Précis - Ofcom has recently put forward a range of measures designed to ensure that: telephone numbers are more efficiently used by communications providers; the documentation issued in relation to telephone numbers is clear, accurate and accessible; and that caps be imposed on the charges for calls to 09 and 118 services.

What? Ofcom has recently carried out a number of consultations, and issued varying statements, addressing concerns it has identified in the use and provision of telephone numbers (both geographic and non-geographic numbers) in the UK.  Ofcom has further developed its thinking in these areas by releasing a statement on measures to promote the efficient use of numbers, as well as two consultations on its proposed modifications to the National Numbering Plan / General Condition 17 and a proposal to introduce service caps for 09 and 118 premium rate services.

So what?

Statement on promoting the efficient use of geographic telephone numbers

Ofcom has previously consulted on a range of issues relating to the use and provision of geographic telephone numbers having published consultations/statements in November 2010, September 2011, March 2012 and May 2012.  However, in its recent statement on "Promoting efficient use of geographic telephone numbers" dated 18 July 2012 Ofcom concluded Communications Providers ("CPs") should be charged for the geographic numbers that they have been allocated.  Ofcom's rationale for such an approach is that it will provide CPs with incentives to use geographic numbers more efficiently.  As a result Ofcom has decided to introduce a charging  pilot scheme covering 30 area codes as of 1 April 2013 (the "Pilot Scheme").  The key elements of the Pilot Scheme are to be as follows:

  • the charges will:
    • apply per geographic number allocated in the Pilot Scheme area;
    • apply whether or not the number is used to provide a service to end users;
    • apply to numbers in blocks already allocated when the Pilot Scheme commences and to numbers in blocks that are allocated subsequently; and
    • be a daily charge of 10p per number per year for each day on which a CP holds the allocation of that number, and be billed in arrears on an annual basis;
  • the first charging year will commence on 1 April 2013 and end on 31 March 2014;
  • a CP may obtain a discount to its bill for numbers allocated to it but where such numbers are used by a different CP due to a regulatory requirement (but not under a commercial arrangement such as a sub-allocation);
  • revenue generated from number charges will be paid into the Consolidated Fund of HM Treasury;
  • Ofcom will continue to recoup its administrative costs associated with number allocation, including number charging, through the annual levy on eligible CPs;
  • the Pilot Scheme will be reviewed after approximately 2 years of operation, although Ofcom may decide to carry out a review earlier if it becomes clear that there are unintended consequences arising from the Pilot Scheme that may harm consumers.  Charging will, however, continue during any such review period; and
  • the Pilot Scheme will be implemented by the setting of new conditions in GC17 which will come into force on 1 April 2013. In addition to encouraging efficiencies Ofcom is also hoping that the Pilot Scheme will prevent, or at the very least delay,  the need to put in place number supply measures relating to the provision of geographic numbers.

Ofcom has also confirmed in this statement its approach to five digit area codes.  The telephone numbering plan currently contains 11 area codes in the format "01XXXX" plus five digit local numbers.  These five digit area codes only have a tenth of the quantity of telephone numbers compared to four digit area codes.  To address this shortage Ofcom has decided to roll-out 100 number blocks for these areas.  Applications for 100 number blocks will be considered on the standard "first come first served basis" and the Numbering Plan will be modified to implement the allocation of 100 number blocks.  However, CPs will need to justify the appropriate block size for allocation by providing predicted demand for numbers when applying for number allocations.  At present Ofcom's proposed approach is limited to the allocation of full 100 number blocks and does not extend to the withdrawal of unused allocated numbers within 100 number block units.

Following its implementation Ofcom envisages that 100 blocks of 100 numbers will be made available in each of the five digit area codes and that that this should extend number availability in these areas for around 21 years (on average).  Although the first of the 5 area codes predicted to run-out of 1,000 number blocks is forecast to only have sufficient numbers to meet demand for the next 13 years following the 100 blocks of 100 numbers having been made available.

Ofcom has also provided notice that it intends to carry on reviewing the administrative process for allocating geographic numbers by releasing a further consultation in this area later this year.

Consultation on service charge caps for 09 and 118 services

In April 2012, Ofcom consulted on a range of measures designed to address certain market failures that it had previously identified in the provision of non-geographic calls.  These included unbundling the charges for calls to non-geographic number ranges by separating out the charges paid for the call ("Access Charge") and the charges paid for accessing the service ("Service Charge").  As part of that consultation Ofcom considered that it was appropriate to set price caps on the Service Charges for 084 and 087 numbers for the purposes of differentiating between these number ranges and to increase price transparency.  In addition, Ofcom was of the view that more detailed consideration would need to be given to whether price caps for Service Charges for 09 and 118 numbers should also be set.

