This project is funded by the European Union Consumer aspects in telecoms regulation Peter Lundy MSc DIC BSc(Eng) Information and Communications Technology

This project is funded by the European Union

Consumer aspects in telecoms regulation

Peter Lundy MSc DIC BSc(Eng) Information and Communications Technology consultant

November 2008

1


Overview

• End user rights in the telecoms legislation• Contract law• Data protection• European legislation on distance contracts,

e-commerce and unfair commercial practices

• Roles of the telecom regulators

2


Before liberalisation

• Before liberalisation, providing telecommunications services was a task of the state

• Providing good quality for low price under fair conditions was therefore also a task of the state– but it did not work very well

3


First steps of liberalisation

• In a licensing regime, end user rights are often ensured by the licences

• Providing good quality for low price is sometimes a criterion for licencing, for example in beauty contests

• Fair conditions are often ensured by licence conditions

4


Fully liberalised market

• Instead of detailed requirements on quality and price, the state only requires transparency: providers must publish information that consumers can compare

• Unfair business methods remain forbidden and the institutional framework against them is strengthened

5


Discussion

• Which types of consumer complaints are reported to;– Operators?– Regulators?– Consumer and business associations?– Other bodies?

6


Examples of consumer problems

• Prices, how to find cheap services• Unsolicited calls• Mis-selling, changing the operator

without consent• Premium rate services, surprisingly

high bills, unsubscrubing from premium rate services text messages

7


Terminology

• Legal definitions (art. 2 Framework Directive)– User: who uses or requests a service

(including providers)– End-user: not including providers– Subscriber: who has the contract– Consumer: who does not use the service

for his trade, business or profession

8


Discussion

• Telephones used in a family: who is user, who is subscriber?

• Internet access by a company: who is user, who is subscriber?

• Is a prepaid customer a subscriber?• Is a small („one man“) enterprise a

consumer?

9


Affordability of tariffs

• Art. 9 Universal Service Directive• No precise definition of „affordable“,

reference to „national consumer prices and income“

• Member states may;– require special tariffs for users with low

income or special social needs– require geographical averaging

10


Control of expenditure (1)

• Art. 10 and Annex I Part A Universal Service Directive;– Itemised billing– Selective call barring– Pre-payment systems– Phased payment of connection fees– Non-payment of bills

11


Control of expenditure (2)

• These are obligations for designated universal service providers

• But in many Member States some of these obligations apply to a larger group of operators, e.g. all providers of publicly accessible telephone services (PATS)

12


Itemised billing

• NRAs must be able to specify a basic level of detail that allows consumers to verify and control the charges and exercise a reasonable degree of control;– in practice: one line per call

• Basic level of detail must be free of charge

• Free calls, including calls to helplines, not to be identified in the itemised bill

13


Selective call barring

• Must be provided free of charge• Subscriber must be able to bar

outgoing calls of defined types or to defined types of numbers

• Directive does not specify details• Typical options: calls to value added

service numbers, in mobile networks also; roaming related call barring

14


Pre-payment systems, phased payment

• NRA must be able to require designated universal service providers to offer pre-payment systems

• NRA must be able to require designated universal service providers to allow consumers to pay the connection fee phased over time

15


Non-payment of bills

• Proportionate, non-discriminatory and published measures

• Due warning must be given before interruption or disconnection

• Service interruption only for the service concerned (exceptions: fraud, persistent late payment or non-payment)

16


Contracts

• Art. 20 Universal Service Directive• Minimum content of contracts;– Applies to consumers, but member

states may extend the scope to all subscribers

• Subscribers can withdraw from contracts, if the provider changes the conditions

17


Transparency

• Art. 21 and Annex II Universal Service Directive

• Minimum information that must be published by providers, including contractual conditions, tariffs, compensation policy, maintenance, dispute settlement mechanisms

18


Operator assistance, directories

• Subscribers have a right to have an entry in the comprehensive directory

• Subscribers must be able to call operator assistance services and directory enquiry services

19


Numbering issues

• European emergency call number 112

• Standard international access code 00

• Non-geographic numbers accessible from other member states

• Tone-dialling, calling line identification (CLI)

• Number portability20


Out-of-court dispute resolution

• Member states must ensure transparent, simple and inexpensive out-of-court procedures

• Details left to the member state to decide, but many member states assign such tasks to the NRA

21


Contracts

22


Introduction

• In the times of the monopoly, the legal relation between phone users and the operator was the relation between a citizen and a public authority

• In an liberalised environment, this changed to a contractual relation between a subscriber and a service provider

23


Discussion

• You go to a shop and buy a pre-paid SIM-Card.

• With whom do you conclude a contract?

• What is the content of this contract?

