TELEPOINT SERVICES (Hansard, 28 July 1988)

Lord Young of Graffbam

Telepoint services are an interesting new development with the potential to add to the variety and convenience of telecommunications facilities available to the public. After consultation with the Director General of Telecommunications we have decided that these services should be licensed so that their worth can be tested in the market.

In the first instance we propose to authorise at least two, and up to four, operators, to provide Telepoint services. Since more than four organisations have already expressed a potential interest in providing such services, we shall, if necessary, ask the director general to advise which applicants to authorise. This will be on the basis of applications which will be invited later this summer against detailed criteria which we shall announce.

The public telecommunications operators will be among those eligible to apply and I anticipate that BT and Mercury (and, in the Hull area, Kingston Communications in place of BT) will wish to offer Telepoint services, though it will be for them to convince the Director General of Telecommunications of the case for this.

Other applicants, if successful, will operate under the provisions of a new type of telecommunications licence which my officials are starting to prepare. The public telecommunications operators, if successful in their applications, will also operate their Telepoint services under the new licences to ensure that competition between all Telepoint operators is on a generally fair and equitable basis. The Director General of Telecommunications will be considering whether amendments to the PTO licences are necessary to ensure this.

In licensing these new services we wish to be sure that the market is given every chance to develop but among the licence conditions which will apply will be ones to ensure that directory information, emergency call facilities and information on the price of calls can all be available. Such requirements help safeguard the public good. There will also be conditions governing the technical specifications of the equipment used. The achievement as soon as possible, if not from the outset, of a common air interface allowing the user a choice of equipment is essential. The related issues of openness of site access and the ability of the user, on appropriate contractual terms, to use his handset at the Telepoint base stations of all operators will also need to be addressed. Again we regard the achievement of this facility at a relatively early date 476WA as highly desirable. It does however raise complex issues of billing and credit verification which will need to be considered in conjunction with the public telecommunications operators. Metering is a further aspect which may also need to be addressed. More information on these and other aspects will be available when applications for the licences are invited.

We do not, at least at this stage, envisage the providers of ordinary Telepoint services being granted the status of public telecommunications operators. Nor will they have applied to them the powers in the Telecommunications Code. This means that we expect the full range of normal planning controls to apply to these Telepoint activities. The same will hold true for the public telecommunications operators in respect of any Telepoint services that they may be authorised to supply. However, the roll-out of the base station infrastructure will be critical to the successful development of Telepoint services on a nationwide basis and, if the absence of Telecommunications Code powers turns out to cause genuine difficulties, we shall be prepared to look at this point again.

Telepoint services will operate at frequencies allocated to cordless telephones and will conform to the same radio specifications. They will therefore be covered by the same arrangements for exemption from licensing under the Wireless Telegraphy Act as normal cordless telephones.

Telepoint is distinct on the one hand from cellular radio telephony and from conventional public callbox services on the other hand, though it has some features in common with both. In particular, we do not see Telepoint as a substitute for conventional public callbox services in the foreseeable future. There is no reason to expect the introduction of Telepoint to have an adverse impact on public callbox services, effective competition in which both the Government and the director general are anxious to increase. Over the much longer term, however, as the build-up of Telepoint services develops it could be that the relationship between Telepoint and conventional callbox services will need consideration. The Director General of Telecommunications has told me that he intends to keep this aspect under active review as the new services arc developed.

These new services should help to create and develop completely new markets. Interesting and potentially far-reaching possibilities can be foreseen. Combining Telepoint and paging facilities so as to permit incoming as well as outgoing calls is one example. More fundamentally, longer-term developments based on Telepoint or similar radio link approaches hold out new possibilities for increasing competition in the final part of the local telecommunications loop which connects subscribers to their local exchange. These could bring Telepoint type devices right into the home or office so offering a subscriber not just the normal Telepoint service in public places but the possibility of mobility in the home or office and incoming and outgoing services competing with services over normal fixed exchange lines. These longer-term augmented types of service raise different and more complex issues which my officials and those from the Office of Telecom- 477WA munications will he exploring with the public telecommunications operators and others in the months ahead to see how, within the bounds of existing policy for the spectrum constraints, the potential may best be developed.

Lastly, because Telepoint is new and the desirable future pattern of development will only become clearer with experience, it is important that regulation should not artificially constrain or divert its progress. For example, it seems likely that Telepoint services could develop on a pan-European basis within the foreseeable future. For all these reasons we need to retain an adequate flexibility of response with the proposed licensing regime. The director general has agreed to keep the position on Telepoint services under review so that modifications and adjustments to the Telepoint licensing regime may he made as necessary to allow the new services to fulfil their potential to the full.