Why telco regulation breeds like rabbits

ACMA has launched a new anti bill shock education campaign, timed to coincide with the popular adoption of superfast mobile broadband aka 4G, aka LTE and, for practical purposes aka iPhone 5.

ACMA’s ‘Take Control’ campaign infographic

Themed around educating users to take control of their data charges, it makes an important point about the reasons behind the TCP Code.  The Code is intended to make the world a better place for telco customers.  While it has over a thousand particular rules, we shouldn’t let that obscure the underlying goal:  That telcos should act decently and and in their customer’s reasonable interests.

Why we get more and more rules

Consumer protection law in Australia started off pretty simple.  In fact, the foundation of it all is just 23 words:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

That’s section 18 of the Australian Consumer Law.

The main reason those few words have multiplied like regulatory rabbits into hundreds of pages of specific requirements is that some businesses aren’t able to adopt simple laws in the spirit the legislators intended.  In many cases, they’ll persist in a misleading or deceptive practice unless there’s a specific rule that describes, and outlaws, that particular practice.

So, the regulators have obliged.  They’ve given us a thousand little laws to clarify the big law.

An example

Take the word ‘unlimited’ in advertising.  If you advertise a plan with a big ‘unlimited’ headline, and bury limitations in fine print or another document, you have breached section 18 of the ACL.  You have ‘engaged in conduct that is misleading or deceptive or is likely to mislead or deceive’.  There should be no need for any other law to deal with that.

Except that many telcos thought:  ‘Where does it say about the word unlimited?  I see misleading and deceptive and trade and commerce but I don’t see the word unlimited mentioned.  So we’ll use it.’

That’s why the TCP Code now includes a specific ban:

Unlimited:  use the term ‘unlimited’ or an equivalent term in an unqualified manner when referring to usage, unless the ordinary use of the service in Australia is genuinely unlimited and not subject to exclusions, including exclusions for various types of calls or usage, or selected parts of the network

And why it specifically bans disclaimers that ‘make a lie’ out of the headlines they refer to:

Detail: ensure that use of any disclaimers does not negate the principal message and main terms of the Advertising

And why the new CIS ‘summary of offer’ document must include:

the inclusions, exclusions and any important conditions, limitations, restrictions or qualifications for that Offer, where applicable

What the regulators really want

We bet that ACMA really wishes that its ‘Take Control’ campaign was an industry initiative.  We bet that it would be delighted if telcos were the ones warning that:

iPhone 5 + LTE + excited new owner = Recipe for Bill Disaster

We also bet that if TCP Code requirements like better consumer information and spend management tools are taken by industry in the spirit they’re intended, we won’t be looking at yet another round of micro-regulation in a couple of years’ time.

About Peter Moon

A telco lawyer with a truckload of experience
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