1. OFTEL Operator Policy Forum October 2000 Update on Pay for Product Adam Maxted Chairman of PfP Committee

2. Introduction Definition of PfP Examples of long call PfP PfP Committee & Working Parties Sequence of events & current status Next actions Summary

3. What is Pay For Product ? “ The use of premium rate telephone services and a single drop tariff (above £1) to pay for goods or services where they are delivered to the subscriber following completion of the call.”

4. Types of products & services Suits low value items under say £20 Examples could include : Books CDs Videos Subscriptions Ticket sales Entertainment & infotainment services

8. How the order process works by ‘phone... Caller dials PR single drop number Connect to IVR and low cost intro Freephone cross ref for more info Press zero to proceed Premium single drop charge applied Caller keys in phone no. Partial / full CLI match from network

9. Process continues... Caller records full name & address Order Reference no. given Call completes All of call is recorded Fulfilment < 30 days later Cost appears on ‘phone bill

10. How the service works by modem Go to web site Select product and price Download premium dialler software Go through disclaimers, cost reminders etc. Re-connect at premium rate Enter customer details Session completes

11. Why is PfP attractive as a new billing option ? Kick start static growth in UK PRS e-commerce growing - £2.8b in 1998 Mail Order revenues currently £18b pa Billing alternative to credit card - 49% of adults 18+ do not have a card PfP ideal for micro payments More secure than credit card Replaces long call PfP - unrestricted currently

12. Key issues... Legal relationships Consumer protection Fraud Unauthorised use Bad debts Commercial justification Sharing of rev. for collection & billing Potential charge backs

13. Background and objectives of: PfP Committee Overview - merchant / SP perspective ICSTIS PfP Working Party looks at : Consumer protection,legal relationship Network PfP Working Party looks at : Fraud, Unauthorised use, Bad Debts, interconnect & revenue sharing

14. The PfP sequence of events Feb ‘97- first PfP group set up May ‘99 - new PfP committee set up June ‘99 - meetings & briefings Sept ‘99 - ecommerce@itsbest.com Nov ‘99 - BT & Access Control Feb ‘00 - PfP report issued Mar ‘00 - First Network PfP meeting

15. PfP sequence of events April 00 - First ICSTIS / PfP meeting June 00 - Second PfP Network meeting July 00 - Second ICSTIS / PfP meeting & release of draft guidelines Sept 00 - Presentation to TUFF Sept 00 - Briefing meeting with OFTEL Oct 00 - PfP main committee to meet

16. Consumer protection Proposed key features Prior permission - application to ICSTIS Controlled service Trial 12 months Compliance with DSD effective Oct. 00 Abide by ICSTIS Code & Guidelines Childrens’ services Record all calls - keep for 12 months 0907 prefix

17. What is the likely impact for service providers ? Demonstrate reliable product fulfilment SPs need to be visible DSD has major implications Need recording capability Maintain database of customers’ orders CLI tracking for checking for excessive spend / subscriber & fraud Ultimately liable - bonds ?

18. Network issues being addressed by PfP Network Committee Measures to control fraud Measures to control unauthorised Use Minimisation of bad debts CLI release to SPs Sharing of revenues for billing and collection Credit and retentions Endorsement of SPS for trial by networks

19. Summary / Immediate future Need clarification / commitment from BT OFTEL involvement monitoring process Consultation on ICSTIS PfP guideline Seek more involvement from other ONOs Agree between networks fraud / abuse measures and circulate for implementation Agree revenue sharing with networks

20. For further information... Adam Maxted - 07005 34 0900 or Updates available from ICSTIS website - visit www.icstis.org.uk