London, 08 December 2006 - "0870, your number's up," announced The Times on 5th October this year fuelling popular misconceptions about 0870 charges and commercial skulduggery. Not wishing to be outdone, The Sun and The Daily Mail ran the same story attacking Barclaycard, British Airways, HSBC and Ticketmaster: "Your number's up, webmaster tells the 0870 rip-off firms." But the Citizens Advice Bureau, Crisis, the British Red Cross, UNICEF and Oxfam also have 0870 numbers and fall into this category.



The Daily Mail article continues with increasing ferocity, describing 0870 numbers as "expensive", "overpriced", "exorbitant" and finally ..."the biggest rip-off in telecoms". Mud sticks. Ofcom's research shows that consumers believe 0870 calls cost 36p per minute. In fact, peak calls cost 7.9p per minute and callers pay only 1.5p per minute at the weekends.

Tired and misguided claims that companies using 0870 numbers "keep customers holding on, racking up profit shared with phone companies" abound. Such arguments are not only simplistic; they make little, if any commercial sense. Given customer acquisition costs, the idea that any large commercial organisation would intentionally aggravate existing customers to earn a couple of pence per minute is risible.

Indeed Ofcom's own research published in its NTS review found no significant correlation between the cost of calls and waiting times. Average wait time was 11 seconds for 0800 numbers, 13 seconds for 0870 numbers and 17 seconds for 0845 numbers (which are less expensive than 0870). 80% of calls were immediately connected to an operator. The Regulator correctly concluded that "call centre waiting times are not being artificially extended to take advantage of revenue share".

So why is there so much antipathy to this number range? 0870 numbers were introduced by Oftel to "encourage and stimulate competition and innovation in the provision of services." The industry responded by developing intelligent number services and sophisticated call management features which do not require expensive hardware †a boon for small businesses and charities.

Charities' responses to Ofcom's consultation show that revenue sharing is not their motivation. 0870 numbers enable them to direct calls appropriately without incurring costs themselves. Call distribution to the optimum location is clearly a service which benefits both parties on the call. Charities are able to handle millions of calls a year because the cost of efficient call delivery is funded via an additional 3-4p per minute paid by the caller. Once 0870 calls are priced at geographic rates, they will need to re-think. However magnanimous, their communications providers are unlikely to deliver calls at a loss and once the commercial model for operating 0870 has been removed; the range will effectively be withdrawn by the Regulator.

The most frequent criticisms of 0870 are to be found on the website of a vociferous consumer lobby group at www.saynoto0870.com. Like the newspaper journalists, they also point to exorbitant call charges, improper use by government departments, erosion of the link with geographic call pricing and revenue sharing for profit.

Ofcom is to be applauded for its ingenuity in tackling all of these issues head on with a "key proposal" of its Strategic Numbering Review, namely the introduction of 03 - a new type of number specifically for those businesses and public services who require a national presence but who do not wish to make an additional charge to consumers for contacting them. The use of revenue-sharing will be forbidden on this range and charges will be specifically linked to the price of calls to 01 and 02 numbers.

Revenue sharing, restoration of the geographic link and the inappropriateness of 084 and 087 numbers for use by public bodies were also central themes of the NTS Consultation, which pre-dated the Strategic Numbering Review. Regrettably the NTS consultation closed a few weeks before Ofcom announced its proposal to introduce the 03 number range. Responses to the NTS Consultation may have been significantly different had stakeholders been aware of the Regulator's thinking on 03 which provides a logical, long term and strategic solution to almost every concern about 087 and 084 numbers raised by consumers during the NTS consultation. Notwithstanding, Ofcom did not consider it appropriate to reopen the NTS consultation, but went further by specifically denying stakeholders an opportunity to comment on NTS issues in their submissions to the Numbering Review consultation.

The result of the NTS Consultation is not a simple tariff revision. It represents a sea change for billing and its repercussions will be felt by telecoms service providers, resellers, 0870 users and their callers as we move from a "calling party pays" to "called party pays" regime. Despite the strategic logic and the creation of a perfect path for voluntary migration (03), Ofcom appears determined to continue down an entirely inconsistent road of forced migration from 0870.

Under the new rules, charities and small businesses will need to pay to receive calls or move to a range where a commercial model for providing call management services still exists - 0871. Is this a positive outcome for their callers who will now pay more for every call? What are the implications for charities and small businesses who will fall under ICSTIS regulation when 0871 becomes a premium rate number?

The need to implement many of the decisions of the NTS consultation was removed with the announcement of 03. Insisting that 0870 calls be charged at the same price as 01 and 02 contradicts the logic, simplicity and transparency of Ofcom's Strategic Numbering Review which describes 08 as "chargeable services".

Thanks to a vociferous but misguided lobby, counselling, telephone donations, advice and essential support may be withdrawn as Ofcom continues on its path to eradicate services and businesses which its predecessor, Oftel promoted. We appreciate that it can be difficult to achieve complete transparency when consultations are run in parallel, but in order for stakeholders to contribute in a meaningful way, it is crucial that they are fully aware of the impact of concurrent consultations particularly when issues are inextricably linked.

US author James Thurber commented, "There is no safety in numbers, or in anything else." For the sake of innovation and investment in a stable regulatory environment, let's hope he's wrong. Instead Ofcom should heed one of Thurber's other observations: "He who hesitates is sometimes saved."

There is still time to re-consult on 0870.