Telephone Numbering - Safeguarding the future of numbers

Consultation summary

Summary

The purpose of this document

1.1 Telephone numbers are a critical national resource. They are a key part of how UK households and businesses access and pay for £34 billion worth of services each year ^(-1-), from basic local calls to services such as help desks and chat lines. They are fundamental to effective business operations. They are also key to the communication requirements of citizens, as they allow access to many essential public services.

1.2 Telephone numbers must be managed effectively, so that they are available on demand, do not need to be changed, and mean something to those who call them. This is Ofcom’s responsibility. This consultation document considers how telephone numbers are used now, how they will be used in the future, and how Ofcom intends to manage them so that consumers get the maximum possible benefits.

1.3 Importantly, this document does not propose changes to the geographic telephone numbers traditionally used by most households and businesses. Indeed, the fundamental aim of our proposals for these numbers is to reduce the risk of such changes, now and in the future. We propose to achieve this by putting in place new mechanisms to manage the allocation and use of telephone numbers.

1.4 We are proposing some changes to simplify the non-geographic numbers used by certain business and public services. This will seek to strengthen consumer confidence in these numbers, and will take into account work already underway by Ofcom to address consumer concerns about them. Our proposals have been designed so as to minimise any disruption caused by these changes.

1.5 The long-term plan for telephone numbering which we set out in this document is based on a set of strategic principles that will apply to all numbering policy decisions. These principles are designed to ensure that our numbering decisions always consider the interests of consumers and businesses. Consumers do not generally care about the more technical aspects of numbering policy, but they do care about the continuity of their own number, and they do want to be able to dial other numbers with confidence.

1.6 We are making a number of specific proposals to benefit consumers:

• using a consumer protection test when allocating telephone numbers, which will permit us to cut off the supply of telephone numbers to those communications providers that persistently and/or seriously abuse consumers;
• restructuring the way in which we allocate geographic numbers (numbers starting with ‘01’ or ‘02’) in order to increase the efficiency with which they are used by communications providers, and thereby avoid number changes;
• creating a new type of number – starting with ‘03’ - for those business and public services who require a national presence, but who do not wish to charge consumers a premium for contacting them. Charges for calls to these numbers would be tightly linked to the charges for calls to normal geographic numbers;
• simplifying the meaning of those ‘08’ and ‘09’ numbers which are used to provide chargeable services to consumers, so that consumers can easily understand the price that they are paying and the service that they are receiving. We would achieve this over a period of time by managing growth in a manner that is consistent with a clear long-term approach. We propose to protect the strong existing brand of ‘Freephone’ services on ‘0800’;
• creating a new type of number – starting with ‘06’ - for existing ‘personal numbering’ services, and perhaps in the future for ‘individual numbers’ which are allocated directly to consumers. We propose to protect against abuse of these numbers by applying a ceiling to call charges. We also propose to consolidate the use of ‘07’ for mobile numbers, acknowledging the strong consumer recognition of mobile numbers; and
• exploring whether the best means of promoting efficiency in the future might be through the use of market-based incentives, such as a modest charge made to communications providers for the numbers that they receive, rather than through the application of ever more complex regulatory rules and processes.

1.7 These proposals fit together to implement the strategic principles we have developed. Some proposals will be phased in, to minimise the costs involved for providers and, ultimately, for consumers. But over time, these proposals as a whole should produce a plan for UK telephone numbers which gives numbers clear and enduring meanings for consumers, which increases trust in certain number ranges, and which makes enough numbers available for current and future services.

1.8 If the various measures proposed here are successfully implemented, then the National Telephone Numbering Plan (‘the Numbering Plan’) in 2010 would look like Figure 1.1.

Figure 1.1 Ofcom’s proposed future Numbering Plan

Numbers starting:		Service provided:
		Geographic numbers
		Countrywide numbers
		For future use
		Personalised numbers
		Mobile numbers
		Freephone
		Chargeable services
		Premium rate services

The need for this review

1.9 Twelve years after the management of numbering transferred from BT to the regulator, we face significant consumer concern about how certain numbers are being used, and possibly substantial technology-driven change in the future. Ofcom is therefore carrying out its first major review of how it manages telephone numbering. The aim is to provide immediate solutions to some current concerns, and to do so as part of a strategic framework that will also make sense in the future as technology and consumer behaviour evolve.

