Pradeep S. Mehta Secretary General CUTS International Jaipur, India CONSUMER REDRESSAL IN THE TELECOM AND CABLE SECTORS

1. Introduction 2. Consumer Concerns 3. Regulator’s Role 4. Approaches for Consumer Redress 5. Novel Approaches 6. Improving Dispute Resolution CONTENTS

Traditionally state-owned enterprises with combined operational and regulatory roles Since 1980’s increased private sector participation Utilities present special challenges to consumer protection Inherent elements of ‘natural monopoly’ INTRODUCTION

CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS Service Charges Disputes in relation to types and amounts of charges levied Billing Dispute over bills for calls not made or services not requested Failure to provide accurate reporting/itemization of charges Slamming Practice of changing a consumer’s service provider without consumer’s authorisation Quality of Service Privacy CONSUMER CONCERNS

CONSUMER REDRESS IN THE TELECOM & CABLE SECTORS South Africa: Telkom’s call charges increased almost 500% since 1996 costing the economy more than R6.0bn (US$1.0bn) a year Tanzania: ‘Rip-off’ rates charged by telecom operators US: Rise in cable TV rates substantially more than the rate of inflation; Congress, consumers push for ‘paying only for what you want’ Taiwan: Cable companies reducing channels as profits tumble Thailand: Duopoly with failure of competition authority CONSUMER CONCERNS: Examples

7 out of 10 households do not have the option to change cable operator Most of these households face frequent hike in cable subscription charges Majority of subscribers receive more than 50 channels, BUT most watch less than 15 channels Majority of respondents (63%) not in favour of accepting Conditional Access System (CAS) 8 out of 10 respondents do not want any increase in monthly bill, if CAS implemented Natural monopoly, price capping the only solution CABLE TV SURVEY IN INDIA (CUTS, 2004)

Resolving complaints Regulating relationship between service providers Enforcing codes Enforcing laws Promoting economic efficiency Ensuring competition and consumer protection REGULATOR’S ROLE

Institutional Requirements Independence Accountability Transparency Predictability Capacity Structure (Centralised or Decentralised) ELEMENTS OF EFFECTIVE REGULATION

Netherland’s competition authority fined country’s five mobile phone operators in the year 2002 for price-fixing South Korean Communications Ministry ordered SK Telecom, country’s largest wireless operator, to cut rates to reduce the burden on consumers due to growing inflationary pressure Taiwan’s media regulator, Government Information Office, in its bid to speed up digitisation intends to crack down on programming cartels, which block development of digital TV India’s Telecom Regulatory Authority directed two service providers to refund migration charges to their mobile subscribers Action Taken by Regulator: Examples

APPROACHES FOR CONSUMER REDRESS Codes/Provisions on Complaints Handling Consumer Advocacy Ombudsmen Schemes Other Approaches (Alternative Dispute Redressal)

CODES/PROVISIONS ON COMPLAINTS HANDLING Australian Communications Industry Forum: Code on Complaints Handling Canadian Cable Industry Privacy Code Malaysia: General Consumer Code of Practice for the Communications and Multimedia Industry India: Common Charter of Telecom Services (in progress, yet to be finalised)

CONSUMER ADVISORY COMMITTEES AND FORUMS Australia: Consumer Consultative Forum China: Telecom Users Committee Hong Kong: Telecommunications Users and Consumers Advisory Committee Malaysia: Communications and Multimedia Consumer Forum India: Core Group of Consumer Advocacy Groups

OMBUDSMAN SCHEMES Australia: Telecommunications Industry Ombudsman United Kingdom: The Telecommunications Ombudsman Services Ltd. India: Ombudsman in Telecommunications Sector (Recommendation made by TRAI)

INDIVIDUAL ACTION Challenges: Lack of capacity to enforce legitimate rights Obstacles: Expense Lengthy Process

CLASS ACTION Authority for Class Action: Sector Specific Legislation Consumer Protection Law Competition Law Courts (e.g. Suo moto and Public Interest Litigation)

NOVEL APPROACHES Nigeria: Televised Consumer Parliament UK: Guidelines and dispute resolution procedures South Africa: Licences issued subject to certain conditions related to handling consumer complaints Indonesia: Collective consumer complaints handling India: Informal telephone adalats (courts)

IMPROVING DISPUTE RESOLUTION Creating awareness among consumers Resourcing and strengthening of consumer groups Compliance education for industry Consumer representation in adjudication of complaints Stakeholder participation in policy-making process Institutional independence of regulatory body

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