Select Committee on London Local Authorities Bill Minutes of Evidence

Evidence Session (Sections 4400-4499)


28 MARCH 2006

 4400. What about BT Retail, the next one you mentioned?

(Mr Nunn) BT Retail is primarily concerned with selling services to residential customers, many of you will have a BT line at home, and so that is the primary role. They do also sell services to other organisations for resale so some of those things are resold through other providers.

 4401. Do other operators provide similar retail services to those which BT Retail sells?

(Mr Nunn) Yes, there are many of them. It is difficult to tell how many because Ofcom do not maintain a list of all of the providers in the UK. We have looked for it and cannot find it. The only list that is available is a list of those people who have number blocks allocated to them. There are many service providers out there who sell who do not have number blocks such as Tesco who sell phone services now, Carphone Warehouse and Virgin Mobile, those people do not have number blocks allocated to them but still sell services to end users.

 4402. Yes, I am going to come back and a little bit more in a moment, particularly having regard to the Chairman's question yesterday about service providers. Tell us first about BT Global services, would you? It is at Paragraph 15.

(Mr Nunn) Global services for completeness sells services to end users both in the UK and around the world but the UK operation is primarily focused on our business customer base, our larger customers and is less likely to be relevant in the case we are considering today. It does also address central local government and large organisations like that.

 4403. Are these various divisions within BT, separate entities or are they one of the same entity?

(Mr Nunn) They are all party to the same legal entity but for regulatory reasons, the divisions are called quite clearly and Ofcom have a number of constraints that are placed on us about how we can pass data around between those various organisations and also prices set between those parts of the organisation, for example, prices are set on Openreach. There is a mandate, Wholesale has to buy those things at prices set by Openreach.

 4404. Is that a reflection of the way in which the industry as a whole works?

(Mr Nunn) Yes, it is. Industry as a whole is subject to that same regulatory framework and we have to serve them on an equivalent basis as we would an internal part of BT organisation.

 4405. Just as BT can provide services to end users, can others do that as well?

(Mr Nunn) Yes, they can, as I mentioned earlier on Tesco, for example, sells home phone services. I do not know who the underlying provider of those services is, if I did I would not be able to tell because that would be breaching confidentiality but a number of players like that, like Tesco and the Post Office, are not necessarily small operators, they are fairly large brand names that are looking to get into telecom services as a way of extending their brand into other services.

 4406. I am going to ask you to explain how a traditional phone call is made because I think this may be of some importance to illustrate a point.

(Mr Nunn) It may be useful to have the diagram in front of you again. Everything starts with an end user, and I have taken a fixed network, mobile networks work in a broadly similar way except there is quite a number of technical differences at the detailed level. It starts at a local level, the caller dials, the digits of that telephone number are then examined in the telephone exchange and the telephone exchange makes a decision whether it can route that call on that exchange alone or whether it has to pass across the network to another node. If it passes across the network, it would then route either directly in some cases to another local exchange or more likely through either one or more core nodes to the termination point. It may leave BT's network at any of those points. The number analysis is such that if the number range is not allocated to BT, it would leave the network at an appropriate point and there are a number of decisions that are made on that. The key point is it is only when the call gets all the way through to the network to the final telephone exchange that there is user related data there that advises whether the call is barred or not. The call will always go all the way through that sequence of exchanges through to the far end and only then it will be known whether the line is in service or temporarily barred from receiving calls, or indeed out of service altogether.

 4407. I would like you to explain to the Committee how all ranges of telephone numbers or blocks are allocated, if you will please?

(Mr Nunn) As we have already heard earlier today, Ofcom allocate number blocks typically in ranges of ten thousand numbers but in certain areas where numbers are scare it is one thousand number blocks, particularly in London, there has been a number exhaustion issue over the last few years which led to 0203 being opened up one year ago. This information is in the public domain, Ofcom's website is an example, on the next page towards the back of the exhibits, illustrating what that information looks like. If I can talk you through this page, the column headed "SABC" that has a number 2079 which indicates that is the number beginning with 02079 the initial zero is dropped for purposes of this. The "D/DE" referred to also as the D and DE Digits, for example, in the first column there (indicating) 50 indicates that number is allocated and indeed it is allocated to MCI WorldCom. So, we know any that number beginning 0207950 is initially allocated to MCI WorldCom and so that block of the ten thousand numbers between that number and the next number in the column belongs to MCI WorldCom or at least was initially allocated there. It is at that block level that numbers are routed through the network. We do not know within BT what goes on inside that range, that is MCI WorldCom's business.

