The Australian Communications and Media Authority (ACMA) has issued the telecommunications industry with an ultimatum to make call costs, data usage and plan details clearer to consumers within five months, or face increased regulation.
After originally giving telcos a two-year timeframe to get their act together, the regulator has tightened the noose on the industry in its final report (PDF) into customer service in the telecommunications industry, only giving it until February 2012 to beef up its Telecommunications Consumer Protection (TCP) code with five changes to ease consumers' interaction with the industry.
For advertising, telcos would no longer be allowed to use terms such as "cap" for plans where the monthly spend quoted is the minimum amount a customer will actually pay. Broadband speeds advertised must also be real-world speeds, rather than the maximum achievable speeds.
Plan information will have to be clearer under the proposal, including details about the length of the contract and minimum monthly spend, as well as clear outlines of call, SMS and data usage costs. The ACMA proposed unit pricing for the industry, with each carrier to detail the cost of a two-minute voice call, a standard SMS and the cost to download one megabyte of data in Australia.
Telcos with more than 30,000 customers would also be required to improve performance measuring. The ACMA has suggested that this should include the number of times that a customer contacts a telco within a 45-day period, as well as the total number of customer complaints.
The ACMA has also called for SMS or email alerts for customers when they are nearing their monthly spending limit, and better tools for customers to check their usage. This obligation was fulfilled by Optus yesterday, which announced that it was moving to near real-time usage report and SMS alerts.
The industry should also implement "best practice" for internal complaints handling, including the establishment of minimum benchmarks for timeliness for dealing with complaints, as well as reporting complaints, the ACMA said.
The ACMA chair Chris Chapman said that the industry needed to shape up or face the strong hand of the regulator.
"The industry should address these concerns as soon as possible, so the industry is now formally on notice to reflect these outcomes in the new TCP Code," he said in a statement. "If the industry doesn't develop a code that addresses the ACMA's concerns, the ACMA will mandate changes through direct regulation."
Optus director of government and corporate affairs, Maha Krishnapillai, said at the Australian Communications Consumer Action Network (ACCAN) conference in Sydney yesterday that the ACMA had a role to stop the telcos' "race to the bottom" on plan advertising.
"If one person introduces a cap, we all have to respond. It's not a world where we can say, 'We'll let them go ahead and do that.' I actually would like, personally would like, to see tighter work around the race to the bottom," he said.
But he didn't want to see regulation limiting what telcos can do.
"There will be new innovations happening over time. You can't collar it in such a way that you only have vanilla product, and that's it. Because everyone wants different services and different ways of using technology."
He also believed that unit pricing was going to be more difficult than the ACMA thought.
"There will be ways of doing it. But it's not groceries. Again, it's not boiled rice. It's not that easy. Some form of unit pricing will be possible. Because of the number of different plans and the different ways people use things ... it will be far more challenging and possibly more confusing for people by having that sort of approach."
Internode co-founder Simon Hackett added at the same conference that it was still very unclear as to what exactly telecommunications companies are allowed to advertise.
"We have spent some years now with the minister for communications describing our network as a 100 megabit fibre network. Unambiguously. Senator [Stephen] Conroy is allowed to say 100 megabits. If I say it, I'll get sued by the Trade Practices Act. It's accurate. The port speed is 100 megabits," he said.
"We have another challenge as an industry around expectation management. About what you can reasonably expect to get as an outcome most of the time through that brilliant connection. These are real challenges about both user education and regulatory education."
The Communications Alliance pre-empted the ACMA's announcement on Wednesday by announcing plans to implement many of the requirements the ACMA asked for, including unit pricing for SMS, calls and data on plans, and a ban on the use of the word "cap" for plans launched after implementation of the TCP code, unless said plans had a hard cap where the customer would not be charged any more money for exceeding that cap.
Today, Communications Alliance CEO John Stanton welcomed the ACMA's report.
"Industry is pleased that the ACMA has decided to take on-board several of the proposals that industry has made in response to the 'Re-Connecting the Customer' draft report recommendations, and as part of the revision of the Telecommunications Consumer Protections (TCP) industry code that is soon to be released for public comment," he said in a statement.
"There are a number of other items within the summary of recommendations that we will need to look at in more detail, and consider as we go about finalising the revision of the TCP Code."