TIO Annual Report 2005/06

Internet service issues (overview)
23,066 issues raised

Overview
Internet services accounted for 18.1% of all complaints, a 44% increase on the previous year. This makes internet the fastest growing of all three complaint categories. With the exception of complaints about provisioning of services, each of the internet complaint categories increased, with Customer service and Contracts recording the most notable rises.

The take-up rate of broadband services continues to rise. This increase may be attributed to further reductions in the price and value of broadband and the increased availability resulting from the Federal Government’s Connect Australia strategy. This is accompanied by an increase in complaints about broadband: 84.5% of this year’s internet complaints involved broadband, compared with 74.3% in 2004/05.

Customer service
Customer service accounted for almost a third of all internet complaints. It ought to be noted, however, that in many cases the customer service issue is not the primary cause of the complaint. For example, the complainant’s original complaint to their provider may have been about a charge on their account, but the matter is subsequently exacerbated by their experience in having the complaint dealt with. What was once a billing complaint therefore becomes both a billing complaint and a customer service complaint.

Billing
Billing was the second largest category, representing 23.4% of all complaints. This category also includes complaints about payments. Over the past year complaints about direct debits increased by 77.5% to 623 complaints. This increase coincides with a trend in the telecommunications industry as a whole towards encouraging payments by direct debits. This is often done by providing discounts to customers who agree to pay by direct debit and imposing fees for all other forms of payment.

Contracts
Complaints more than doubled. In response to the complaints received, the TIO identified that there may be a systemic issue involving specific members. The TIO subsequently began several systemic investigations involving internet services. The complaints in these cases arose predominantly from a member’s attempt to unilaterally alter the terms and conditions of their existing customer contracts, although one investigation related to the adequacy of advice provided at the point of sale about the terms of an acceptable use policy. .

The TIO is concerned that some providers continue to purport to reserve a right to unilaterally vary the terms of a contract in their standard forms of agreement despite the introduction in 2005 of the ACIF Consumer Contracts Code. (The code stipulates various client notification requirements that must fulfilled before a contract can be unilaterally varied.) The continued receipt of complaints in relation to contract variations suggests that further promotion of this code within some segments of the industry may be required.

Broadband Connect
On 1 January 2006, the Commonwealth Government launched Broadband Connect, allocating $878 million to subsidise the cost of providing to consumers in regional, rural and remote locations broadband services that are equivalent to those available in metropolitan areas. Broadband Connect is largely based upon the original HiBIS model. In addition to the initial subsidised connection, there are two further important features of the scheme. Firstly, plans offered under the scheme must meet minimum requirements in terms of speed and usage allowances. Secondly, the price of plans may not exceed the amounts fixed by the scheme.

As with HiBIS, Broadband Connect is making significant inroads into improved availability of broadband services to many Australian communities. Yet the provision of such services is not problem-free. In 2005/06, 269 complaints were received about services provided under HiBIS or Broadband Connect. A significant number of these involved faults. Where the investigation resulted in escalation to Level 3, however, contract complaints outnumbered the fault complaints. This may reflect the difficulties associated with resolving contractual issues where a one-off subsidy is provided by a third party such as the government.

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