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3. CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS Contents: 1. Introduction 2. Consumer Problems with Telecommunications and Cable Providers 3. Regulators and Consumer Redress 4. Why Regulators/Industry Should be Interested in Complaints Handling? 5. Approaches by Regulators and Industry 6. The Formal System 7. Novel Approaches 8. Improving Dispute Resolution

4. CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS INTRODUCTION Quality of life depends on access to utility services Traditionally state-owned enterprises entrusted with operational and regulatory roles Since 1980’s governments have invited private sector participation

5. CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS The utilities industries present special challenges to consumer protection ‘Natural monopoly’ – consumers are ‘tied in’ to particular supply companies

6. CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS Areas of Consumer Concern Service Charges Disputes arise in relation to the various types and amounts of charges that are levied

7. CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS Billing Disputes over charges billed to a consumer for calls or various services Alternatively, consumers may dispute bills for calls not made by them or services that they have not requested (“cramming”) Also results where there is failure to provide accurate reporting/itemization of charges

8. CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS Payment of Charges Disputes also arise due to the terms of payment for services and timeframe for disconnection after non-payment Although regulators generally set standards to govern terms of payment and disconnection, these seldom cover all areas of dispute

9. CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS Slamming This involves the practice of changing a consumer’s service provider without the consumer’s authorisation (Banned in many jurisdictions)

10. CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS Quality and Terms of Service Disputes frequently caused by poor quality of service and terms of service (e.g. connection and disconnection terms) Use of standard form contracts

11. CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS Privacy These involve the use of personal consumer information e.g. - credit information - home address - calling patterns Disputes also surround issues such as the right to have the consumer’s name removed from the telephone directory / restrictions on when the service provider may release confidential information about the consumer.

12. CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS Advertising Consumer disputes may also arise due to misleading advertising Law governing advertising in the telecommunications sector and the authority to deal with the breaches often unclear – is it the telecommunications regulator or the the Ministry of Trade/Commerce

13. REGULATORS AND CONSUMER REDRESS Regulatory Bodies Perform a Variety of Functions: Individual complaints handling Enforcing Codes Enforcing laws

14. REGULATORS AND CONSUMER REDRESS Role of Regulators Promoting economic efficiency Meeting other national objectives (SMI’s, minority rights, affirmative action policy, etc) Regulating the relationship as between providers Protecting consumers These are not objectives that can always be reconciled and regulators are often forced to choose which shall be the dominant factor influencing any particular decision

15. WHY REGULATORS/INDUSTRY SHOULD BE INTERESTED IN COMPLAINTS HANDLING? Communication Direct contact with constituents. Opportunity to detect problems Responsiveness Enhances image of “customer responsiveness”. Opportunity to present a public service orientation image Public Relations Pre-empt bad press with positive approach to solving problems and dealing with complaints

16. WHY REGULATORS/INDUSTRY SHOULD BE INTERESTED IN COMPLAINTS HANDLING? Accountability, Openness and Accessibility Opportunity to provide information about policies and decision making process Cost Effective Serious complaints are reduced , less critical queries are resolved at an earlier stage – less social costs involved. May prevent litigation

17. WHY REGULATORS/INDUSTRY SHOULD BE INTERESTED IN COMPLAINTS HANDLING? Public Participation Essential element of democracy. Broader concept of participation in policy and decision making Information Valuable data to identify patterns and trends. Changes in policy and allocation of resources

18. APPROACHES BY REGULATORS & INDUSTRY Proactive Approach, Reactive Approach or a Combination of Both CODES/PROVISIONS ON COMPLAINTS HANDLING Australia: Australian Communications Industry Forum - Code on Complaints Handling (ACIF C547:2004) The Code provides practical guidelines for the step by step handling of a customer complaint plus a comprehensive set of rules for handling complaints within an organisation Essential process designed to reduce the need for customers to seek conflict resolution services from third parties Suppliers covered by this Code are expected to develop and enforce a comprehensive complaint handling process within their respective organisation

19. APPROACHES BY REGULATORS & INDUSTRY Suppliers are also expected to:   - recognise, promote and protect customers’ rights, including the right to actively provide feedback; - provide an efficient, fair and accessible mechanism for handling customer complaints; - provide information to customers on the complaint handling process for the services and products of the organisation; and - monitor complaints in order to improve the quality of products and services   As the Telecommunications Industry Ombudsman (TIO) is given jurisdiction to handle complaints about possible breaches of this code, the TIO data can be used by the Australian Communications Industry Forum ACIF and the ACA as an indicator of levels of industry compliance with the Code. Also, given that the Code is registered by the ACA, the ACA can enforce code provisions on industry participants covered by the Code.

