ACCAN calls on principle-based regulations model for telco industry

ACCAN claims the current self-regulatory system with its rules, exemptions and exclusions, has failed

The Australian Consumer Communications Action Network (ACCAN) is calling for the implemntation a ‘principle-based’ regulation model to address the local telecommunications industry's "woeful" customer service record.

In a discussion paper, Consumers First: Smart Regulation for Digital Australia, the advocacy group examined principle-based regulation, an approach that focuses on outcomes rather than regulatory procedures.

Under a principle-based model, regulators would put forward “desirable regulatory outcomes” and move away from “detailed prescriptive rules”.

ACCAN chief executive officer, Teresa Corbin, said the current self-regulatory system “with its excessive rules, exemptions and exclusions”, had failed.

“Without a new approach to protection, consumers are going to be left with providers that still don’t care and won’t change,” she said in a statement. “Smart regulation is about making the market work for consumers.”

According to the paper, regulation based on principles would require the industry to treat customers fairly, respect their privacy, provide accurate, clear information on product and services from the point of advertising to after sales service, and to resolve disputes quickly and fairly.

“To apply the principles the regulator needs to engage all of the stakeholders in a regulatory conversation,” the paper read. “The conversation would include meetings and consultations, prescriptive notices, best practice guidelines, publishing formal and informal guidance and publication of determinations.”

However, the report’s co-author, Professor Michael Fraser, warned that smart regulation would only work if regulators have the correct enforcement tools, processes and culture to hold companies to account.

“The ACMA [Australian Communication and Media Authority] needs a dedicated consumer protection arm that has access to business complaints data and auditing, and has the right enforcement tools and culture,” he said.

“Smart regulation is a holistic approach that would see the regulator maintain a continuous conversation with all stakeholders to ensure businesses are focusing on good consumer outcomes and clearly understand their responsibilities.”

The paper makes a number of recommendations for regulators, including the ACMA and the Telecommunications Industry Ombudsman (TIO), in addition to policy makers and outlines 10 principles:

  • Businesses must treat their customers fairly
  • Businesses must respect the privacy of their customers
  • Businesses must provide their customers with clear, accurate and relevant information on products and services before, during and, where appropriate, after the point of sale
  • Businesses must resolve customer disputes quickly and fairly
  • Businesses must ensure that advertising and promotion of products and services is clear, accurate and not misleading
  • Businesses must have appropriate policies and practices in place to assist customers who are disadvantaged or vulnerable
  • A business that breaches the principles-based regulation will provide an effective remedy for the customer and may be liable to an effective sanction.
  • Businesses will develop ongoing monitoring and reporting measures designed to ensure successful implementation of the principles-based regulation
  • Customers will behave honestly in their dealings with businesses and cooperate with businesses when seeking to resolve any problems or disputes
  • For transparency and accountability, businesses will have their compliance with the principles-based regulation reviewed and reported by an external auditor

The discussion paper follows the launching of the ACMA's Reconnecting the Customer public hearing in Melbourne, where Telstra group managing director, public policy, David Quilty, said existing industry codes and industry-driven solutions — already in development by the telecommunications sector — were the key to resolving the issue of poor customer service.

“That work is going on as we speak as part of a review of the code one of the working groups has been specifically tasked to look at issue of compliance monitoring and enforcement,” he said at the time.

Also speaking at the hearing, Optus director of Government and Corporate Affairs, Maha Krishnapillai, claimed [[artnid: 366195 |an upgrade to its IT systems and ensuring a ‘level playing field’ would lift customer service in the Australian telecommunications sector.

The Communications Alliance has rejected the call by ACCAN for the move to a ‘principles-based code, however noted the importance of principles in the process of improving the Telecommunication Consumer Protections (TCP) Code.

Communications Alliance chief executive, John Stanton, said that the group managing the Code revisions had worked hard to agree with consumer representatives on a set of strong overarching principles that are being used to guide the re-writing of the code.

“But to ensure we deliver improved protections for consumers, the Code must provide clear guidance to service providers, and its provisions must be able to be interpreted by regulators,” Stanton said in a statement.

“The risk is that switching to a Code that provides only principles for guidance will result in ambiguity and confusion among service providers and consumers alike, as well as inconsistency in the enforcement of the Code”.

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