Select Committee on Culture, Media and Sport Written Evidence


Memorandum submitted by BT

INTRODUCTION

  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.

BACKGROUND TO THE PROCESS

  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.

REVENUE FROM CALLS

  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.

BILLING CUSTOMERS

  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.

SUMMARY

  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





 
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