19 November 1999

House of Commons Trade and Industry Committee

Oral hearing with the Director General of Oftel, 7 December 1999

Submission by the Service Provider Interest Group

1.  Introduction

The Service Providers Interest Group, SPIG, represents the interests of businesses that provide content, data, Internet and mobile telecommunications services. It promotes the value of services competition and seeks a fair competitive environment for services competition. Information on our members and our views can be found on the SPIG web site.

SPIG welcomes the opportunity of putting its views on the role and responsibilities of Oftel to the Trade and Industry committee in preparation for the oral hearing with the Director General on 7 December 1999.

We would be pleased to expand on the issues that we raise in person either on 7 December or at a later date.

2.  Major issues of concern

SPIG members are concerned that competition in service provision is not fully engaged by Oftel, who by its actions seems to prefer those vertically integrated businesses that have access to scarce resources- the network operators- rather than the businesses that service the customer. In doing so the environment for services competition is not, in our opinion, handled in a way to ensure fair and sustainable competition in the telecommunications market.

The result is that the incumbent operators are favoured and prices to the consumer across the telecommunications market are high.

If the Government’s intention of an UK lead in e-commerce is to be realised, the underlying telephony has to be the most competitively priced in Europe. In order to ensure this the regulator has to be independent, strong and sufficiently resourced to understand fully the industry it is regulating, and maintain a fair and competitive industry. It should not relinquish the expectation of fair competition nor be withdrawing from regulation, as is proposed in Oftel's long term strategy.

The examples that we have included in this submission:

• Oftel’s complaints handling - paper 1
• The lack of fair play for Mobile Independent Service Providers - paper 2
• The Calls and Access experience and the implications for Government telecoms policy- paper 3
• Access to the local loop - paper 4

Each show that Oftel needs to be proactive in order to be effective.

3.  Recommendations

SPIG has identified some basic problems that have to be addressed by Oftel, if telecommunications is to deliver the platform for e-commerce in the next century. We recommend that:

1. Oftel is resourced to have independent sources of technical expertise, such as independent research into network operator costs, that it can draw on when conducting inquiries or investigating complaints.
2. An appeals mechanism for Oftel's decisions is set up that does not involve the courts.
3. Oftel is seen to be independent of Government, answerable to Parliament and effectively audited by the National Audit Office.