Government folly creates public enemy number 118

DQ service 118 118 is under the spotlight for failing customers. So, once again it’s Hobson’s choice we’re left with post-deregulation, reckons George Pitcher

There is probably no sadder parable for our free market times than the story that David Bedford, the Seventies middle-distance runner, plans to sue the directory enquiries (DQ) service, 118 118, for trading on his image without his permission.

Bedford wore droopy moustaches, long hair, headbands and vests. So do the deeply unattractive and unfunny pair who advertise 118 118, who may well not have been born when Bedford was contending the 10,000 metres. It may well be that 118 118 is making a great deal of money out of looking like Bedford, without Bedford making his cut. That will be for the courts to decide. What is so sad is not just that Bedford should feel he has some degree of ownership over the intellectual property of cow-catchers and sweaty vests, but that the entire competitive edge of the leading deregulated provider of directory enquiries by telephone should hinge on being unattractive and unfunny.

Because that is what such services have turned out to be. Telecoms regulator Oftel held back from imposing punitive measures on The Number – the company that operates 118 118, which is itself owned by the American InfoNXX – for dispensing “above the norm” amounts of wrong numbers to subscribers.

The Number has sacked some 30 call-centre staff as a result. And apparently, there has been an internal investigation into allegations that operators have been deliberately giving false numbers in order to limit call times and to fulfil their quotas to qualify for bonuses.

This would be funny – country squires being put through to massage parlours when they asked for holiday-relief workers – if it weren’t for people being fobbed off with useless numbers when they need urgent medical care.

And it has to be asked: what sort of regulator would hold off punitive measures, just because a company under its tutelage is conducting an internal “investigation”? One wonders, for example, whether even the notoriously easy-going Football Association would stand by while – to pick a club at random – Arsenal was shown 30 red cards for professional misconduct.

But the really depressing aspect of the DQ deregulation is that one is tempted to shrug and ask what everyone expected when Oftel opened the market to almost unlimited numbers of 118 operators. In the rather dreamy world that regulators inhabit, the deregulated operators are meant to deliver better services and to drive down prices.

Even those with responsibility for championing consumers have been drawn in. Allan Williams, senior policy adviser at the Consumers’ Association (CA), claimed last Christmas, when these services were first announced, that they offered a “better choice for customers and potentially lower prices”.

Note that qualifying use of the word “potentially”. He offered two caveats: “Consumers need to be aware both of the nature of the service and the cost.” Quite.

The nature of the service is now all too apparent to anyone who has been put through to Sting’s fanzine when they asked for the Police. I exaggerate, but the nature of the charges against 118 numbers are that callers can be churned as quickly as possible to make money.

I was quoted 65p a minute for connection to Interflora the other day, a considerable margin above BT’s monopolised 192 service. And, when the CA talks of being aware of the “nature of the service”, I suspect it had in mind that there may be extra charges for services such as cinema listings and hotel bookings.

Never mind that this has ringing overtones of the kind of irrelevant services that consumers demonstrated they didn’t want from WAP services on their mobile phones. The nature of the DQ services has manifested itself in “cybersquatting” – by which rival operators steal each others’ potential customers by buying similar internet domain names for service referrals.

The DQ fiasco epitomises this Labour Government’s failure to understand the nature of business. We can blame Oftel, but behind it are the likes of the minister with responsibility for telecoms, Stephen Timms, for whom “choice” is both a mantra and an obsession.

In its neo-Conservative zeal, this Government pursues choice in education and health-provision as if choice is of itself a virtue. It may seem blindingly obvious to say so, but choice in any kind of market is only desirable where it improves the nature of the service.

Where it becomes a choice between crappy services, we are probably better off with monopolies. In fairness, the Tory policies on which Blair’s Government models its competition principles were often hopeless too.

Who can forget how Mercury struggled against impossible odds to compete with a privatised BT that still owned all the infrastructure? Or the painful, drawn-out saga of British Gas’s belated break-up, after its privatisation as a monopoly (and its ads about cheery service engineers, whom we never met in the real world)?

The political imperative is a clear one. “Choice” is only itself a choice where it demonstrably improves services and drives prices down. But we have heard precious little of that kind of view either from Bournemouth or Blackpool, where the existence of choice is seen as some kind of cure-all for both private and public sectors.

DQ services are a paradigm. As I write this, a radio commercial advises me, in the exquisite tones of Brian Sewell, that one 118 service has more “Maureens” than its rivals. Is this really the best we can hope for?

George Pitcher is a partner at communications management consultancy Luther Pendragon

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