Communicate

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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