ACMA pledges tougher stance on telco customer service

'More court cases' to address toothless critique.

The media watchdog has promised to take a tougher stance on the telecommunications industry's ability to handle customer complaints as it seeks to adopt a revised code on the issue.

The Australian Media and Communications Authority (ACMA) is gearing up to register the second version of the Telecommunications Consumer Protection (TCP) on September 1, requiring telcos to significantly change customer practices around complaints handling, advertising and the information provided to new and existing subscribers.

The new code is expected to hit smaller telcos hardest, some of which previously escaped any real backlash for failing to comply with the previous 2007 version.

The ACMA's general manager of content, consumer and citizen issues, Jennifer McNeill, promised "more investigations, more directions, [and] more court cases" were in store.

McNeill acknowledged the ACMA had previously taken a "walking softly" approach to enforcing compliance but would now look to use its powers more effectively over the next two years to ensure telcos more adequately complied with the code.

"Historically, the ACMA's approach to securing compliance was to engage with and educate individual providers that came to its attention, quietly securing process improvements," she told an industry briefing on Wednesday.

However, criticisms made by the industry during the course of the ACMA's 2010 inquiry into telco customer handling practices had led it to change its ways.

"The ACMA has heard those criticisms and you will see more investigations, more directions and more court cases," she said.

"You will see a shift over time from an emphasis on education to an emphasis on using our formal enforcement powers."

McNeill said the ACMA would continue educating providers "for a short while", but warned investigations and enforcement would continue shortly thereafter.

"For those who do not demonstrate a commitment to compliance — and by that I do not mean good-natured incompetence which is sometimes the response we get from providers ... we want a genuine commitment compliance and we want you to be able to demonstrate it," she said.

The authority has not gained any new enforcement powers as a result of the code; one of the major criticisms laid by consumer groups over the code's shortcomings.

The ACMA must still rely on its ability to direct non-compliant companies to comply with the code, enforce infringement notices of $6600, or seek penalties of up to $250,000 through the Federal Court.

But McNeill indicated the body would lean more on its weightier powers — following a similarly litigious manner adopted by the Australian Competition and Consumer Commission — in order to ensure TCP compliance.

"The ACMA has already commenced a program of visits to medium-sized telcos, who are not [Communications Alliance] members, to remind them of the new code starting date and the obligations it contains, and to inform them of our expectations," she said.

The compliance regime surrounding the code has been bolstered by a completely new, industry-led body — Communications Compliance — that will regularly audit telcos and provide a more comprehensive membership base of participating companies.

Telcos have also gained greater obligations to point to the key complaints body, the Telecommunications Industry Ombudsman, as a means of redress for consumers and small businesses.

Staggered deadlines

Though the code comes into effect on September 1, many of the new elements in the revised document have been staggered until 2014 to meet different deadlines.

The first major change for telcos is the introduction of unit pricing for two-minute calls and downloading one megabyte of data by October 27 this year.

The introduction of measures to warn users when they reached 50, 85 and 100 percent of their data or call volume allowance under a capped plan, would also follow in 2013 and 2014, depending on the size of the telco.

"The world is watching"

The ACMA will also publish priorities it intends to focus on during investigations of individual telcos, likely focusing in the first instance on compliance with new complaints handling and advertising rules, before auditing the industry's actions on credit management tools and, in particular, the accuracy and authenticity of the information summaries provided to new customers on signing up to plans.

The code itself is also under threat should its promise of significant changes to the telco industry fall short.

McNeill repeated concessions that user complaints may rise immediately following implementation of the new code, as users become aware of their rights, but said an ongoing rise in statistics published by the TIO could ultimately be used as one metric for determining whether the code was working.

"While TIO complaint statistics will be one potential proxy for measuring success, they're not going to be determinative and we're still working through what the best ways to assess the success of the code," she said, warning that "the world is watching".