 4408. I would like to you ask you one or two more questions in this area, if I may. First of all, that is, I think you are saying, information of original allocation of the telephone numbers to those providers is information in the public domain, is it not?

(Mr Nunn) It is, yes. There is a web link on the exhibit.

 4409. If anyone has an 0207 or an 0208 number, for example, is that a BT telecom number as one might suppose or not necessarily?

(Mr Nunn) Not necessarily. As you can see looking down the exhibit, there are only four instances on that page where BT numbers are listed. There is another 11 operators listed on that page after 26 entries. That is not typical, I should probably give the figures.

 4410. Can you give the figures for this?

(Mr Nunn) Yes. I want to make it clear I am not trying to mislead you. The numbers allocated to BT in 0203 is 59 per cent allocated to BT, in 0207 it is 55 per cent BT and in 0208 it is 64 per cent BT and the overall figure is 59 per cent BT, that is in terms of numbers of blocks in the London area allocated to BT. Actually, there was something like a 59 per cent chance of a number being allocated to BT. Not being a statistician I have to get that one in somewhere.

 4411. Yesterday, the Chairman asked who can be a service provider in this context. Can you explain that, please?

(Mr Nunn) Essentially anybody can be a service provider. The requirement, as I understand it, from section 32 of the Communications Act and basically what that says is that anyone wishing to offer service must previously notify Ofcom that they intend to offer service. There are a number of other general conditions which need to be met there which are laid out in statute in the Communications Act but once those conditions are met, then anybody can become a communications provider and they are fairly straightforward conditions. For example, you do not need to own a network to be a communications provider.

 4412. Do you know how many service providers are there operating in London so far as you are aware?

(Mr Nunn) In terms of number blocks allocated, there are 146 fixed line operators with number blocks allocated in London. There are a further 140 operators who have allocations in the 07 range and those are numbers that would appear as a mobile number. There are also some personal numbers in that range as well but essentially 07 contains 140. That is a total of 286 operators with number allocation in the London area but there is clearly nothing to stop people advertising numbers that are outside the London area or indeed outside the UK on those cards?

 4413. Coming back to your paragraph 24, a telephone call made to a BT number, that is an originally allocated BT telephone number. Does that necessarily pass all the way through BT networks all the way down the line or can you explain and elaborate on that a little, please?

(Mr Nunn) If you go back to the diagram in the pack then the answer is no because any one of those blocks along the page there could be a third party, so it could originate on an Orange mobile phone, be transited through a Cable and Wireless trunk network and terminate onto a BT network and that is an entirely valid way.

 4414. How many service providers might you have in such a sequence?

(Mr Nunn) That is quite difficult to answer, the reason being that with portability in fact the number could go through multiple providers so, for example, if I was to extend that case it could start in the Orange network, go through Cable and Wireless as a trunk, go to the BT network which originally owned the block, BT would then find that number has been ported to NTL for example, but it may be that BT does not have a direct connection relationship with NTL in that area so it might then have to go through another trunk operator and perhaps back through Cable and Wireless again and then land on NTL. These call flows can get quite complex with a mobile scenario, there is a number of other signalling hiccups that go on as well although it would stay within the network usually. If the phone had roamed into another area, that would make it more complex.

 4415. Can I understand your evidence, does it follow from what you are saying that if an end user has a BT telephone number, it does not necessarily follow that end user's telephone services are provided by BT?

(Mr Nunn) That is correct. There are a number of reasons why that might be the case, I think the panel has understood that now. The other reason might be is if BT has wholesaled that number to a third party, for example, the Post Office or Tesco and the end user has gone to Tesco to buy their phone service which is then provided by a service provider, BT for example, whose number block is allocated to so it would appear from the Ofcom website to be a BT number but, in fact, BT would have no contractual relationship with the end user of the service. We would have a contractual relationship with Tesco in that case which would be covered by NDAs.

 4416. CHAIRMAN: Could you remind us what NDA is?

 4417. A Non Disclosure Agreement; apologies for using a TLA, a three letter acronym!

 4418. MR ASPREY: Does it also follow that the provider of the services to the end user could be any one of 280 different service providers in London?

