address ways in which bodies such as the OFT, TSI, CAP, statutory sectoral regulators, industry self-regulatory bodies and the Cabinet Office will need to be drawn into the implementation process. This will enable standards declared by Ofcom to be endorsed and enforced.

The biggest problem is that companies don't update their website content very often. Even if they received a letter telling them that the wording for 084 numbers must be updated, most would have no clue where on their website all instances of such wording occurred. Many others would fail to identify that they need to make any changes at all.

Although not quite the same thing, evidence for the lethargy can be seen in the number of companies that still believe that London has three area codes: 0203, 0207 and 0208, Southampton has two area codes: 02380 and 02381 (all incorrect for 12 years now), Bristol has two area codes: 01173 and 01179, and Sheffield has two area codes: 01158 and 01159 (all incorrect for 17 years now). Many compnies can't be bothered to get their own phone numbers right, why would they now spend extra effort to clearly inform their customers they are also being charged a premium to place the call?

Any such change by Ofcom would need a huge publicity campaign to get even 10% compliance. It's a nice idea but in practice it is likely to be ignored by the vast majority.

catj wrote on Jun 24^th, 2012 at 9:36am:

… It's a nice idea but in practice it is likely to be ignored by the vast majority.

Catj

If I have missed your alternative proposal, then please forgive the following response.

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The fair telecoms campaign exists to see that issues which can be addressed are dealt with effectively. This may well be less quickly than we wish and inevitably without 100% success (although with more than 10%).

This forum and the Which? conversations appear to be well populated by those who share the alternative view - that nothing can be done. This causes me to wonder why people waste their energy by contributing to what they see as a hopeless cause, unless they simply enjoy moaning and mocking those who are earnestly looking for solutions and seeking to promote support for positive proposals.


We urge those who believe that there is some useful purpose to be served by engaging in these issues to support Ofcom by a brief positive response to its consultation and by registering their support for the fair telecoms campaign.

We are happy to explain why we believe that all is not hopeless and to join in debate about which potential solutions are likely to be most effective. We do however try to avoid wasting too much energy on battling with those who agree that there is a problem but do not believe that it can be addressed, rather than those who do not wish it to be addressed for more significant reasons. Our main target is those who genuinely accept the principle of fairness but are, often unintentionally, engaged in unfair practice. We believe that they are perhaps far more numerous than some assume.

Dave wrote on Jun 24^th, 2012 at 12:36am:

ACs will be expected to be advised at point of sale and on bills and so on.

Can I clarify what you mean by expected?  Is it Ofcoms intention that this will be mandatory or that simply they hope OCPs will be forthcoming?

Going by past experience, a few years ago Ofcom changed General Condition 14.2 so that OCPs would make more prominent call charges for NTS number just as they did their geographical call charges.

I bet you now a lot of OCPs don't fully comply with this GC.  In fact, looking at BT's website they don't even mention how much calls to geographical numbers cost or even provide an easily accessible link to see call charges.  I bet if I was to spend the time looking I could find it but who is going to do this?

So basically if they don't do this now even though they are obliged to then why will it change under Ofcom's new proposals?

SilentCallsVictim wrote on Jun 23^rd, 2012 at 11:38pm:

Where organisations currently give an “honest” indication of the call cost (typically by giving only the BT pence per minute rate) and will continue to use the same number, then little will change. The amount will essentially remain the same, but it will be made clear that this is the charge that they levy in addition to what is charged by the telephone company. There are very few who make this clear at present. Even bbb_uk has been misled into thinking that BT currently retains some of its charge, when it is prevented from doing so by regulation, which will be removed under the new regime.

It is my understanding that BT is allowed to keep some costs for originating the call albeit smaller amounts than other OCPs may do so.

Just looked up costs for what I assume would be advertised now as a 5ppm call (a 08 'g20' call).

BT (when I eventually found it) said it costs 5.05ppm and on TalkTalk it's 5.06ppm.

Basically, as I said earlier, most OCPs last I checked generally charge around the same so the old pricing is more accurate to the true cost of the call.

But this exact same call under the new proposals would mean it's advertised as (just guessing) 3ppm service charge and then us joe public then have to know what the price of the Access Charge is and if they (the OCPs) go out of their way to hide like they do now with calls to NTS numbers then joe public will be worse off and more confused about the cost of these calls.

bbb_uk wrote on Jun 24^th, 2012 at 10:53am:

Dave wrote on Jun 24th, 2012 at 12:36am: ACs will be expected to be advised at point of sale and on bills and so on. Can I clarify what you mean by expected?  Is it Ofcoms intention that this will be mandatory or that simply they hope OCPs will be forthcoming?

Given that the way in which calls to most non-geographic numbers are charged will be radically altered, it is inconceivable that telcos will not draw this to the attention of their customers.

The draft changes to the GCs will be announced at the end of 2012 (according to the current plan). I believe that there will be a battle over the question of there being a single Access Charge and perhaps also over the removal of call setup fees (connection charges).


The issue of cost declaration for 0870 was a mess. Ofcom knew that it had more extreme powers coming and that BT was intending to remove the premium from 0870 call charges immediately on implementation. The specification of the requirement was therefore absurdly weak. The investigations and enforcement arms of Ofcom operate on ridiculous consumerist principles, dedicating resources only where it is necessary to respond to extensive criticism, or where it serves a strategic objective. I doubt that there have been many complaints from those who cannot not see the premium rates for 0870 calls, because they are not given sufficient prominence. From a strategic perspective, Ofcom wanted to wait for its greater powers in order to address the much wider issue properly.

