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NGCS Focus Group – 22nd July 2010 – 2.00 pm Ofcom

Agenda item (1) Introductions and review of minutes:

Attendance:

Justin Hornby

Cable&Wireless Worldwide - Chair

Geoff Brighton

Ofcom

Andy Martin

IV Response

Sean Hartley

BT

Laurent Pariat

Cable&Wireless Worldwide

Peter Farmer

Gamma

Jeff Loan

Ofcom

Kath Embleton

BT

Sandra Reid

VirginMedia

By telephone:

Stephen Ornadel

Everything Everywhere

Lesa Green

Kcom

Alistair Dixon

Colt

Agenda (2: Update / progress report on the current 'live' NTS related consultations / investigations:

  • PRS Scope Review

Jeff reported that Ofcoms consulation on whether Payforit and on-portal services should be included under PhonepayPlus regulation is at the stage of internal sign-off before it can be published.

PhonepayPlus has received over 40 submissions in response to the new Code of Practice with Ofcom receiving just over half of that total. Jeff explained that there were new the new risk assessment and due diligence requirements and that the proportionality of the Code was an important aspect. He acknowledged the UKCTA response which had been helpful.

The next step is for the Code to be submitted to Europe for approval which should take three months with implementation mid 2011.

Alistair Dixon asked why the Ofcom and PhonepayPlus consultations were being held in parallel and whether changes would be made to the Code if the European review found it to be disproportionate. Jeff explained that last time the consultations were serial and added three to four months to the process without generating any new material issues. Ofcom will consider any comments made during the review.

  • PRS Bad Debt

Ofcom has received an interim update from BDO who continue to work with BT and a further update is expected in August. The outstanding information for 2009/10 is imminent and will provide an indication as to what the future Retail Uplift and PRS Bad Debt surcharge should be. BDO has been set a target date for the end of September. Stakeholders will then be invited to sessions approximately three weeks later to discuss BDOs findings.

Alistair asked whether that meant that BTs revised OCCN should be applicable for the intervening period or if the PRS Bad Debt surcharge should remain at 3.03%. Geoff explained that any dispute regarding BTs OCCN would be considered upon its merits. Ofcom in the meantime are continuing as if the new rates hadnt been issued.

Andy Martin expressed his belief that as the PRS Bad Debt surcharge was part of the charge control process it wasnt appropriate to sign the OCCN and place IV Response at a competitive disadvantage. Peter Farmer commented that those companies which had signed the OCCN were all net originators.

Geoff acknowledged that the current process was much later than expected, but noted that the cause of the delay was not of Ofcoms making. The dispute and BDO work will be carried in parallel.

  • 080 Termination Rate Competition Appeals Tribunal (CAT) Appeal

Geoff reported that the CAT had made an interim judgement to allow BTs additional information to be admissible.

A decision remains to be taken as to whether to seek to link the Appeal with any appeal of the 0845/70 determination. Ofcom fully expect this determination to also be appealed.

  • 0845 / 0870 Termination Rate Dispute

Responses to the Supplementary Consultation have been received and Ofcom has a target publication date of 9th August.

Peter queried how Ofcom had managed to reach its conclusion for Principle 3 and commented that it was a risk adverse approach. Geoff declined to comment whilst the final determination was still under consideration.

Andy expressed his belief that IV Reponse had succeeded in meeting all of the Principles set out by Ofcom but that the mobile operators were unilaterally declining to negotiate. Andy asked whether the mobile operators were objecting to the framework or the charges themselves? Stephen Ornadel noted that T-Mobile didnt want multiple disputes with operators and that they hoped the CAT decision on 080 would help flush out the issue and give a clear decision which can be used across all operators.

  • NGCS Review

Ofcom is considering the data it gathered as part of the Section 135 requests and is targeting late September / early October for publication of the consultation. The approach has been to start with a blank sheet and to consider everything up to complete price caps. One of the key questions is whether there is on approach that will suit all sections of the market.

Geoff mentioned that the European Framework changes that are due to be implemented next Summer. Ofcom is working with BIS on the implications and may not be able to implement all of their desired changes until the Framework changes are in place. It is likely that this will mean Summer 2011 for any implementation consultation with changes coming into effect some 18 months later.

Andy asked if Ofcom was looking at market power and Geoff responded that Ofcom was looking at a resolution that resolves the issues without relying upon a finding of SMP. The NGCS review is not a market review but a review of the structure of how the market works. When pressed Geoff confirmed that Ofcom had no plans to conduct a market review as there was no need to carry one out. In addition it is considered doubtful whether the European Commission would accept NTS as a market definition. Any changes could be linked to the numbering plan rather than SMP findings.

Agenda Item (4): Implementation by BT of the 4th January 2010 increase in VAT

Geoff announced that it was Ofcoms intention to make changes to the Numbering Plan in order that VAT changes can be made without impacting POLOs. This would mean that the VAT recovery is at the retail end rather than through reduced POLOs. Members were told to expect a short numbering consultation to allow the changes to be made before 4th January.

AP SEP 01 Ofcom to provide an update at the next meeting

Date of Next Meeting: 2nd September 2010

Summary of New and Outstanding Actions:

AP SEP 01

Ofcom to provide an update at the next meeting

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