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Following receipt of the Ministerial Direction, the ACMA wrote to Telstra, Optus and Vodafone on 7 September 2012 seeking responses to the following questions:
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Do you notify customers when they are to incur IMR charges? If so, how, and in which jurisdictions, are the notifications provided?
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Is there any facility to cap the total charges which may accrue while a customer is travelling outside Australia? In which jurisdictions are such caps available?
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Are your customers provided with an opt-in or opt-out default for using IMR services? When are these decisions made and at what point(s) can they be changed?
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Do you provide customers with any usage notifications when they are using IMR? If so, how and when are the notifications provided?
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Feedback was sought until 12 October 2012. Further to this a stakeholder workshop was held on 27 September 2012 in Sydney.
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The objective of the workshop was to allow Industry, Industry representative bodies and Consumer representative bodies to provide an input into the process of creating the Standard.
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Representatives from the following organisations attended the 27 September workshop:
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Communications Alliance
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Australian Mobile Telecommunications Association
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Telstra
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Optus
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Vodafone
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TPG
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Spintel
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Telecommunications Industry Ombudsman
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Australian Communications Consumer Action Network
Invitations to the workshop were extended to iiNet and M2 Telecom who did not attend.
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The ACMA also met individually with representatives of various service providers prior to drafting the Standard to clarify issues raised and to ask individual questions in response to submissions.
Public Consultation Process -
Following the information gathered in the preliminary consultations, the ACMA drafted an IMR Standard for public consultation.
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On 13 December 2012 the ACMA released the draft consultation IMR Standard for public comment. As per section 132 of the Act, the ACMA is required to undertake public consultation prior to determining a Standard and invite submissions for a period of at least 30 days. As the public consultation period occurred over the Christmas break, the public consultation period was extended until 1 February 2013 to allow sufficient time for all relevant stakeholders to contribute a full and considered response.
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Individual meetings were held with the three major providers during the public consultation period to respond to clarify the intent of the drafting within the Standard.
Submissions -
A total of 26 formal submissions were supplied to the ACMA as part of the public consultation process. The submissions were received from a variety of sources:
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12 from consumers (including 1 SME) and 1 from the peak consumer advocacy body, the Australian Communications Consumer Action Network (ACCAN).
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3 from MNOs
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3 from MVNOs
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2 from Representative Industry Bodies
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2 Government organisations
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Submissions from the Telecommunications Industry Ombudsman (TIO) and the Australian Compliance Institute (ACI)
The submissions to the public consultation process have helped the ACMA gauge the concerns of interested stakeholders as described below.
Targeted Consultation -
Due to the number of amendments that followed public consultation, the ACMA held a number of one on one teleconferences and meetings with key stakeholders throughout February and March. As a result of these meetings a final draft Standard was prepared, with a short public consultation process held from 4 April to 11 April 2013. Specific contributors the ACMA had previous correspondence with and submission from were advised of this consultation.
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Seven responses were received by the ACMA; from the three MNOs, the ACCC, ACCAN, AAPT, and a combined submission from CA and AMTA. These are available online at the ACMA website.
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This final consultation process included direct contact with a number of key stakeholders to ensure they had a chance to provide final input into the Standard after the consultation period had finished. In addition to meetings and teleconferences held before and after this consultation process, the ACMA continued e-mail updates and responses with stakeholders to ensure the process of finalising the IMR Standard was as collaborative an effort as possible.
Consolidated Stakeholder Views Notification Requirements -
Vodafone and Telstra currently provide notifications for their retail customers upon arrival at an overseas destination, however this is not in real-time and significant delays may occur. These notifications are sent in SMS form. One MNO does not have the functionality to send welcome messages however it is being introduced for their retail post-paid customers. Developing or altering this capability will have a financial impact.
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One MNO noted that allowing “maximum” price information in notifications in lieu of personalised price information is a much cheaper solution that has similar benefits for customers.
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There are contractual and separation issues in sending welcome messages to wholesale customers who do not have a direct relationship with one of the MNOs.
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MVNOs note that as the MNOs already have the capacity to send notifications, MNOs sending notifications on behalf of MNVOs is the most efficient industry solution. There is no market efficiency in replicating this ability.
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Some mobile devices such as tablets/iPads may not be able to receive an SMS and/or consumers may not know how to readily access an SMS that is received on the device. This is only a fraction of the market at this stage however there is some incentive for the Standard to be as future-proof as possible.
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E-mail is not a solution to the tablet/iPad issue as there are costs in downloading e-mails, and if a download has not occurred for some time there may be significant charges as all e-mails are downloaded in bulk at an overseas location.
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Customers should be allowed to “opt out” of receiving notifications.
Prescriptive Nature of Notifications -
MNOs and MVNOs expressed a desire that the Standard avoid being prescriptive where possible in the wording of notifications. There was agreement that the ACMA should not dictate the wording of warning or pricing alerts, with increasing costs, complexity, inter-operator arrangements and longer implementation times all offered as arguments against prescriptive wording.
