Stiffer rules to keep telcos in line

IDA move set to raise transparency, consumer protection and promote fairer competition

After a two-year deliberation, local authorities are pressing ahead with plans to raise consumer protection by outlawing the use of bait-and-hook tactics where telcos start charging unsuspecting consumers after a free trial.

From Jan 21, the Infocomm Development Authority of Singapore (IDA) will introduce a stiffer set of operating rules for telcos as part of its triennial review of the Singapore Telecom Competition Code.

Among the upcoming changes is a new rule which forbids telcos from automatically charging consumers upon the expiry of a complimentary trial. Operators can only do so if they have ‘obtained express agreement’ from customers, the IDA said in a statement yesterday.

Dishing out freebies such as time-limited access to more pay-TV channels or selected mobile services is a common tactic telcos use to get subscribers to try out more offerings in the hope of eventually converting them to become paying customers.

However, consumers have cried foul that the terms of some of these free trials are buried deep in the fine print of their contracts. Consequently, they end up being charged for services that they are unaware of.

While the ruling will still allow for free samples, it will prevent such disputes from arising as consumers will now need to give the go-ahead.

In addition, the regulator also seeks to ensure that Singaporeans will have uninterrupted access to basic telecommunications services such as a fixed-line telephone with its new rules.

To guarantee this, IDA will not allow telcos to ‘cross-terminate’ a customer’s fixed-line subscription if he has violated the conditions of a separate agreement such as failing to pay his monthly mobile phone bills.

The same prohibition applies to services that are covered by a telco’s affiliates under separate agreements.

‘This would mean that telecom operators cannot exert undue pressure on consumers to make payment of disputed charges through threatening to terminate services offered by an affiliated telecom operator, unless the services are offered under the same service agreement,’ the IDA explained.

Another major change to the Singapore Telecom Competition Code is aimed at promoting fairer competition.

It comes in the form of a caveat which allows the IDA to slap a prohibition clause on any telco that is found to have abused its market position.

Previously, this only applied to Singapore Telecommunications and StarHub, the two operators that are deemed to be dominant by the IDA.

‘This (the change) takes into consideration that licensees may acquire significant market power in certain telecom markets over time, and will allow IDA to investigate and take measures if such licensees’ actions restrict competition,’ it explained.

When contacted, all three operators – SingTel, StarHub and M1 – said that they are reviewing the changes.

StarHub added that it is already going by IDA’s new book as it does not charge customers after their free trials without their consent.

Plans to change these regulations were first unveiled in November 2008 when the regulator initiated its first round of public consultation.

It then fine-tuned the rules after taking into account feedback from telcos and industry players and opened them up for a second round of comments a year later.

More changes could yet be in store for local operators as the IDA is currently seeking public feedback on proposed changes to the broadband landscape as well.

A new condition that is being studied as part of its ‘Net Neutrality’ consultation is the requirement for telcos to disclose real or average download speeds.

Currently, telcos advertise their Internet packages based on peak download speeds that are typically attained in controlled, laboratory conditions.

The increased transparency will give consumers a better picture of what they are paying for, the IDA previously said.

In addition, operators will not be allowed to block legitimate content and services, a condition similar to the one adopted by the US Federal Communications Commission in its Net Neutrality ruling on Tuesday.

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