User Pays User Group User Pays User Group Wednesday 30Wednesday 30thth April 2008 April 2008

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Today’s Agenda

Introduction Helen Barratt

Contract and Governance – The Way Forward Andy Miller

Operational Update Vicky Palmer Demand

Invoicing

IAD Outages Dave Ackers

Charging mechanism Andy Miller

AOB SPAA Andy Miller

Summary and next steps Helen Barratt

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Objectives

Work with you to incorporate change mechanism

within the contract

Develop effective User Pays governance

Listen to you and respond constructively

Seek ongoing open dialogue and feedback

Facilitate the development of User Pays in the best

interest of the industry as a whole

Customer Focused

Collaborative

Con

stru

ctiv

eO

pen

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Current Position

Agency Charging Statement, Licence changes and

Modification approved

Service requests received from all customers

Smooth transition from an operational perspective

A number of parties have signed the contract

Addressing the actions outlined in Ofgem’s ACS approval

letter

Contract and governance issues still to be resolved

Proposed approach to contractual Proposed approach to contractual change and governancechange and governance

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Proposed approach

Acknowledge your feedback on key areas Customers must have a voice when it comes to contractual changes User Pays non-code services must have some form of governance

Approach Take forward and resolve as an industry Propose User Pays User Group as governance body for non-code

services Develop User Pays User Group Terms of Reference Develop contractual change However, these may be developed independently

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A Potential Way Forward - Governance

Governance proposal for non-code services User Pays User Group

Terms of Reference – requires your input in development Membership Secretary Quorum Frequency of meetings Notice of meetings Minutes of meetings Reports Duties Other

Views on ToR

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A Potential Way Forward – Change

Contracting proposal Customers and xoserve must agree on contractual change for the

change to happen

xoserve has one vote and the customers collectively have one vote

Escalation route requirements

Customers to decide how they wish to reach a consensus for their one

vote

Mechanism for handling legislative and regulatory change

To be reflected in the contract

Thoughts?

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How might this work?

User Pays Contractual Framework

User Pays User Group

Change

Customer xoserve

One Vote One Vote

Contract

Governance

Change

Contract Refinements RegisterContract Refinements Register

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Refinements Register

Many and varied comments have been received on the

current contract

Where possible these have been addressed with the

individual parties

Some comments are likely to result in a change to the

contract See examples at the back of the pack

These will be progressed and incorporated into revised

contract when agreed

Draft Time TableDraft Time Table

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High Level Time Line

Party Activity May June July

Amendments to the Conditions

xoserve Revised contract to customers 13th

Customers Period for review 13th 6th

xoserve Revise & re-issue 6th 20th

Customer Signed by all parties by 11th July 20th 11th

Governance arrangements for no-code services

xoserve Draft Terms of Reference 9th

All Review TofR 9th 6th

Customers Customer Contract Group agree consensus/voting approach

9th 6th

xoserve ToR final drafting & back to all 9th 20th

All ToR agreed 20th 15th

All User Pays User Group Meetings

20th 17th 15th

Operational UpdateOperational Update

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Current demand for services

IAD demand is lower than previously indicated Demand is still changing Intention is to review cost recovery position in July/August

Service Forecast Current Demand

IAD 12,500 10,500

Telephones Band mix different to forecast but overall currently equal to forecast recovery

DVD 10 10

Email 2,020 Pay as you go

AQ spec calc 2.5 million Pay as you go

Portfolio reports 80 125

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Operational Update

General Overview

Operational service provision continues as is

Operational governance arrangements in place Some teething issues have led to some customer frustration

However, appropriate controls over provision of User Pays services

are working

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Operational Update

IAD Service Created circa 700 new accounts – all processed within SLA No system performance issues

Telephone Service On target for handling 30,500 calls. SLA for answering being achieved Power cut interrupted service for 30 mins on 23rd April

Email Reporting Service Processed 110 requests – all returned to Requestor within SLAs

M No DVD The July edition will be first to be provided under User Pays

Portfolio Reports All timetabled reports have been sent on due dates

InvoicingInvoicing

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Invoicing

Contract Managers will be provided with an e-mailed scanned invoice as well as a paper copy

Non-code services chargeable from 1st April, code chargeable from 9th April (when Mod was approved)

If customers wish additional details can be provided for IAD for an interim period, e.g. number of account creations and deletions

Propose to review this after three months Please contact me after the meeting or e-mail

xoserve.userpays@xoserve.com if you’d like to receive this additional information

IAD outages IAD outages

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IAD planned outages

Outage planned for 17th/18th May Addresses system security issues regarding concurrent

account usage In addition DN interruption functionality being implemented

Outage planned for 21st/22nd June Addresses password security and reset issues

Customer password reset Day 1 and 28 days reset

In addition functionality to monitor transactional usage being implemented

IAD charging mechanismIAD charging mechanism

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IAD charging mechanism

Currently IAD is charged by an account basis

Accounts are for a specific shipper short code

Current basis of charging is the most cost reflective given

current system configuration

Some customers have asked for a review of potential

alternative charging approaches

Alternatives are likely to lead to price changes for all

customers therefore need to have customer consensus to

review

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IAD charging mechanism – potential alternatives

Alternatives By an account that accesses all of a company’s shipper short code On a transactional basis

Proposed review to include Identification of alternatives Impact on system and processes Cost of change Timescales Price impact for customers

Consensus to proceed?

