Ofcom to charge Communications Providers for number allocations

Ofcom, the super regulator that looks after broadcast, radio and telecoms has issued a statement about protecting number ranges and intends to charge for their use.

The initial exchanges affected are area code Bournemouth (01202) which is likely to need new supplies during 2012, followed by Aberdeen (01224), Bradford (01274), Brighton (01273), Cambridge (01223) and Milton Keynes (01908) by 2016.

The first stage will force local users to dial the full local number (including the geographic code) which will allow Ofcom to allocate number beginning with 0 and 1.

Ofcom is also proposing to charge 10p per allocated number for new allocation and for EXISTING allocations in those exchanges where numbers are running out.

This may not sound like a bad thing, but it's going to cause huge problems for communicatoins providers (CP) with customers using telephone numbers in these ranges, especially if they're a smaller provider (mainly affects VoIP providers).

Currently Ofcom allocates numbers in blocks of 10,000 normally or 1,000 in exchanges where numbers of running out. This is due to the way telephone calls are routed between telephone exchanges and is based on BT's inability to handle blocks less than 1,000 numbers (due to legacy telephony constraints). BT actually manually loads all number blocks into their exchanges so each time a CP gets allocated a block - they inform all the other CPs of the blocks and they put the information into their systems (telephony switches/exchanges). Though it affects all CPs, BT is still the main telephony network in the UK and by default they'll transit the calls through their network.

The big telephony providers won't really be affected by this as they have millions of customers, so the additional payments for handling blocks of 1,000 numbers is minimal, however the costs for a smaller VoIP provider can be significant.

As the charging applies to existing numbers allocated (to encourage providers to hand back unused numbers) smaller providers will be forced to pay (even if they've just reserved numbers just so they can offer local numbers all over the UK).

The problem is that say a CP has a couple of customers in one of the exchanges where numbers allocations are restricted, they will have taken a block of at least 1,000 numbers. They either have to give the whole block back and the customer loses their telephone number, or the CP keeps the whole block. It's also impossible to port the number as then there will be a whole in the block and again it can't be given back (unless it's ported to another provider who will take the whole black - which is only going to be possible to the larger CPs where the costs won't be significant).

So this new policy hurts all the smaller providers - who'll just have to discontinue offering numbers in protected blocks (and get existing customers to give-up their local numbers) while supporting the large incumbents.

There is a solution to this, Ofcom could maintain a central on-line database of numbers and what CP they belong to (and there's even an existing telephony protocol that supports this called ENUM). Then any CP wanting to route calls to a particular number would first consult the database and then route the call the relevant provider.

This would allow Ofcom to allocate SINGLE numbers rather than blocks and CPs would only need to pay for numbers they actually use, it would also mean they could return any numbers not in use. This would then allow the smaller CPs to maintain numbers even in the protected exchanges and they could return huge amounts of unused numbers in other exchanges too.

Many of the VoIP providers support ENUM now and it would be trivial for them to support a CP interconnect version of ENUm too. Unfortunately companies like BT and other incumbents don't and they control the market.

If Ofcom does implement this policy many smaller CPs will be financially constrained which might make their VoIP services uneconomical, so they'll have to stop offering VoIP which will just play into the incumbents and make them even more powerful and resistant to change.

Ofcom needs to support a central database of number allocation utilising ENUM and force CPs to use this for inter CP call routing and then allocate single numbers. This will encourage competition and ensure there is market choice for consumers in terms of CP choice and of course remove the current issues of numbers running out.