0870 0870 & & Consumer Empowerment Consumer Empowerment - - PowerPoint PPT Presentation

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0870 0870 & & Consumer Empowerment Consumer Empowerment - - PowerPoint PPT Presentation

Jun 25, 2023 353 likes •969 views

0870 0870 & & Consumer Empowerment Consumer Empowerment William R Goodall William R Goodall FleXtel Managing Director Comms08 Comms08 0870 0870 Ofcom Policy 0870 Update 2 Comms08 Comms08 Ofcoms Policy Policy

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Comms08 Comms08

0870 0870

& &

Consumer Empowerment Consumer Empowerment

William R William R Goodall Goodall

FleXtel

Managing Director

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2 Comms08 Comms08

0870 0870

  • Ofcom Policy
  • 0870 Update
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3 Comms08 Comms08

From the Ofcom website...

  • Own Consultation Guidelines...

– If intervention is justified we aim to choose the least intrusive means of achieving our objectives, recognising the potential for regulation to reduce competition.

  • Better Regulation Task Force...

– The option of not intervening...should always be seriously considered. – Regulation and its unintended consequences, may be worse than the effects of the imperfect market.

Ofcom’s Ofcom’s Policy Policy

Consultation

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From the Ofcom website...

  • 3(1) It shall be the principal duty of Ofcom, in carrying out their

functions;

(a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition

Ofcom’s Ofcom’s Policy Policy Duties - Communications Act 2003

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From the Ofcom website...

  • 3(1) It shall be the principal duty of Ofcom, in carrying out their

functions;

(a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition

A serious omission on the Ofcom website...

?

?

Ofcom’s Ofcom’s Policy Policy Duties - Communications Act 2003

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From the Ofcom website...

  • 3(1) It shall be the principal duty of Ofcom, in carrying out their

functions;

(a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition

Ofcom has a mandatory duty to be Prudent...

  • 3(3) In performing their duties under subsection (1),

OFCOM must have regard, in all cases, to

(a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted

  • nly at cases in which action is needed;

Ofcom’s Ofcom’s Policy Policy Duties - Communications Act 2003

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Competition Appeals Tribunal Competition Appeals Tribunal

Judgements 2008 Judgements 2008

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Competition Appeals Tribunal Competition Appeals Tribunal

Judgement 1 Judgement 1

20th May 2008 - Mobile Termination Rates

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  • Ofcom must be Prudent

– CAT specifically reaffirms and emphasises Section 3(3) of the Act

  • Flawed Thinking

– Ofcom’s use of the GFT test was seriously flawed and a serious error

  • Blind to Costs

– Ofcom's refusal to consider cost information ... was an error

  • Unreasonable

– OFCOM did not approach resolving these disputes on this basis [reasonableness] and it therefore committed an error of law.

  • Consistency

– “Consistency is important because companies need to be able to plan their business on the basis of how they anticipate the regulator is going to act.”

Competition Appeals Tribunal Competition Appeals Tribunal

Judgement 1 Judgement 1

20th May 2008 - Mobile Termination Rates

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Competition Appeals Tribunal Competition Appeals Tribunal

Judgement 2 Judgement 2

18th October 2008 - Number Portability

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  • Ofcom must be Prudent

– CAT again reaffirms and emphasises Section 3(3) of the Act

  • Weak Impact Assessment

– [Ofcom’s impact assessment] does not meet the test of... profound and rigorous scrutiny.

  • Advice on Impact Assessment

– [Ofcom] to ensure that the important decisions it takes, with potentially wide ranging impact on industry, should be sufficiently convincing to withstand industry, public and judicial scrutiny.

Competition Appeals Tribunal Competition Appeals Tribunal

Judgement 2 Judgement 2

18th October 2008 - Number Portability

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Ofcom Policy Ofcom Policy

Impact of CAT Judgements Impact Assessments Impact Assessments & & Cost Benefit Analysis Cost Benefit Analysis

must withstand must withstand

Profound and Rigorous Scrutiny Profound and Rigorous Scrutiny Prudent Regulatory Activities Prudent Regulatory Activities

Transparent, Accountable, Proportionate, Consistent Transparent, Accountable, Proportionate, Consistent

and and

Targeted Targeted

  • nly where
  • nly where

Action is Needed Action is Needed

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0870 0870

  • Ofcom Policy
  • 0870 Update
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0870 Policy Objectives 0870 Policy Objectives (Ofcom’s Original 2005 Consultation)

  • 1. Price transparency

– Consumers should know what they are paying for calls.

  • 2. Range and choice of services

– Consumers should have access to a wide range of services and a choice of suppliers.