(Mr Nunn) Indeed so and in fact more than that. As I said earlier on, I do not believe that the Post Office, Tesco, or Virgin mobile have a number range allocated to them so, there is no single place a borough council can go to get a list of all the service providers that could be providing end user service.

 4419. CHAIRMAN: Can I ask Mr Nunn a question very briefly. Mr Nunn, were you involved in any of the discussions with Westminster that led to this clause coming forward?

(Mr Nunn) Not personally, no.

 4420. You were aware of them perhaps?

(Mr Nunn) Not until quite recently, until the Bill had been proposed.

 4421. I wondered whether the information which you are giving us now was made clear by BT in its discussions with Westminster?

 4422. MR ASPREY: I think I need to make it very clear, before this Bill was promulgated notwithstanding our close working relationship with Westminster, we were not consulted about this.

 4423. CHAIRMAN: Thank you.

 4424. MR ASPREY: In light of the evidence you have just given Mr Nunn to consider clause 7, I mean summarise it again for the Committee. I turn to your paragraph 29 and I am referring to the point which we have already made that the borough council wish to serve notice under clause 7, "will not know who is the 'relevant electronic communications service provider'". What is your evidence about that, please?

(Mr Nunn) That is correct and the key word in the clause is relevant. The council cannot know the identity of the service provider who has the contract with the end user, they can only know the owner of the number block that was originally allocated. For example, if BT is granted access to its network facilities to another service provider such as the Post Office, the end user has then gone to the Post Office - and I think I have talked through this already - if that is the case then the number on the card will aware to be a BT number but, in fact, the contract with the end user will be the Post Office. The relevant service provider would be the Post Office, the borough council has got no way of knowing that.

 4425. When you say no way of knowing that, can you explain further leaving on one side the statutory provision which Mr Clarkson referred to earlier?

(Mr Nunn) There is no way that they can find that out. They can try and ring the number and ask who their service provider was. I suspect if it was someone engaging in criminal activity, that would get them nowhere. They could look the number up on the Ofcom website and that would give them BT which would be the incorrect answer so all we would be able to do is serve a notice. We would not know quite what to do to serve a notice, I think that is one of the key issues for us. Would we try and enforce barring, find the number is not one of ours and then have to respond to the council and say, sorry we cannot enforce this notice. We may be able to go straight back to them and say this is not one of our numbers but they will say what is the status of that notice that has already been served on us incorrectly. It is those sorts of issues.

 4426. Would you, BT, in the example you have given, necessarily know who the provider of the telephone service is to the end-user?

(Mr Nunn) Not necessarily, because some of these retail issues can become complex, where in fact a reseller can, again, sell the service to another party, so there would be quite a complex audit trail. We obviously internally know who we are providing service to in the next link in the chain, but the sequence of resellers would need to be followed all the way through to the end to identify the end-user.

 4427. Even if you did know who the ultimate service provider was, would you consider yourself at liberty to divulge that information to the local authority?

 (Mr Nunn) Not as I understand it. I think we have already covered the issue that our contract would have a nondisclosure agreement. In the example I have given, we would not tell anyone that that number is allocated to a service we are providing to the Post Office, for example.

 4428. Turning to your paragraph 35, can you see some adverse consequences arising from the enactment of clause 7 in these circumstances?

(Mr Nunn) Yes. Certainly one possibility is that BT and in fact all other service providers would be bombarded with a large number of invalid notices. In fact, from the previous evidence the implication was that the council would serve the notice on all 286 people who could potentially own that number range and leave it to them to work out whether the notice was relevant to them. If that were to be the case, that would be a huge overhead on the service providers, some of whom only have one 10,000 number book in the London area, and yet the implication from the answer given to the question earlier is that they too would receive a letter.

 4429. Therefore, it is not just BT who would be in this predicament; it would be all service providers.

(Mr Nunn) Absolutely it would, yes.

 4430. I would like you to discuss the topic of number portability, first explaining how this works, if you would, please.

(Mr Nunn) It might be useful to have the diagram in mind. First of all, may I describe how portability is applied for and provided. Portability is intended to give customers freedom of choice from whom they take their telephone service and the ability to retain their number when moving between operators. Let us say a BT customer decides they want to take their service from NTL, they will contact that second service provider, NTL in that example, and request that their number be ported. NTL will then come to BT and ask us to apply portability. We are obliged, as we have heard earlier, under article 30 of the Universal Services Directive 2002 to provide portability to NTL in "as reasonable time as possible" I believe the Act says. We would aim to do that within four working days in BT. That is a legal requirement. It is also included in general condition 18 of the standard conditions which are applied to all telecommunications providers.