20. APPROACHES BY REGULATORS & INDUSTRY Canada: Canadian Cable Industry Privacy Code Used by the Cable Television Standards Council when handling complaints relating to privacy and the Internet services provided by members of the Canadian Cable Television Association Reflects cable industry’s commitment to protect personal information of both customers and employees Consists of 10 interrelated principles such as accountability, obtaining consent, limiting the collection of personal information, limiting use, disclosure and retention of personal information, and safeguarding personal information Code conforms to the requirements set out under Part 1 of the Personal Information Protection and Electronic Documents Act, which came into force on 1 January 2001

21. APPROACHES BY REGULATORS & INDUSTRY Malaysia: General Consumer Code of Practice for the Communications and Multimedia Industry A self regulatory Code for service providers in the communications and multimedia industry Provides and sets standards for the overall improvement of services (by service providers to consumers) Part 3 provides that service providers must implement mechanisms for a complaints handling system based on visibility & accessibility, special needs, responsiveness, charges, complaints, internal data collection and analysis, retention of records etc. )

22. APPROACHES BY REGULATORS & INDUSTRY The Code was drafted by service providers and consumer representatives who work together in the Communications and Multimedia Consumer Forum of Malaysia (CFM) Registered as a voluntary industry self-regulatory code on 17 October 2003 The Code is binding on and requires compliance of all licensees under the Communications and Multimedia Act 1998, irrespective of whether they are members of the CFM

23. APPROACHES BY REGULATORS & INDUSTRY CONSUMER ADVISORY COMMITTEES AND FORUMS (-input into policy making process) Australia: Consumer Consultative Forum (CCF) The CCF was established in accordance with the Australian Communications Authority (ACA) Act 1997 The Terms of Reference of the CCF are to assist the ACA with consumer consultation on matters relating to its telecommunications functions, ensure that consumer interests are adequately considered in the ACA's decision-making and, assist in informing the community about telecommunications service issues and matters relating to the industry Members of the CCF include organisations that represent consumer interests from a variety of perspectives, relevant government agencies and industry bodies

24. APPROACHES BY REGULATORS & INDUSTRY China: Telecom Users Committee The Committee comprises government, companies, education units and common users – to provide consumers with the means for raising and having service concerns addressed

25. APPROACHES BY REGULATORS & INDUSTRY Hong Kong: Telecommunications Users and Consumers Advisory Committee The Committee made up of industry, interested organisations, consumer bodies and government departments Advises the Office of the Telecommunications Authority (OFTA – the industry specific regulator) on the development, provision and maintenance of services from a consumer’s perspective, and on education of, and dissemination to, consumers

26. APPROACHES BY REGULATORS & INDUSTRY Malaysia: The Communications and Multimedia Consumer Forum (CFM) The CFM was set up by the industry as one of the four independent forums formed in line with the requirements of the Communications and Multimedia Act 1998 The forum comprises service providers, telecommunications companies, broadcasting stations, non-governmental organizations and public interest groups

27. APPROACHES BY REGULATORS & INDUSTRY OMBUDSMAN SCHEMES Australia: Telecommunications Industry Ombudsman (TIO) Established in 1993 by the Australian Federal Government Independent of industry, the government and consumer organisations Authorised to investigate complaints about the provision or supply of telephone or Internet services. Industry-funded scheme. Income solely from members who are charged fees for complaint resolution services provided by the TIO. A member is only charged complaint handling fees if the TIO receives a complaint from one of its customers. The funding system acts as an incentive for members to keep TIO investigations to a minimum

28. APPROACHES BY REGULATORS & INDUSTRY United Kingdom: The Telecommunications Ombudsman Services Ltd. (TOSL) The TOSL was set up in 2002 as a not-for-profit company Set up by the telecommunications industry as an independent body to consider and investigate unresolved complaints by residential and small business customers against member companies Funded by industry members and approved as a dispute resolution service by the sector regulator (OFCOM) At this stage, its scope is limited to voice and voice related services. The service is run by a Council, consisting of a majority of Independent members, which guarantees the independence of the Ombudsman.

29. APPROACHES BY REGULATORS & INDUSTRY OTHER REGULATORY APPROACHES Canada: The Cable Television Standards Council (CTSC) The CTSC was established in 1988 by Canada's cable TV companies, to administer the council’s standards, codes and commitments The CTSC promotes self-supervision within the cable industry It also responds to any public complaints regarding cable service. The standards and codes are set by the Canadian Cable Television Association The CTSC has the mandate to review and respond to concerns relating to any aspect of the service provided its members Membership in the CTSC is open to all Canadian cable television companies licensed by the Canadian Radio-Television and Telecommunications Commission (CRTC). Licensees of specialty, pay television and pay-per-view services are associate members

30. APPROACHES BY REGULATORS & INDUSTRY China: Consumer Complaints Service Center Established by the Ministry of Information Industry Independent of the Ministry Addresses complaints of individual consumers Issues aggregate data on complaints received Provides information on complaints against individual operators

31. THE FORMAL SYSTEM INDIVIDUAL ACTION Substantive right offered to consumers Inability to enforce legitimate rights Major setback – compliance with procedural requirement Need for consumer disputes to be resolved expeditiously Legal systems in most countries do not cater for this

