Pradeep S. Mehta

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CONSUMER REDRESSAL IN THE TELECOM AND CABLE
SECTORS
Pradeep S. Mehta Secretary General CUTS
International Jaipur, India sg-cuts_at_cuts-internati
onal.org
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CONTENTS

• 1. Introduction
• 2. Consumer Concerns
• 3. Regulators Role
• 4. Approaches for Consumer Redress
• 5. Novel Approaches
• 6. Improving Dispute Resolution

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INTRODUCTION

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

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CONSUMER REDRESS IN THE TELECOM CABLE SECTORS
CONSUMER CONCERNS

• 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 consumers service
  provider without consumers authorisation
• Quality of Service
• Privacy

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CONSUMER REDRESS IN THE TELECOM CABLE SECTORS
CONSUMER CONCERNS Examples

• South Africa Telkoms call charges increased
  almost 500 since 1996 costing the economy more
  than R6.0bn (US1.0bn) 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

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CABLE TV SURVEY IN INDIA (CUTS, 2004)

• 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

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REGULATORS ROLE

• Resolving complaints
• Regulating relationship between service providers
• Enforcing codes
• Enforcing laws
• Promoting economic efficiency
• Ensuring competition and consumer protection

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ELEMENTS OF EFFECTIVE REGULATION

• Institutional Requirements
• Independence
• Accountability
• Transparency
• Predictability
• Capacity
• Structure (Centralised or Decentralised)

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Action Taken by Regulator Examples

• Netherlands competition authority fined
  countrys five mobile phone operators in the year
  2002 for price-fixing
• South Korean Communications Ministry ordered SK
  Telecom, countrys largest wireless operator, to
  cut rates to reduce the burden on consumers due
  to growing inflationary pressure
• Taiwans 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
• Indias Telecom Regulatory Authority directed two
  service providers to refund migration charges to
  their mobile subscribers

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APPROACHES FOR CONSUMER REDRESS

• Codes/Provisions on Complaints Handling
• Consumer Advocacy
• Ombudsmen Schemes
• Other Approaches (Alternative Dispute Redressal)

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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)

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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

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OMBUDSMAN SCHEMES

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

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INDIVIDUAL ACTION

• Challenges
• Lack of capacity to enforce legitimate rights
• Obstacles
• Expense
• Lengthy Process

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CLASS ACTION

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

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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)

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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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THANK YOU