In summary, I do not think that much can be drawn from a very different situation.

bbb_uk wrote on Jun 24^th, 2012 at 11:13am:

SilentCallsVictim wrote on Jun 23rd, 2012 at 11:38pm: Where organisations currently give an “honest” indication of the call cost (typically by giving only the BT pence per minute rate) and will continue to use the same number, then little will change. The amount will essentially remain the same, but it will be made clear that this is the charge that they levy in addition to what is charged by the telephone company. There are very few who make this clear at present. Even bbb_uk has been misled into thinking that BT currently retains some of its charge, when it is prevented from doing so by regulation, which will be removed under the new regime. It is my understanding that BT is allowed to keep some costs for originating the call albeit smaller amounts than other OCPs may do so.

I may have over-simplified the situation, however I believe that 5p will continue to be 5p, or perhaps something greater (7p has been mentioned as a possibility). The actual amounts have yet to be determined, however I believe that every effort will be made to ensure the minimum possible change both to TCPs arrangements and call charges that are currently advised.

The amount which BT is allowed to retain is (relatively) miniscule - a small fraction of a penny per minute. Furthermore, there has to be some allowance for the effect of the call setup fee and BT is allowed to engage in commercial arrangements so the amount paid on is not always the same, even though the call charge is constant.

"g6" is the more widely used example of the "5p per minute" call type. The table in this document does indeed demonstrate how those who compete directly with BT mirror its charges.

Whilst the "NTS condition" remains in place, keeping down the BT rates for calling NTS numbers, this has the effect of artifically deflating the retail cost of these calls, causing telcos to cross-subsidise. Ofcom is at the very end of its legal justification for this regulation - it has to go. I am not sure if an argument for its retention is being advanced!

Because BT does not operate in the mobile calls market (now slightly more than 50% of the total for non-business calls) its tariffs have no effect there.

bbb_uk wrote on Jun 24^th, 2012 at 10:53am:

Dave wrote on Jun 24th, 2012 at 12:36am: ACs will be expected to be advised at point of sale and on bills and so on. Can I clarify what you mean by expected?  Is it Ofcoms intention that this will be mandatory or that simply they hope OCPs will be forthcoming? Going by past experience, a few years ago Ofcom changed General Condition 14.2 so that OCPs would make more prominent call charges for NTS number just as they did their geographical call charges.

I used the word "expected" simply because I couldn't find any bit of the consultation which talks about the possibility of this being covered by a General Condition, such as 14.2 (this is despite spending time looking). I didn't want to get readers' hopes up by spreading false information if there is no proposal for anything stronger!



bbb_uk wrote on Jun 24^th, 2012 at 11:13am:

SilentCallsVictim wrote on Jun 23rd, 2012 at 11:38pm: Where organisations currently give an “honest” indication of the call cost (typically by giving only the BT pence per minute rate) and will continue to use the same number, then little will change. The amount will essentially remain the same, but it will be made clear that this is the charge that they levy in addition to what is charged by the telephone company. There are very few who make this clear at present. Even bbb_uk has been misled into thinking that BT currently retains some of its charge, when it is prevented from doing so by regulation, which will be removed under the new regime. It is my understanding that BT is allowed to keep some costs for originating the call albeit smaller amounts than other OCPs may do so.

BT's retention on calls it originates to other providers' 084, 087 and 09 numbers in miniscule. The BT Wholesale Carrier Price List which shows the outpayments that it makes in such circumstances gives figures that are about the same as its retail call prices.

Whilst regulations will change to create a system of official Service Charges, for the purpose of our discussion, BT's retail charges are roughly equal to the levels of what are effectively the Service Charges now. In essence, BT's current (regulated) Access Charge is probably very very small.

SilentCallsVictim wrote on Jun 24^th, 2012 at 11:47am:

I may have over-simplified the situation, however I believe that 5p will continue to be 5p, or perhaps something greater (7p has been mentioned as a possibility)....

Does this mean that Ofcom is expecting call charges to possibly rise?


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Whilst the "NTS condition" remains in place, keeping down the BT rates for calling NTS numbers, this has the effect of artifically deflating the retail cost of these calls, causing telcos to cross-subsidise.

BT and other OCPs may cross-subsidise things but there has been no evidence that I can think of that once regulation is removed that prices fall or even out across the board. 

The first thing that I think of is what happened when most of BT regulations were removed, costs of geographical calls and line rental rose to very high signifcant levels as can be seen now.

Now I realise that competition is meant to keep these things low but I dont think there is much in way of competition between OCPs (more so landline OCPs) because once one OCP increases charges, the rest just follow suit albeit some more quickly than others.

Dave wrote on Jun 24^th, 2012 at 12:29pm:

bbb_uk wrote on Jun 24th, 2012 at 10:53am: Dave wrote on Jun 24th, 2012 at 12:36am: ACs will be expected to be advised at point of sale and on bills and so on. Can I clarify what you mean by expected?  Is it Ofcoms intention that this will be mandatory or that simply they hope OCPs will be forthcoming? Going by past experience, a few years ago Ofcom changed General Condition 14.2 so that OCPs would make more prominent call charges for NTS number just as they did their geographical call charges. I used the word "expected" simply because I couldn't find any bit of the consultation which talks about the possibility of this being covered by a General Condition, such as 14.2 (this is despite spending time looking). I didn't want to get readers' hopes up by spreading false information if there is no proposal for anything stronger!

All I can see happening under new proposals is that call charges will rise simply because the OCPs will just bury (like they do now with general call costs) the cost of the ACs and SPs will just say that calls cost 3/4ppm (based on a now 5ppm call) and joe public will just have to guess how much such AC actually is.

Don't get me wrong, I think it would be a great idea if fully implemented and more is done to stop OCPs from hiding their AC but going by past experience with Ofcom who failed several times to get OCPs to comply with GC14.2 despite several complaints by myself (and possibly others) not to mention Ofcom having to re-open a case on forcing OCPs to comply, it has still failed as can be seen today.

