BT's response to the Ofcom Consultation: Charges between Communication Providers: Number Translation Services Retail Uplift Charge and Premium Rate Services Bad Debt Surcharge

BT's response to the Ofcom Consultation: Charges between Communication Providers: Number Translation Services Retail Uplift Charge and Premium Rate Services Bad Debt Surcharge

Issued 5 May, 2005

Summary

• BT has focussed this response on the main changes since the July 2004 consultation. It maintains the views it expressed at that time, including its reservations about the continuation of the regulation of NTS calls.

• If regulation is to continue, then BT can see the merits of Ofcom's proposal to extend the use of the RPI-x approach to determining the NTS Retail Uplift charge. BT also agrees that the glide path methodology and alignment with the implementation of the new Network Charge Controls (NCC) are appropriate.

• BT's key disagreement is that Ofcom's forecasts of NTS volumes used to calculate the NTS Retail Uplift show an insufficient decline.

• BT has concerns about Ofcom's new approach of taking out recoverable costs from the NTS Retail Uplift charge as a result of economies of scale and scope derived from increases in non-price capped activities.

• Ofcom uses a non-transparent approach to calculating underlying forecast volumes, economies of scope and scale, and the resulting input volumes. It is not sufficient that such a key input is calculated by 'approximation'.

• Ofcom's decision to use the same rates of decline in forecast volumes than it used in July 2004 shows that it is not using an approach of forbearance. This is despite overwhelming evidence that NTS volumes are declining at a much greater rate than Ofcom suggests.

• BT urges Ofcom to use a more robust methodology of calculating volume forecasts and to consider using an error correcting mechanism for such a key  input to the NTS Retail Uplift charge.

Download response as PDF document

Comments should be addressed to Barry Aspinall at barry.aspinall@bt.com