Discuss

AOBAOB

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SPAA/User Pays

There are differences between SLAs

Feedback from some customers is a desire to have them

more aligned

Happy to explore options and implications with customers

How is the best way to take this forward?

Any change will have to be go through the agreed

governance process for User Pays

Thoughts?

Summary and next stepsSummary and next steps

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Objectives

Work with you to incorporate change mechanism

within the contract

Develop effective User Pays governance

Listen to you and respond constructively

Seek ongoing open dialogue and feedback

Facilitate the development of User Pays in the best

interest of the industry as a whole

Customer Focused

Collaborative

Con

stru

ctiv

eO

pen

Contract Refinements RegisterContract Refinements Register

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Contract areas requiring review

Clause Text Comment

2.6 The parties agree that there is no obligation on the Customer to issue any requests for the provision of the Services, nor any obligation on the part of xoserve to accept such requests.

Amend to cover xoserve to reasonably accept service requests

3.4 xoserve may from time to time add additional Service Schedules to these Conditions by publishing the same on the Website. In the event of an additional Service Schedule the Agency Charging Statement may require modification accordingly. Any such modification shall be made in accordance with the provisions of Special Standard Condition A15 of the Transporter’s Licence. The addition of Service Schedules shall not amount to an alteration or change of these Conditions or of the Service Schedules for the purposes of this clause.

Amend to be more explicit re the ACS modification e.g. “to include the Charges for the services detailed in the additional Service Schedule"

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Contract areas requiring review

Clause Text Comment

4.2 To enable xoserve to perform the Services, the Customer agrees to provide xoserve with any and all information, data and/or other materials which xoserve may reasonably request from the Customer from time to time. The Customer shall use all reasonable endeavours to ensure that any and all information, data and/or other materials which it provides to xoserve will be complete, accurate and up to date as at the date of its submission to xoserve.

Amend to limit clause to data only relating to the services provided

5.8 The Customer shall be responsible for the payment of any and all bank charges which may be incurred (either by the Customer or xoserve) in the payment and receipt of payment of xoserve's invoices.

Amend to be more clear on requirements

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Contract areas requiring review

Clause Text Comment

7 Data Protection

Clauses 7.4 and 7.5 Comments received and being reviewed.

7.6 If any data held by xoserve relating to and/or provided by the Customer is lost, damaged or otherwise destroyed due to xoserve's own negligence and/or breach of the Contract, xoserve shall use all reasonable endeavours (at its own cost and expense) to reconstitute such data from any back up copies it may have. The Customer shall provide xoserve with all such assistance as xoserve may reasonably request to assist in the re-instatement of the data.

Comments received re last sentence – regarding payment for all reasonable expenses incurred.

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Contract areas requiring review

Clause Text Comment

8.3 The obligations of confidentiality shall continue indefinitely except they shall not apply to information:

Amend to limit of 5 years

10.1 If the Customer wishes to terminate a specific Service Request or the Contract it may do so on not less than 28 days’ written notice in accordance with the provisions of clause 12.7 on condition that (subject to any specific provisions in any of the Service Schedules) the Customer pays any and all sums then accrued for Services performed under any Service Request up to and including the date of termination and any applicable early termination charges as set out in the relevant Service Schedules.

Comments received re what if xoserve action leads to termination (also 10.4). Under review.

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Contract areas requiring review

Clause Text Comment

11.3 Neither party shall be liable (including without limitation to refund Charges or pay liquidated damages) for failure to perform and/or any delay in performing any obligations (other than obligations as to payment) to the extent that such failure and/or delay is caused or contributed to by a Force Majeure Event. The party which suffers a Force Majeure Event shall use its reasonable endeavours to mitigate the effects of the Force Majeure Event and to recommence performance of its affected obligations as soon as possible and to the extent reasonably practicable. xoserve will not charge the Customer for Services which have not been provided/made available to the Customer due to any Force Majeure Event affecting xoserve.

Amend to cover circumstances where customer pays in advance for services

11.5 Without prejudice to Section U1.9 of the Uniform Network Code, the ………..

To be amended to cover all of UNC, not just specific clause

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Contract areas requiring review

Schedule Text Comment

Schedule 1

Contract Manager Amend to cover this being a named person within xoserve

Schedule 4

Introduction Add reference to normal operations include daily re-fresh.

Schedule 7

Clause 4.4 For the avoidance of any doubt, no reduction to the Charges shall be applied in the event that there is any failure to amend the Customer Password in accordance with the provisions of paragraph 2.5.3, nor shall xoserve incur any liability as a consequence thereof.

Amend to cover for liabilities if xoserve fail to update password within required time.