I think it's all to do with the constant approach of light-touch regulation and Ofcom's lack of proper enforcement otherwise all OCPs websites would comply fully with GC14.2 which just looking at the main provider (see link in an earlier post) it doesn't.

bbb_uk wrote on Jun 24^th, 2012 at 2:50pm:

Dave wrote on Jun 24th, 2012 at 12:29pm: bbb_uk wrote on Jun 24th, 2012 at 10:53am: Dave wrote on Jun 24th, 2012 at 12:36am: ACs will be expected to be advised at point of sale and on bills and so on. Can I clarify what you mean by expected?  Is it Ofcoms intention that this will be mandatory or that simply they hope OCPs will be forthcoming? Going by past experience, a few years ago Ofcom changed General Condition 14.2 so that OCPs would make more prominent call charges for NTS number just as they did their geographical call charges. I used the word "expected" simply because I couldn't find any bit of the consultation which talks about the possibility of this being covered by a General Condition, such as 14.2 (this is despite spending time looking). I didn't want to get readers' hopes up by spreading false information if there is no proposal for anything stronger! All I can see happening under new proposals is that call charges will rise simply because the OCPs will just bury (like they do now with general call costs) the cost of the ACs and SPs will just say that calls cost 3/4ppm (based on a now 5ppm call) and joe public will just have to guess how much such AC actually is.

The current situation allows users of 084/087 numbers to quote BT's abnormally low prices as if they were the norm. This has led to SPs being able to effectively mask the degree of their Service Charge. It has also meant that some are not aware of the Service Charge they impose. It also allows some call providers (mainly the mobile ones) to add huge ACs.

Those who do not wish for clarity to be introduced with respect to their Service Charges are likely to argue for the status quo. It is for this reason that I believe that changes must be made.

What do you think should happen?

Dave wrote on Jun 24^th, 2012 at 3:07pm:

The current situation allows users of 084/087 numbers to quote BT's abnormally low prices as if they were the norm. This has led to SPs being able to effectively mask the degree of their Service Charge. It has also meant that some are not aware of the Service Charge they impose. It also allows some call providers (mainly the mobile ones) to add huge ACs. Those who do not wish for clarity to be introduced with respect to their Service Charges are likely to argue for the status quo. It is for this reason that I believe that changes must be made. What do you think should happen?

I'm not the regulator, I'm just joe public who is going by past experience of dealing with Ofcom/OCPs.

I mentioned earlier that most OCPs do generally compete to a certain degree with BT on calls to 084x.  The most notable one that doesnt is VirginMedia and mobile networks.

So the current recommended wording for calls is as accurate as can reasonably be with a warning that mobile costs can vary considerably.

Like I said, without proper regulation, the new proposal will just mean lower prices quoted with joe public expected to go out of their way to find the AC charge.

I personally can't see joe public going out of their way to find the AC charge (especially if this can still vary depending on call type).  It took me a while to find out where BT had hidden the price of their calls now so for someone without great knowledge of using the internet, they'd most probably give up.

All that is needed is Ofcom to be firm with the OCPs and actively enforce it and sanction those that do try to hide their AC.  Like I said, GC14.2 was meant to do something similar and it hasn't and Ofcom has in the past just told OCPs that didnt comply off but yet they still don't comply.

As I said earlier, if mobile networks when promoting their tariffs inclusive minutes, etc also had to state their basic geographical call/text costs (for those outside their inclusive allowance) and their AC ALL on the SAME page; and the landline OCPs also did the same then this would be the cheapest and easiest way providing Ofcom did monitor (at least for a while) and actually sanction those that don't instead of their current light-touch approach.

So in summary, the new proposals seem like a good idea but without firm action by Ofcom to ensure the AC isn't hidden away like now then all that will happen is it will cause more consumer confusion over the overall cost of a call.

Quote:

If I have missed your alternative proposal, then please forgive the following response.

Just taking the role of devil's advocate for a moment. You passed the test. ;)

SilentCallsVictim wrote on Jun 24^th, 2012 at 10:51am:

This forum and the Which? conversations appear to be well populated by those who share the alternative view - that nothing can be done. This causes me to wonder why people waste their energy by contributing to what they see as a hopeless cause, unless they simply enjoy moaning and mocking those who are earnestly looking for solutions and seeking to promote support for positive proposals.

One alternative view is to revert to the situation prior to the introduction of numbering that has only disadvantaged the consumer; a situation that is of the regulator's making.

Prior to the introduction of revenue generating non geographical numbering, calling the local bank cost the same as calling your friend in the next street. Calling the bank at the other end of the country cost the same as calling a long distant friend. It was simple, and costs were consistent and, importantly, known, if somewhat high. Due to many factors, the cost of telephony has reduced, meaning a call to Australia now costs a few pennies compared to a much greater amount not so long ago.

Telecom companies started to bundle calling packages, so one could make unlimited, or a large number, of calls for a given cost. All well and good, and consumer friendly. Now, the growth of NGNs and their position that they are almost the universal number of choice for businesses, govt agencies, health services and non-profits, means that the bundling becomes less valuable to the consumer as the bundle excludes a significant number of typical calls the consumer wishes to make, and to add further insult, the consumer has to fork out an additional fee for the privilege of making a call to such entities. It is similar to an 'all you can eat' buffet where you are limited to broccoli and cauliflower - anything else costs extra.

As I have stated previously, any entity deriving revenue from calls, whether it is one pence or one hundred and fifty pence per minute, needs to use numbering designed for that purpose. Such numbering exists in the 09 PRS range, and any administrative overhead will have to be accepted by those using such numbering.

It is my alternative belief that there is absolutely no justification for fee based numbering to exist outside of a fully regulated PRS range with strong redress capabilities. This was the case prior to 0345 and 0990 and this should be the case now.

Every few years, the regulator consults and ultimately shifts the problem sideways until the next consultation comes along. As I said, the regulator has created this mess, and it's now grown way too big to go away easily.

