WVMR Part 2 – CP Status – we need a new one!

Simon Woodhead

Simon Woodhead

26th August 2020

By Simon Woodhead & Peter Farmer

We discussed last week what we’d like to see from the Narrowband Review. Less than 24 hours later Ofcom published its Wholesale Voice Markets Review 2021-2026. This is important and going to govern our industry for the next 5 years, and arguably reshape it forever.

Rather than brain-dump all our reactions (there are many) here, or indeed simply share our response, which by nature will be somewhat legalistic, we wanted instead to serialise a few points in plain English. 

Our response will obviously feature these, so if they resonate with you and you think they matter, we would encourage you to respond to the consultation. You are very welcome to cite Simwood, this blog, or our formal response if it helps.

If you missed them, see Part 1 – Huawei bad for Internet; Huawei good for Voice over Internet, Part 3 – What the hell is IPX?, Part 4 – BT’s unchecked monopoly in porting and Part 5 – A prime opportunity to improve porting?

The Communications Act 2003 defines two types of participant in our deregulated market:

  • Electronic Communications Network (ECN)
  • Electronic Communications Service (ECS)

These are then usually used with the term public in front to negate private networks from being subject to the whole gamut of regulation, so we get Public Electronic Communications Network (PECN) and Public Electronic Communications Service (PECS).

In simple terms, those providing the service tend to be customers of a network. While, in some cases, vertically integrated entities like Sky are both at the same time, in the business communications space, it is common for the service to be an entity reselling a network or a wholesale customer of a network

Back in the day this was a clear separation and it made a lot of sense. That separation enabled regulation to be targeted because, after all, you might have more stringent security rules or commercial restrictions to safeguard competition placed on a PECN than a PECS. Equally, measures to protect consumers are more likely to be set on the PECS than the PECN. 

Collectively we’re known as Communication Providers (CPs) and the General Conditions of Entitlement (GCs) generally refer to CPs. We no longer have a prior-authorisation (aka licensing) regime, because everyone is permitted to operate a PECN or PECS providing they comply with the rules; rules which Ofcom set under its Communication Act powers. 

Ofcom policy has often differentiated between PECNs and PECS. For example, if a PECS approaches Ofcom for numbering resources, they cannot have them unless they are a PECN. If a PECN wants mobile resources, they cannot have them unless they’re an MNO and they cannot be an MNO unless they are a mere vassal of the MNO-oligopoly or apparently have a supportive Minister. But I digress…

The qualification for being a PECN is convincing Ofcom you are one and this is something we help Simwood customers needing resources from the National Telephone Numbering Plan with. Being an IPX reseller seems to be enough too though. So is it any wonder that we now have 450+ range-holders in the UK, which by policy, must also be PECNs.

The vast majority of those ‘PECNs’ appear to have their number ranges ‘hosted’ by what would previously have been called a PECN. There’s nothing wrong with that, Simwood has a lot of experience in managing the PSTN interface and it makes a lot of economic sense for a new entrant. Indeed more than 6% of them are hosted on Simwood – that’s 6% of all rangeholders; our share of those that are hosted is much higher.

If we’re all realistic though, they’re more often than not a PECS with numbers. Frankly, some of them are even stretching the bounds of PECS let alone PECN, e.g. the company formation agent that has number ranges!

This policy peculiarity and the resultant excess of PECNs makes differentiating between PECN and PECS largely pointless. In fact, neither term even appears in the Wholesale Voice Markets Review. What does appear is CP, the more general term, sort of.

‘CP’ would be too general and all encompassing, and Ofcom have apparently wanted to ensure no confusion can arise and nothing applicable to boring old landlines can intrude on the walled garden that is mobile. So they refer 24 times to either FCP or MCP, being Fixed and Mobile Communications Provider, distinguished not by oligopoly membership but by the numbering resources they have. So whilst the stick is out, Simwood is both an FCP and an MCP. When the mobile carrot comes out, we’ll probably just be an FCP. But I digress again!

The fact our regulator is contorting things with names and categories because those defined in the Communications Act are no longer appropriate, says to me some consideration might want to be given to the different types of market participant we have in 2020 and some new definitions created.

Whilst PECS and PECN in themselves are fine, it is this middle tier of PECS with numbers that need clarification. As it stands, those in this novel third category have obligations that the vast majority outsource to a more classically defined PECN. This includes not only interconnect but porting and provision of narrowband access. Every other network that hosts ranges we know, except one, treats hosted numbers with parity alongside its own. So if you want Narrowband access to a range hosted on the Simwood network, come to Simwood. If you want to port a number from such a range, come to Simwood. That doesn’t deny any of our customers the opportunity to do that themselves and indeed become a “true” PECN, but it guarantees somebody is doing it!

The one exception is of course BT IPX which wants to be all things at all times even if mutually exclusive. We’ll be diving into “What the hell is IPX?” next time to explore that. 

This review claims that the rangeholder has all the power because they can move their range elsewhere which, to be blunt, is just not how the world works and belies a complacency from the regulator in understanding what it seeks to regulate! 

So if BT decides to fleece Simwood for (non charge-controlled) transit to Scrote Telecom’s ranges, and Scrote Telecom refuse to provide Narrowband Access because they consider BT do that for them, they will decide to move their ranges to a more permissive network to solve Simwood’s problem will they? Similarly, if all the shenanigans around porting and the Scenario 7 issue enable Scrote Telecom to never port a number out, perhaps claiming they only port on BT’s ‘new’ network, or that IPX doesn’t let them port, Scrote Telecom will decide to move hosting to a more permissive network to make losing customers easier will they? I think not. Scrote Telecom will enjoy the restrictions because they help their business, whilst BT will claim they offer the tools to Scrote Telecom, and Ofcom (in our experience) won’t consider the abuses to meet their “administrative priorities” threshold for intervention. 

There is nothing wrong with being a PECS with number ranges; this lowers barriers to entry in a market that has been very successful, by many metrics, on fostering competition for the benefit of the users of telecommunications. 

However, this review needs to recognise the all important nuance, which we find to be exploited more often than not, between being the range holder and being the hosted network provider. It’s a simple distinction; a free-standing PECN that hosts a number range should be subject to all the same rules and obligations on that hosted range as it would for a range in its own name. 

This is no skin off our nose; we do this already. In fact, as far as we are aware, there’s only one service in the whole industry that would be affected by this ask; BT IPX Type A. 

It would solve two problems in a stroke; 

  • As written, the review talks about access to BT’s number ranges at FTR but not those they host. For those ranges the market will have to pay BT non-charge-controlled transit to reach them or seek to persuade Scrote Telecom that BT don’t actually do it for them and they have to give access even if they don’t want to. 
  • Meanwhile, the burning fire that is porting will be partially extinguished. BT resellers can currently use BT’s agreements to port from Simwood, but Simwood cannot port from BT resellers under those same agreements – and even when some of those operators are sent the IPX manual and told how to comply with their obligations they’ll still flat out refuse. 

In doing so, rather than having 450+ “network operators”, many of whom assume their host takes care of their obligations for them already, they’d have 10-20 proper PECNs responsible for the compliance of their PECS and PECS-with-numbers (needs a catchier name admittedly). And many of the industry’s biggest problems would go away!

Not too big an ask is it?

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