Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 120-139)


2 MAY 2006

  Q120  Rob Marris: In terms of costs and accuracy?

  Mr Carter: Costs and accuracy.

  Q121  Rob Marris: Is on your website?

  Mr Carter: Mm. Well, it was; whether it is still on the site today, again, I do not want to mislead you but it certainly was.

  Q122  Rob Marris: You can do that for Directory Enquiries but not for the mobile phones?

  Mr Carter: To be clear, we did it at a point in time—

  Q123  Rob Marris: As a snapshot.

  Mr Carter: We did a snapshot at a point in time. We do not claim that it is up to date market priced accurate information. We did two depth pieces of research at specific points in time.

  Lord Currie: The reason for that was obviously to address the concerns about developments in this area.

  Q124  Rob Marris: So how does the consumer find out, given if you call up these people they will probably charge you for the call?

  Mr Carter: Ultimately you find out in your bill.

  Q125  Rob Marris: It is a bit ex post facto is not it, to be an informed consumer?

  Mr Carter: It is ex post facto but, again, it is like most markets, that is ultimately how you find out whether or not you have paid too much for the service you have just bought, and you then do not buy again.

  Q126  Rob Marris: Hang on; in most markets I usually know the price before I buy the service.

  Mr Carter: And you would know the price in that instance.

  Q127  Rob Marris: How do I find out, that is all I am asking?

  Mr Carter: Increasingly what most people are doing is doing it on-line where they pay nothing.

  Q128  Chairman: If I were going to go on to your website to check the price and accuracy I am better off going on to the free services on the Internet.

  Mr Carter: Indeed.

  Q129  Mr Evans: Stephen, I know you were very careful to say that it did not happen under your watch and if I were sitting where you are I would say that too and perhaps emphasise it even more because the impression I get is that most people out there think that it could have been done better.

  Mr Carter: I mean, I—

  Q130  Chairman: We will take that as a yes, shall we?

  Mr Carter: Possibly there are definitely lessons to be learnt from it and we have been pretty public about those lessons and I think that is the way we have approached it and the research has given us some quite good tips about if you are going to liberalise the following markets how do you do it in a more measured way, and one of the key lessons that comes out of it—slightly relating back to Mrs. Curtis-Thomas' question—is about consumer information. One of the things that happened when that market was liberalised was previously everyone had got used to 192, a single service provider that had been around for a long, long time, and then there was a flurry of new providers who were all arguing their own case; but there was no neutral point of information at the point of the transition. So, for example, if you go back to our proposals on retail price control deregulation one of the things that we are proposing there is that over the summer period if we do deregulate retail price controls we will have a public information campaign explaining that change of rules, so that there is a neutral point of information at the point of the transition. That was a lesson we learned out of Directory Enquiries, so we have tried to learn lessons where we can.

  Q131  Mr Evans: You said that you can name three of the numbers. I could only name one this morning when I started to think myself and it is probably one of the three that you can name.

  Mr Carter: Very probably!

  Q132  Mr Evans: So would it not have been better in some regards to have treated 192, which was hugely popular, you could say that everybody knew the number and it was cheaper in many respects than some of the services that are currently available—and I agree with Claire that for the vast majority of people out there they do not have the faintest idea what they are paying for Directory Enquiry services when they get through—to have controlled it or regulated it somewhat like Camelot and then put it on the market every seven years for somebody else, like a franchise?

  Lord Currie: That would have been another approach to deregulation, that is certainly right. It is worth recalling that quite a lot of people did not appreciate that they were paying for 192 calls under the old regime, so the old regime is not necessarily rosy in the way it is looked at.

  Chairman: It was kindly priced just below the sum that showed an itemised bill, I think, so that you did not know—49 point something pence!

  Q133  Mr Evans: Can I ask you, Lord Currie, looking at the options and the franchise route; do you think that would have been better for the consumer?

  Lord Currie: I do not know. It certainly would have been an alternative but I am not sure that it would necessarily have been an appropriate way for transition because what we now have is a regime in which any new entrant could come in, and they will only do that if they have a sensible business case. But I think that is a better regime than one where there are only a certain limited number of franchises.

  Q134  Mr Evans: The vast majority of people are using just two of those numbers and the majority just one because that is the one they know.

