TIO Annual Report 2003/04

Ombudsman's Overview

From the TIO’s perspective, the past year marked the beginning of a new stage, if not a watershed, in the development of the telecommunications industry.

As I noted in the last Annual Report, continuing technological changes and the adoption of new applications are now clearly driving the convergence of industries and blurring the accepted distinction between carriage and content. The Government’s decision to merge the Australian Broadcasting and Communications Authorities signals the reality of convergence, even if the detail and future directions of this reality are still unclear.

For the TIO, the challenge is to remain relevant for consumers. This means the Scheme must maintain and increase the adequacy of consumer protection in the face of new ways of communicating and new products, services and applications. The current bundling of products and services can be seen as merely a precursor of likely future aspects of convergence.

So, it is imperative that the TIO Scheme deals with issues already confronting it. Here, the principal issue is the TIO’s current lack of jurisdiction to handle complaints by subscription television (pay-TV) viewers relating to billing, credit management, fault repair and the provisioning of new services and the like, particularly where this service is part of a bundle, as it usually is.

With the exception of Telstra, none of the providers of pay-TV has shown any inclination to support this much-needed reform. Indeed, they are vociferous in opposition to any change. This leads to the absurd position that a consumer contracting to receive a bundled service including pay-TV is able to bring a billing dispute concerning any of the other services in the bundle to the TIO, but not a dispute about the billing of the pay-TV service.

For its part, while not indicating active support for the proposal, Telstra has put forward two principles which should be met before consumers would be able to bring complaints to the TIO.

Firstly, any extension of the TIO’s role should be on the basis of competitive neutrality; that is all providers of pay-TV should be subject to the TIO’s jurisdiction. Currently, all the providers of pay-TV, with the significant exception of Foxtel, are Members of the TIO, because they all provide ‘eligible’ services. However, for historical reasons the TIO has no jurisdiction over the provision of pay-TV by these Members. Foxtel has not offered to join the TIO.

Secondly, there needs to be an appropriate mechanism to deal with any regulatory overlap between the TIO’s prospective jurisdiction and the current mechanism for handling complaints. The TIO Council has adopted these principles and has sought the support of a past Minister and of the Department of Communications Information Technology and the Arts (DCITA), to no avail.

So, a recommendation by the Australian Competition and Consumer Commission (ACCC) that the TIO Scheme have jurisdiction over bundled pay-TV complaints has become a victim of a successful lobbying effort by the pay-TV industry. This is doubly disappointing.

It shows a failure of significant players in the industry and Members of the TIO to recognise an important aspect of necessary consumer protection. Perhaps more importantly, there are signs that this stems from a view that the status quo of the TIO should be maintained.

If this is the case then it represents a failure of vision for the future of the Scheme. This ‘steady as she goes’ approach can be contrasted with the dynamic and forward looking view of the foundation Members of the Scheme, Telecom, Optus and Vodafone and other service providers, as well as the TIO Council and Board, when they unanimously supported expansion of the TIO Scheme in 1997.

In broad terms, the TIO needs to become a ‘one-stop-shop’ for consumer complaints across a rapidly converging communications industry. Such a reform will not only reduce consumer confusion, it will mean that they will not have to face double or multiple handling of complaints. For the industry, this will mean more efficient and hence cheaper complaint handling.

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