How Mobile Phone Charges Will Be Less Confusing

A new version of the Telecommunications Consumer Protections (TCP) Code — the regulations all companies selling phone and Internet services in Australia agree to abide by — was announced today. How will it make your costs easier to understand and help eliminate bill shock? (Good news: the word 'cap' will be banned!)

Picture by Cameron Spencer/Getty Images

The code was developed by industry body Communications Alliance, which represents all the major carriers and resellers in the country. Before you collapse with shock at the thought that phone companies might actually be trying to make things easier for consumers, it's worth remembering that the industry is doing this essentially at gunpoint. The Australian Communications & Media Authority (ACMA) issued a set of recommendations for improving bills and complaints processes last September, and told carriers that if they didn't reflect those in an improved code by February 2012, those rules would be enacted in legislation. Given the choice, the industry decided to develop its own code.

While the new code reflects most of the approaches ACMA suggested would be useful, a few details have changed. Below, we've explained how the rules will work — assuming that ACMA accepts them. This is by no means guaranteed, and there's no time frame for when it might happen, although everyone involved is pushing for it to be sooner rather than later.

A central theme in all the proposed changes is the need to make costs more transparent and bills more predictable. "Many of the complaints that come to providers and the TIO are generated by the fact that consumer have purchased a product without fully understanding all the elements of it," Communications Alliance CEO John Stanton said on a media call to launch the code. "The oft-quoted phenomenon of bill shock is real and it has been a big problem for consumers and providers for too long."

What's new and changed?

On a practical level, here are the important new requirements the code will introduce:

The word 'cap' is banned. Plans which have a minimum monthly spend but which could cost much more can no longer be described as caps, which would be a welcome improvement. The term can only be used for so-called "hard cap" plans, which have a maximum possible expenditure, not a minimum one.

A standard set of price details must be provided. Under the heading 'Plan Essentials', all phone plans must clearly indicate how much a standard 2-minute call to another mobile costs (including flagfall where appropriate); how much a standard Australian text costs; and how much a megabyte of data costs. All those costs must be quoted free of any discounts, and the minimum monthly charge must also be included. The same heading will be used by all providers, so comparing these details will be easier. Any other significant conditions and exclusions must also be prominently displayed, including rollover details. This must be available as a standalone document and can't run for more than two pages.

Usage notifications. Customers must be sent three usage notifications to indicate when they are close to using up their allocated phone calling minutes, texts and data. The notifications should kick in at 50 per cent, 80 per cent and 100 per cent use.

Billing and usage data must be available online. This must be available for the full 24-month life of a typical contract.

What's not included?

Not everything suggested by ACMA or by consumer groups is in the code. A proposal to include the number of standard 2-minute calls that could be made on a given plan was rejected by the industry, on the grounds that it was unrealistic to assume a phone would be used only for brief calls, and never for texting or data. "We thought it would be almost always be misleading," Stanton said. "There was scope for a lot of confusion and for the generation of unnecessary complaints."

Call usage data for notifications has to be provided within 48 hours maximum, but real-time data isn't a requirement. Stanton suggested that was impractical, because data isn't distributed in real time to MVNO companies which resell the major networks.

When will it happen?

As we've mentioned, the code was submitted by the Communications Alliance to the Australian Communications and Media Authority (ACMA) today. There are three possible outcomes.

  • ACMA accepts the proposal, and the code is ratified. That could see the rules in place within months.
  • ACMA asks for changes, the industry argues about them, but eventually gives in. That will slow the introduction.
  • ACMA asks for changes the industry refuses to make, or rejects the report outright. Those rules could then be legislated, but that would take even longer, especially given the close-to-hung Federal Parliament.

Communications Alliance CEO John Stanton believes the code represents real progress. "I think this is an extremely good piece of work by all the stakeholders involved. The industry has really stepped up in this process. There is a genuine acknowledgement from CEO level down that customer service and complaints handling in our industry has not always met expectations."

From a consumer perspective, having legislation might be preferable, if only because it would have more teeth. For his part, Stanton argues that a code makes more sense because it doesn't include provisions that aren't feasible to implement without jacking up overall costs. "The code is an enormous advance on its predecessor. It is a code that has been developed with very strong industry input which means its solutions are implementable and they are practicable."

Will ACMA agree to the code as it stands? We'll be keeping a close eye on it and update readers as the issue progresses.

Like the sound of the new regulations? What other information would you like before signing up for a phone plan? Tell us in the comments.

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Comments

    I think it's a great step forward.

    The phone companies should also commit to testing time-frames for handset updates from the manufacturers.

    I realise there needs to be carrier testing, but if a manufacturer releases an update, that testing should be completed and the update released to customers in a timely fashion, with clearly understood timeframes. (The fact that Telstra relies on a single person for signal strength testing is ludicrous, they need to fix that and streamline their testing procedures properly. http://youtu.be/mOsAj7chImc?t=2m32s )

    When the phone company sells a handset on a 24 month contract, they are publicly stating they expect it to be a competitive and current handset for 24 months.