  • 3. Consumer protection

– Use of 08 numbers as a micro-payment system should be accompanied by measures which provide an adequate level of consumer protection, particularly for vulnerable consumers.

  • 4. Promotion of competition

– Regulation should promote competition between CPs and SPs, consistent with reasonable levels of cost recovery and revenue certainty.

  • 5. Reduced regulatory intervention

– Ofcom should operate with a bias against regulatory intervention and should avoid imposing any unnecessary burden on consumers, suppliers or other stakeholders.

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0870 0870

The Pre-call Announcements Debacle !

  • Ofcom “pushed-on” - heedless of dire warnings
  • Activated 070 PCA’s - 1st September 2007
  • Ofcom “uncovered” Heath & Safety Risks

– including “unknown” embedded systems alarms protecting both People & Property

  • Emergency modifications unsafe & unsound
  • PCAs fully withdrawn - after 3 months chaos
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How did it happen?

  • Inadequate Impact Assessment on 070
  • No H&S Risk Assessment (on PCAs)

Outcome?

  • Cost 070 Industry over £1 Million
  • Caused distress to vulnerable consumers
  • Confused callers, including the vulnerable
  • Best viewed as “Low Traffic Test” for 0870

0870 0870

The Pre-call Announcements Debacle !

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0870 Cost-Benefit Changes 0870 Cost-Benefit Changes

(2005-2008)

  • Pre-call announcements no longer an option

– Reduced Benefit - Loss of consumer protection

  • 03 already offers 0870 service at Geo rates

– Reduced Benefit - Unnecessary 0870 migration

  • International access to 0844/0871 is mired

– Reduces Benefit - impacts EU cross border trade

  • Costs to receive 0870

– Inadequate prominence of likely costs in consultation

=> erroneous impact assessment

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0870 Next Steps? 0870 Next Steps?

  • New, Rigorous, Impact Assessment - so PCA error avoided

– Does 03 make the Burden of Intervention unnecessary?

  • H&S Risk Assessment required? - If network changes planned
  • New, Robust, Cost-Benefit Analysis

– Real Cost Impact on trade? – TCP Revenue Uncertainty and cost recovery? – Targeting mobile supplier overcharging? – Delivers Consumer Protection?

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Comms08 Comms08

Consumer Empowerment Consumer Empowerment

  • BERR & Consumer Protection
  • Price Competition & Confusion
  • Price Transparency
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BERR BERR & Consumer Protection & Consumer Protection

Consumer Protection from Unfair Trading Regulations 2008

Came into Force: 26th May 2008

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BERR BERR & Consumer Protection & Consumer Protection

Consumer Protection from Unfair Trading Regulations 2008

Came into Force: 26th May 2008

Misleading Actions

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BERR BERR & Consumer Protection & Consumer Protection

Consumer Protection from Unfair Trading Regulations 2008

Came into Force: 26th May 2008

Misleading Actions

  • “price or the manner in which the price is calculated"

is a consideration...

  • “if it or its overall presentation in any way deceives or

is likely to deceive the average consumer” such that...

  • “it causes or is likely to cause the average consumer to take a

TRANSACTIONAL DECISION he would not have taken otherwise”.

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BERR BERR & Consumer Protection & Consumer Protection

Consumer Protection from Unfair Trading Regulations 2008 Transactional Decisions

  • A “Transactional Decision” is “Placing a call“

Why?

  • The Caller Commits to Pay (contractually binding);
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BERR BERR & Consumer Protection & Consumer Protection

Consumer Protection from Unfair Trading Regulations 2008 Transactional Decisions

Price must be presented...

> Before a consumer decides to place a call; > In an accurate (up-to-date) manner; > So it is unlikely to deceive or mislead

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Consumer Empowerment Consumer Empowerment

  • BERR & Consumer Protection
  • Price Competition & Confusion
  • Price Transparency
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Price Competition & Confusion Price Competition & Confusion

32 pages

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Price Competition & Confusion Price Competition & Confusion

Page 18 Page 4

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Price Competition & Confusion Price Competition & Confusion

Time Bands? Time Bands? (page 3)

(page 3)

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Price Competition & Confusion Price Competition & Confusion

Time Bands? Time Bands?

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Price Competition & Confusion Price Competition & Confusion

Set-Up Fees? Set-Up Fees?

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Price Competition & Confusion Price Competition & Confusion

Set-Up Fees? Set-Up Fees?

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Price Competition & Confusion Price Competition & Confusion

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Price Competition & Confusion Price Competition & Confusion

60 pages

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Price Competition & Confusion Price Competition & Confusion

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Price Competition & Confusion Price Competition & Confusion

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Price Competition & Confusion Price Competition & Confusion

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Price Competition & Confusion Price Competition & Confusion

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Price Competition & Confusion Price Competition & Confusion

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Price Competition & Confusion Price Competition & Confusion

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Price Competition & Confusion Price Competition & Confusion

On BT Business... Is it really cheaper to call 0870 than 01 & 02 ?

