Ofcom will ask BT to pay back termination fees for calls to 0845 and 0870 numbers, as basing them on what mobile operators charged punters isn't fair. Since November last year BT has been charging mobile operators a termination rate for 0845 and 0870 calls which was dependent on what that operator was charging its customers - …
It's about time 0845 and 0870 numbers were done away with, and replaced with 03xx numbers.
On a related note, I love http://www.saynoto0870.com/
Yet again OFCOM fails to protect the consumer, and instead protects the mobile phone companies and BT......
sliding scale = ?
So, entity A claims right of charge for infrastructure maintenance and places a surcharge on the incomes of group-of-entities B, with a base right and a mechanism that increases the percentage taken as their income rises. The money gained from this scheme is meant to be used to improve and maintain the infrastructure and services that entities B have been promised by Entity A, but Entity A instead uses the money to fund the lavish lifestyle of its highest echelons, or to fund invasive monitoring systems that diminish individual privacy and liberties, or squander the money on conceits and projects that have no benefit except to further the personal pride of those in charge, who can claim to be doing something as a result.
And just like the government described above, so does BT.
I don't understand how what amounts to a progressive income tax regime can be claimed as right it comes from the state, but is somehow wrong when it comes from another entity. You can't argue a difference; in both cases the amount of income derived is calculated as an increasing percentage of the income being "taxed". Both are charged with the implied threat of violence (violence being defined as the use of the power of the state/entity to extract the money against your will) and both are, if you're being inconsistent, unjust. The idea that the state has some moral right to take more money from rich people that a private company doesn't is laughable. If the state has that right, so does BT. Otherwise, neither do.
It also begs the question, when am I going to get my money back from either of them?
Someone's been eating their Ayn Rand Weetabix
Totally agree with the sentiment but what's the solution? BT has a market monopoly on infrastructure (through BT Openreach, I think), would that really work any better if it were to be, for example, broken up?
The inefficiencies of the "progressive tax" by BT are probably more favourable (just) than the protectionism that would arise if it were broken up and deregulated.
And you've heard of the only two certainties in life right?
I hear they'll have death cracked soon.
BT is a state-created monopoly, and it's maintained by regulations that prevent competitors setting up their own hardline networks to compete directly with BT. I'm not keen on the idea of the state breaking up a company just because it can. I'd rather see the regs tightened up and cut back to make it easier for investors to create an entirely new phone exchanges. Real competition rather than the, faux competition on common infrastructure favoured by the current regulatory regime, would break BT's monopoly without having to break BT.
Progressive income tax doesnt work the same way as BT is charging, taxation happens at each level, it's not "OhNo I just earned £37,401, now I have to pay 40% of everything I have made"... It's "OhNo, I just earned £37,401, now every 1£ over that I have to pay 40 pence out as tax (Until I reach £150,001)"...
The Americans have a hard time understanding this and they think that if they make $68,001 a year instead of $67,999 that they'll pay an extra $6,800 in tax when in reality, they'll only pay an extra £0.40 in tax.
BT's method means that we would have seen most companys locking calls in at 12.49, 17.49, 22.49, 27.49, or 32.49 pence per min.
The key thing that people should take home here is that we could have had these calls at around 5.5ppm during the day, and 3.9ppm at all other times for operators to make a profit.
Problems either way...
That's still a progressive income tax though, regardless of whether it's banded or not. And US federal income tax is banded similarly as well. I don't think that any country does it like you mention in your second paragraph.
The OP's complaint was regarding the hypocrisy of the government (via Ofcom) in decreeing that this sliding scale system was "unfair" while income tax is done in more or less the same way. However, I wish him good luck in getting a flat tax law passed...
The issue isn't the amount of profit that the operators are making, after all they'll charge what the market can bear. The flaw lies in the market which is subject to statutory monopoly. The problem is that even if everything was deregulated, there'd still be a relatively small number of high-capacity exchanges controlled by an even smaller number of operators (wiki tells me this is called an oligopoly). There wouldn't be enough competition and the operators would be acting like a cartel and we'd still have inflated prices. Take SMS messages for example. Most PAYG texts are around 10-12p while they cost operators a fraction of a penny to send.
Solution? There probably isn't one as long as people continue to use centralised fixed line networks. However we should all switch to using Skype; we'll still get shafted on data rates but at least we'll have video!
End the shame
These 0845 & 0870 numbers are such a shame. Ofcom should force everyone to migrate to the new 03 numbers as soon as possible.
An example of how economics fail in a monopoly environment
In this particular BT was probably on the consumer side. The mobile ops have jacked up the supposedly national rate 87 and 845 to stratospheric heights. It is now cheaper to call a "landline" instead.
If normal rules of economics worked in the mobile telecoms world the fact that jacking the price further up no longer produces any improvement in margin would have forced the price down through competition. It is basic laws of economics - if you operate on a fixed margin you do anything you can to increase volume as this is the only way to increase profit. The obvious way to increase volume in this case is drop the price.
Unfortunately this is a classic example that economics in BT telecoms need not apply and most worryingly the regulator does everything it can to assist the operators in "gently buggering the consumer with chainsaw".
By the way as far as operating 087, 0845 BT I would not be so sure that BT is the biggest operator. It will be interesting to see this particular claim in the article backed by actual numbers.Traditionally it has been Cobbly & Wobbly. This also explains why Ofcom quickly yielded a big stick. The UK regs are full of ex-C&W execs and anything produced by them is always bent in a way where they do not jeopardise their share stock vested interests. The broadband review, Digital Britain, etc are all fine examples of said vested interest. I was hoping that the new govt will clean this carousel of "I will rub your back so you rub mine". However, it is being rather slow in doing so.