 4431. If a number has been ported to another network, is the borough council able to know or find out to whom that number has been ported?

(Mr Nunn) No. As far as BT is concerned that information would be confidential between us and NTL in that example. The other thing I should say about portability is that we deliberately ignore any other actions around ceasing or barring the line, for very good reason, because I, as a customer wanting to move my number from BT to NTL, may contact BT and say, "Please cease my BT service because I do not want to be billed any more by BT, I want my bill to come from NTL" but if we did cease service at that point, we would not then be able to call the number because the number would be allocated back potentially to another customer. So we have to ignore cease requests, and we do not actually take note of barring requests at that point either, we simply enact what the legislation tells us to do and blindly allow portability to happen.

 4432. I would like you to consider clause 7 and the impact of number portability on clause 7, please.

(Mr Nunn) Okay. Assuming that the borough council could identify who they thought was the relevant service provider or even the relevant service provider to serve a notice, the end-user advertising their number could simply ask for their number to be ported as soon as the clause 7 piece had been enacted.

 4433. Would you like to express an example for that.

(Mr Nunn) If, for example, it was a BT number, and BT was the service provider that was providing that service so that the customer was in fact a BT customer, the borough council would not know that that was so, but they may assume so because it was a number allocated to BT. As soon as the end-user requested the number be ported, the notice would become invalid because we would no longer be the relevant service provider. Once the number had been ported, the customer would then have a relationship with another service provider and no longer with us. They would not then know the identity of the service provider on which to serve the new notice and would not be able to find it out either.

 4434. CHAIRMAN: Mr Asprey, the Committee has heard quite a lot on portability. I think we have the picture. Is there more to unpack on this subject?

 4435. MR ASPREY: No. I will go on to the new technology. Would you turn to appendix 2, please, and give us your evidence on new technology.

(Mr Nunn) I think people are aware now that broadband is a growing technology and you can run multiple services over broadband. The top three telephones on the illustration are base-band telephony - so called because they work in the same way as phones do today. Those three telephones would be caught by the provisions of clause 7 as currently drafted. The bottom three would not, because those all use internet protocol. Internet protocol is always used to carry services on broadband. With regard to the bottom left-hand one, which is labelled "POTS", there are a number of service providers out there, including BT, who provide an adapter that is either a separate unit to the DSL modem or embedded in it in some cases, which gives you the ability to plug a second phone in, and the benefit for the user is that it is a second phone line in the home. The middle one is a smart phone, an IP phone, typically found in offices these days, which uses technology, and the right-hand one we have heard about already, about Skype. I would like to make one point about Skype. The point was made yesterday that you cannot call a Skype user from a regular phone. That is incorrect. Skype do provide a facility called Skype-in, which gives you a phone number to associate with your Skype account. This would mean that a pimp or a prostitute could sit, let us say, in a café, with a laptop computer and headset, receiving calls from a regular telephone. I thought I ought to make clear that is entirely feasible. There was some evidence given that perhaps new technology was not relevant because it is some time in the future. These are all things that you can buy today and use today.

 4436. Given that calls made over internet protocol have been excluded from the ambit of clause 7, would you explain what all this means as to whether or not clause 7 can be effective.

(Mr Nunn) The top three telephones on the picture would be caught by clause 7 because they are analogue devices; the bottom three devices would not be caught by clause 7 but would be exempt from it.

 4437. Can anyone ask for their telephone line to be broadband enabled?

(Mr Nunn) They can, yes.

 4438. Do you happen to know what the cost is?

(Mr Nunn) I believe BT have a special offer at the moment, which I think is something like £14.99 a month, but generally it is in the region of between £15 and £30 depending on the features you want and depending on the speed and the contention ratio and a number of other technical issues.

 4439. Does it require any change in the telephone number?

(Mr Nunn) No, it does not.

 4440. If somebody has in fact asked to be broadband enabled, it would be possible to connect up any one of those three facilities on the bottom line there and use those facilities on the system.

(Mr Nunn) It would, indeed.