Whilst some of the proposals in this latest consultation are an improvement to the existing position, they do not address the problem that is shared by many - why do we need to pay a fee to call xyz when we didn't pay a fee before? Why is it cheaper for me to call Bank of America than it is to call the Coop Bank across the street? These are simple questions that need to be addressed.

bbb_uk wrote on Jun 24^th, 2012 at 2:35pm:

Does this mean that Ofcom is expecting call charges to possibly rise? … BT and other OCPs may cross-subsidise things but there has been no evidence that I can think of that once regulation is removed that prices fall or even out across the board.

The first thing that will be seen when the "NTS condition" is removed is that the cost of calling NTS numbers will increase.

If you believe that businesses simply charge the most that they are allowed to by regulation then you may not be wrong. If that is a bad thing, then the only answer is full state control of all business. It is EU regulations which demand that Ofcom remove the NTS condition and also demand an open market approach. Those who may share the view that all business must be rigidly controlled by the government will therefore be leading the calls for us to leave the EU!

Ofcom proposes to use powers granted to it by the implementation of an EU Directive to impose clearer regulation on the way in which charges for calls to NTS numbers are made by ALL providers, including those who do not have "Significant Market Presence" - which is now all telcos providing call services.

---

bbb_uk wrote on Jun 24^th, 2012 at 2:50pm:

… going by past experience with Ofcom who failed several times to get OCPs to comply with GC14.2 despite several complaints by myself (and possibly others) not to mention Ofcom having to re-open a case on forcing OCPs to comply, it has still failed as can be seen today. I think it's all to do with the constant approach of light-touch regulation and Ofcom's lack of proper enforcement otherwise all OCPs websites would comply fully with GC14.2 which just looking at the main provider (see link in an earlier post) it doesn't.

As stated above, I believe that “The issue of cost declaration for 0870 was a mess”. I hope I explained why I see the present proposals as being very different.

Ofcom has to primarily rely on a market to serve the consumer interest. This is why it has had to go to such lengths in its current consultation to demonstrate that the market has failed, so as to justify the radical intervention which it proposes. Contributors to these threads who believe that Ofcom is fundamentally corrupt, rather than founded on ill-considered principles, under resourced for the job which many of us think that it should be doing and too often self-serving on account of its independent status will undoubtedly believe it to be incapable of delivering a proper result on any issue. Despite my many disagreements with Ofcom and intense criticism of many of its policies, I do believe that the current proposals on the "unbundled tariff" are worthy of support.

That is not to say that there are not many points that need to be made about the way in which the proposals will be implemented. Of course the requirements will fall short of what we may wish for, of course there will continue to be abuses, of course enforcement action will not satisfy all. The fair telecoms campaign seeks for change in the real world, properly aware of these realities, but not consumed by them.

SilentCallsVictim wrote on Jun 24^th, 2012 at 6:57pm:

The first thing that will be seen when the "NTS condition" is removed is that the cost of calling NTS numbers will increase. If you believe that businesses simply charge the most that they are allowed to by regulation then you may not be wrong. If that is a bad thing, then the only answer is full state control of all business. It is EU regulations which demand that Ofcom remove the NTS condition and also demand an open market approach...

I'm sure I read somewhere that the EU has regulations that would imply that calls to these 084x numbers be could potentially be treated as premium rate due to revenue sharing but Ofcom doesn't treat them as revenue sharing as far as PRS is concerned.

Although there are multiple OCPs to choose from, competition doesn't really exist with regards to pricing as they all basically copy each other when one increases their cost of something.

Does Ofcom have a price cap on what can be charged for 084x numbers (in total) in their new proposals?

If not, does that mean that a 0844 call that used to cost 5ppm could cost 15ppm (4ppm SC, 11ppm AC) if an OCP did so decide to have a high AC?

I know you may think that an OCP wont have such a high AC and although I'd like to think that, if you were to have asked me 2/3+ years ago, I'd never of thought we would have line rental, geographical calls and a connection charge as high as we do now!

idb wrote on Jun 24^th, 2012 at 6:40pm:

One alternative view is to revert to the situation prior to the introduction of numbering that has only disadvantaged the consumer; a situation that is of the regulator's making.

So far as 0845 is concerned, we cannot easily return to the situation where BT is a near monopoly provider with distinct local and national rates. It was in this situation that the option to have national calls at local rates whilst also providing subsidy to service providers to enable investment in enhanced telephony was introduced.

BT is no longer a near monopoly provider, so the NTS condition cannot be sustained. The end of BT Standard has meant that the concept of subsidy to SPs without cost to callers cannot be resuscitated. We must move forward. The way in which we return to the desired position must however take account of where we are now. This means that it cannot be as direct as we may wish.


It is my belief that the obligation to declare any service charge will ensure that calls to most businesses, govt agencies, health services and non-profits will become included in standard call bundles. I am thinking of those who have a genuine need for a non-geographic number. Ofcom has decided that this should be achieved by having only one range of non-geographic numbers (03) which are charged at geographic rates, thereby requiring many number changes - although only one digit of the number needs to change.

The proposed alternative approach, of having only range to which premiums may be applied (09, notwithstanding some other particular cases) has been rejected. One possible justification for this is the distinction between a premium which serves to simply offset the costs of a Service Provider, as against that which delivers income.

No operator of a contact centre with a 084 or 087 number hears the cash register ring when the phone rings. They have simply taken what seems to be the best option offered by a telephone service provider, often based on false statement about what callers pay to call. (There may be some who can handle incoming calls at a cost of less than 10p per minute, e.g. dialup ISPs and some other providers of particular telecoms services, but I do not believe that they are the main focus of our concern here.)

Providers of "Premium Rate Services" on 09 numbers understand that they must declare the cost of their service and offer value for money to their callers. Although this could never work in the same way for most users of 084 and 087 numbers (because the cost incurred by the caller is way short of the cost of the service) it does no harm to subject them to the same discipline in terms of cost declaration.


Ofcom states a belief that there will continue to be demand for 084 and 087 numbers when the cost is made transparent. It will take some time to see if this is true, however it is my belief that there will be mass migration to 03.

