Feature Article - An Ombudsman For Pay Television Services

• The TIO and Pay Television complaints
• TIO Quarterly Complaint Statistics – Pay TV
• Bundled Services
• The ACCC
• An Ombudsman for Pay Television Services?
• Bundling and Discounts
• Complaints
• Advice for Consumers

Earlier this year, the ACCC recommended to the Federal Government that the TIO be given jurisdiction to investigate non-content related Pay Television complaints where that service was provided as part of a bundle of services, eg with fixed line and mobile telephony.

The TIO does not currently have jurisdiction to investigate non-content Pay Television issues such as billing, provisioning, fault repair and credit management, even though the service may be provided by a member of the TIO such as Telstra Multimedia, Optus Vision, TransAct, Telstra Pay TV or Austar United Communications. Foxtel is not a member of the TIO. Complainants are currently referred by the TIO to state-based offices of fair trading in respect of any Pay Television issues.

It is the Ombudsman’s view that this situation is confusing and unfair for consumers who should be able to have a one-stop shop for their complaints, particularly where they have purchased a bundle of services and often receive a single bill.

The TIO and Pay Television complaints

In the six months to September this year, 198 people contacted the TIO to complain about their Pay Television service. Mostly these complaints were related to faults with the service, failure to provide services as promised, poor customer service, billing disputes or contracts. A much smaller number, 10, were related to the content of a Pay Television service, for example inappropriate content or failure to conform with the published program.

Until recently, the TIO considered all of these complaints, content and non-content alike, to be outside of its jurisdiction and complainants were referred to state-based fair trading offices or the Australian Broadcasting Authority (ABA). This is because:

1. Pay Television does not fit the definition of an ‘eligible carriage service’ under section 127 of the Telecommunications (Consumer Protection and Service Standards) Act 1997; and
2. Section 128(6)(b) of this same Act specifically prohibits the TIO from investigating content-related complaints.

Bundled Services

Many telecommunications providers now offer customers a discount for the provision of multiple services, including Pay Television. This practice is commonly known as “bundling”.

Until recently, when a consumer complaint involved the bundling of services, the TIO would deal only with issues that related to the non-Pay Television components of the bundle and referred complainants to their local office of fair trading in respect of the remainder.

The ACCC

In its recent report to the Minister for Communications, Information Technology and the Arts on Emerging Market Structures in the Communications Sector, the Australian Competition and Consumer Commission (ACCC) examined this issue and concluded that:

The ACCC then went on to recommend that:

An Ombudsman for Pay Television Services?

While the TIO Council has not finalised its position on this issue it has reached the following general view. Firstly, if the TIO were to be given jurisdiction over non-content related Pay TV complaints it should be on a non-discriminatory basis, ie all providers of Pay TV services should be subject to the TIO’s jurisdiction whether the service is provided as part of a bundle or not. Council does not, therefore, support the current ACCC recommendation.

Secondly, Council would need to be convinced that there is a mechanism for dealing with any regulatory overlap which might arise.

Thirdly, Council notes the signification opposition by many Pay TV providers, such as Austar, FoxTel and Optus, as well as by the industry association ASTRA to any extension of the TIO jurisdiction. In general, the position of these parties is that the current co-regulatory mechanisms are working adequately.

In the meantime complaints relating to the Pay Television portion of a bundled service are still being referred to state-based offices of fair trading. The TIO continues to refer content related complaints to the Australian Broadcasting Authority.

Bundling Discounts Cause Confusion

Bundling and Discounts

As many phone companies have now expanded their offerings to a wider range of services including Internet and Pay TV, some consumers have expressed concern about how ‘bundling’ discounts are calculated and applied.

Bundling refers to the offering of multiple telecommunications services - landline, mobile, Internet and Pay TV - by the one provider, and the method of billing for these services. It has become increasingly common in the industry since the ACCC permitted Telstra to bundle Foxtel television services earlier this year.

Bundling offers typically promise additional discounts or other benefitsfor each service that a customer combines on their bill. The discounts often work in conjunction with existing discount schemes and understanding exactly what is and is not included in the various discount offers can be confusing.

Complaints

Complaints about bundled services relate most often to nature of the bundling discounts on offer. Complainants typically state that their decision to transfer their services to a new provider was based on a belief that they would receive the stated discount off their entire bill, not off ‘eligible charges’.

Information given to customers about bundling discounts is more often than not compliant with the Australian Communication Industry Forum’s Customer Information on Prices, Terms and Conditions Code. Unfortunately although consumers will almost always accurately recall the value of the discount, they often fail to notice that it applies to only some of the services on offer.

The TIO believes that providers should take steps to ensure not only that their advertising clearly describes what discount applies to what service, but also to ensure that customers who enquire about such offers are given clear information about the offer and acknowledge their understanding.

Advice for Consumers

• Consider carefully whether bundling will be to your benefit, and ensure that you have a complete understanding of which of the bundled products discounts apply, and how much money you actually will save.
• Ensure that you are aware of any minimum term contract arrangements (for the bundle, or any one of its individual components. For example, your mobile service), and the effect a decision to disconnect any one of the bundled services might have on the value of the discount.

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