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If the Standard is prescriptive, this reduces differentiation between providers.
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Existing European regulations do not stipulate the technology that must be used to deliver notifications.
Usage Notifications -
Usage notifications are problematic for Voice calls and SMS as there are delays of 24 hours to 60 days in receiving this information from overseas providers.
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Due to the differences in international routing, data usage is “near real-time” so notifications for data can be sent as soon as designated benchmarks for customer usage are reached.
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Usage information is not the same as charging information so there is potential for customers to be misled or for complaints to arise when a customer receives their bill.
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Different charging regimes in different countries create the potential for confusion.
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Due to delays in using the voice and SMS service and the Mobile Carrier receiving charging information, there may be significant delays in a customer reaching a designated notification level, and the notification being sent to the customer.
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There will be development costs involved in complying with any usage notification requirement which may be significant.
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Notifications are unnecessary for pre-paid users as they are immune to bill shock (service ceases once credit runs out).
Spend Management Tools/Apps -
The cost in setting up prescribed App is a major imposition upon MNOs & MVNOs, and the Standard should seek to keep costs upon industry to the minimum imposition possible if a viable alternate exists.
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Third party Apps currently available do not meet all of the requirements of the first draft of the IMR Standard. Prescriptive requirements to replicate this market are inefficient, as Apps require constant updating for multiple mobile devices and operating systems.
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Any App that relies on handset usage information is likely to be inaccurate, and there are difficulties in obtaining usage information on iOS platforms.
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As some CSPs already provide Apps or are developing Apps, overly prescriptive App requirements will disrupt existing Apps and/or plans which add cost to compliance for no consumer benefit.
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There is usually at least a 48 hour delay in receiving Voice & SMS information from overseas providers, and evidence suggests most of the bill shock issue relates to data usage and customer inability to reconcile data usage with charging information. As such, spend management tools should focus on data usage.
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Tools to manage data usage are cheaper and easier to implement, and data usage information can be provided in near real-time.
Reseller Issues -
Currently, MNOs do not liaise directly with the customers of MVNOs due to the operational separation that is a key contractual issue between wholesalers and resellers. There may be an impact on contracts already in place between providers, if the generic warning message is required to be sent to customers of MVNOs by MNOs.
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Having more than two service providers in the “chain” of servicing a customer (i.e. with “aggregator” providers between a CSP and the MNO) causes further complexity with the issue of contacting customers.
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MNOs do know which mobile numbers relate to customers of MVNOs on their network, but have no way of knowing to which reseller a wholesale customer belongs to.
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The MVNOs that have responded to the ACMA do not currently have the capacity to send notifications to customers. If this requirement was to be mandated, many would not offer IMR services to their customers, which would have the net effect of reducing competition.
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It is in the interests of MVNOs to provide consumers with as much pre-departure information as possible to reduce bill shock, as complaints regarding this issue “take considerate time and resources to resolve”.
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MVNOs usually have IMR service set to off as a default, and customers are required to contact their provider to activate these services prior to departure.
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Spend management tools are difficult to implement due to the delays in receiving information from MNOs, and may not be economically feasible for smaller MVNOs.
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Accurate charging information can be difficult for MVNOs to calculate in advance
Implementation Issues -
Some MNOs are largely complying with the provisions in the IMR Standard, while others have to build systems from scratch. Time implications should be taken into account as much as the cost.
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A phased implementation schedule is recommended for the more technically challenging aspects of the Standard.
Consumer Concerns -
The Standard does not resolve the issue of push notifications to non-SMS enabled devices (e-mail suggested as an alternative, issue with e-mail noted above under the notification sub-heading)
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Customers should be informed about their phone being locked and methods of unlocking their phone from their network
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Any application should be seen as complementary to other spend management tools
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Cruise ship systems and other non-national networks are not accounted for
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If a MNO fails to provide the generic warning message, this may create issues for the specific customers who are overcharged without receiving the message
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The cost of retrieving voicemail messages and the cost of sending an SMS within the same overseas country should be part of the warning information.
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The cost of diverting calls to voicemail while someone is overseas may also attract charges, and this should be made clear by the CSP.
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Data charges should be quoted in higher denominations (i.e. per MB or GB) as price per Kb can make costs appear low to non-tech savvy consumers.
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Some customers want a hard cap on prices in place for overseas travel, either a nominated mandatory amount or a customer set-limit organised pre-departure.
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An easy method of checking balances should be in place such as the use of USSD codes (i.e. 2 Degrees Mobile New Zealand use *100*1# for information).
Other Views -
The TIO notes that there are occasions in which the MVNO and the MNO require dispute resolution regarding charges accrued by a customer of a reseller.
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Consumer education is as much a key as mandatory conditions, e.g. What does a MB or GB of information actually mean? What alternatives to roaming are there?
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A focus should be made on the ‘less transparent” costs associated with IMR, such as receiving a call or message, or automatic updates on a smart device that use data downloads.
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There is broad agreement amongst major providers that timely provision of information and transparency of pricing helps to mitigate the effects of bill shock, supporting the findings of the ACMA’s RTC Inquiry noted earlier.
