Small telcos cash out on ACMA reforms

Has the industry given enough ground to ward off intervention?

Communications Alliance CEO John Stanton has warned small telcos could exit the market due to the cost of implementing consumer protection reforms currently before the communications regulator.

Under an 18-month revision [pdf] to the 2007 Telecommunication Consumer Protection (TCP) code that has been submitted to the Australian Communications and Media Authority (ACMA) for registration, telcos will be required to make significant changes to their complaints handling and customer service arrangements.

The revisions are meant to address concerns raised by the ACMA's Reconnecting the Customer inquiry into high customer complaint levels in the industry.

However, at least one industry body has slammed the revised code as not going far enough in addressing the ACMA's concerns.

"I think the industry could have gone further," Australian Communications Consumer Action Network (ACCAN) CEO Teresa Corbin said.

"I don't think they [the industry] took [the ACMA's] Reconnecting the Customer report seriously enough."

She said industry's efforts at self-regulation did not go far enough to protect users from 'bill shock'.

The ACMA has threatened to create and impose its own customer standards on the industry should it find the revised code unaccepable.

ACMA chairman Chris Chapman said the regulator was "under no time limit" to assess whether the revisions addressed concerns raised in its inquiry.

"We do understand that Communications Alliance have carefully considered the ACMA's report," Chapman said.

System changes

If the revised code is accepted by the ACMA, telcos will be required to:

• Publish a "Plan Essentials" document summarising the details of all plans offered to consumers.
• Provide unit pricing for two-minute calls, sending an SMS message and using one megabyte of data.
• Notify users when they reach 50 percent, 80 percent and 100 percent of their contract value for mobile voice and SMS use, in addition to data.

Stanton said that the latter change would have the most significant impact on smaller telcos, requiring system changes to comply with the revised code.

"The biggest reason that we hesitated and thought very hard about voice and SMS notifications is that, that will be hard for some players [to implement]," he said.

"There will be some players in the industry who may decide to get out or sell the business rather than undertake the investment needed to have that capability in place.

"That's a harsh reality and that's a reality we had to consider before deciding to put that in the code."

Telcos will be required to put systems in place for usage notifications around voice and SMS usage within 24 months - or by March 1, 2014. Data usage notifications must be implemented a year earlier.

However, ACCAN attacked what it saw as the industry's failure to address ACMA's recommendations for unit pricing and term definitions to be included in all plan advertising.

Corbin said the revised code proposed by the industry would restrict unit pricing information to large-text advertisements, online ads and the "Plan Essentials" summary document.

She said the spend management tools proposed, which currently allow for a 48-hour turnaround of data and usage information, would not appropriately keep consumers up-to-date on their usage.

Stanton defended the industry's decision not to apply real-time usage notifications for users, a contentious topic for carriers who have warned it is technically unfeasible.

He said it would place some service providers which rely on wholesalers for usage date to fall behind in complying with such a request. 

"Smoke and mirror" compliance

Alongside the TCP code revision, the industry group has foreshadowed the establishment of a new compliance body, Communications Compliance, tasked with shaming carriers who flout the rules.

The industry-funded organisation will be able to seek corrective advertising for those who repeatedly breach the code, but Stanton said it could not impose financial penalties.

The compliance board will refer repeated code breaches to the ACMA for further investigation.

"It's not an enforcement body," he said. "We're not trying to duplicate the role of the ACMA."

Corbin said the Communications Compliance body proposed under the revised industry code would provide only "smoke and mirror" compliance without any behavioural change from industry.