1.10 Ofcom is responsible for managing telephone numbers in the UK. In doing this it must ensure that enough numbers continue to be available to consumers, so that they can benefit from the services which numbers support. Ofcom must also ensure continued trust in the meaning provided by numbers, so that consumers can use them with confidence. Over the past few years we have seen these objectives come under pressure:

• availability is threatened by shortages of numbers in some geographic areas, a threat which is exacerbated by the prospect of market entry by many new competitors. There are also projected shortages for categories of non-geographic numbers (some of those beginning with 08 and 09), for which the usual response of opening extra number ranges could add to existing consumer concerns; and
• consumer confidence is threatened by confusion about the prices and services associated with certain numbers. This has been a particular concern for services beginning with 08 and 09 numbers. Consumer confidence is also threatened by the misuse by some providers of certain types of numbers, which tends to bring all services offered on such numbers into disrepute.

1.11 At the same time, the role and use of numbers is expected to shift dramatically over the next few years. Of particular importance is the emergence of ‘Voice over IP’ (VoIP) as a mature technology. This fundamentally changes the way in which calls are routed by telephone networks, and therefore fundamentally changes the role of telephone numbers. A variety of new communications providers are using VoIP technology to enter the market for voice calls, whilst those communications providers already active in this market are investing in Internet Protocol (IP)-based ‘Next Generation Networks (‘NGNs’). These developments will reduce the pressure on numbering capacity, support exciting new services and enable greater consumer choice, but may also allow new forms of abuse and exploitation.

Numbering principles

1.12 In this document we set out the standard approach that we will take whenever we look at numbering policy issues. These principles are intended consistently to promote the interests of citizens and consumers, by ensuring that:

• the numbers consumers want are available when they are needed;
• the numbers consumers currently use are not changed if this is avoidable;
• the meaning which numbers provide to consumers is protected;
• number allocation processes support competition and innovation; and
• consumers are not unnecessarily exposed to abuse.

1.13 This approach recognises that consumer interests are, in general, best served by promoting effective competition; telephone numbers have an important role in this. However, it also recognises the direct consumer interests related to the misuse of numbers, and the broader citizen interest associated with continuity and availability of certain numbers.

Policy proposals

1.14 This review draws on a significant evidence base developed by Ofcom in 2005. We have carried out market research into consumer attitudes to and use of numbers. We have carried out a detailed analysis of current demand for numbers, and technical research into how this may change. We have reviewed the legal framework underpinning Ofcom’s role in managing numbers, and carried out economic analysis of the potential role for market-based mechanisms. As a result of this analysis we have developed a number of policy options, which are discussed in more detail throughout this document. The following paragraphs summarise the key elements of our current policy proposals.

We propose to use consumer protection tests to deny allocations of numbers to providers who persistently and/or seriously abuse consumers

1.15 We aim to increase trust in UK numbering as a whole by establishing one or more consumer protection tests that would permit Ofcom to deny allocations of numbers to providers that persistently and/or seriously abuse consumers. Such tests would need to be applied in an objective, transparent, non-discriminatory and proportionate manner, and on a case-by-case basis. We consult in this document on the principle of such tests and the general approach that we might take in order to meet these criteria.

1.16 We also consult in this document on a specific example of such a test, covering the allocation of numbers. Ofcom proposes to consider refusing future allocations of numbers in cases where a provider has breached specific consumer protection standards more than once within the previous year. Such a test could substantially reduce current levels of misuse of numbers.

We propose to take steps now to minimise the chance of consumers having to change their geographic number in the future

1.17 Geographic numbers are widely recognised and trusted by consumers. Our consumer research emphasises that consumers highly value continuity in their geographic numbers, and this is also apparent from the public hostility that has historically been associated with major number changes.

1.18 Geographic numbers are also in high demand by communications providers. This is not because underlying consumer demand is growing in the UK as a whole. Instead, it is because the numbers that have been allocated are not well-utilised, because the total pool of numbers is spread across many geographic areas and an increasing number of communications providers.

1.19 Ofcom proposes to maintain the continuity and availability of geographic numbers to consumers by allocating some geographic numbers to providers in smaller-sized blocks. At present we normally allocate geographic numbers in blocks of 10,000 numbers. In those areas where numbers are in imminent danger of running out, we allocate blocks of 1,000 numbers. We now propose to allocate in blocks of 1,000 numbers in all geographic areas that are at risk of exhaustion within five years.

1.20 This approach is only required for the next five years or so, as in the longer term the deployment of VoIP technology in general, and NGNs in particular should allow the allocated numbers to be better-utilised. This is because these networks will no longer use telephone numbers as the means of routing calls (they will use IP addresses instead), and this means that the network itself no longer constrains the size of number blocks. It will be possible to allocate telephone numbers in whatever block-size is most efficient from a numbering management perspective.