Fleece the bastards for all you can get! Most of these #s from my experience are either to extort money for 'free' support services or to trick people into calling & cost them money. The simple workaround being to use the internet support (although I think BT themselves might not do this scam, with BT's twitter for instance things actually seem to get sorted much faster, since they immediately run a test instead of asking the usual mad questions to try and fob you off you get from the call centres).
Better sliding scale.
I'd say that the termination charge increases exponentially whith what the mobile operator charges the customer.
If they charge the customer ANY premium over a 01xx or 02xx number, then BT similarly stings the mobile telco, the way that they sting their customers. That way, the mobile telco makes most money by charging the same as 01xx or 02xx numbers...
I can dream...
Not in the interests of end customers
"...has ruled...that the sliding scale is not in the interests of end customers"
And is it in the interest of customers (i.e - us) that BT charges the mobile operators 2.6p and yet we get charged 30-od pence? or that the the charge is never covered by your mobile's "included minutes" or any number of other fiddles that the mobile operators manage to pull?
And may I also add my 2p to the call to get rid of 0845 and 0870 numbers - they are an absolute PITA, and (along with 0800 numbers) are particularly annoying from mobiles because they are never included in "included minutes". Which is especially annoying when car insurance and car breakdown companies publish "emergency" 0800/0845/0870 numbers - because you're not going to be calling THEM from your mobile now, are you? ARRRGGGGHHH!!!
There should be a law that says if you ARE going to publish an 0800 or 0845 number, you MUST also publish a normal 01/02 number. 0870 numbers are a different kettle of fish altogether and should be banned outright.
saynoto0870.com do a great job to help, but many companies seem to be getting wise to this and are blocking the normal numbers so you have no choice any more. Very VERY annoying.
...and what are Ofcom doing about this? On a scale of bugger-all to nothing?
...that said mobile operators will be passing this refund onto their customers who forked out huge sums for calling 0845/0870 numbers.
"Local/ National Calls"...?
It's now actually cheaper for me to phone Europe or the USA than it is for me to call an 0870 or even 0845 number!
Indeed - why do companies catering for people on the move use numbers which can be the most expensive type to call from a mobile? Want bus times? The bus stops advertise an 0871 number that can cost up to 40p/minute on some tariffs! Spend too long trying to get the times and you've spent more than the bus fare.
What is especially galling is that with only a few exceptions, 0800 numbers are charged for from mobiles at equally stratospheric rates. Not many people know about dial-through numbers such as 020 0222 0700 which allow you to call then at standard rates or using your inclusive minutes.
0700 numbers are as expensive os 0870 numbers even from a landline!
yeah yeah sod what BT get, its what the ruddy customers pay on mobiles thats the real issue :(
All I know is that it costs me £5 to make an appointment to see my doctor if I use my mobile - makes me sick.
What of other landlines?
Like Virgin Media who charge 11p connection and 10p per minute to 0845 where BT's landline rate is 4p?
More to come from Ofcom ... we hope
BT has made a noble attempt to do Ofcom's job for it - assuming of course that BT was intending to hand back all this extra cash to the customers who paid it in the first place.
It is now for Ofcom, when the outcome of the current review is seen in the Autumn, to do its own job properly. With the "NTS condition" lifted from BT, regulation of the surcharges levied on PRS and "revenue sharing" calls will have to applied across the market - Yes Ofcom has at last discovered that BT's rates are not universally copied because of its market dominance.
In my submission to the Ofcom "call for input", I propose that regulation would have to be against a tariff-specific base rate, with banded limits for each call type. Discounting of 01/02/03 calls against the base would be permitted, e.g. through inclusion in packages.
The vital issue is for the extent of the surcharge to cover the cost of paying over money to the call recipient to be limited and known by the caller. We will then be able to see whether we are being ripped off by our bank, our doctor, HMRC or our telephone company - or perhaps all of them, as at present in some cases.
It is for Ofcom to ensure that we can see what is going on, not for BT to collect penalties from those who it believes are being greedy (even if we agree with its judgement. Under present regulations BT can do almost nothing about what it charges for 084 calls, it can however increase its rates for chargeable 01/02/03 calls at the constant rate of 30% per annum, so they now cost more than the most expensive 084 call.
Ofcom must act firmly to end this madness. Thanks for trying BT, but get ready to sort yourself out when your shackles are removed - that is when we will see your true colours.
Terminate the rate
This morning I found 2 new threads on a certain forum. One linked to here, and another to BT's Terminate the Rate campaign, about lowering wholesale rates to mobiles
BT seems to be lying to its customers about this campaign, pretending and trying to claim credit that it is the one having the influence, when in fact it is Ofcom here, and the other regulators all over the EU, who are driving these rates down. And there are ERG and BEREC documents which prove this.
But having read today that although other providers can get rates of 2 or 3 pence to 0845 numbers, that BT still charges these extortionate rates to the mobile networks, at rates which are several times higher that mobile wholesale rates, I can only see BT's position as massive hypocrisy, and the Terminate the Rate campaign as a mouthpiece for corporate mendacity.
The Ofcom document is about 180 pages too long
What it should say is: we have driven through previous cuts in wholesale and retail rates for calling 0845 and 0870 numbers. BT has continued charging mobile providers much higher rates, and this practice has now been ended.
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