ITU Telecommunication Development

1
ITU Telecommunication Development
Bureau Consumer Protection and Other
Safeguards in the Delivery of Telecommunications
Services ?????????????????????????????????????????
????????????????????????????
Workshop on Telecommunication Policy and
Regulation for Competition, Bangkok, Thailand 12
July 2005
Scott W Minehane Windsor Place Consulting
2
1. Introduction ????
3
Consumer protection can be achieved in a variety
of ways ??????????????????????????????????????????
???????????????????
Generally speaking, consumer protection measures
will be imposed either by statute or through
licensing arrangements.
Statutory or regulator imposition
????????????????????????????????????
Licensing arrangements ??????????????????????
Consumer Protection ????????????????????
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2. Licensing Provisions and Consumer Protection
??????????????????????????????????????????
5
Establishing a framework which safeguards the
interests of consumers (i)
??????????????????????????????????????????????
Licenses often include conditions which seek to
establish a level playing field for
competition, limiting the ability of incumbent
providers to abuse their dominant position in a
way which is detrimental to consumers.
(?????????????????????????????????????????????????
??????????????????????????????????????????????????
??????????????????????????????????????????????
???????????????????????)

• Such conditions are generally known as
  anti-competitive safeguards (???????????????????
  ????????????????????? )or fair trading
  provisions (???????????????????????).
• They often include prohibitions (???????) against
  a range of anti-competitive practices such as
  cross-subsidisation, predatory pricing, excessive
  pricing and discrimination.

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Establishing a framework which safeguards the
interests of consumers (ii) ?????????????????????
?????????????????????????
In addition, terms dealing provisions are often
included in licences (????????????????????????????
???????????????????) , along with other terms and
conditions relating to the provision of services
and facilities.

• These conditions tend to relate to matters such
  as price regulation (????????????), quality of
  service standards (???????????????????????????),
  and mandatory services that must be provided to
  consumers (???????????????????????????????????????
  ????????).
• e.g. directory services, operator assistance and
  emergency services.
• However regulators tend to pursue these goals by
  way of generally applicable rules and regulations
  rather than through the licensing process.
  (?????????????????????????????????????????????????
  ????????????????????????? ????????????????????????
  ????????? ????????????????????????????????????)

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3. Statutory Consumer Protection Measures -
Universality ????????????????????????????????????
- ???????????????????????
8
Universality and consumer protection
??????????????????????????????????????????????
Universality is relevant to consumer protection
because its overriding objectives are to expand
and maintain availability of affordable
telecommunications services to the public,
particularly those who would not otherwise be
able to access such services. Generally,
universality is statutorily imposed.
Universal Access ?????????????????????????????
Universal Service ?????????????????????????????
9
Introduction to key concepts in universality
?????????????????????????????????????????????????
????????
There are two key concepts in universality -
universal service and universal access.

• The objective of connecting households to the PTS
  is generally referred to as the Universal
  Service Obligation.
• Universal service is a realisable policy
  objective in industrialised countries, but is not
  always economically feasible in developing
  countries, where universal access is a more
  practical objective.
• Universal access is a situation where every
  person has a reasonable means of access to a
  publicly available telephone.
• Universal access can be realised through pay
  telephones, community telephone centres,
  teleboutiques, community Internet access
  terminals, etc.

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Objectives of universality ???????????????????????
????????????????????????
Broadly speaking, universality has a number of
fundamental objectives including

• To enable full participation in 21st century
  society (???????????????????????????????????????
  ??????? 21)
• To promote national, political, economic and
  cultural cohesion (????????????????????????????
  ??????????? ?????? ???????????????? ???
  ?????????????)
• To promote economic development
  (????????????????????????????????)
• To encourage more balanced distribution of the
  population
• To eliminate the disparity between rural and
  urban areas.(?????????????????????????????????????
  ?????????????????)

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Achieving universality ???????????????????????????
?????????????
There are a number of mechanisms which are used
either individually or in concert to achieve
universality. These include

• Market-based reforms (?????????????????????????)-
  especially privatisation, competition and
  cost-based pricing
• Mandatory service obligations (???????????????????
  ???????????) - imposed by licence conditions or
  other regulatory measures
• Access deficit (?????????) charges - paid by
  operators to subsidise the access deficit of
  incumbent operators
• Universality funds - independently administered
  funds that collect revenue from various sources
  and provide targeted subsidies and, to a lesser
  extent
• Cross-subsidies - between or within services
  provided by incumbent operators.