1.21 This proposal will improve the utilisation of these numbers, and substantially reduce the risk of number changes. A moderate improvement in utilisation rates, from the current average of 15 per cent of available numbers to about 30 per cent, would reduce the number of geographic areas currently at risk of number shortages from 34 to zero.

1.22 Ofcom has also considered contingency plans to make available additional numbers if numbers do become exhausted in a small number of specific areas. This might occur for unforeseen reasons such as substantial new housing development within a limited geographic area. Our view is that the most effective means of providing additional numbers in a targeted manner, to minimise consumer disruption, is to use ‘overlay codes’ (i.e., using a second area code for exactly the same geographic area that has run out of numbers). This view is supported by the successful introduction of ‘020 3’ (similar to an overlay code) in London over the last year. We therefore propose to adopt overlay codes as a backstop measure where allocating numbers in smaller blocks is not sufficient.

We propose to manage numbers more effectively by substituting market-based mechanisms for some administrative rules and processes

1.23 Ofcom currently manages numbering using complex rules and processes that are designed, for example, to ensure that providers use numbers efficiently. But we have been considering whether some use of market-type mechanisms might be more effective and less intrusive.

1.24 Initially, we are considering charging communications providers (not consumers) a nominal sum for number allocation, sufficient to incentivise efficient use of the numbers that they are allocated. We consult in this document on the principles that would apply to any such charge.

1.25 Ofcom notes that it is unlikely to be possible to introduce any form of charge before 2007. Ofcom is aware that by signalling the possible introduction of such a charge, providers may apply early for numbers that they do not yet need in order to avoid future charges. Ofcom wishes to make clear that such behaviour will not be rewarded. For example, any charge which is introduced is likely to include an annual charge that would be applied to all allocated numbers.

We propose to create a new type of number – starting with ‘03’ - for those business and public services who require a national presence, but who do not wish to charge consumers a premium for contacting them

1.26 The original purpose of those non-geographic numbers starting with ‘08’ and ‘09’ was as a single point of contact for those businesses and public services which have a national presence. These numbers additionally permit businesses and public sector bodies that make services available to the public to charge for those services using a micro-payment mechanism known as ‘revenue share’; this capability is widely used.

1.27 However, consumers have a poor awareness of the absolute level of call charges for these numbers, and the nature of the micro-payment which is included in them. Additionally, a number of ‘scams’ have emerged which exploit this micro-payment mechanism. The result has been a substantial erosion of consumer trust. Some proposals to restore this trust have already been set out in separate consultations, which will be concluded separately ^(-2-).

1.28 This review also notes that several key ‘08’ ranges are at risk of running out. This is due to strong growth in underlying demand, rather than poor utilisation of the allocated numbers, and so Ofcom will need to make available additional numbering capacity. This creates an opportunity to manage growth in a manner that is consistent with a long-term vision intended to deliver further benefits to consumers.

1.29 Ofcom proposes immediately to create a new type of number – starting with ‘03’ - for those business and public services who require a national presence, but who do not wish to make an additional charge to consumers for contacting them. We would expect the new range to become trusted by consumers as covering clearly-understood services and price ranges. We would take several steps to build this trust:

• the new proposed ‘03’ range is numerically next to the existing ‘01’ and ’02’ geographic ranges, and call tariffs would be the same as geographic rates. Consumers would therefore have a clear understanding of the price that they are paying for a call;
• the use of revenue-sharing would be forbidden on this new range. Consumers calling these numbers could be confident that they were paying only for the call, and not for any additional services provided by the organisation being called; and
• Ofcom would work with those UK communications providers responsible for managing international network interconnection, to try and ensure that the new range can be called from abroad.

We propose to simplify the structure of the 08 and 09 number ranges

1.30 Services which require small micro-payments would stay on the ‘08’ range, getting new number allocations as required by demand. The creation of the new 03 range would, however, both give Ofcom more flexibility in managing the 08 range in the short- to medium-term, and make it possible over a longer period to simplify the public description of numbers within the 08 range.

1.31 Our long-term approach to the 08 range is that services would be described at the 2-digit level (e.g., 080, 081, 082) rather than the current 3-digit level (e.g., 0844, 0845). This would increase the capacity of each range by a factor of 10, so ensuring number availability for each service for the foreseeable future. Services would be allocated number ranges in order of price, from 080 to 089 (e.g., 080 is free, 084 is 5ppm or less, 087 is 10ppm or less). This should significantly increase transparency for consumers.

1.32 Ofcom proposes to leave current 0800 Freephone service numbers unchanged. This is the one type of 08 number that is well-recognised and trusted by consumers. The same number generally is used for Freephone services internationally, which may contribute to high consumer awareness. And there is no current danger of these numbers being exhausted.