The fact that many have remained on 0871/2/3 numbers after them being designated as PRS suggests that I may be wrong, however I believe that this owes something to the general degree of confusion and misunderstanding. If a general move to 03 takes place, then it is likely that many present 087 users will get drawn into it.

I repeat, it will take time for these effects to be seen.



Ofcom is shifting the problem, but I believe that it is right to make it an issue between the Service Provider and their caller, with a relatively minor role for the telco. It is for the coop bank to decide whether the cost of its contact centre operations is met fully as an overhead, reducing the profit that it distributed to its members, or if it is to ask for a contribution from those who call them. The effective level of this contribution should not depend on who the caller chooses as a telephone service provider, albeit that their other telephone costs must do so.

I accept that many believe Ofcom should deny the coop bank, and others, the opportunity to be able to make this decision, or to somehow decide who is and is not able to make such a decision. In very many cases the option to make this decision will be withdrawn by the implementation of Article 21 of the Consumer Rights Directive.


It may be that, by a somewhat devious route, we will be able to return to a golden past age.

bbb_uk wrote on Jun 24^th, 2012 at 7:33pm:

I'm sure I read somewhere that the EU has regulations that would imply that calls to these 084x numbers be could potentially be treated as premium rate due to revenue sharing but Ofcom doesn't treat them as revenue sharing as far as PRS is concerned.

I believe that you may be referring to Article 21 of the Consumer Rights Directive, as discussed above. Under the terms of the unbundled tariff there will be no doubt that calls to 084x numbers are not charged at the "basic rate".


bbb_uk wrote on Jun 24^th, 2012 at 7:33pm:

Although there are multiple OCPs to choose from, competition doesn't really exist with regards to pricing as they all basically copy each other when one increases their cost of something.

I do not want to get into a deep debate about market theory, however it is understood that in a competitive market, prices will equalise.


bbb_uk wrote on Jun 24^th, 2012 at 7:33pm:

Does Ofcom have a price cap on what can be charged for 084x numbers (in total) in their new proposals? If not, does that mean that a 0844 call that used to cost 5ppm could cost 15ppm (4ppm SC, 11ppm AC) if an OCP did so decide to have a high AC? I know you may think that an OCP wont have such a high AC and although I'd like to think that, if you were to have asked me 2/3+ years ago, I'd never of thought we would have line rental, geographical calls and a connection charge as high as we do now!

Capped aggregate retail prices was an option put forward in the previous Ofcom consultation. It has not been taken forward. I believe that Ofcom shares my distaste for the concept of retail price capping.


Ofcom proposes caps on the Service Charge for each broad range of types of number, e.g. 084  - 5p, 087 - 10p. These are examples based on the current situation - nothing has been decided, and some provision will need to be made for general price inflation and possible future VAT rate changes. Ofcom also proposes that there be a single Access Charge per tariff, expressed as a ppm rate not a per call charge. There are arguments about the latter proposal, on issues that become complex.

What you refer to as the rate for geographic calls is probably the "penalty charge" that is imposed on those who call outside the terms of the call plan that they have chosen. The connection charge (which also applies to calls that are never covered by call plans) is also partly "penal". These charges continue to increase at a most significant rate, in part to secure subscriptions to the most inclusive package that is appropriate for the customer. Because headline competition is on the price of inclusive packages, it is natural for other charges to be used as a source of increased revenue.

Rates for NTS numbers are currently stated by SPs with no reference whatsoever to the call setup fee. The fact that the unbundled call cost declaration will have to refer to the Access Charge should serve to give it increased prominence, although one cannot fully predict how effective this will be in encouraging comparisons. The fact that the Service Charge rate is outside the control of the telco should put more emphasis on the Access Charge rates charged by the different telcos, so as to encourage competition.

It will only be when telcos start coming forward with their suggestions about what their Access Charges are likely to be that we will really know what is likely to happen. Given the radical nature of the changes that are coming, I do not believe that this will wholly escape attention.


I do not have sufficient knowledge of the present and future market to make predictions about actual cost levels. I comment primarily on the principles involved in the proposals, although I am ready to be drawn into general discussion on the particular effects that will be seen.

SilentCallsVictim wrote on Jun 24^th, 2012 at 8:12pm:

It is my belief that the obligation to declare any service charge will ensure that calls to most businesses, govt agencies, health services and non-profits will become included in standard call bundles....

Personally all I think will happen is that SPs will just state the SP part of it as Ofcom proposes which could potentially be actually lower than the current price guides and if us consumer complain they can just say that nothing has changed their side as in they (the SP and TCP) still get the same amount per call and it's the consumers telco (OCP) which is adding extra on to the call so complain to them.  So the SP & TCP will just name & shame the OCP as the reason for the price hike.


Quote:

No operator of a contact centre with a 084 or 087 number hears the cash register ring when the phone rings. They have simply taken what seems to be the best option offered by a telephone service provider, often based on false statement about what callers pay to call...

I disagree.  Whilst some operators may not actually get a rebate as its used for call diversion and other telephone features, there are also some SPs that choose it because of the actual rebate possible without being subject to actual PRS but I also agree that some SPs may have been misled.

Just a quick search found this and for an 0844 they say it's possible to have a rebate of upto 4ppm.  The cost of the number can be got for free and can come with no monthly charge.

It's my belief that if a contact centre needed the features that a NGN brings and didn't want this paid for out of profit/general running costs then they could choose other number ranges like 0845.  Personally, I'd prefer the 03x range but I accept that the 0845 is a happy medium as it must be possible to get this number range without the additional costs of an 03 number and it's rare if not unlikely that an 0845 teleco provider actually passes any rebate to the called party (SP).


Quote:

Ofcom states a belief that there will continue to be demand for 084 and 087 numbers when the cost is made transparent. It will take some time to see if this is true, however it is my belief that there will be mass migration to 03.