    If they don't want to provide 24 months of updates, then don't offer it on a 24 month contract, simple as that. (Warranties and updates should be provided for the duration of the contract as a bare minimum.)

    Also I'd like the real-time usage updates, I know the phone companies don't have that available internally yet, but in this day and age they _should_ have it.

    Other than that, it seems a fair, it's in the companies best interest to make things clearer to the customers, and they should have done this years ago.

      "When the phone company sells a handset on a 24 month contract, they are publicly stating they expect it to be a competitive and current handset for 24 months."

      Quite the contrary, when you purchase a handset on a 24 month contract you are agreeing that the phone you are getting will be suitable for your needs for the next 24 months. If you don't think it is go on a 12 month contact or buy your phone outright.

    This will make those plan hacker spreadsheets that much easier to make eh?

    looks good

    So will the code be applicable to business accounts or purely retail consumer?

    How about no two tier rates? "excess usage" fees are clearly intentional traps to pad profits, not to preserve network integrity or pay for upgrades. If they want to claim that, make them offer hard or soft data caps based on network capacity., ie cut off data or slow it as an alternative to ridiculous $2000 per GB fees when normal rates are around $10 per GB

    "All phone plans must clearly indicate how much a standard 2-minute call to another mobile costs." Is this in real money, or the pretend money that they refer to when they say that you're getting $300 worth of value per month for a plan you pay $30 per month for?

      They'll have to quote real money that you would have to pay if you were "cap"-less.

    And how long until they start exploiting these new rules, i bet they have already have a bunch of new confusing terms to replace cap. They will tweak the call connection / minute rate so that 2mins sounds good but 3mins is more than it is now.

    Sometimes i think the US has it better, you pay $X and get Y minutes of talk time and z SMSs (0 to infinite). Although last time i checked, in the US both parties pay for the call out of their minutes. But it woudl be so much easier to say pay $40 and have 400minutes of calls and say 200 sms credits, (and you get the same kind of sms alerting as the proposed data alerts, although i dont think 50, 80 and 100 are enough, needs 50, 80, 90, 95 and 100) in fact when making a call if you have less than 30mins of call time left it should state so before the call is placed (my old prepaid did that for my call credit $ amount).

      the US "receiver pays" is an anachronism that needs to die. I prefer the Indian way: clear no-bull per-second billing. Call costs are around 0.02c/second and SMS is 0.05c "in network" and 0.1c "out of network". When I can get a signal and connection in a city with as many people as the whole of Australia, why can't the Aussie carriers manage to match that price?

        Yeah the "receiver pays as well" method sucks, but it effectively halves the cost to make a call and gives you an excuse easily get off the phone with someone just tell them your light on minutes this month so it has to be quick).

        Is that 0.02c or 2c ?

        Im not sure about much with the indian system, but im sure if it was 2c a min here, the towers would be jammed. The real issue with australia is the fact its big and sparsely populated (there are countries with 10x the population with a 1/10th the land mass) and the cost to have that network coverage (and that no one wants the towers near them, but want better coverage)

        Because there's more money to be made this way.

    I think the call time amount should have been 1 minute & 30 sec, cause to call someone for 1 minute and 5 secs these days is the same cost as calling someone for 2 minutes. It's ridicules. Good on them for trying to simplify the undecipherable.

    I agree with Tim. Instead of just a 2-minute call comparison, they should offer the $40 plan gets you 200 minutes of calls and 200 SMS messages. We do have one advange here though, to my understanding in the US, the $0 phone is pretty much unheard of. They go on plans and still have to put money down on high end phones.

    I can manage myself and my phone usage - and truthfully don't understand how haphazard you would have to be to wrack up a $1000 bill... BUT having said that - these decisions are mostly good.

    The only things I think are rediculous is the constant messages about your credit limit. this should be opt-in. I get enough crap from Optus about promotions and remember on Voda it was a nightmare.

    The focus should be on why they won't give real time (or within an hour or 2) of usage data.

    - Oh and for those talking against caps? They are the best thing that ever happened if used responsibly. Explain how else I would only spend $39 a month and get unlimited calls, unlimited text and 3gb data...

      No one is complaining about caps per se. Its that most of the caps are not actually caps they are minimum spend with lots of included call credit (and highly overpriced rates to make up for it, and so you get boned if you go over the included credit).

    I'd love to see a "real" cap... a deal where I cannot spend more than a certain amount per month, and if I try to do anything that will push it over I just get cut off (I'm thinking more data here, since that's probably a lot easier to go over than call credit, at least for me.) Get rid of those ridiculous excess data fees.

    Virgin Mobile has there whole system set up to make it impossible to properly track your data. I check my data frequently using their meter. The other day i checked it and it said 231m so i bought a $5 top up and kept using it. Then next time they updated the data tracker it said i had excess usage of 31m and slugged me $62 tripling my normal bill. There excess usage rate is 2500% higher then our home internet rate. They give no warnings and there response to compaints is basically ha ha bad luck

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