Select Committee on Trade and Industry Appendices to the Minutes of Evidence



APPENDIX 6

Memorandum submitted by Consumer Communications for England

1.   The Advisory Committees on Telecommunications

1.1  Consumer Communications for England (CCE) and the other five advisory committees ("ACTs") were established by the Telecommunications Act 1984 to advise the Director General of Telecommunications on matters within his remit which they wish to draw to his attention or matters he refers to them. The committees seek to represent the interests and concerns of consumers, and try to ensure an emphasis on the needs of those with least power in the market—those on low incomes or in rural areas, small businesses, the disabled and elderly (see Annex 1 for further details of the ACTs).

  1.2  Committee activities encompass conducting occasional research, running conferences with other consumer organisations, seeking views on telecoms issues from other consumer organisations, monitoring the findings of OFTEL's own consumer and market research programme, receiving reports on trends in consumer complaints dealt with by OFTEL. The Advisory Committees maintain an independent web site providing information about their membership and work, copies of annual reports and plans, responses to government and OFTEL consultations, details of meetings, links to other relevant sites, information on how to pursue a complaint an dhow to contact OFTEL and a form for consumer feedback.

  1.3  Through its quarterly meetings (held in public) CCE organises its two main activities: preparing written responses to OFTEL consultations and participating, through membership of working groups with OFTEL staff and telecoms operators, in policy deliberations, planning and implementation.

  1.4  CCE submitted evidence to TISC's previous inquiries into telephone numbering and into the work of OFTEL.

2.   CCE and OFTEL

  2.1  CCE maintains its support for OFTEL's approach to consultation. We expressed the view in our previous submission to TISC that OFTEL's policy development process is highly consultative.

  2.2  CCE itself is frequently able to discuss early drafts of consultation papers with the relevant regulatory policy staff and CCE members have been consulted throughout the process of publishing and reviewing comparable telecoms performance indicators, preparing for the implementation of Carrier Pre-Selection, developing and seeking consensus on a methodology for price comparisons, and in many other policy areas.

  2.3  More recently, OFTEL has consulted on "co- and self-regulation". CCE and other advisory committee members have been active participants in several "co-regulatory" projects over the last few years, including the work that has been done to provide comparable performance and price information on telecoms services.

  2.4  In our view, much of the recent press hostility towards OFTEL was misconceived. We comment in more detail below on ADSL (Asynchronous Digital Subscriber Line) and LLU (Local Loop Unbundling). In summary:

    —  LLU in the UK has been pursued with vigour by the current Director General, reversing the policy of his predecessor;

    —  on ADSL, there have been genuine technical problems to overcome, and much of the delay in progress has been due to the inability of competing operators to collaborate to the extent needed to deal with co-location issues; and

    —  on internet access, OFTEL has worked hard, on NTS (Number Translation Services) policy, and on FRIACO (flat-rate internet access call origination), on both issues with the aim of enabling Internet Service Providers to bring their retail prices down.

  2.5  CCE's comments on the co and self-regulation consultation and on OFTEL's recent consultation announcing a review of the dial-up internet access market, are attached to this submission[4].

3.   Access to mobiles

  3.1  Consumer access to mobiles is surely not in question. There has been huge growth in subscriber numbers in the last year or so, particularly in take up of pre-paid services. The four network operators have a more even share of the market each than in other European countries. Prices have been falling for some time, and the range of tariff options remains wide.

  3.2  There remain some barriers. For those customers, probably still the majority, with single-band handsets, switching networks may involve purchase of a new handset. Some service providers seem to be imposing quite high charges to port mobile numbers, and we understand SIM-locking remains an issue.

  3.3  In relation to IA (Indirect Access) to mobiles, CCE responded to OFTEL's consultation last year on this. We welcomed OFTEL's determination that Vodaphone and BT Cellnet should be required to offer access to IA operators. We expressed a hope that Orange and One-2-One would recognise the marketing benefits of offering such access voluntarily.

  3.4  CCE will be actively participating in OFTEL's review of the mobile market. As our last TISC submission said, we particularly wish to ensure OFTEL's market analyses do not focus solely on the supply side, but also investigate consumer experience.