 4441. I would like you to draw a conclusion to the evidence, please.

(Mr Nunn) Assuming the borough council can identify the right service provider and assuming the end-user does not port their service to another number, then they could still avoid it by using a broadband service and simply putting a service and running it over broadband. Therefore, we believe the clause is completely misconceived. It is difficult to see how it can be of practical benefit when there is such a get-out for someone to employ that. On the downside, there is a huge bureaucratic nuisance. It is going to require hundreds of notices being served on BT. I think we heard of 3,700 numbers found, so we can expect to receive that number of notices, as can the 140-odd London operators. Finally, on new technology, BT are upgrading both their core and access networks so that all telephone calls can be carried using internet protocol. That would clearly neutralise the Bill in its entirety and that process is starting in November this year.

 4442. MR ASPREY: Thank you very much.

Cross-examined by MR CLARKSON

 4443. How long is that going to take to come through?

(Mr Nunn) We are planning on that process taking around four years. We were entering a trial in the Cardiff area first in November of this year and the plan is to do the roll-out over the following four years.

 4444. Then there will have to be developed, will there - I do not know - a degree of numeracy as far as the users are concerned?

(Mr Nunn) No, there is no change to the equipment on the end-user; it is all changed within the network. Effectively, we use the same technology as is used to provide broadband services but move that back into our local exchanges.

 4445. Could we go back to the approach on TRAP. Were you or are you involved in that in any way?

(Mr Nunn) I am not involved in TRAP at all, no.

 4446. Do you know anything about it?

(Mr Nunn) I know what I have learned over the past few weeks, researching for this event, but that is the extent of my knowledge.

 4447. Would you tell us, with regard to any of your exhibits, what BT have done as part of the TRAP process. It is a mechanical or electrical engineering question, all right?

(Mr Nunn) Are you asking at what point on the flow chart TRAP becomes an engineering piece?

 4448. Yes.

(Mr Nunn) The first point at which engineering on the network, other than just data analysis, becomes relevant, is the point at which service is suspended to a customer. That, as has already been said, is simply a matter of a number of key strokes on to the management system that manages the local exchanges to change the user data on the exchange that serves the end-user, basically to say "reject incoming calls".

 4449. Could you tell us, in relation to your first exhibit, what it is that BT did as part of the TRAP call barring?

(Mr Nunn) Assuming the call is originating on the left-hand side of that picture and terminating on the right-hand side, we have modified the data in the box labelled "Access", which is our local telephone exchange, to reject the call.

 4450. We have heard statistics of reducing it somewhere down from 95 per cent to four per cent over a period of time. You did that quite well.

(Mr Nunn) Yes, I believe the TRAP process has been quite successful in removing BT numbers from boxes.

 4451. Call barring in respect of BT was not a problem.

(Mr Nunn) No, the technical issue of call barring for us is very straightforward.

 4452. Do you know where all the numbers that were allocated have gone?

(Mr Nunn) In what sense? I am not sure I understand the question there.

 4453. As I understand it, some BT numbers have gone elsewhere.

(Mr Nunn) Yes, numbers might be moved because they have been ported to another operator.

 4454. Did you in that exercise bar any that had been ported?

(Mr Nunn) I do not know the answer to that question. I would have to refer to my colleague Mr Ferguson to be able to answer that question.

 4455. Do you know, nevertheless, what the numbers are?

(Mr Nunn) We know from our system whether a number that has been allocated to BT has been ported, yes.

 4456. You would know that, would you, at the stage of end-user/access?

(Mr Nunn) Can you take me to that stage in the flowchart?

 4457. I am looking at the right of the blue document.

(Mr Nunn) Yes, we know on any given exchange which numbers are ported, yes.

 4458. When it comes to call barring of all those numbers, you know what the numbers are and you could bar them at the end-user/access stage, could you?

(Mr Nunn) No, we could not. The way a telephone exchange works is that it is a sequential process of analysing digit strings until you get to a point where you can read the call and at that point a decision is made what to do with the call. It just so happens that the data that relates to the porting overrides any data related to the user, and incoming call barring data is user-related data, and, essentially, the call never gets to see whether that data has been set or not, so the call would always take the port route rather than test for barring. That is a technical restraint of the exchanges.

 4459. It might be a technical restraint, but surely it is technically possible, is it not, for you to bar the number as opposed to the user, as you just described?

(Mr Nunn) Yes, it is technically possible. However, the European Directive states that we must port the number. It does not make any statements about a subsequent request to apply barring from a third party. I suspect we would be in breach of the European Directive.