In its consultation "Service Charge Caps for 09 and 118 Services" dated 25 July 2012, Ofcom sets out its thinking in relation to the application of service charge caps for the 09 and 118 number ranges.  Ofcom does not currently impose retail caps on the price of calls to 09 or 118 numbers but calls to these numbers are subject to regulation by PhonepayPlus ("PPP") which imposes a range of consumer protection measures on providers offering services over 09 and 118 numbers.  However, BT's significant market power NTS Call Origination Condition (which restricts the amount of revenue that it can retain from the prices it charges for calls) and its revenue retention controls have led to a de facto constraint on outpayments to the organisations providing these services.  The effect of this is that BT does not charge its customers more than £1.53 per minute for calls to 09 numbers from a BT landline.  The restriction on outpayments currently constrains the range of services that are provided over 09 PRS calls.  Although not regulated, other fixed line providers have general chosen not to charge more than BT for calls to 09 numbers.  However, whilst these characteristics naturally constrain the level of charges on the 09 range, Ofcom is of the opinion that this should not prevent the imposition of price caps on the Service Charges.  In addition, BT's NTS Call Origination Conditions do not apply to 118 numbers with the prices for calls to these numbers varying significantly between fixed line and mobile operators and often costing substantially more than calls to 09 numbers.

Ofcom has therefore proposed that a price cap of £5 per call and £3 per minute be applied to calls to both 09 and 118 numbers.  It considers that whilst these new limits may not lead to automatic increases in revenue for PRS providers they will have a positive impact on confidence in these markets and help to reduce the potential for fraud and bill shock whilst also assisting originating communications providers in minimising their risk of bad debt.  Ofcom is also of the opinion that the caps for Service Charges are inextricably linked to Ofcom's proposal to unbundle the Access Charge and Service Charge.  Whilst welcoming comments on the options reviewed by Ofcom for additional consumer protection measures (including pre-call announcements, opting in to PRS, alerts on the duration of calls to PRS, dedicated number ranges for the most expensive PRS and extensions to the 30 day payment hold period), Ofcom's analysis suggests that at the Service Charge levels proposed no additional consumer protection measures, above those imposed by PPP, would be necessary.  Any caps on the Service Charges will also need to be implemented alongside Ofcom's unbundling proposals, most likely 18 months after Ofcom's release of its statement on the unbundling approach for Access and Service Charges.

Consultation on changes to the Numbering Plan and General Condition 17

Ofcom is responsible for the administration of the UK's telephone numbers as part of the regulation of the communications sector.  As part of Ofcom's review of non-geographic call services it is considering making a number of changes to the National Numbering Plan ("Numbering Plan"), the forms used to apply for numbers and General Condition 17 ("GC17").  Ofcom considers it to be an appropriate time to undertake a substantive review of the Numbering Plan which was first released in July 2003 but has not been subject to an overarching review since its release, despite numerous amendments/modifications in the intervening years.  The focus of Ofcom's review of the Numbering Plan is to ensure that as a whole it is clear, accessible and accurate whilst remaining fit for purpose.

Ofcom considers in its "Telephone Numbering" consultation dated 26 July 2012 that the provisions of the Numbering Plan, and the related provisions of GC17 (as well as the numbering application forms), could be improved in several aspects.  It proposes to:

  • create a single reference point for communications providers and other stakeholders in relation to number ranges and related restrictions;
  • simplify the provisions relating to compliance with the Numbering Plan and other restrictions on the adoption and use of numbers;
  • improve the clarity of the Numbering Plan, and remove unnecessary duplication;
  • ensure consistent reflection of current numbering policy across GC17 and the Numbering Plan;
  • delete obsolete or redundant text;
  • make consequential amendments to the numbering application forms; and
  • correct textual and typographical errors.

Ofcom has confirmed that its proposed changes and modifications are not intended to alter the current scope of the substantive regulations in this area.

Consultation Periods

Ofcom has requested that any comments on the proposals outlined in either the "Service Charge Caps for 09 and 118 Services" or the "Telephone Numbering" consultations be submitted to it by 19 September 2012.