TCPCode.com.au really doesn’t set out to find fault with the drafting of the new Telecommunications Consumer Protections Code. We just study it very carefully so we can help telcos comply. We can’t help it that careful reading reveals a lot of shocking drafting in the rules.
Take clause 7.11.2 for disastrous example.
First things first: About Chapter 7
Chapter 7 of the TCP Code deals with ‘churn rules’ … how customer transfers take place.
Clause 7.1 places an obligation on a Gaining Supplier.
Clause 7.2 is a rule for a Gaining Supplier, as well.
Clause 7.3 is another set of obligations for a Gaining Supplier.
Clause 7.4 also places obligations on Gaining Suppliers.
Clause 7.5 puts certain validation requirements on a Gaining Supplier.
Clause 7.6 requires the Gaining Supplier to give certain information.
Clause 7.7 mandates that a Gaining Supplier tells the customer when a transfer is completed.
Clause 7.8 requires a Gaining Supplier to keep certain records.
Clause 7.9 requires the Gaining Supplier to allow access to those records.
Clause 7.10 imposes more obligations on Gaining Suppliers.
Summary: Clauses 7.1 to 7.10 are rules that Gaining Suppliers have to comply with.
OK, what about clause 7.11?
Clause 7.11 imposes obligations on Losing Suppliers, in special situations where they sell their customer base or transfer it as part of a corporate reorganisation.
And clause 7.11.2 says:
Provided that a [Losing] Supplier complies with the terms of this clause 7.11 in circumstances where a Transfer of a Customer’s Telecommunications Service arises as a result of a sale of the [Losing] Supplier’s business or a Corporate Reorganisation, the [Losing] Supplier is not required to comply with the other provisions of this Chapter in relation to such a Transfer except for clauses 7.6, 7.7 and 7.9.
But think about it …
The earlier provisions of the Chapter, including clauses 7.7, 7.8 and 7.9 never apply to Losing Suppliers anyway!!!!!! They are all Gaining Supplier obligations.
The fact is that even if a Losing Supplier doesn’t comply with its obligations under clause 7.11, it still isn’t obliged to comply with any of clauses 7.1 to 7.10.
And even if a Losing Supplier does comply with clause 7.11, the Gaining Supplier still has to comply with clauses 7.1 to 7.10.
What did it mean to say?
It probably meant to say this:
Provided that a Losing Supplier complies with the terms of this clause 7.11 in circumstances where a Transfer of a Customer’s Telecommunications Service arises as a result of a sale of the Losing Supplier’s business or a Corporate Reorganisation, the Gaining Supplier is not required to comply with clauses 7.1 to 7.5, 7.8 or 7.10
the other provisions of this Chapter in relation to such a Transfer except for clauses 7.6, 7.7 and 7.9.
So what’s the practical problem?
For one thing, if a service provider sells its customers, or transfers them in a reorganisation, the Gaining Supplier must comply with clauses 7.1 to 7.10, even if the Losing Supplier has complied with clause 7.11. That means a lot of extra work and responsibility for parties that buy customer bases. Because clause 7.11.2, which was probably intended to excuse Gaining Suppliers from a lot of those rules, in fact fails to do so.
But extra work for Gaining Suppliers is not the main problem. The main problem is that an Australian telco cannot sell its customer base unless the buyer complies with clause 7.2:
A Gaining Supplier must use reasonable endeavours to ensure that a Consumer is only the subject of a Transfer by a Gaining Supplier if the Consumer has provided their consent to such Transfer.
That’s right. Every single customer must be asked for their consent to be transferred as part of a business sale. That’s such a nightmarish, ridiculous, uncommercial and unintended outcome that (the only good news is that) no regulator will be prepared to enforce it.
What’s the practical solution?
Well, it may be a bit embarrassing for the ‘powers that be’ but there should be a position statement issued, assuring the industry that clause 7.11.2 will be read as if the third reference to ‘Supplier’ was to ‘Gaining Supplier’.
