Memorandum submitted by BT
BT provides this paper in order to give background
information to the Committee about the way in which callers to
Call TV quiz shows are billed for their calls. BT has no comments
to make on the specific questions raised by the Committee in its
notice of 24 October 2006, since these are questions for the broadcasters.
Calls to TV quiz shows are made using Premium
Rate Service (PRS) numbers, which carry a cost to consumers that
is higher than normal calls. The PRS industry is complex as there
can be a number of different companies involved in handling PRS
calls eg the Originating Communications Provider, the Terminating
Communications Provider and the Service Provider, all of whom
participate in revenue share. Please see the attached diagram
for a visual description of the way that calls are relayed from
the customer to the Service Provider (the quiz show in this case)
through the various parties involved in the process.
When customers of BT call such quiz shows then
BT carries those calls as an Originating Communications Provider.
This is a regulated service and the amount BT, as an Originating
Operator, can retain is only around 3p on a £1.50 call. The
remainder is passed down the value chain. In some cases BT also
acts as the Terminating Operator, with whom the Service Provider
contracts. In such cases we provide transmission and interactive
voice services and the amount retained depends on things such
as the call volumes involved and the complexity of the service
required. The Service Provider (the broadcaster in the case of
quiz shows) usually retains between 80 and 95% of the total revenue
before VAT. The Government, of course, keeps 17.5% as VAT.
The cost of calls that customers make to quiz
shows appear on the bills presented by the company that provides
them with their calls service. This is because the quiz shows
themselves have no direct billing relationship with the customer.
Instead, the communications company providing the customer with
their calls service collects the money on behalf of all the companies
involved in the chain and then passes the money down the line.
As a responsible company, BT has various billing
processes in place which are used to alert customers to any unusual
calling patterns that emerge, not just those that might arise
as a result of calling quiz shows. This helps to minimise potential
bill payment problems. If the callers to such shows are customers
of other communications companies then they receive bills from
them and their processes will apply.
BT bills its customers for calls they make.
In the case of Call TV quiz shows, those calls are made at PRS
rates. BT retains only 3p in every £1.50 as an originating
company. BT also sells standard commercial products to the quiz
shows who act as the Service Providers. Providing information
to customers about the cost of calls is a matter for the Service
Providers, for example via recorded call announcements, on-screen
information and presenter announcements.
21 November 2006