It is my belief that there will be no or hardly any change like there was with 0871 when it came under PRS.

SilentCallsVictim wrote on Jun 24^th, 2012 at 8:12pm:

It is my belief that the obligation to declare any service charge will ensure that calls to most businesses, govt agencies, health services and non-profits will become included in standard call bundles.

I hope that you are right, but I have my doubts. The problem is simply too pervasive.


SilentCallsVictim wrote on Jun 24^th, 2012 at 8:12pm:

No operator of a contact centre with a 084 or 087 number hears the cash register ring when the phone rings. They have simply taken what seems to be the best option offered by a telephone service provider, often based on false statement about what callers pay to call.

While the cash register sounds probably do not automatically ring, I do believe that, given the all pervasiveness, end users of NGNs generally now accept that this is useful revenue for very little effort, and some will exploit this to the maximum extent. It is morally wrong.


SilentCallsVictim wrote on Jun 24^th, 2012 at 8:12pm:

Ofcom states a belief that there will continue to be demand for 084 and 087 numbers when the cost is made transparent. It will take some time to see if this is true, however it is my belief that there will be mass migration to 03.

Again, I hope you are correct, but I can't see certain operators releasing this easy and in some cases substantial revenue source.

The starting point with respect to campaigning against the use of NGNs should be that the customer should pay only the cost of conveyance of the call and not an additional fee to the recipient. A simple and valid analogy is with the mailing of a letter. This concept of fee payment only started with the introduction of 0345 etc. It didn't exist in the past, it doesn't exist in many other places, nor should it continue to prevail. If there is a true value added service that the customer is willing to fund in addition to the call transit charge, ie a premium, then all well and good. Such numbers must exist as PRS entities, even if the premium is low. Users of such numbers will have to accept the enhanced regulatory consequences of using such numbers. The Ofcom proposals, while useful, do not address the fundamental problem, a problem that causes significant expense for the average phone user.

idb wrote on Jun 25^th, 2012 at 11:33pm:

The starting point with respect to campaigning against the use of NGNs should be that the customer should pay only the cost of conveyance of the call and not an additional fee to the recipient. …

The fact that the proposals are to have the fees declared, whereas they are covert now, means that campaigning will be much simpler. They won't be able to pretend that they get no benefit by denying receipt of revenue payments.

Dave wrote on Jun 25^th, 2012 at 11:45pm:

idb wrote on Jun 25th, 2012 at 11:33pm: The starting point with respect to campaigning against the use of NGNs should be that the customer should pay only the cost of conveyance of the call and not an additional fee to the recipient. … The fact that the proposals are to have the fees declared, whereas they are covert now, means that campaigning will be much simpler. They won't be able to pretend that they get no benefit by denying receipt of revenue payments.

I hope your right.  However, unless the unbundling included a clause that stated what, if anything, the SP gets back in actual revenue ppm (ie money paid to them for receiving a call) then I can't see it making much difference as we wont know what the split (if any) is between what the TCP gets and what the SP actually receives.

Like I said in an earlier post, the SP will just say that their 08x provider (the TCP) receives the money and/or the TCP & SP can just say that the cost has gone up because your teleco (OCP) has increased it's AC.

In theory, I do like it but I have reservations that Ofcom will actually do more to ensure things like the AC is clearly mentioned and not hidden away like now otherwise consumer confusion will just get worse.

bbb_uk wrote on Jun 26^th, 2012 at 8:27am:

… unless the unbundling included a clause that stated what, if anything, the SP gets back in actual revenue ppm (ie money paid to them for receiving a call) then I can't see it making much difference as we wont know what the split (if any) is between what the TCP gets and what the SP actually receives.

Can you please explain why this matters.

Should there also be a requirement to specify the full details of all related contractual arrangements, so that we  can know whether the TCP is reflecting the benefit that it receives from the enhanced termination fee in some other way?

I am content to assume that the TCP is not ripping off the SP. This may not be true, but I believe it is fair for the SP to suffer the effect of this assumption - indeed, this may help to ensure that it is not ripped-off.

SilentCallsVictim wrote on Jun 26^th, 2012 at 11:50am:

bbb_uk wrote on Jun 26th, 2012 at 8:27am: … unless the unbundling included a clause that stated what, if anything, the SP gets back in actual revenue ppm (ie money paid to them for receiving a call) then I can't see it making much difference as we wont know what the split (if any) is between what the TCP gets and what the SP actually receives. Can you please explain why this matters.

I was responding to what Dave mentioned:-

Quote:

The fact that the proposals are to have the fees declared, whereas they are covert now, means that campaigning will be much simpler. They won't be able to pretend that they get no benefit by denying receipt of revenue payments.

I was trying to say that from a consumer point of view, we will not know how much the SP (ie the company were actually calling) gets as the SC quoted is split between what the TCP gets and, if applicable, what the SP gets so the cost is still covert with that regard.

Hope I explained myself a little better?  :)

I have a feeling the following may happen:-

[list bull-blackball]

Overall costs of calls to 08x likely tho go up

The cost quoted by SP will likely be less than now as it's only the SC that is mentioned

Consumers are likely going to have to go out of their way to search their own teleco website to see what the AC is (assuming they can find it)

It's potentially possible (albeit over time) that an 0844 can cost overall more than 0871 but without being subject to PRS like 0871

bbb_uk wrote on Jun 26^th, 2012 at 5:45pm:

SilentCallsVictim wrote on Jun 26th, 2012 at 11:50am: bbb_uk wrote on Jun 26th, 2012 at 8:27am: … unless the unbundling included a clause that stated what, if anything, the SP gets back in actual revenue ppm (ie money paid to them for receiving a call) then I can't see it making much difference as we wont know what the split (if any) is between what the TCP gets and what the SP actually receives. Can you please explain why this matters. I was responding to what Dave mentioned:- Quote: The fact that the proposals are to have the fees declared, whereas they are covert now, means that campaigning will be much simpler. They won't be able to pretend that they get no benefit by denying receipt of revenue payments. I was trying to say that from a consumer point of view, we will not know how much the SP (ie the company were actually calling) gets as the SC quoted is split between what the TCP gets and, if applicable, what the SP gets so the cost is still covert with that regard. Hope I explained myself a little better?  :)

I'm with SCV here. On what basis does this matter?

