Examination of Witnesses (Questions 120-139)
OFCOM
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.
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