1.33 Ofcom has also considered a variety of options for simplifying the public description of ‘09’. We would prefer a similar approach to that proposed for ‘08’, by associating a clearly defined service category with specific 2-digit ranges. For example, ‘092’ might be allocated to ‘charity fund-raising’, and ‘098’ to ‘adult content’. The aim would be to try and establish a clear identity for each number range, in the interest of both consumers and service providers.

1.34 Ofcom recognises that the proposals for 08 and 09 would leave existing services in place on certain 3-digit numbers that are inconsistent with the long-term approach. We are not proposing here forced migration of such services, as that raises a number of complex issues about migration costs on which we have consulted separately ^(-3-). We note however that the proposals described here are designed so as to create a strong and positive brand for the new numbers which are made available, in the expectation that this will encourage voluntary migration over a period of time to the new structure. If this proves to be successful, then it may be appropriate to return to the issue of forced migration of remaining legacy services. The trigger for such a re-evaluation would be a level of voluntary migration which materially reduced the residual costs associated with forced migration.

We propose to take immediate steps to increase consumer protection for 070 personal numbers, allowing ‘07’ to be wholly identified as a mobile range

1.35 Personal Numbering Services are provided on one specific part of the 07 range (070). Ofcom has several concerns about these services. There is very limited consumer awareness of ‘Personal Numbers’ as a concept, and legitimate personal numbering services have had relatively little market impact. At the same time there have been a number of cases where providers have exploited the poor awareness of this range, and the lack of call charge ceilings, to run ‘scams’.

1.36 There has been a previous attempt to restore trust in personal numbers, by removing the ability of 070 providers to use revenue-sharing, but continuing consumer abuse suggest that this was not sufficient. Ofcom therefore now proposes to introduce a charge ceiling on calls to personal numbers, to close the 070 range to new applicants and to allow current 070 services to migrate to a new range within perhaps three years.

1.37 Consumers primarily associate the 07 range with mobile services, and this provides a valuable degree of tariff transparency, making clear when consumers are paying a premium for a mobile service. The migration of personal numbers from 070 will permit Ofcom to consolidate this recognition, by formally designating the entire 07 range as being for mobile services. It might be appropriate to reserve specific sub-ranges for new mobile multimedia services, which might have different tariff structures from existing voice services, and Ofcom is seeking views on ways in which this might be achieved.

We propose to designate a new ’06’ range for existing personal numbering services and future individual numbering allocations

1.38 Ofcom proposes to open a completely new range – ‘06’ – for ‘follow-me’ services such as personal numbers. Ofcom further proposes to open a specific sub-range - ‘065’ - to accommodate those specific personal numbering services which are migrating from 070, and also to accommodate growth in such services. Ofcom would apply the same consumer protection conditions to ‘065’ numbers as are proposed for ‘070’.

1.39 In the longer term Ofcom believes that there may be merit in considering extending the concept of ‘personal numbers’ to include ‘individual numbers’ allocated directly to end users. A number of issues would need to be resolved before such a scheme could be implemented, and Ofcom is seeking input on these issues. In the meantime, Ofcom provisionally proposes that ‘060’ be used for such services.

Next steps

1.40 This consultation runs until 25 May 2006 (deadline extended 20|04|06). Ofcom aims to publish conclusions in a statement in summer 2006 on geographic numbering, some non-geographic numbering (including 08 numbers) and the approach to 070 personal numbers. During this consultation period, Ofcom will also arrange consumer research to help develop straightforward descriptions and associated graphics for individual number ranges with the aim of promoting greater consumer awareness.

1.41 Ofcom will also need to conduct further consultation on the detailed steps necessary to implement these proposals, perhaps in a single consultation document in summer 2006. Ofcom also expects to consult further in summer 2006 on more detailed proposals concerning consumer protection tests, number charging, allocating numbers directly to end users, and numbering for premium rate services, with final conclusions being published by the end of 2006.

Footnotes:

1.- UK spending on telecoms, excluding broadband and corporate internet

2.- Number Translation Services: A way forward (http://www.ofcom.org.uk/consult/condocs/nts_forward/) Providing citizens and consumers with improved information about Number Translation Services and Premium Rate Services (http://www.ofcom.org.uk/consult/condocs/nts_info/), Conditions regulating Premium Rate Services (http://www.ofcom.org.uk/consult/condocs/prsconditions/prs.pdf)

3.- Number Translation Services: A way forward (http://www.ofcom.org.uk/consult/condocs/nts_forward/)

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