4.   Local Loop Unbundling

  4.1  With hindsight, CCE regrets the decision by the previous Director General to focus his promotion of competition on infrastructure competition. Whilst cable operators are generally undercutting BT prices it became clear some time ago that roll-out was unlikely to reach more than 50 per cent UK households. Meanwhile other countries were pressing ahead with LLU and CPS (Carrier Pre-Selection). We believe CPS and LLU will benefit consumers. Already those consumers aware of Indirect Access operators have seen significant reductions in call prices as compared to standard BT tariffs, and those service providers utilising BT's Calls and Access product have been able to offer different bundled services to customers. LLU should enable more providers to offer services, at lower prices than Calls and Access has allowed.

  4.2  CCE believes the current Director General deserves credit for his vigorous attempts to maximise progress towards LLU. In the face of considerable technical difficulties, and problems in getting the industry to collaborate effectively to the extent needed, OFTEL has succeeded in bringing forward the process as quickly as we believe possible.

  4.3  We would also acknowledge that there have been and are immense technical hurdles to overcome. Facilitating ADSL and IP (Internet Protocol) in particular, and providing for a significant number of competitor providers to make use of LLU, has meant a considerably more complex process than that which faced other countries, where LLU was promoted in the context of largely narrow-band voice transmission and with fewer players in home markets.

  4.4  CCE believes LLU will bring benefits for consumers. However OFTEL has a difficult balancing act to perform. Under section 3 of the Telecommunications Act 1984, the Director General has duties to promote competition and protect consumers. But he also has specific duties to ensure the provision of telecoms services to satisfy all reasonable demands, to ensure that operators providing such services are able to finance their provision of those services, and to promote efficiency and economy in their delivery. These duties impose upon OFTEL the need to bear in mind both the financial impact on BT as a public company and the technical demands made of its network, when assessing the competitive and other pressures upon the BT network.

  4.5  CCE does not wish to be seen as an apologist for BT. However we do have genuine concerns fo the stability of the company and particularly for the technical resilience of its network, which, despite growing competition remains and will remain absolutely fundamental to the public provision of telecoms services in the UK.

  4.6  CCE therefore welcomes LLU and progress towards ADSL, but believes neither should be pursued in such a way as to risk de-establishing the BT network.

5.   Leased lines

  5.1  CCE has prioritised its attention to those OFTEL projects most affecting residential consumers. We are not able to respond to every consultation and have not specifically commented in response to the OFTEL consultation on leased lines. [Note the Scottish Advisory Committee on Telecommunications has responded.] We recognise that the cost of leased lines does impact on consumers as end users, given their use by eg Internet access providers. In general CCE supports the approach suggested by OFTEL in the consultation paper.

November 2000

Annex 1

  The Secretary of State for Trade and Industry appoints members and Chairmen to CCE (the English Advisory Committee), SACOT (Scotland), WACT (Wales) and NIACT (Northern Ireland). Members and Chairmen of DIEL (representing the interests of the disabled or elderly) and CfB (Communications for Business, representing the interests of small businesses) are appointed by the Director General of Telecommunications.

  The committees are advisory NDPBs, with a small secretariat of three OFTEL staff in London, and local staff in Edinburgh, Wales and Belfast. In total the running cost of the six committees is approximately £450,000 in the current financial year. This is financed from programme expenditure within OFTEL's budget.

  The Director General has statutory responsibility to receive consumer complaints and take regulatory action where appropriate. He has delegated this responsibility to the ACTs in Scotland, Wales and Northern Ireland so that consumers get a local response. An 0845 or local rate phone number provides access to the complaints service, with calls routed to OFTEL or the respective Advisory Committee office according to the country from which the call is made. CCE does not have complaints-handling responsibilities, but monitors enquiry trends and receives regular reports from OFTEL on complaints handled.

  The committees form their views independently of OFTEL, and see both strengths and weaknesses in the current "semi-detached" relationship with OFTEL. OFTEL operates a consultative policy-making process, with ACT members and other consumer organisations involved in ad hoc working groups with OFTEL staff and allowed opportunities to comment on early drafts of most consultation papers. In addition OFTEL consults the advisory committees and others on its annual work programme. The Director General attends a number of ACT meetings each year including regular meetings with the Chairmen.

  The committees are required to report annually on their work. This they do in an appendix to the OFTEL Annual Report, and independently, in leaflet format, incorporating both an annual review and a summary of their key interests for the coming year.

  Committee reports and information about ACT meetings are published on an independent web site (www.acts.org.uk). CCE quarterly meetings are held in public.


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