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4. Other Statutory Mechanisms Designed to Ensure
Consumer Protection
(?? ???????????????????????????????
?????????????????)
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Price control measures ????????????????????
Price control measures are legally imposed and
are designed to put downward pressure on the
incumbents charges, and indirectly, on those of
its competitors.

• A price cap (???????????????) will generally
  apply to local, long distance and fixed-to-mobile
  calls, and ensures that the incumbents prices
  stay within a specified range in real terms.
• Price caps generally apply to business and
  residential line rentals (????????????????????????
  ?????????????) in order to reduce the access
  deficit - i.e. the shortfall in line revenues
  compared with line costs.
• Specific measures can also be developed in order
  to protect low-income customers
  (?????????????????????????????) from the effects
  of line rental increases and increases in call
  charges.

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Other statutorily imposed measures
????????????????? ?????
Other consumer safeguards commonly provided for
by legislation include requirements for inter
alia

• Itemised billing (???????????????????????????????
  ?)
• Directory assistance services (??????????????????
  ???????????? ????????????????????)
• Protection of consumer privacy (??????????????????
  ????????????).

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Customer Service Guarantees ??????????????????????
????????
Customer service guarantees impose a legal
requirement on all service providers to meet
specified timeframes to connect services
(???????????????????) , repair faults (???????
???????????????), and keep appointments
(???????????????), subject to limited exceptions.

• If a telephone company fails to meet these
  timeframes, a consumer may be entitled to
  financial compensation from the company.
  (??????????????????????????????? ????????????????
  ????????????????????????????????)
• The CSGs are designed to encourage improvements
  in service from carriage service providers to
  safeguard residential and small-business
  consumers against poor performance.
  (?????????????????????????????????????????????????
  ??????????????????????????????????????
  ?????????????????????????????????????????????)

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Digital Data Service Obligation
??????????????????????????????????
The DDSO is one example of a legal requirement
that is designed to ensure that digital data
services are reasonably accessible to all people
on an equitable basis, wherever they live or
carry on business.

• DDSOs are designed to ensure that everybody can
  have access - upon request and payment of the
  relevant charges - to a 64kbps or comparable data
  service.

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5. Statutory Consumer Protection - Consumer
Contracts ?????????????????????????? -
?????????????????
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The role of statute in consumer protection (i)
?????????????????????????????????????????
In addition to establishing the competition law
framework, trade practices or competition
legislation (???????????????????????????????????)
can also deal with consumer protection. The
legislation attempts to promote consumer
protection (????????????????????????????) in a
number of ways, including

• Providing protection for consumers by implying
  certain terms into consumer contracts.
  (?????????????????????????????????????????????????
  ???????????????????????????????)
• Proscribing certain conduct in trade or commerce,
  including misleading or deceptive conduct
  (????????????????????????? ????????????)and
  unconscionable conduct. (??????????????
  ????????????????????)

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The role of statute in consumer protection (ii)
?????????????????????????????????????????
COMPETITION LEGISLATION ????????????
Implication (??????????)of certain terms into
consumer contracts
Prohibition(???????) of certain conduct in
relation to consumer transactions
CONSUMER PROTECTION ????????????????????
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Statutorily implied terms in consumer contracts
(i) ??????????????????????????????????????????????
????????????
Trade practices or competition legislation
regulates certain transactions in order to
protect consumers from unscrupulous dealings. For
instance

• When a consumer purchases goods or services,
  certain conditions and warranties will be implied
  into the transaction. (???????????????????????????
  ??? ????????????????????????????? ???????????
  ???????????????????)
• These statutory conditions and warranties provide
  consumers with a basic level of protection for
  goods and services they purchase
  (?????????????????????????????????????????????????
  ???????????).
• The legislation often provides a number of
  remedies which are available to consumers,
  depending on the circumstances

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Statutorily implied terms in consumer contracts
(ii) ?????????????????????????????????????????????
?????????????
statutorily implied rights and obligations
contractual rights and obligations
Rights obligations implied by statute cannot
be excluded by contractual agreement.
Generally speaking, statutory remedies are more
flexible than contractual ones.
transaction

statutory remedies
contractual remedies
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Statutorily implied terms in relation to
contracts for services ??????????????????????????
??????????????????????????????????????????????????
The kinds of terms implied into contracts for
services include

• Services must be carried out with due care and
  skill (???????????????????????????????????????????
  ??).
• Any materials used in connection with the service
  will be fit for the purpose (?????????????????????
  ?) for which they are supplied.
• If a consumer is explicit (??????) in describing
  the purpose or result desired from the service,
  there is an implied warranty that the services
  will be fit for that purpose.

