ISP Beagle says half of TIO effort wasted

ISP Beagle Internet has claimed that half of the energy expended by the Telecommunications Industry Ombudsman (TIO) resulted in "no useful outcome" to the ISP or consumer.

In a submission [pdf] to the communications regulator's Reconnecting the Customer inquiry, Beagle Internet launched a scathing attack on the TIO, claiming its figures were grossly inflated and that it was in the financial interests of the ombudsman to report high statistics.

A TIO spokesman declined to comment specifically on the allegations.

"Given that Beagle Internet's submission is to a public inquiry being conducted by the ACMA, it is not appropriate for the TIO to make any public comment on the submission," the spokesman said.

"The TIO has also lodged its submission to the ACMA inquiry and it is available for public viewing on the ACMA website."

Beagle Internet joined other telcos including AAPT in claiming that TIO figures were inflated by the way the organisation counted complaints lodged with it.

The ISP claimed that a "single complaint could be counted up to as many as eight complaints in the statistics published in the TIO Annual Reports."

"This occurs because the TIO re-bills complaints each quarter if they take more than three months to process and then double, tipple [sic] or even quadruple counts complaints if they are escalated in level classification," the ISP said.

"At a worst case, this represents an over-inflation of complaint numbers in the order of thousands."

Beagle was also critical of the TIO over its decision to stop publishing the outcomes of complaints that were investigated at escalated levels 2-4 in its annual report.

"The TIO ceased publishing these key metrics in 2008 and curiously has not responded to our enquiries as to why this has occurred," Beagle said.

The ISP said that the results from 2005 to 2007 saw a doubling in the number of complaints with a "neutral outcome"; that is, one where the outcome favoured neither the complainant nor the ISP.

"A neutral outcome gives a clear indication that the complaint before the TIO did not represent a true unresolved dispute or a failure on the part of the member [ISP]," Beagle said.

"Indeed, it is likely that such matters represent events or issues that should not have been brought before the TIO at all.

"Further, this [sic] statistics indicates that essentially 50 percent of the effort expended by TIO resources results in no useful outcome to either the member or the consumer.

"As the scheme itself costs members many tens millions of dollars per year to run, if over 50 percent of complaints are delivering neutral outcomes, there are significant questions to be answered regarding the cost-effectiveness and quality of the scheme from both a structural and implementation perspective."

Among Beagle's other criticisms was that the TIO suffered a "conflict of interest by virtue of its funding model".

"The TIO receives 100 percent of its revenue from processing individual complaints levied against its members," Beagle said.

"The very existence of the TIO (including continuity of employment for its staff), and the perception of its relevance and reputation in the regulatory environment relies solely upon maintaining and increasing the number of complaints it receives from consumers.

"Unlike other alternate dispute resolution schemes or tribunals, the TIO engages in active advertising campaigns to attract new complaints and undertakes no ongoing programs to actively reduce the number of complaints or improve the quality of complaint classification and analysis to reduce the enormous number of neutral outcomes.

"This conflict of interest therefore undermines the independence of the scheme and places a question mark upon some of the policy, practice and published metrics of the TIO," the ISP claimed.

Beagle called for reform of the funding model but did not propose an alternative in its submission.