The maximum permitted call handling fee (“CHF”) that can be re-couped by BT Communications Ireland Limited (“BT”) for the period from 12 February 2015-11 February 2016 is to be set at €3.82. A somewhat disappointing result for BT, as the October 2014 Consultation proposed a maximum fee of €4.63 – but still up from the €3.02 charge for 2014/2015.
The Communications Regulation Acts 2002-2011 (the “Act”) requires ComReg to review the maximum CHF that can be charged by the emergency call answering service (“ECAS”) provider (currently BT) each year. In line with this obligation, ComReg published a consultation (ComReg 14/109). Relevant stakeholders were invited to respond to ComReg’s proposal to increase the CHF – the deadline for responses was 21 November 2014; with ComReg publishing its Response to Consultation and Final Determination on 14 January 2015.
So why such a variation between the CHF in the Consultation and ComReg’s final decision?
It seems that part of the reason for ComReg settling on the lower €3.82 figure, was due to re-evaluation of ComReg’s preliminary views on the likely annual rate of decline in call volumes. Initially, ComReg predicted the rate of decline in its October 2014 Consultation to be around 15.2%. However, in light of submissions received, ComReg now considers the annual rate of decline to be less, at around 11.7%. Consequently, this has had the effect of reducing the maximum permitted CHF.
Additionally, ComReg took into account the fact that the contract for delivery of the ECAS between the Department for Communications, Energy and Natural Resources (“DCENR”) and BT would be extended for a further 12 month period ie, to July 2017. This means that BT would have a longer period over which to recover its fixed costs (ie, the depreciation charge and the current under-recovery rate could be allocated over an extended period).
ComReg also estimated that despite the continuing trend of decline in calls to the ECAS, the forecast number of calls from which BT’s costs are to be recovered should be increased from 2.6 million to 4.4 million over the relevant period.
An olive branch does seem to have been extended to telecoms operators however - according to ComReg, although the CHF has increased year on year, the total amounts payable by operators towards BT’s costs have declined. But not for much longer….! According to the figures in paragraph 90 of the Determination, the total amount payable by operators for the coming period 2015/2016 is actually going to increase from €6.47 million to €7.26 million. Perhaps in an attempt to soften the blow, ComReg makes a conscious effort to point out that the payment in 2014/2015 was actually below average, due to an unprecedented decline in call volumes of 20% (when ComReg had forecast the decline to be around 3%) – so perhaps this coming increase is simply a ‘bump’ in the road….?