Consideration of stakeholder views -
Post-consultation, the ACMA made a number of amendments to the Standard in response to the balance of concerns submitted from the telecommunications industry, consumers and relevant stakeholder groups. This is important as it enables more effective implementation of the Standard and reinforces the seriousness in which the ACMA takes submissions to the public consultation.
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The changes applied since the first consultation draft of the Standard are:
General -
References to elements of the Standard complying with the Spam Act 2003 (Spam Act) and the Privacy Act 1998.
Definitions -
Updated to reflect terms introduced in the final version of the Standard.
Section 5 -
Allowing CSPs to use their own wording and terminology in lieu of the prescribed wording proposed. If a CSP does use their own language, a note is included to ensure they comply with the Spam Act.
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Amending the cost requirements from a 2 minute to a 1 minute phone call, and adding the cost of receiving a 1 minute call and an SMS.
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Extended implementation (12 months after Standard takes effect i.e. 23 August 2014) for the requirement of the first CSP (effectively the MNO) to notify the second or subsequent CSP (MVNO) when a customer activates a mobile/SMS capable device.
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No obligation to send SMS’s or notifications to customers if they activate their device in the same country within 14 days of the first message is sent.
Section 6 -
Extended implementation (23 May 2016) for the requirement of the second or subsequent CSP (MVNO) to send a detailed pricing SMS applicable to that overseas location when a customer activates a mobile/SMS capable device.
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Prior to 23 May 2016, for CSPs who do not provide a detailed pricing SMS, they must provide an ACMA fact sheet and detailed pricing information to a customer at the time IMR services are activated.
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Added a requirement to inform a customer about any network unlocking fee.
Section 7 -
Establishes an obligation to provide a low-cost opt-out option for customers by two methods (calling an Australian number and/or via the website of their CSP).
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Sets the maximum charge to customers as AUD$1.00 to opt-out by phone, and no charge to opt out electronically.
Section 8 -
CSPs must inform a customer of the spend management tools available when they activate IMR on their account.
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No differentiation between ‘smart’ and non-smart’ devices in the Standard as CSPs cannot determine the customer equipment a service uses.
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Place an obligation on CSPs to provide customers with at least one spend management tool such as an application or an online portal.
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Usage notifications for post-paid services to apply only to data usage and exclude voice calls and SMS use (unless voice and SMS are offered as part of an Included Value Pack).
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Remove the requirements for alerts for pre-paid and automatic pre-paid IMR services.
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Notifications for Included Value Packs are only to apply to plans that have been introduced to the market from 1 March 2012 or later (aligning the Standard with the TCP code).
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Extend the implementation of this clause for second providers who are MVNOs until 23 May 2016.
(New) Section 10 -
Establishes a review date of the Standard of 23 May 2018 or earlier.
Conclusion and recommendations -
The problem section shows that the underlying cause of Bill Shock is the different charging of domestic versus international mobile phone use. In particular it is data use that causes most Bill Shock. The recent level of instances of Bill Shock reflects strong growth in international travel, growth in the use of mobile internet devices such as smart phones and tablets, along with the greater level of complexity in understanding data use in comparison to call or SMS.
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Option 1 does less to address the causes of Bill Shock than options 2 and 3, but also has lower costs. This is due in part to MNOs being already compliant with many of the elements of option 1. However, it does not facilitate consumers’ management of their spending as much as the other options, with only basic alert notifications provided.
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Options 2 and 3 better address these underlying causes by making it easier for customers to monitor their spend while using IMR. Option 2 is unlikely to provide significantly more benefits to consumers than Option 3. On the other hand, Option 3 is likely to impose significantly lower compliance costs relative to option 2 as it largely targets data usage and post-paid services.
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All options are likely to decrease competition in the market by raising the barriers to entry and are inconsistent with the Competition Principles Agreement.
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The benefits of option 3 include the timely delivery of better information to consumers about the costs of IMR services and better consumer control of access and use of IMR Services. The allowance for longer transitional timeframes under option 3 for MVNOs recognises the extra challenges MVNOs face when developing these systems.
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Overall, it is likely that Option 3 would result in a relatively low but positive net benefit, given that its expected costs and benefits are relatively low. Option 3 is preferred by the ACMA.
Implementation and Review -
The IMR Standard must be made on 27 August 2013 in line with the requirements of the Direction. The Standard will coincide with a public awareness campaign that will seek to ensure providers and consumers are aware of the Standard, as well as noting alternatives to using IMR services.
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A review period of up to 23 May 2018 is included in the proposed version of the IMR Standard; this does not preclude the ACMA from revising the Standard earlier if it deems there is a need to do so.
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The success of this regulation will be measured across four areas:
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A decrease in complaints to the TIO about IMR
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A reduction in the average amount of IMR complaints to the TIO
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A reduction in write-offs associated with IMR
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A reduction in the percentage of consumers experiencing bill shock caused by IMR in a regular ACMA telecommunications consumer survey.
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