1.1 A key feature of electronic communications services is that consumers are not readily able to verify that their bills accurately reflect their usage of voice and data services. This is in part because of the large number of communications services and tariffs and also, unlike for the supply of gas and electricity, there is no meter for consumers to monitor their usage so, although consumers may be able to identify major errors, to a large extent the detail and accuracy of bills is taken on trust.
1.2 It is important that such trust is justified, consumers are not overcharged and consumer confidence in the accuracy of bills is maintained. As a consequence, Ofcom requires all providers of electronic communication services to provide accurate bills, under General Condition 11.1.
1.3 General Condition 11.3 imposes additional requirements on communications providers ("CPs") with a turnover in the provision of Publicly Available Telephone Services (PATS) (i.e. fixed and mobile voice services) of over £40 million per year.
1.4 Under General Condition 11.4, such CPs are required to obtain approval of their Total Metering and Billing Systems (TMBS) for PATS services from third-party assessors against the requirements of a Direction set by Ofcom ("the Direction"). The third party assessors - called Approval Bodies ("ABs") - are appointed by Ofcom.
1.5 The Direction is essentially a technical standard intended to ensure that CPs' billing systems deliver accurate bills. It includes monitoring and reporting requirements for CPs and it also sets maximum error rates ('tolerance limits') for those systems. The current Direction was adopted by Ofcom in 2008. Fixed and Mobile Voice Services are required to meet mandatory compliance requirements in the Direction whilst data connections (Broadband) and 'Voice over Internet Protocol' (VoIP), are subject to voluntary provisions.
1.6 The purpose of this consultation is to review the Direction and consider whether any changes are necessary. We want to ensure that the Direction's scope and requirements remain appropriate given changes in the market in recent years including the growth in data services.
1.7 We also want to consider the impact of the increased availability and take-up of inclusive tariff packages (e.g. where a data download allowance or a call allowance is provided in exchange for a fixed fee and if a consumer does not exceed their allowance for a particular service, they will not incur any additional costs). It may be the case, in these circumstances, that the accuracy requirements set by the Direction may be of less relevance in providing protection for these consumers. That said, it is still important that use of inclusive allowances is accurately monitored and that, when consumers do exceed their allowance, the charges are accurately calculated.
1.8 The final reason for the review is that ABs and CPs have reported difficulties in achieving compliance with the Direction in respect of services for large businesses and of wholesale services which CPs provide to each other.
1.9 In general, we consider that the Direction is working well and therefore propose that the existing requirements remain largely unchanged. The proposals that we are considering are targeted changes in response to market developments and feedback from CPs and ABs.
1.10 In summary, we propose that:
- The requirements in respect of fixed and mobile voice services for households and small and medium-sized businesses should remain unchanged.
- Fixed and mobile data services should remain subject to voluntary provisions. However, the provisions should be reviewed by ABs and CPs and updated to ensure that they remain relevant and effective. We will also explore ways to encourage greater adoption of these voluntary provisions.
- The accuracy and tolerance limits should be removed for services to large business consumers with a telecoms spend in excess of £50k per year. The evidence we have from CPs and ABs suggests compliance with these limits is not achievable given the volume of traffic for large businesses. We welcome views and further evidence, particularly from large business consumers, on this proposal.
- CPs and ABs have indicated that the accuracy and tolerance levels for wholesale services are not achievable. However, as the rest of GC11. does not apply to wholesale services and CPs are likely to have an incentive and ability to monitor bills from wholesale providers, we consider it appropriate to remove wholesale services from the Direction rather than simply remove the accuracy and tolerance levels.
We are seeking views on these proposals by 25 April 2013.