ACMA registers new telecom protections, but enforcement questions remain

Consumer group ACCAN praises bill shock and other consumer protections but worries about compliance.

The Australian Communications and Media Authority (ACMA) has said it will enforce an industry code to prevent telephone and broadband bill shock. However, the Australian Communications Consumer Action Network (ACCAN) has said the ACMA lacks adequate power to keep telcos honest.

The ACMA agreed to register an improved Telecommunications Consumer Protection Code written by industry, government and consumer groups. The new TCP code aims to protect customers from unexpected charges, sort out confusing mobile plans and improve handling of customer complaints. It applies to all types of telecommunications providers, including ISPs, landline and mobile carriers. Some of the rules go into effect 1 September, with the rest to be phased in over 24 months.

“The ACMA will very closely monitor its progress and will not hesitate to communicate to industry the need for further change, if that need arises,” said ACMA chairman, Chris Chapman. “Compliance with the code is no longer an option. The ACMA obviously stands ready to use its powers of investigation and enforcement if participants choose not to comply with these new code obligations.”

If ACMA determines a provider isn’t complying with the voluntary code, it can issue a direction requiring the provider to comply. If the company doesn’t heed the direction, the agency can take the provider to federal court and seek civil penalties of up to $250,000.

ACCAN seeks sharper teeth to back up the rules. In a letter to Senator Stephen Conroy, minister of Broadband, Communications and the Digital Economy, ACCAN's CEO, Teresa Corbin, wrote: “The big issue here is that the ACMA does not at present have strong enough powers to enforce the Code.”

A costly and drawn-out court process is no substitute for strong laws, Corbin told Computerworld Australia. Going to court is “a much longer route than having the powers directly to make sure consumers are fully protected.” The rules are “definitely the best set of rules that we’ve seen in the code so far, but ultimately what we still need is a strong enforcement body.”

Giving the ACMA direct enforcement powers will require legislation changing the law governing the agency. “I don’t think that’s a barrier,” Corbin said. The telecom industry applauded the new code. Communications Alliance CEO, John Stanton, said it “heralds a sea-change in the telco consumer experience in Australia.” Australian Mobile Telecommunications Association CEO Chris Althaus said, "This new Code sets the standard for customer service and protections and after a lengthy and detailed review involving industry, government and consumer representatives it has resulted in a very substantial reform of the protections afforded to customers.”

"While there will always be those who insist that the code could do even more, that should not detract from the significant advancements in consumer protection that Australians will now enjoy in relation to telecommunications products and services," said Shane Barber, a partner at Truman Hoyle, which helped draft the code.

Under the TCP code, customers will receive clearer information about their plan and better notification about usage, the ACMA said. Providers will need to describe charges in a manner consistent with the rest of the industry and substantiate claims about broadband speed. Also, the code overhauls industry complaint resolution procedures.

The code allows up to 48 hours for providers to notify consumers when they reach 50, 85 and 100 per cent usage of their data, voice calls and SMS. ACCAN believes that’s too long, Corbin said. “We don’t think this will be an end to bill shock.”

“The ACMA considered the limitations of existing billing systems and the particular difficulty that resellers face in receiving usage information from wholesalers,” ACMA explained. “It would not be appropriate to put obligations on a selected class of suppliers that they are unable to meet as this would limit competition in the industry.”

Providers must report compliance to a new industry new compliance monitoring body, Communications Compliance. The Communications Alliance, which developed the code, named Deirdre Mason to be independent chair of the compliance body. Mason was formerly director of the Telecommunications Industry Ombudsman and has also worked at Telstra. Michael Lee, Communications Alliance chair and former federal minister for communications, also will serve on the compliance board.

“Communications Compliance fills a vital gap in the co-regulatory framework—that of a strong independent body to verify that service providers nationwide are complying with the comprehensive and expanded set of consumer protections enshrined in the revised TCP Code,” Stanton said. But ACCAN fears it will be difficult for the compliance body to remain independent, sitting under the Communications Alliance, Corbin said. Also, it may be “hard for it to be effective without a proper budget for doing investigations,” she said. The body’s budget is currently unknown.

Some parts of the new code have delayed implementation. The new Communications Compliance framework begins 1 March 2013. The requirement for standardised charge information takes effect 27 October this year. Total amounts for last two billing periods are to appear on bills and critical information summaries are required starting 1 March 2013. Spend management tools will be phased in starting 1 September 2013.

ACMA and industry had been negotiating the rules since 2010. The code was written by a steering group under the Communications Alliance and included representatives from industry, ACCAN, the Australian Competition and Consumer Commission (ACCC) and the Department of Broadband, Communications and the Digital Economy.

The ACMA was unhappy with an initial draft of the code presented by the Alliance in February. “Following several months of intense negotiations between CA and the ACMA, CA presented a satisfactory code in June,” the agency said.

The ACMA said it “estimated that the annual recurring costs associated with the industry’s unsatisfactory performance under the previous code included $1.5 billion associated with consumers choosing the wrong plan, $108 million for the costs of telephone complaints and $113 million for the costs of writing off bad debts.”

A recent study by Macquarie University found that bill shock cost Australia $557 million per year.

ACCC litigation against telecom providers was not enough to tackle the industry’s problems, the ACMA said. “While the ACCC’s actions have addressed unlawful misleading or deceptive conduct, confusing advertising practices in the industry continue to persist and are widespread, resulting in significant consumer detriment such as bill shock,” the ACMA said.

“Telstra has been a key contributor in delivering this improved industry code while also working hard behind the scenes to simplify our offers and better protect our customers against bill shock,” a Telstra spokeswoman said.

You can read the new code at the Communications Alliance website.

Follow Adam Bender on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

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