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Statutorily implied terms in relation to
contracts for goods ?????????????????????????????
????????????????????????????????????????????
The kinds of terms implied into contracts for
goods include

• That the goods will be of merchantable quality
  (???????????????) - goods must meet a basic level
  of quality and performance (??????????????????????
  ?????????) given the price and description of the
  goods.
• That the goods will be fit for the purpose
  (??????????????????????) - goods must do the job
  for which they are intended.
• That the goods will match the description or
  sample provided prior to purchase
  (????????????????????????????????????) - whether
  through a catalogue, labelling, packaging, on a
  website or in person.

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Prohibited conduct under Trade Practices
legislation (i) ??????????????????????????????????
?????????????
In Australia, the relevant legislation also
prohibits misleading and deceptive
(??????????????????????????????? ???????)
(conduct in relation to consumer transactions.
This prohibition precludes business from

• Making false or misleading representations about
  the price of goods or services.
  (?????????????????????????????????????????????????
  ????)
• Engaging in misleading or deceptive conduct in
  advertising goods or services (???????????????????
  ????) - they must not send a message that
  creates, or could create a false impression in
  the minds of consumers.
• Using fine print (??????????????????) to insert
  disclaimers into advertising or contracts unless
  it is sufficiently prominent to form part of the
  customers overall impression of the
  advertisement.

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Prohibited conduct under the Trade Practices
legislation (ii) ?????????????????????????????????
??????????????
Australian trade practices legislation also
prohibits unconscionable conduct in relation to
consumer transactions. (?????????????????????????
??????????????????????????????????????????????????
??????????) Unconscionable conduct is conduct
which is unjust, unscrupulous, unreasonable or
excessive, or generally against the dictates of
conscience. In determining whether conduct is
unconscionable in the context of a consumer
transaction, regard will be had to inter alia

• the relative bargaining positions of both
  parties
• whether the contract was induced by any undue
  influence, pressure or unfair tactics
• the amount for which the consumer could have
  acquired the goods from another supplier and
• whether the consumer was able to understand the
  documents relevant to the transaction.

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Administration of the statutory consumer
protection provisions ????????????????????????????
????????????????
The administration of consumer protection
provisions in respect of teleco services will
vary from country to country.

• Generally, this responsibility will fall to
  either the competition regulator or the industry
  regulator.
• For example, in Australia, the provisions of the
  Trade Practices Act are administered largely by
  the Australian Competition and Consumer
  Commission (ACCC).
• The Commission is an independent statutory
  authority , and it is empowered to inter alia

• Provide advice to consumers (?????????????????????
  ?????) about their rights under the legislation
  and
• Assist in resolving disputes (????????????????????
  ????????????) by directing parties to appropriate
  complaint resolution options.

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6. Industry Bodies, Interest Groups and Consumer
Protection (???????????????? ??????????????????
???????????????????????)
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Industry bodies and other interest groups
involved in consumer protection
(?????????????????????????????????????????????????
?????????????????????)
Statutory authorities
Industry bodies promoting the interests of
providers
Industry bodies promoting the interests of
consumers
CONSUMER PROTECTION MATRIX
Other interest groups promoting the interests of
consumers
Other interest groups promoting the interests of
providers
Independent industry forum
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Industry bodies involved in consumer protection
???????????????????????????????????????????????
In addition to the competition or industry
regulator, there will generally be a number of
industry bodies concerned with consumer
protection. For instance, in Australia, there
are a number of organisations which have emerged
to address inter alia consumer issues. These
include

• The Australian Communications Access Forum - an
  industry self-regulated body, approved by the
  ACCC. ACAFs role includes recommending services
  which should be subject to the telecommunications
  access regime, and generating and updating access
  codes.
• The Telecommunications Industry Ombudsman - an
  independent non-governmental scheme that handles
  complaints about phone and internet access
  services. The TIO is independent of companies,
  consumer groups and governments, and is a free
  service to consumers.

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Interest groups involved in consumer protection
??????????????????????????????????????????????????
???
There are also a number of interest groups who
are involved in consumer protection, including

• The Australian Telecommunications Users Group Ltd
  - a national association of telecommunications
  users in Australia. ATUG promotes choice in
  serves to ensure better prices and quality of
  services in the industry.
• The Consumers Telecommunications Network - a
  national coalition of consumer and community
  organisations concerned with access and equity in
  Australian telecommunications for residential
  consumers.

