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Code to keep telcos honest gets go ahead

The Australian Communications and Media Authority has finally agreed to register the telco industry's new consumer protection code.
Written by Josh Taylor, Contributor

After months of negotiations back and forth between the Australian Communications and Media Authority (ACMA) and the Communications Alliance, the new code designed to protect telco consumer rights has finally been accepted by the authority.

ACMA chair Chris Chapman today said that ACMA had managed to get the Communications Alliance, acting on behalf of the telecommunications industry, to agree to most of the tough new rules and standards that ACMA had sought late last year, including:

  • Clearer advertising, with less confusing terms

  • Spend management tools to avoid "bill shock"

  • Improved complaints handling.

The new code also works towards a better customer care reporting framework, and the government is working towards also strengthening the role of the Telecommunications Industry Ombudsman (TIO).

The new code will be enforced on telcos through a phased implementation, commencing 1 September. The implementation begins with new complaint-handling rules, credit management rules and advertising information rules. Complaints-handling will result in a more timely and easier resolution of complaints for consumers within 15 working days, and customers will be able to track their complaints through a unique reference number, ACMA said.

Terms like "caps" will no longer be able to be used by telcos in advertising, and terms such as "unlimited", "free" and "no exceptions" will only ever be able to be used if the plans are genuinely unlimited, free and there are no exceptions.

In March 2013, the code will bring in standard summaries for key product and pricing information in advertising, at the point of sale. This would include information on the number of two-minute calls customers can make, the cost for one SMS message and 1MB of data. Comparative billing information will allow customers to see how their bills have tracked over time. An industry-selected Communications Compliance body will also start work on this date to monitor the industry, to ensure compliance with the TCP code. Those who do not comply with the code will be publicly named-and-shamed by the body. Industry veteran, former TIO director and Telstra executive Deidre Mason has been appointed as the independent chair of the body by the Communications Alliance.

By September 2013, larger telcos such as Telstra and Optus will be expected to have their spend-management tools in place. These will provide alerts for when customers are nearing their data, voice and SMS limits, with alerts being sent at 50 per cent, 85 per cent and 100 per cent of allowed useage.

Smaller communications companies will be expected to have these in place by September 2014.

According to ACMA, the information is not expected to be up-to-the-minute, with the code only requiring information to be a maximum of 48 hours behind. This is mainly due to the high number of mobile virtual network operators (MVNOs) in the market that rely on billing information from their wholesaler, which is not always provided immediately. ACMA expects that as technology improves, telcos will be able to provide more up-to-date information.

Chapman is optimistic, at this stage, that the code will be effective in improving customer service in the telecommunications industry.

"The industry has developed initiatives in its code to deliver world's best protections for Australian consumers, which should give rise to a much needed, much improved, customer experience," he said in a statement.

"The code is a unique and ground-breaking document by world standards, bringing together best practice protections at all of the touch points in the telco customer lifecycle."

Communications Alliance CEO John Stanton said that the code was a "comprehensive upgrade" of consumer protections.

"From much-improved complaint handling and customer service, the introduction of unit-pricing, stronger controls on advertising and billing content, better pre-sale information for consumers and improved credit management, through to a strong, pro-active approach to ensuring compliance, this Code heralds a sea-change in the telco consumer experience in Australia," Stanton said.

The Australian Communications and Consumer Action Network (ACCAN), which initially voted against the Communication Alliance's last version of the code, said that the rules were now fairer.

"We'’re encouraged that ACCAN and other consumer representatives, the ACMA and the Communications Alliance, working together, were able to improve the TCP Code, and are hopeful that its adoption will result in clearer advertising, easier comparison of products, better information about contracts and better tools to help consumers avoid bill shock,” CEO Teresa Corbin said in a statement.

Under the code, ACMA can order a provider that has breached the code to comply with its provisions, and if the provider breaches the code again, that provider can be taken to court. ACCAN argued that this did not go far enough and said ACMA needed powers to directly fine or penalise the provider.

"The big issue here is that the ACMA does not, at present, have strong enough powers to enforce the code. Enforcement powers are essential in getting industry compliance. The Australian Competition and Consumer Commission, for example, has much stronger powers, and its issuing of fines has sent a strong message to the telecommunications industry that its advertising cannot be misleading," Corbin said.

ACMA said that the new code is designed to work in harmony with the ACCC's powers to penalise telcos, or pursue court action against companies for misleading and deceptive advertising.

ACMA said that it will wait and see if the new code is effective, but also said that it still has the power to intervene and impose stronger regulation on the industry if the code proves to be a failure.

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