 4460. We will wait for submission on that if that is pursued. The simple position is that it is mechanically possible at the stage of end-user and access for you to bar all the numbers that you know were BT numbers or were ported numbers ex-BT. Is that fair?

(Mr Nunn) It is mechanically possible, yes, although it would clearly create some contractual and potentially legality issues, as was raised earlier.

 4461. Yes, the contractual position, which we understand. Were there any contractual positions, do you know, at the time of TRAP?

(Mr Nunn) I cannot comment on that. I do not know the contractual status.

 4462. Let us return to the situation of those that have not been ported, just so I understand it. Are you saying that of the number of allocated operators that you have identified, there is a 59 per cent chance of them being BT numbers?

(Mr Nunn) That is correct.

 4463. If there is an 0203, 0207 or 0208 number on a card in a telephone box, there is a 6:4 chance that you have it, is that right?

(Mr Nunn) Roughly, yes.

 4464. Which company is the next biggest?

(Mr Nunn) Cable and Wireless have 13 per cent of the number box allocated; followed by NTL with five per cent; Telewest with four per cent; Colt with three per cent; MCI with three per cent; and then 140 others each with less than one per cent.

 4465. The 140 others are known, are they?

(Mr Nunn) They would be known from the Ofcom database, yes.

 4466. If they were asked a question: "Have you got x number?" they could say yes or no, could they not?

(Mr Nunn) They could indeed.

 4467. If you were asked - and this is not a legal question but a general question - "Can you address the issue of a serious criminal activity?" it is possible at all stages, is it not, for you to find out where the number has gone?

(Mr Nunn) Yes, it is. We know that information on our systems and I would imagine the other operators would have a similar system that would enable them to find out, yes.

 4468. MR CLARKSON: Thank you, Mr Nunn,

 4469. MR ASPREY: I have no further questions.

 4470. CHAIRMAN: Thank you. I think that is the end of your witnesses.

The witness withdrew

 4471. MR ASPREY: That is the end of my evidence, yes.

 4472. CHAIRMAN: We would normally expect to hear from the Government at the end of the process. Am I right in thinking that there was a request that the Petitioners should be heard after the Government?

 4473. MR ASPREY: I think that is right. I would certainly make the request if it happens to be convenient to the Committee. It seems to me that we should sum up on the basis of all the information which has been provided to you.

 4474. CHAIRMAN: I will take advice. (The Chairman conferred with the Clerk) As you will be aware, the Government representative has just walked into the room, so we will give her 30 seconds to catch her breath. We must bear in mind, firstly, that she is not here to give evidence but to answer questions on the statement from her Department. (Pause)

 4475. Ms Gillatt, I believe you have a short statement from your department.

 4476. MS GILLATT: We thought it might be simplest to state the basics of the position and save questions as far as possible.

 4477. The Government is sympathetic to local communities that encounter nuisance from prostitution in their daily lives and is determined to reduce the numbers involved in prostitution, to reduce the levels of violence and exploitation associated with it and to improve the safety and quality of life of communities.

 4478. The report of the Minister of State for the Department of Trade and Industry, which was submitted on behalf of the Government on 16 June 2005, details our main concerns and forms the basis upon which we wish to see clause 7 deleted from this Bill.

 4479. The Government's Prostitution Strategy, published in January 2006, followed the widest review of prostitution in 50 years. Consultees were specifically asked about the issue of prostitutes' cards and how the problem could be addressed.

 4480. As part of the review, the Home Office developed a partial regulatory impact assessment on a coordinated strategy for prostitution. It found that the problem of prostitutes' cards in telephone boxes occurs in only a few areas of the country, principally Brighton, Norwich and some London boroughs, most notably Westminster.

 4481. The partial regulatory impact assessment looked at costs and benefits resulting from prostitution and the impact on the police and other agencies and on the taxpayer, although it did not specifically address particular costs such as those associated with carding as it accompanied the open consultation document rather than a firm set of recommendations or proposals for legislation.

 4482. No regulatory impact assessment has been made of the costs of those proposals to telecoms operators. Nor has any fact-based evidence been produced to demonstrate that the benefits of the clause would outweigh the costs.

 4483. As a consequence, to implement these proposals would represent poor regulatory practice and go against the Government's objective to reduce the burden on business as part of its Better Regulation Agenda: regulating only when necessary and doing so in a way that is proportionate to risk.

