49. We asked the Director General who owns telephone numbers and were told that "nobody actually owns the numbers".[139] It is surprising that the ownership of numbers should be undefined, given the costs incurred by users and operators when numbers are changed and when some firms, including Guardian Direct, rely so heavily on their telephone numbers for contact, trade and marketing purposes. Furthermore, memorable, or golden, numbers may already be charged for by operators. FUG told us that "the licence between Oftel and the network suppliers recognises and allows them to charge premiums for numbers that they define as being golden...[They can charge] either an initial premium or an on-going higher level of rental than for an ordinary randomised [nine]-digit number".[140] Oftel estimate that the "charges made by operators are sometimes in excess of £1000 for each number each year".[141] We believe that telephone numbers are a national resource; income derived from them should be returned to the public purse.

50. In July 1998 Oftel put forward proposals to change the way in which the NNS is administered, including:

• the introduction of a pricing mechanism for the allocation of numbers by Oftel to operators. Number charging would be intended to increase the efficiency of number use
• the introduction of individual number allocation by Oftel to end-users, initially for the 08 and 09 ranges, and associated pricing arrangements, including number auctions
• arrangements to deal with the development of number trading
• clear guidelines regarding the ownership of numbers and any associated rights of use, including the enforcement of 'use it or lose it' rules intended to prevent number hoarding
• the expansion and eventual privatisation of the arm of Oftel dealing with the administration of the NNS

These proposals would be likely to require primary legislation in order to be implemented.[142]

51. Witnesses were divided over the merits of Oftel's proposals to reform number administration. FUG supported the need for the definition of number ownership to be made more clear and argued that it did not disagree "with the idea that Oftel should use numbers in broadly the same way as [car] numberplates and seek to charge some form of premium." Their concern, in respect of freephone numbers, was that existing golden numbers would "fall back into Oftel's hands and they should recharge somebody for them".[143] The DMA argued that individual number allocation would "increase number allocation and flexibility" by recognising "the value of a number to a subscriber and the cost and inconvenience that a number change would cause".[144] The Other Licensed Operators' group described number charging as "an unacceptable tax on the telecommunication market", suggested that improved regulatory arrangements could be as effective as number charging in improving the effiency of number use and raised concerns about the technical costs of achieving individual number allocation.[145] NTL/Diamond, although "generally supportive of Oftel's objectives", are commissioning a cost-benefit analysis of Oftel's proposals.[146] The Federation of the Electronics Industries declared themselves to be "fairly sceptical" of the proposal for Oftel to auction golden numbers to end-users.[147] Colt Telecommunications expressed strong opposition to individual number allocations and charging for numbers, declaring that "Oftel should commit to schemes which reduce regulation and the regulatory workload rather than the other way round".[148]

52. We think it vital that the efficiency with which the nation's resource of telephone numbers is used is increased and believe that economic incentives are more likely to achieve this aim than regulatory diktat. While acknowledging the costs associated with implementing individual number allocations, especially those falling on operators, we believe that progress in this direction will be of benefit to consumers. Most importantly, legislation to clarify the ownership of telephone numbers is over-due. We recommend that Oftel, working with Ministers, bring forward legislative proposals to clarify the ownership of telephone numbers and to permit number charging and individual number allocations, once the costs and benefits of these proposals, and the objections raised to them, have been carefully assessed.

140  Q134 Back

141  Number Administration, paragraph 3.6 Back

142  Q28; Number Administration, paragraphs 2.9 Back

143  Qq135, 137 Back

144  Ev, p46 Back

145  Ev, p57, 59, paragraphs 2.3, 2.8, 4.8 Back

146  Ev, p54, paragraphs 3.1-3.2 Back

147  Ev p63, paragraph 3.5 Back

148  Ev, pp60-1 Back