Oftel Consumer Representation
50 Ludgate Hill
London EC4M 7JJ	

Dear Sir/Madam,

I am writing as a committee member of the Campaign for Unmetered
Telecommunications on behalf of our members and supporters.

As you are no doubt aware, Telecom Eireann is introducing flat-rate telephone
tariffs for Internet users throughout Eire in the near future. Their
justification for so doing is "to give Ireland a significant competitive
advantage over its European neighbours in the area of electronic commerce" [1].
It is now orthodox opinion that "flat-rate access in the United States is one
of the principal reasons for the success of e-commerce" there.

The Campaign has written to OFTEL about unmetered communications before. The
responses merely summarised OFTEL's apparent disinterest and evident uninterest
in the matter. Now that a country so close to ours has taken this bold
initiative, it is clearly time for OFTEL to think again.

One of OFTEL's stated requirements is "to advise the Secretary of State for
Trade and Industry on telecommunications matters". That OFTEL does so on this
matter is pressing: the Campaign has received thousands of letters and emails
from dissatisfied UK Internet users who cannot understand why a country with
such an advanced telecommunications infrastructure should have so little
flexibility in billing. In the words of Malcolm Matson, the managing director
of Colt, "All the telephone companies are desperately trying to find ways to
slow down price cuts" [2] In fact, the problem is even more fundamental than
this: there seems terminal reluctance even to initiate discussion of
sustainable charging structures for unmetered tariffs. The very notion is
discounted with pat, sometimes misleading, statements to customers and even
Parliamentary Select Committees. The counter-arguments are never given official
airing. This one-sided justification for the status quo is a scandal if, as
reported in the Mail on Sunday, "the true cost of connecting a call remains a
mystery, and Matson believes that hidden in this information vacuum there is
evidence that domestic customers should have free calls and pay through
flat-rate line rental charges"[2]. A first step could be OFTEL's assistance in
populating this "information vacuum".

The Campaign is not suggesting OFTEL seek the use of proscriptive or
market-bullying tactics. What is clear, though, is that this issue is not being
given the focus that it should be. An OFTEL spokesperson dismissed it by,
amongst other things, arguing that unmetered calls "are not 'free' … the user
simply pays in some other way" [3]. The Campaign is well aware of this. We
argue, with many others, that the user should be given a choice as per several
advanced countries now including Eire. Choice is exactly what OFTEL champions,
and yet there seems little incentive for BT's competitors to offer this
particular choice. What with BT's combined inertia and regulatory restrictions,
short-termism in its competitors and  issues such as per-minute interconnect
charges, it is little wonder that this matter is a non-starter for ostensibly
market-driven companies. And so what should be almost inevitable in a
competitive market, because of massive customer demand on one hand and
technical feasibility on the other, is barely present beyond a few threatened
cable-to-cable "free local call" packages (usually excluding data) [4]

The lack of unmetered tariffs can no longer be thought of as a peripheral
issue. Its resolution will be a major determinant of this country's future
socio-economic success. A long research paper from the University of
Westminster concludes that "...pricewise, if we are to compete on an
international basis on the net, we need free local calls as in America. This
would benefit the country as a whole as it would enable us to compete for
business on the web all over the world" [5]. Barbara Roche MP argued recently
that "there will not be a true information society until everybody is able to
make use of it" [6]. For everyone to be able to make use of it, it must be
affordable and budgetable with no open-ended charges. Metering, for a great
number of people, allows neither. This issue can no longer be avoided with
semantics or baseless assurances to the contrary. We have the evidence and the
arguments, and gladly report them on our Web site at
http://www.unmetered.org.uk/

Our Irish neighbours have realised the importance of this issue and have
grasped the opportunity. They will surely reap the rewards. With this precedent
so close to home, I hope that OFTEL will feel able to enter into dialogue with
us. Again, we are not expecting any grand pronouncements or edicts, but a start
would be an acknowledgement that this issue is serious and legitimate. The
standard disparaging replies are no longer sufficient when the whole subtext of
unmetered access has changed within the last few years. It deserves important
attention by all concerned with the evolving online economy of this country,
not least OFTEL.


I look forward to hearing from you,

Nick Mailer (on behalf of CUT's committee, members and supporters).

References:

[1] Sunday Tribune (Dublin), 27 September 1998

[2] Mail on Sunday, 2 August 1998

[3] Letter to CUT committee member, 11 February

[4] See Cable and Wireless Watch, http://www.unmetered.org.uk/

[5] See http://www.sevens.demon.co.uk/thesis.htm

[6] Hansard, 11 July 1997, column 1237