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The role of industry bodies and interest groups
in consumer protection ???????????????????????????
????????????????????????????????????????
These bodies work together to develop industry
codes of practice which deal with inter alia

• Various consumer matters, such as call charging
  and billing, complaint handling and credit
  management and (??????????? ?????????????????????
  ? ????????????????????????? ??????????????????????
  ?? ????????????????)
• Operational matters such as customer transfer,
  mobile number portability.

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7. Consumer Privacy ???????????????????
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Protecting consumers privacy ????????????????????
????????
There are a number of mechanisms that can be used
to protect consumers privacy.

• Sector-specific legislation ?????????????????????
  ?
• General legislation and ????????????
• Ancillary legislation. ?????????????????????????
  (supporting legislation)

Each serves a different purpose.
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Why is the protection of consumers privacy
important? ???????????????????????????????????????
???????
Providers of telecommunications services are in a
position to collect information about their
customers (?????????????????????).

• Such information may include names, addresses and
  telephone numbers as well as information on
  monthly billing levels, calling patterns,
  percentage of calls unanswered etc.
  (?????????????????????????? ???? ???????
  ??????????????? ????????? ????????????????????????
  ??? ???????????? ???????)
• This information can be very valuable in
  marketing new services. (?????????????????????????
  ????????????????????????????????????????????????)

e.g. Customers with very long calls may be heavy
internet users to whom internet services could be
successfully market. e.g. Customers with high
international calling would be good targets to
tie up in long-term contracts if a competitive
international service operator is about to be
licensed.
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Sector specific regulation - restrictions on the
use of customer information (i)
?????????????????????? - ?????????????????????????
???????
In some countries, including the US and Canada,
regulatory restrictions are imposed on the use of
customer information. (???????????????????????????
???????????????????????????????????)

• Some of these rules are designed to protect the
  privacy of customers. (???????????????????????????
  ?????????????)
• e.g. Typically, consumers of telecommunications
  services do not want others to know what phone
  numbers the call.
• In the European Union, legislation imposes
  specific limits on the use that can be made of
  billing and other customer data.
• e.g. There is a prohibition against using the
  information to market services to customers
  unless the customer has consented to that use of
  its data.

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Sector specific regulation - restrictions on the
use of customer information (ii)
?????????????????????? - ?????????????????????????
???????
Other restrictions are aimed at preventing
anti-competitive use of customer information
(??????????????????? ????????????
??????????????????????? ?????????????????????)
gathered by monopoly operators that have
competitive operations or affiliates.

• Such rules may require a monopoly local operator,
  for example, to share any customer information
  (??????????????????????) that it provides to its
  competitive operations or affiliates with
  interconnecting operators or other direct
  competitors in the same line of business.
• e.g. If a local monopoly operators long distance
  division collects information to identify heavy
  internet users to help its Internet division sell
  services, it would be required to provide the
  same information to competitive ISPs.
• These restrictions are based on the assumption
  that the monopoly provider is in a position to
  collect the information solely as a result of its
  monopoly position.

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General privacy legislation (i)
?????????????????????????????????????
In addition to the sector-specific privacy
regulation, there may also be general privacy
legislation in a jurisdiction.

• These measures operate in concert with
  sector-specific legislation.
• They provide consumers with greater protection
  (?????????????????) in terms of their privacy,
  and a greater number of remedies where their
  privacy has been breached. (??????????????????????
  ? ???/???? ???????????????????????????????????????
  ?????????)

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General privacy legislation (ii) - privacy
principles ?????????????????????????????????????
- ?????????????????????
Privacy legislation will generally encompass a
number of principles, as illustrated below.
collection
use disclosure
data quality
data security
identifiers
Consumer Protection
access correction
sensitive information
transborder data flows
anonymity
openness
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Ancillary privacy provisions ?????????????????????
??????????????????
In addition to general and sector-specific
privacy provisions, there may be ancillary
legislation enacted to bolster consumers privacy
in relation to specific threats or problems, such
as spam email.

• Anti-spam legislation (???????????????????????????
  ????????????????) has been enacted in a number
  jurisdictions in response to the growing volume
  of unsolicited commercial electronic messages, or
  spam.
• The legislation prohibits such emails, and
  targets the senders (????????? ????
  ???????????????????) of unsolicited electronic
  messages.

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Thank You ?????????? I would be pleased to answer any questions you might have .