  Mr Carter: You raise very interesting questions. On a larger scale this is what the cable industry has just gone through in 20 years—110 multiple service operators rationalised now down to one. You could ask in retrospect was it a good idea to licence 110 MSOs? It probably was not but at the time I am sure that it was done out of a desire to drive regional infrastructure at a local level in individual geographies; I am sure that was a well-intentioned decision. It is a very interesting area this question about what is the optimal level of competition and when does a small number of competitors become a kind of collusive market, and you always have to be alert to that, and what you are seeing in Directory Enquiries is the customers aggregating in the main—not entirely—around three or four providers.

  Q135  Mr Evans: Can I ask one final question on it, which is do you not think therefore that it would be useful, because you said people find out how much they have been charged when they see it on their bill, that before the number is given people are told how much they are going to be charged for the information?

  Mr Carter: It would undoubtedly be useful but whether or not we should mandate it, which I suspect is what is behind your question, is a question I would like to take away.

  Q136  Mrs Curtis-Thomas: I have heard some very interesting language to defend some of your actions and I quite like it, simply because it appeals to what I want. You talk about a neutral point of information, and then you have talked about the need for visibility in terms of pricing. You have also referred to the fact that you have made the charges associated with Directory Enquiries available on your own website, which is interesting, but when I searched for comparison of Yellow Pages or Directory Enquiries charges your website did not come up to provide me with that information.

  Lord Currie: I think there is an important distinction that Stephen was making between informing people at the point of, in effect, a regime change, moving from 192 to a variety of 118 numbers, which is what Oftel, we felt, should have been done more, and which we have been aiming to do in other products, from providing information on a continuous basis in an established market. The latter is a very difficult task technically and probably almost impossible to keep up to date, and we are not clear that that is the role for us to be doing that.

  Q137  Mrs Curtis-Thomas: I am rather confused, you see, because there are a huge number of gas, oil, electricity and energy providers in this country and yet that task is managed by them, but it seems to me that you cannot even manage it for the Directory Enquiries service providers. I do not think that is rocket science, I think it can be done and I think that it needs to be done to allow people, in your own words, to have a neutral point of information in this very important and costly area, and it is costly for lots of people. Why are you running away from what seems to be a very reasonable ask on behalf of the people of this country?

  Mr Carter: I suspect we are not going to agree on the question of how much consumer information should we provide. I will say three things and my Chairman may wish to add in. Firstly, we give this a lot of time and discussion within Ofcom as to where and when we should provide a neutral point of information, and on three or four occasions we have done it. There are specific reasons why we have done it and normally they have involved either a market transition or a particular investigation where there has been a high level of abuse, where there has been a consistent record of failed delivery by the operators. We have decided not to set ourselves up as a permanent independent broker of information across the entire market, for two reasons: firstly, because it would be substantially resource intensive and we do not have the resource to do it; secondly, because we do not believe it is technically do-able; and thirdly, there are alternative providers in the market who do it—there are commercial providers. If it is the case that they do not in the areas you are interested in then clearly that is an issue that we should take up with you separately and we can look at the specifics of the case upon which you are asking us to provide more information.

  Chairman: I am going to cut off here, if I may, because we have three minutes and there is one area left and it was prompted by something you just said there, Stephen. I was going to say let us move on to telephone numbers, and I did not mean the numbering plan, but your budget because you said you did not have enough resources. I think John Whittingdale, my fellow Chairman, has a few thoughts about resources.

  Q138  Mr Whittingdale: Yes. Stephen, your message in your parliamentary bulletin you proudly tell us that Ofcom will deliver for less and you point out that you have achieved a real terms budget reduction for the third consecutive year, which is commendable. But your budget is still nearly £130m whereas the budget of the Telecom Regulator in France is £12.9m and the US Federal Communications Commission, which does include broadcasting, which I accept the French one does not, manages to cover the whole of America with £170m. Why are you so expensive?

  Mr Carter: You speak from a position of knowledge I do not have, Chairman, on the French ART and FCC comparisons, and I will very happily go to France and indeed go to Washington and do the analysis and come back and answer your question!

  Q139  Rob Marris: Just do not call home when you are there!

  Mr Carter: We will go next year, it will be cheaper! What I can comment on with some degree of authority is how the numbers compare to the previous costs of doing regulation in this country, which is what we are responsible for; I do not know the reach of the US and the French authorities but I suspect that they are substantially different although the names and descriptions may suggest similarities. When I do compare them to the previous costs of regulation in this country we are as we say.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 21 June 2006