32. THE FORMAL SYSTEM Obstacles in individual court actions Expense Length of time Alienation Individual Cases (not geared to the institution of common or grouped claims) Adjudication

33. THE FORMAL SYSTEM CLASS ACTIONS Authority to Commence Class Action: Specific Act General Law (Tort, Contract) Consumer Protection Law Sector Specific Legislation Rules of Court

34. THE FORMAL SYSTEM Authority to Commence Class Action: Australia: Part IVA of the Federal Court of Australia Act 1976 (Cth) Order 18A of the Victorian Supreme Court Rules Indonesia: Article 46 the Law of the Republic of Indonesia Number 8/1999 Concerning Consumer Protection Regulation of the Supreme Court of the Republic of Indonesia Number 1/2002 New Zealand: Rule 78 of the Rules of High Court

35. THE FORMAL SYSTEM Merits of Class Actions Ensures that all of society benefits (beyond members who received compensation) Prevents repetitive litigation Reduces cost Eases psychological barriers to litigation

36. THE FORMAL SYSTEM Problems Associated with Class Actions: Vehicle for litigation blackmail Prevents innovation Promotes unmeritorious/dubious claims (costly to defend) Tendency to victimise consumers through unfair settlements Fee generating mechanism for lawyers “Opt-out” scheme – rights of the consumer may be affected by proceedings. Bound by judgments even when unaware that litigation was in progress    

37. OTHER OPTIONS The formal system (court) is not the only solution Other informal options for dispute resolution ADR – useful supplement to the judicial process    

38. NOVEL APPROACHES NIGERIA Televised Consumer Parliament The Nigerian Communications Commission collaborated with the television broadcast media to establish a televised “consumer parliament” Monthly gathering of unsatisfied consumers (old parliament building) with representatives from Nigerian service providers A consumer is appointed as speaker

39. NOVEL APPROACHES Consumers invited to ask questions and make complaints to service providers Process broadcast on the Nigerian national television channel - brings pressure on service providers to reduce causes for consumer complaints Educational function Regulator present can take opportunity to explain to viewers the role of regulation in relation to the consumers’ complaints

40. NOVEL APPROACHES UNITED KINGDOM Guidelines and Dispute Resolution Procedures Guidelines on dispute resolution procedures that must be implemented by public communication providers in the UK Outlines the approach the Regulator (OFCOM) will rely on in approving dispute resolution procedures (Communication Act 2003 and Office of Telecommunications Ombudsman - OTELO) Not restricted to ombudsman type relationship

41. NOVEL APPROACHES UNITED KINGDOM Guidelines and Dispute Resolution Procedures In order to be approved, an ADR must be: Independent and impartial User friendly and easily accessible by all consumers Transparent (regular feedback to consumers through the process of the dispute)

42. NOVEL APPROACHES Effective – most disputes resolved within 6 weeks of initial complaint Free of charge to the consumer (no cost awarded against unsuccessful complaint) Able to properly investigate disputes and make awards of appropriate compensation

43. NOVEL APPROACHES SOUTH AFRICA Licences issued to Vodacom Group (Pty) Ltd. & Mobile Telephone Networks (Pty) Licences issued subject to the companies publishing and enforcing guidelines for their personnel to handle consumer complaints Guidelines must be available to consumers at the commencement of service Licensees must file statistics on consumer complaints with the Postmaster General every 6 month

44. NOVEL APPROACHES INDONESIA Collective Consumer Complaints Handling YLKI publicity campaign: taking in complaints - via newspaper advertisements, brochures and radio jingles etc. Organise and host a meeting between themselves, the complainants, regulators/service providers and the media Successful in getting large number of complaints

45. NOVEL APPROACHES Large number of complainants in the same room with the regulators/service providers - similar problems can be solved once and for all The consumer organisation acts as the mediator Large scale meeting, individual consumers are brave enough to speak up and voice their dissatisfaction

46. NOVEL APPROACHES Regulators/service providers, are forced to listen to the crowd and take their suggestions into consideration. In some cases, regulators had to solve the problem impromptu. Allows the process to be more efficient, transparent and enables more consumer participation.

47. IMPROVING DISPUTE RESOLUTION Information and education campaigns for consumers on their rights with respect to telecommunications and cable sector Industry being informed of legal/extra-legal responsibility under the various legislative or voluntary schemes Consumer representatives in adjudication of complaints

48. IMPROVING DISPUTE RESOLUTION Co-regulatory schemes instead of purely industry sponsored schemes (to address non-member companies not bound by codes) Participation of stakeholder in policy making process (input of regulators, industry, consumer organisations) Ensure access, fairness, transparency, strategies for effectiveness, and periodic independent evaluation in developing ADR schemes

49. IMPROVING DISPUTE RESOLUTION Draw on experiences and approaches of other countries Initiatives of international organisations Example: Global Regulators Exchange – online medium for exchange of information and opinion among regulators InfoDev Programme of the World Bank – Telecommunications Regulation Handbook Asian regulators should form their own regulators forum for specific sectors and harmonize dispute handling mechanisms