Pricing and consumer protection
What rules govern retail pricing for telecoms services?
In practice, no retail price controls (RPCs) apply in Australia. Previous RPCs over Telstra (the nation’s historic monopoly telecommunications company) were revoked in March 2015 following a study by the Centre for International Economics that found that the state of competition in Australia’s retail telecommunications market made price controls redundant.
What rules govern consumer service contracts?
The Telecommunications Consumer Protection Code (TCP Code) sets out certain minimum protections for consumers of mobile, internet and landline products and services. These protections cover such things as advertising and selling practices, billing requirements, credit and debt management, rights to change service providers and complaint handling processes. In addition to the TCP Code, general consumer laws (including the Australian Consumer Law set out in Schedule 2 to the Competition and Consumer Act 2010) also apply to such consumer contracts.
In addition to contracts with consumers, telecommunications service providers that supply standard telephone services must also meet the performance requirements of the Consumer Service Guarantee (CSG) (eg, in relation to corrections to faults and priority assistance services) and provide compensation to customers if they do not comply with the CSG.
Are telecoms service providers bound by any consumer disclosure requirements?
Under the TCP Code, telecommunications service providers must ensure that consumers of landline, mobile and internet products and services can view and download relevant terms and conditions about the service provider’s products and services from its website. This includes providing a summary of each offer (known as a ‘critical information summary’) and the service provider’s financial hardship policy.
Issues and concerns
Are there any particular competition issues or concerns in the domestic telecoms market?
The Australian Competition and Consumer Commission (ACCC) had expressed some concerns regarding the advertisement of the nbn network by retailers, in particular in terms of the available speed. The issue centres around the lack of clear and accurate information about typical broadband speed that would enable customers to make informed decisions about which provider to purchase a service from. This stems from the fact that retailers tend to advertise an ‘up-to’ speed, which can give the impression that the speed advertised is achievable at most times, even during busy periods.
To address this issue, the ACCC had published industry guidance for retailers on how to advertise speed for nbn network broadband services, including clearly identifying typical minimum speeds during peak periods. In the guide, the ACCC included standard labels for retailers’ use that consists of tiered offerings based on available evening speed to give consumers better information about what they can expect during the evenings and, thus, better enable them to compare plans.
This guide seeks to move retailers from advertising their services based on the maximum internet speed that may be delivered during off-peak periods to the speeds that consumers can expect to achieve during the busy evening periods. The ACCC plans to review the guide after 12 months to determine its effectiveness.
Do any sector-specific competition regulatory/legal provisions apply (eg, special conditions for dominant telecoms market players)?
Part XIB of the Competition and Consumer Act (CCA) contains industry-specific prohibitions against anti-competitive conduct in the telecommunications sector (the Competition Rule). This regime applies in addition to Part IV of the CCA, which deals with restrictive trade practices. This part applies to telecommunication carriers and carriage service providers.
The ACCC may issue telecommunication carriers and carriage service providers with a competition notice stating that they have engaged or are engaging in anti-competitive conduct, or that they have contravened the Competition Rule. In addition, the ACCC has the power to:
- issue an order exempting specific conduct from the scope of the definition of anti-competitive conduct;
- direct carriers and carriage service providers to file tariff information with the ACCC;
- order carriers and carriage service providers to make certain reports available to the ACCC; and
- make record-keeping rules.
Additionally, Part XIC of the CCA provides a telecommunications access regime. Its aim is to promote the long-term interests of end users via a more competitive industry with efficient investment and use of infrastructure, resulting in lower prices, service innovation, greater choice of service for customers and improved quality. It does so by allowing the ACCC to declare specific telecommunication services to be subject to the access regime. The provider of the declared services must provide access on agreed terms (or where terms cannot be agreed upon, terms arbitrated by the ACCC). The ACCC has published a comprehensive guideline to the declaration provisions under Part XIC of the CCA setting out various ways in which the telecommunication services can be declared and outlines the ACCC’s general approach to declaration issues under Part XIC.
Are there any requirements for structural, functional or accounting separation of operators’ activities?
The telecommunications industry was recently subject to reform. Central to this reform was the view that Telstra’s high integration in both the wholesale and retail telecommunications markets, as well as across all the telecommunications platforms, had hindered the development of effective competition in the sector. Subsequently, Telstra chose to separate its business structurally by migrating its retail services from its fixed-line networks onto the nbn network. Telstra provided a structural separation undertaking to the ACCC, which was approved in February 2012. This structural separation was intended to lead to a national outcome where there is a wholesale-only network operating across the country that is not controlled by any retail company – thus providing better and fairer infrastructure access for service providers, greater retail competition and better services for consumers and businesses.
The operator of the nbn network is prohibited from selling the nbn service on a retail basis. The National Broadband Network Corporation Act 2011 expressly states that nbn must supply the service on a wholesale basis only.
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