Examination of Witnesses (Question numbers
80-91)
OFCOM
1 DECEMBER 2009
Q80 Miss Kirkbride: Ofcom has been
rebuffed on the issue of porting and whether or not there should
be a two-hour porting time and we should move over to recipient-led
porting. Where are we on this matter?
Mr Richards: We have not been
completely rebuffed because we have managed successfully to move
the UK from five to two days. That is a huge step forward. We
are pleased with the progress we have made. We wanted to go further
and have had to rethink that. One accepts that that is one of
the things that happens. That is the way the process works and
we do not have a problem with that. The most significant development
is that the new framework directive just agreed in Brussels provides
for one day porting. Therefore, the following move is for us to
consult on the next steps. The backdrop to that is the European
legislation which provides one day. We will then ask ourselves
whether on a cost benefit basis there is a case for moving even
further than one day and that we are examining carefully at the
moment. I do not want to preordain where we will come out on that
because we need to look at the relative costs and benefits.
Q81 Miss Kirkbride: For the moment
the two hours has been dropped?
Mr Richards: No; it is one of
the range of possibilities we are looking at. What you are trying
to weigh up with that question if you have already moved from
five to two is the incremental benefit to consumers of making
it even lower. If Europe requires us to move from two to one that
is a further gain. Then you say: what is the cost associated with
moving from one day within 24 hours to two hours versus the benefits?
We need to establish how valuable consumers would find that. Do
they really value highly a two-hour or four-hour opportunity,
or are they relatively indifferent as long as it is within a couple
of days or a day? One compares that with the cost associated with
such a move. That is exactly what we are looking at presently.
There has been real progress. Five days was too long; two days
is much better, and we will now look at whether there is a next
step that will reduce the time even further.
Q82 Miss Kirkbride: Recipient-led
porting is the norm in Europe, is it not?
Mr Richards: Yes.
Q83 Miss Kirkbride: Where are we
on that?
Mr Richards: You are absolutely
right to raise it. There are two dimensions: first, how long it
takes; second, whether it is recipient or donor-led. At the moment
we have donor-led porting. Many other parts of Europe have recipient-led
porting and that is another issue on which we shall consult and
see whether there is a case for moving over to it. There are very
different views about in the industry. It is true that recipient-led
porting is the method used in other countries but there is also
concern in this country on the part of some operators that that
could lead to a rise in mis-selling and slamming.
Q84 Miss Kirkbride: Why?
Mr Richards: Because at the moment
if it is donor-led there is an opportunity for the donor to ask
if you are absolutely sure rather than it just popping up to say
you have been transferred. That is one of the differences. We
are not sure how serious that concern is and we must assess it,
but that is the issue. Over the past three or four years we have
had big issues in this country over mobile mis-selling. That is
one matter where we have had considerable success during the past
18 months. If you look at the graph of mobile mis-selling, it
was very high and it came down when we first introduced a voluntary
code and then a formal one. The numbers now are very low and I
am delighted about that because the industry has responded to
the code and public outrage about it. The numbers are good. If
we go right back to the start of the session when we were challenged
to say where we had moved things on for consumers, I believe that
mobile mis-selling is a story of considerable success. The numbers
have come right down and we do not regard it as a serious problem,
but that is why we do not want to take risks and recreate it and
we shall consult on those issues and see what the next steps should
be.
Q85 Miss Kirkbride: It is possibly
partly mis-selling and partly sheer confusion at the range on
offer. I have a particular case in my constituency involving EasyTalk
where the cancellation rate for the phone line is £300. Would
that constitute mis-selling in your view?
Dr Bowe: Is this an early termination
charge?
Q86 Miss Kirkbride: Yes.
Dr Bowe: It depends on the initial
terms of the contract.
Q87 Miss Kirkbride: Even if it is
in the contract is not a charge of £300 a damned cheek?
Dr Bowe: The question is whether
it is fair. The whole question of what is a fair charge to a customer
has come right up the agenda this week with the decision of the
Supreme Court on bank charges. Perhaps you would send me the constituency
case and we will have a look at it.
Q88 Miss Kirkbride: I shall certainly
do that. I am not sure about banks but there we are.
Dr Bowe: That will probably take
us into other areas. The Supreme Court judgment is relevant to
the whole issue of what are fair charges in our sector.
Mr Richards: We have been exploring
this and have reached a provisional view about termination charges,
but we must understand the Supreme Court judgment. There is a
direct read across in terms of what is and what is not fair in
a contract. We are digesting that at the moment and until we have
finished that we shall wait to see what our next steps are on
early termination charges. A lot of issues arise from that question;
it is not the first time people have raised it.
Q89 Miss Kirkbride: But the Supreme
Court decision was about the imposition of bank charges when you
have gone into the red and you are not authorised to run up an
overdraft. I would have thought that was a slightly different
issue from a termination charge that you agree to but which is
usurious and unfair.
Dr Bowe: The generic issue is
about the fairness or unfairness of what are actually contractual
terms. From the sound of it that is where your constituent's problem
arises.
Q90 Peter Luff: Perhaps the outstanding
questions can be dealt with by exchange of correspondence. For
example, I wanted to ask you about access of third-party providers
to mobile services and the impact on directory inquiry services
in particular. There are lots of other things we could have asked
about, but if it is acceptable to the Committee and the witnesses
perhaps we can do that in correspondence.
Dr Bowe: As you wish.
Q91 Peter Luff: We have had a rich
feast for the past two hours. There is a bewildering array of
important issues to be dealt with and in most cases we have only
scratched the surface. I have not asked about other substantial
areas. This is a frustrating experience for all of us. We are
very grateful for the comprehensive way you have answered our
questions. I shall hold you to your promises and intentions on
radio microphones. Who knows what will happen? This is the last
time in this Parliament we will see you jointly. Thank you for
your tolerance, frankness and openness.
Dr Bowe: Thank you. We find these
sessions extremely helpful and we hope you do too.
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