 4484. Legislation that was introduced in 2001, as the Committee is aware, makes it an offence to place prostitutes' cards in telephone boxes. It is the Government's view that a targeted approach to enforcement of that existing law is needed, together with environmental measures, including redesigning telephone kiosks and a cleaning crackdown, as recommended in The Jill Dando Institute report of 2004. This would be a more proportionate and effective way of tackling the problem of carding.

 4485. Such an approach has already proved successful in Brighton. The Home Office's regulatory impact assessment notes that: "Sussex Police report that enforcement of the offence, together with follow-up visits to those brothels using prostitutes' cards has been sufficient to remove the problem."

 4486. The Prostitution Strategy takes the approach that street prostitution and any form of commercial sexual exploitation, whether in massage parlours or saunas, brothels or on the street, should not be tolerated. The strategy provides a framework for local partnerships to disrupt local sex markets through preventative measures to stop young people from being drawn into prostitution; the development of routes out for those already involved; targeted enforcement against those who create the demand for such markets; and robust use of the new powers in the Sexual Offences Act 2003 to address all forms of commercial sexual exploitation. In time, this should reduce the numbers of brothels, and the nuisance - including prostitutes' cards - associated with them.

 4487. Under the Communications Act 2003, Ofcom was given powers by Parliament to oversee and regulate electronic communications networks and services on a national level. Telecoms policy is implemented on this basis and has not been devolved to administrations.

 4488. Clause 7 calls for individual local authorities to be given powers to impose local conditions on operators of telecommunications services. The Government's view is that this would not be appropriate. The Government maintains that regulation of the telecommunications industry is a matter for Ofcom.

 4489. Ofcom is best placed to take a national co-ordinated approach. All regulation has to be carefully considered to ensure a transparent open and fair market in what is a complex area. We think that a piecemeal approach, whereby other bodies such as local authorities can impose conditions on telecoms operators, is highly undesirable and will be likely to undermine that openness and transparency.

 4490. The Government can see no convincing evidence that call barring as proposed under this clause would cease the practice of carding or produce any of the intended benefits for local communities.

 4491. The voluntary call barring scheme operated by BT with Westminster City Council, has shown that it can have a disruptive effect where landlines are used, but the growing use of mobile phones, particularly pre-pay phones, with their anonymity, quick and relatively inexpensive portability and replacement of numbers, means call barring would have no significant impact if such a scheme was extended to mobile networks. The Mobile Broadband Group has raised concerns with us about the effectiveness of such a scheme in the light of advancing technologies. We believe an increasing availability of internet based communications, many of them based beyond the UK's jurisdiction, will undermine the effectiveness of the proposed measures.

 4492. The Government reasserts its opposition to clause 7 of the Bill for the reasons stated and calls for it to be removed in its entirety. Ofcom and BT have confirmed their support to the Government's objection.

 4493. CHAIRMAN: Does any member of the Committee have any questions relating to what we have just heard?

 4494. LORD FAULKNER OF WORCESTER: I am sure Ms Gillatt is aware that this has been around in Parliament for a very long time. The first consultation paper of which I have notice in which prostitutes' cards were described as a problem was in 1999. The legislation to which you refer was passed in 2001. The Minister, replying in this House of the Government, Lord Bassim said then, "My understanding is that Oftel" - the predecessor of Ofcom - "has had discussions with the telecommunications industry about a call barring scheme. Some progress has been made in that area. I am told it is not a simple business. It needs to be developed. I hope it can be." Why do you think it is that the Government have not made any progress on developing a call barring scheme since 2001?

 4495. MS GILLATT: The key reason for that, so far as I am aware, as I have just indicated, is that the communications channels that are available have become increasingly complex, increasingly easy and anonymous for people to use, and there is increasing availability of telecommunications channels that have their roots outside the UK's jurisdiction. We are certainly conscious that it is increasingly difficult to come up with a scheme that would operate as an effective stop to this particular aspect of the nuisance caused by prostitution.

 4496. MR CLARKSON: Can I just ask through you one question, it may help you, it is a practical question? How many prostitutes are there in Brighton and how many in London?

 4497. MS GILLATT: I am sorry, My Lord Chairman ----

 4498. CHAIRMAN: I did not expect you to be able to supply the answer, the implication is clear. Do any other counsel have questions?

 4499. MR JONES: I have no questions.

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