The TCP acts as the SP's agent, so how is it relevant knowing what proportion of the SC each retains?

Dave wrote on Jun 26^th, 2012 at 6:04pm:

I'm with SCV here. On what basis does this matter? The TCP acts as the SP's agent, so how is it relevant knowing what proportion of the SC each retains?

You mentioned that under the new proposal, nothing is covert anymore compared to now.

I am trying to say from the consumer point of view, they wont care what the TCP gets just what the SP gets and obviously just quoting the SC, what the SP gets is still not known so its still covert whereas you said its no longer covert.

We can guess that some SPs gets nothing in revenue rebate and some SPs may get the upto 4ppm given by the teleco I quoted in an earlier post (maybe even more).

Thinking about it now I think the misunderstanding is that you were referring to what the TCP gets is no longer covert whereas I thought you were referring to, from the consumer point of view, what the SP gets because like I said most consumers are more likely wanting to know what the company they are calling is getting.

bbb_uk wrote on Jun 26^th, 2012 at 5:45pm:

I was trying to say that from a consumer point of view, we will not know how much the SP (ie the company were actually calling) gets as the SC quoted is split between what the TCP gets and, if applicable, what the SP gets so the cost is still covert with that regard. Hope I explained myself a little better?  :)

You appear to think that the consumer may want to know every detail of the finances of a company it is intending to call, so as know if it is being treated fairly. This may indeed be true, but it is rather a lot of information to put on a letterhead or "contact us" page of a website.

(For example, I am probably far more interested in the wages and working conditions of its contact centre staff and in the levels of competence they bring to their work, than in the arrangements it has with its telephone service provider.)

Ofcom proposes that the consumer may be content, at a minimum, to know the cost that is being added to the call charge imposed by their chosen telephone service provider by the company they are calling.

Those who want to understand the exact nature of the financial relationship between that company and their telephone service provider, or any other related information, will have to make other enquiries, respecting the fact that such arrangements may be confidential.

---

P.S. I prepared the above before reading reply #36. I do not however see any need to change it.

bbb_uk wrote on Jun 26^th, 2012 at 6:21pm:

Dave wrote on Jun 26th, 2012 at 6:04pm: I'm with SCV here. On what basis does this matter? The TCP acts as the SP's agent, so how is it relevant knowing what proportion of the SC each retains? You mentioned that under the new proposal, nothing is covert anymore compared to now. I am trying to say from the consumer point of view, they wont care what the TCP gets just what the SP gets and obviously just quoting the SC, what the SP gets is still not known so its still covert whereas you said its no longer covert. We can guess that some SPs gets nothing in revenue rebate and some SPs may get the upto 4ppm given by the teleco I quoted in an earlier post (maybe even more). Thinking about it now I think the misunderstanding is that you were referring to what the TCP gets is no longer covert whereas I thought you were referring to, from the consumer point of view, what the SP gets because like I said most consumers are more likely wanting to know what the company they are calling is getting.

I still don't understand the reasoning behind the need to know the split of the SC.

I've always looked upon this issue as being one of what happens at the point of interconnection; i.e. the level of termination charge.


So let's suppose that you have two SPs to choose from. Both operate on what are currently known as 0844 "g6" numbers, so the SC is 5ppm. One is paid 3.5ppm by its telephone provider and the other is paid nothing.

What is your point? How does this affect you as a consumer?  :-?

Dave wrote on Jun 26^th, 2012 at 6:33pm:

… One is paid 3.5ppm by its telephone provider and the other is paid nothing.…

With apologies for "ganging up", as two of us are making the same point …

I will add that the difference referred to above typically arises because the former has a less predictable volume of incoming calls and consequently pays a higher fee for its service. In the latter case the telco is more confident in the termination fee revenue it will receive and therefore is able to offer a lower monthly fee, rather than a cashback which is dependent on aggregate call volume.

It is well known that the DWP switched from the cashback "revenue share" arrangement with BT to the lower periodic charge arrangement some years ago. All things being equal, this made no difference whatsoever to its operating costs, as it made no difference to what callers paid to contact it. The DWP however sought to pretend that this made a significant difference and it appears that some would have been ready to accept this.

The other possibility is that the telco is dealing fairly with its customer in the former case, whereas in the latter the customer is being ripped-off.

I can see how a caller may be interested to know which of these four, or indeed other, situations applies, however it cannot think that it would make that much difference to a decision about whether or not to pay 5ppm in addition to the Access Charge to call the company.

Dave wrote on Jun 26^th, 2012 at 6:33pm:

I still don't understand the reasoning behind the need to know the split of the SC. I've always looked upon this issue as being one of what happens at the point of interconnection; i.e. the level of termination charge.

Me too generally, but due to my misunderstanding what you meant by the fact that cost of calls will no longer be covert, I was mearly trying to highlight the cost is still covert but not as covert as it is now.  It's going from an overall cost ppm, to knowing that our teleco is taking x ppm with the remainder going to the TCP but not knowing how much the SP gets.

I can't explain myself anymore but so long as I know what I mean lol  :)

SilentCallsVictim wrote on Jun 26^th, 2012 at 7:16pm:

It is well known that the DWP switched from the cashback "revenue share" arrangement with BT to the lower periodic charge arrangement some years ago. All things being equal, this made no difference whatsoever to its operating costs, as it made no difference to what callers paid to contact it...

