Telco customer code goes to the regulator

Telco customer code goes to the regulator

Summary: The Communications Alliance has submitted its revised Telecommunications Consumer Protections (TCP) Code to the Australian Communications and Media Authority (ACMA), but the code has been rejected by a peak consumer action body.

TOPICS: Telcos

The Communications Alliance has submitted its revised Telecommunications Consumer Protections (TCP) Code to the Australian Communications and Media Authority (ACMA), but the code has been rejected by a peak consumer action body.

The board of the alliance, which represents more than 100 telecommunications organisations in Australia, approved the revised code yesterday, and it has been submitted to the ACMA for approval.

The new code aims to simplify advertising, mobile plans and bills, and provide more information in order to prevent so-called "bill shock".

The new draft code released yesterday said:

  • Telcos must display in large print advertisements for mobile plans the cost for making a two-minute standard national call on a mobile, the cost for sending an SMS in Australia and the cost for consuming 1 megabyte of data in Australia
  • There must be clearer advertising rules, such as avoiding using terms such as "unlimited" in advertising, and advertising actual download speeds rather than peak download speeds
  • Telcos must provide a summary of offer to customers before they buy post-paid products
  • There must be better "spend management tools" that allow customers to view their monthly usage for calls, SMS and data to avoid bill shock
  • There should be stronger protection for credit and debt management for customers, including requirements for notifications of payments due, failed credit checks and when accounts will be passed onto collection agencies.

The Communications Alliance CEO John Stanton said the code also had stronger compliance measures including "naming and shaming" telcos who are found to breach the code, and the telcos must promote the telecommunications industry ombudsman (TIO) to customers as an alternative avenue if they are unhappy with the response from the telco. There will also be a new oversight body funded by the industry to ensure telcos are complying with the code. The new oversight body won't have any ability to force a telco to comply with the code, but will be able to refer matters to the ACMA for investigation.

The alliance was working on constructing the structure and determining funding for this new oversight body, but Stanton said that the Communications Alliance wouldn't appoint anyone to the new body until the ACMA had accepted the code.

Following the publishing of the draft code in October last year, the Comms Alliance has taken on feedback from the industry and the public on possible changes, and Stanton said there had been a number of revisions.

"We agreed to extend the expenditure management tools to voice and SMS," he said, saying that expanding from data was a much more complex ask for the industry.

"It is much more difficult from a systems point of view ... to provide that notification function from voice and SMS, but the industry looked hard at the recommendations ... and decided it would make a commitment to be able to provide that capability."

He said the summary of offer will be called the "Plan Essentials", and the organisation changed the definitions of "complaint" and "urgent complaint" in the code on the back of ACMA recommendations. Customers will also be able to view their billing history for 24 months now instead of just 13.

The ACMA had sought unit pricing for calls to be in one-minute blocks; however, Stanton said that two minutes is more representative of average phone calls. It was also impossible to have near-real-time account management tools, he said, because apart from major operators like Telstra, Optus or Vodafone — which own their infrastructure — it is near impossible for a telco to have real-time billing data. Instead, the code allows for a maximum of 48 hours delay between notification and charges.

In releasing the ACMA's report into the telecommunications industry in September last year, ACMA chair Chris Chapman issued a strong warning to the industry to refine the code, or face the regulatory consequences.

"If the industry doesn't develop a code that addresses the ACMA's concerns, the ACMA will mandate changes through direct regulation," Chapman said at the time.

Although the majority of the board approved the code, the Australian Communications Consumer Action Network (ACCAN) voted against the revised code, stating that it failed to meet the five recommendations of the ACMA's report.

"This was the industry's last chance to avoid regulation and we don't believe the ACMA will be able to register this code, which may mean that the days of industry self-regulation are over," ACCAN spokesperson Elise Davidson said.

"Despite all the best efforts of those involved, including both consumer and industry representatives, the industry as a whole just wasn't able to make the major changes that were necessary to once and for all fix customer and complaint handling across the telco industry."

Stanton said that the code is preferable to stronger regulation because the code is workable for the industry.

"It is a code that has been developed with very strong industry input, which means its solutions are implementable and they are practical," he said.

"One of the things I think is meritorious about industry codes is that they are developed through industry eyes, through providers knowing what it is possible for them to do [and] what will work from a technical and commercial and customer point of view."

The ACMA will now review the code, and Stanton said he expected the industry to begin implementing it within months if it is accepted.

Topic: Telcos


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • What is missing from the code is a ban on the telcos creating their own funny-money by offering (say) "$500 worth of calls for $50" (and call cost is $1 per minute). Obviously the telco is not giving away $100 bills for $10 so really you are probably getting, at best, $50 worth of calls for $50, and call cost is really only 10c per minute. In fact, the Virgin Bean Counter contract call rate is 10c pm, so this is not unrealistic.

    So why do the telcos like these inflated plan prices? Because the know the fear of 'bill-shock' forces people to buy more expensive plans than they usually will need.

    The current inflated plan system makes lots of profits for the telcos but they can survive without it. If resellers like Virgin, TPG and Crazy Johns can make a profit charging 10c pm, and Exetel and others by charging less than 25c pm, then it can be done.
    I'm on an old Three plan which costs $18pm and 9c per 30sec. I get exactly $18 value. What a surprise. Vodafone have offered to move me onto a Voda plan with similar charges, and similar value. Amazing. Pay $18 and get $18 worth of value!
  • i used to be a national dispute manager for one of the big telcos. all of these codes of practices and rules within are barely known, and abide by, those who manage disputes in a telco (let alone the exec/seniors in the telco).

    At no time do the private boy clubs that make up the comms alliance meetings ever involve those who actually do disputes in the industry, nor would they give a **** about our opinions even if we were lucky to be picked to go.

    I remember at one major telco (known for its good guy status/marketing) i raised a business proposal to move several thousand customers from a broadband plan which had a small quota and that was regularly resulting in thousands in bill shock.

    the proposal was to put them on a cap plan that resulted in no excess charging, just the slowing down of the service.

    A few weeks later I was told by senior management that it would take 4 years for the business to recoup the lost margin that they were gaining every month from the customers who paid up their very large bills (and that was on the proviso that the churn rate stayed static).

    Pricing and product marketing groups in telcos run riot creating products that cleverly ensure profitability is grown and maintained. they don't give one **** about customers, at any level. Their only concern is growing profitability and the size of the customer base. These teams will barely pay any attention whatsoever to Comms Alliance, unless it was for the free lunch the all day off-site meeting entitles them to.