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Price Competition & Confusion Price Competition & Confusion

6 different tariffs ! 4 different tariffs !

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Price Competition & Confusion Price Competition & Confusion

Actually page 44 not 42 !

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Price Competition & Confusion Price Competition & Confusion

Call Charge Rounding? Call Charge Rounding?

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Price Competition & Confusion Price Competition & Confusion

Call Charge Rounding? Call Charge Rounding?

Simplified?

  • Nearest penny
  • Half penny or
  • 1/10 penny

depending on your package and the dialled number

Simplified?

  • Nearest penny
  • Half penny or
  • 1/10 penny

depending on your package and the dialled number

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Price Competition & Confusion Price Competition & Confusion

Call Duration Rounding? Call Duration Rounding?

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Price Competition & Confusion Price Competition & Confusion

Call Duration Rounding? Call Duration Rounding?

Whole minute charging was outlawed by Oftel in 1980’s Recently re-introduced by BT - after BT unfettered by Ofcom

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Price Competition & Confusion Price Competition & Confusion

Price Parameters Price Parameters

  • Dialled Number
  • Time of Day
  • Type of Day
  • Time Band
  • Charge Rounding
  • Duration Rounding
  • Charge Band
  • Set-up Fee

To work out call price - To work out call price - you must know you must know... ...

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Price Competition & Confusion Price Competition & Confusion

Summary Summary

  • Pricing remains opaque

(to all but Rocket Scientists)

  • Tricky Tariffs and Price Gouging common
  • Consumers have a right to feel confused
  • Consumer mistrust is justified
  • Call Price competition remains weak

(Ofcom’s GC14/Annex 2 isn’t working)

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Comms08 Comms08

Consumer Empowerment Consumer Empowerment

  • BERR & Consumer Protection
  • Price Competition & Confusion
  • Delivering Price Transparency
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Price Transparency Price Transparency

Consumer Empowerment Consumer Empowerment

Consumer Empowerment is…

An accurate call price

  • When placing the call
  • At the point of sale

…but, how can this be done?

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Price Transparency Price Transparency

Call Price Labelling Call Price Labelling

One way? From your phone:

  • 1. Press star followed by the phone number
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Price Transparency Price Transparency

Call Price Labelling Call Price Labelling

One way? From your phone:

  • 1. Press star followed by the phone number

e.g. * 0870-321-1000

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Price Transparency Price Transparency

Call Price Labelling Call Price Labelling

One way? From your phone:

  • 1. Press star followed by the phone number

e.g. * 0870-321-1000

  • 2. Listen to the price free of charge and...
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Price Transparency Price Transparency

Call Price Labelling Call Price Labelling

One way? From your phone:

  • 1. Press star followed by the phone number

e.g. * 0870-321-1000

  • 2. Listen to the price free of charge and...
  • 3. If the price is too high...

... hang up and it costs you nothing.

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Price Transparency Price Transparency

Call Price Labelling Call Price Labelling

One way? From your phone:

  • 1. Press star followed by the phone number

e.g. * 0870-321-1000

  • 2. Listen to the price free of charge and...
  • 3. If the price is too high...

... hang up and it costs you nothing.

  • 4. If the price is OK

…just dial number.

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Price Transparency Price Transparency

Call Price Labelling Call Price Labelling

One way? From your phone:

  • 1. Press star followed by the phone number

e.g. * 0870-321-1000

  • 2. Listen to the price free of charge and...
  • 3. If the price is too high...

... hang up and it costs you nothing.

  • 4. If the price is OK

…just dial number. (variation: hold for connection - but more load on network)

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Price Transparency Price Transparency

Call Price Labelling Call Price Labelling

One way? From your phone:

  • 1. Press star followed by the phone number

e.g. * 0870-321-1000

  • 2. Listen to the price free of charge and...
  • 3. If the price is too high...

... hang up and it costs you nothing.

  • 4. If the price is OK

…just dial number. (variation: hold for connection - but more load on network)

No Confusion - No Rocket Science - No Brainer !

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Price Transparency Price Transparency

Consumer Empowerment Consumer Empowerment

  • Benefits of Price Transparency

– Consumers make informed choices – Consumers get protection – Reduces scams & corporate swindles – Efficient price competition – Drives down wholesale termination rates – Less Intrusive Regulation – More trust in the Market

…but can Ofcom grasp the nettle and act?

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Consumer Empowerment Consumer Empowerment

Summary Summary

For more details see… www.flextel.com/ofcom