It's possible to have an 0844 with no cost to the SP and where it can receive a rebate and another where no (or very little) rebate is paid but other enhanced network features are utilised.  This latter one I refer to as benefits-in-kind. ie the SP is getting these network features that it would otherwise have to pay for if it didn't already have such features in their existing (PBX) setup.

So, in this example, you have two companies selling similar things and compete, 'Acme A' and 'Acme B'.  Both these companies don't really need the enhanced network features just the plain old divert of call to a geographical.

Acme A, has an 0844 'g6' and receives a rebate of upto 4ppm on calls to it's number.

Acme B, also has an 0844 'g6' but they never looked around and went with the first 0844 provider it found which didn't provide any rebate.

I agree that from the caller point-of-view, the cost is the same except that Acme A is likely to earn more profit overall due to the fact that it gets paid for calls received.

In the grand scheme of things yes it comes under operational costs but if both companies sold the same number of products at the same price and had the same outgoings (ie staff, letting, etc) then obviously Acme A will make more profit as it had more incoming money (ie the rebate).

I don't believe every company out there has a need for the network features a NTS number has.  However, I also agree that those that do need the NTS features it can lower their operational costs.

bbb_uk wrote on Jun 26^th, 2012 at 8:53pm:

… 'Acme A' and 'Acme B' …

If both companies are paying the same basic price for their telephone service and 'Acme B' follows the same procurement principles in general, then I would probably be wasting my time calling it, because it will very soon go out of business.

The general profitability of a company is likely to have far more to do with the way that it handles telephone calls (a cost which dwarfs the benefit of 5ppm revenue share) than this relatively petty bit of cost saving. It is the effect on the caller, who often pays more to their own telco than to the SP and TCP, which is more significant. (With any 0845 numbers that remain, with a 2ppm service charge, it is likely that this point will remain relevant under the unbundled tariff, as in many cases the Access Charge will be more than 2ppm.)

The availability of 03 flushes out the cases where the enhanced features of non-geographic numbers (including the geographic anonymity) are genuinely beneficial. It also removes the caller from any discussion about the benefit of these features. Because 03 offers a cost neutral option, the Service Charge must be justified in isolation from any argument about benefits which are exclusively available on non-geographic numbers.

---

I drafted what follows before reading reply # 41, as I believed that the discussion was closing.


bbb_uk wrote on Jun 26^th, 2012 at 8:28pm:

I can't explain myself anymore but so long as I know what I mean lol  :)

I got the impression that you had a quite justifiable interest in knowing more about what happens between the TCP and the SP.

Like any arrangement between businesses, this must remain largely covert, even though customers and the public in general are very keen to know the truth. This is especially true when business let out selected facts which may be seen as being to their advantage - e.g. "we receive no revenue share". This "selective transparency" must be dismissed as worthless, when there is no answer to the inevitable follow-up question "so are you being ripped off by your telco then?".

The Ofcom proposal simply avoids this nonsense by addressing the only point about what happens between the TCP and the SP which is of direct relevance to the caller - the level of the Service Charge.


On the Access Charge.

Unlike the present situation where your telco has hundreds of different groups of non-geographic rates to advise for each tariff, Ofcom proposes that it has just ONE. I have some sympathy with a telco that does not put the rate for calling the particular 0844 number used by someone's GP on the front page of its tariff sheet. If it can find a way of making its Access Charge for calls to every non-geographic number similarly inaccessible, then it may earn my respect for its ingenuity - it could not however find any way of justifying such action.



I hope that all readers of this thread will take a few minutes tomorrow (the deadline) to offer Ofcom some support for its proposals. There are no prizes being offered for those who are able to present an exhaustive and meaningful response to each of the 60-odd questions.

SilentCallsVictim wrote on Jun 26^th, 2012 at 10:04pm:

If both companies are paying the same basic price for their telephone service and 'Acme B' follows the same procurement principles in general...

Unfortunately companies don't always follow the same procurement principles.  In this job and a previous job, I have observed that when procuring a service, you were told you had to use their preferred supplier (who just happened to be internal in both jobs) even though this was more expensive than going to another supplier.  However, when a supplier is external you can go with whichever is the most cost-effective.


Quote:

It is the effect on the caller, who often pays more to their own telco than to the SP and TCP, which is more significant.

is there an idea of how much is split between the OCP, TCP and SP?

Going by that 0844 supplier I found, they offered 4ppm (off-peak) and 2ppm (peak) rebate to the SP.  I'm assuming the TCP take at least 1ppm (I'd guess more) so based on what the SP gets and assuming what the TCP take, very little goes to the OCP compared to what the TCP & SP get.

This is based on the current method, I guess it will change and the costs rise when unbundling happens.


Quote:

The availability of 03 flushes out the cases where the enhanced features of non-geographic numbers (including the geographic anonymity) are genuinely beneficial. It also removes the caller from any discussion about the benefit of these features.

I agree but the SP would have to pay (more than likely) for such enhanced features which is why, I believe, 084x numbers are generally used.


Quote:

On the Access Charge. ...I have some sympathy with a telco that does not put the rate for calling the particular 0844 number used by someone's GP on the front page of its tariff sheet.

Ofcom guidelines, if I remember correctly, stated it had to give a guide price with regards to calls to 0844 due to number of different ranges.  So, BT for example, they could have put "calls to 0844 cost upto 5ppm.  Please see PDF for more accurate price".  VirginMedia could have put something along the lines of from 10ppm.


Quote:

Unlike the present situation where your telco has hundreds of different groups of non-geographic rates to advise for each tariff, Ofcom proposes that it has just ONE.

Can I clarify whether that is one SC for each number (ie 0845x, 0844x, 0871x, 09x) or one for the entire number range?

bbb_uk wrote on Jun 27^th, 2012 at 5:45pm:

SilentCallsVictim wrote on Jun 26th, 2012 at 10:04pm: …

The consultation (officially) closed at 5 pm.

Overnight submissions are usually accepted.

I fear that there is no more time for discussion on how to respond.