2007-02-09


In practice

• Almost every kind of commercial activity is based on contracts

• Most of these contracts are not concluded written form

• It most cases it would not be possible to determine all details of the contract

• In most cases it would be difficult to enforce the contract in case of a dispute

2007-02-09


Discussion

• How can a company change its existing long-term contracts, for example the monthly price?

2007-02-09


Data protection / Privacy

27


EU legislation

• Directive 95/46/EC: General data protection directive– scope: all personal data, all „controllers“

who process personal data

• Directive 2002/58/EC: Privacy in electronic communications– scope: subscribers, users, providers of

electronic communications networks and services

28


Directive 95/46/EC

• Art. 6 Principles relating to data quality– Personal data must be collected for a

certain, legitimate purpose, and most not be processed contrary to that purpose

– Personal data must be kept up to date, and must be deleted when no longer needed for the purpose

29


Directive 95/46/EC

• Art. 7 Criteria for making processing legitimate– consent by the data subject– processing necessary to fulfil a contract– processing necessary to fulfil a legal

obligation– task carried out in the public interest– ...

30


Directive 95/46/EC

• Rights of data subjects– Right to be informed about processing

personal data– Right to object– Right to access own personal data– Right of rectification or deletion

31


Directive 2002/58/EC

• Confidentiality of communications• Strict rules on processing traffic data:

delete as soon as possible• Itemised bill shall protect interests of

other calling users (who are not the subscriber) or called users

• Rules how users can restrict CLI

32



• Rules on processing location data: consent needed

• Directories: subscribers must have the possibility to decide whether they want be included– but no clear opt-in or opt-out principle

• Rules against unsolicited messages (automated calling systems, spam)

33


Data retention

• Directive 2006/24/EC• Turns the principle that personal data

shall be deleted as soon as possible upside down

• Providers shall store telephony data and Internet data (but not the transmitted content) for 6 months to 2 years, for law enforcement purposes

34


Distance contracts, electronic commerce, ...

35


EU legislation

• Distance Contracts Directive 97/7/EC• Distance marketing of consumer

financial services, Directive 2002/65/EC

• E-Commerce Directive 2000/31/EC• Unfair Commercial Practices


36


Directive 97/7/EC

• Distance contract: wide definition, includes selling per telephone, mail-order catalogues, websites, ...

• Detailed information requirements, in particular identity of the supplier, price, delivery costs, ...

37


Directive 97/7/EC

• Right of withdrawal– consumer can withdraw without stating

any reason– without penalty or charge (only delivery

costs for returning)– within 7 working days (financial

services: 14 or 30 days)– some exceptions

38


Discussion

• What does this mean in practice?– for selling telephone services via call

centres or websites?– for provision of value added services?

39


E-Commerce Directive

• Information obligations• Rules how to conclude a contract via

websites and email– technical steps must be explained, a

possibility to correct errors must be given, possibility to store the contract

• Rules on advertising

40


Unfair Commercial Practices Directive

• Forbids misleading and aggressive commercial practices– abstract definition in articles 5 to 9–many concrete examples in annex 1

(same list applies in all member states)

• Applies to business-to-consumer relationship

41


Discussion

• Do you know examples of misleading or aggressive commercial practices in the telecoms sector?

42


The role of Telecom regulators in consumer

protection

43


Transparency

• Publication of general business conditions

• Publication of tariffs• Tariff calculator on the website– requires lot of timely updates and

programming in order to take new tariff options into account

44


Public relations

• Reacting to consumer issues in individual press releases

• Annual report• Information on consumers‘ issues on

the regulator‘s website– on most regulators‘ websites, this is one

of the first items in the navigation

45


Quality of service

• Possibility to regulate it, if necessary• Trend, not to require certain level of

QoS, but only to require transparency

46


General business conditions

• A regulator can enforce the rules– from the telecoms acquis, for example

minimum content– from other parts of legislation, e.g.

unfair clauses

47


General business conditions

• Methods of enforcement–Misdemeanour provisions• only in serious cases

– Obliging operators to change business conditions• in cases of complaint• evaluation of all general business conditions

as a regular activity

48


Consumer complaints

• Out-of-court dispute settlement on case-by-case basis– task of many EU regulators

and/or• dealing with consumer issues on a

more general level– for example the Ofcom Consumer Panel

explicitly states that it does not deal with individual complaints

49


Expertise

• Provision of expertise to consumer protection institutions, in individual cases

• Regular exchange of information with such institutions

• Staff of the regulator acts as court experts

50


Discussion

• Which consumer protection activities do your regulators currently perform?

• Cooperation between regulators and consumer protection institutions?

51

Documents

This project is funded by the European Union Consumer aspects in telecoms regulation Peter Lundy MSc DIC BSc(Eng) Information and Communications Technology