It’s stunning, but two whole clauses of the TCP Code have no effect. They are supposed to be the detailed rules that apply if a service provider changes its upstream wholesale arrangements. But thanks to the worst piece of regulatory drafting we have seen in fifteen years*, they may as well not be printed in the Code.
Here’s the sad story.
First background item: Some definitions
You need to understand what a ‘Transfer’ means under the Code.
Transfer means the transfer of all or part of a Consumer’s Telecommunications Service from one Supplier to the Gaining Supplier.
And a Gaining Supplier …
Gaining Supplier means the Supplier to whom a Telecommunications Service is to be Transferred.
In the Code, ‘Losing Supplier’ is not defined, but we’ll use that term to refer to the Supplier from whom a service is transferred.
Second background item: Clause 7.12 is modelled on clause 7.11
The significance of this will become apparent later. But for now, just note that clause 7.11 deals with situations where a Losing Supplier sells or reorganises its business, resulting in a Transfer of customer services to a Gaining Supplier.
So, it says things like:
Before the Transfer is initiated, the [Losing] Supplier must notify the Customer that the Customer’s Telecommunications Service will be Transferred to the Gaining Supplier …
And:
Before the Transfer is initiated, the [Losing] Supplier must notify the Customer of the proposed date by which the Transfer will be completed …
And:
Before the Transfer is initiated, the [Losing] Supplier must notify the Customer of the appropriate contact details for lodging an inquiry or a Complaint about any aspect of the Transfer …
That’s all fine. There’s going to be a Transfer, and the Losing Supplier must do certain things before the Transfer happens. No worries.
But when we come to clause 7.12, there’s no ‘Transfer’ involved
Clause 7.12 only deals with changes to upstream wholesalers. There’s no change in Supplier involved here. The customer stays with the same service provider, even if they are moved from the Optus network to Telstra, or from Voda to Optus.
Actually, when the drafter copied over the rules from clause 7.11, they must have realised that there was no Transfer involved under clause 7.12, because they changed the wording in the copied clauses.
Like this:
the Supplier must notify the Customer that the Customer’s Telecommunications Service will be
Transferred to the Gaining Suppliermoved to the new network …
And this:
the Supplier must notify the Customer of the proposed date by which the
Transfermove will be completed …
And this:
the Supplier must notify the Customer of the appropriate contact details for lodging an inquiry or a Complaint about any aspect of the
Transferchange of wholesale supplier …
As we said, the drafter clearly understood that there was no ‘Transfer’ here, so they correctly decided not to use the defined term ‘Transfer’.
Well, they made that decision in some parts of clause 7.12. For reasons that are unfathomable, they left the word ‘Transfer’ in the clause at two critical points.
The first critical point
All a Supplier’s obligations under clause 7.2.1(a) are preceded by these words:
7.12.1 A Supplier must take the following actions to enable this outcome:
(a) Notification of Transfer: before the Transfer is initiated, notify all its Customers in the manner in which the Supplier normally communicates with them:
(i) that the Customer’s Telecommunications Service will be moved to the new network …
But there is no Transfer!!!! Transfers have nothing to do with clause 7.12. There is no change of Supplier. What (if anything) was the drafter thinking?
None of the requirements in clause 7.12.1(a) will ever be activated except in the theoretical case where a customer is sold to a new service provider and simultaneously switched to a new wholesale network.
Second critical point: Clause 7.12.1(b) also shoots itself in the foot
This reads:
Termination by a Customer: A Supplier must ensure that, if so notified by the Customer who is exercising the applicable termination right, if any, as a result of a Transfer, the Supplier terminates the relevant Customer Contract relating to the Telecommunications Service within 5 Working Days of receiving the Customer’s notice.
Don’t worry about the confused detail (that’s another story). Just note that the whole clause only applies if there’s a Transfer, and there are no Transfers under clause 7.12.
It gets worse
In another post, we explained why clause 7.11.2 doesn’t do what it was supposed to. The same broken clause is copied and pasted into clause 7.12, and it’s even more dysfunctional in this context.
In addition to what we said in the earlier post, note that in the case of a change in upstream wholesaler there is no Transfer, no Losing Supplier and no Gaining Supplier. So clauses 7.1 to 7.10 of the Code are totally, gloriously irrelevant. Why the Code babbles on about them in clause 7.12.2 is beyond comprehension.
So what is left ‘alive’ in clause 7.12?
This is what actually operates, based on the drafting and its proper reading:
7.12 Change of Wholesale Provider
If a Supplier proposes to move their Customers to an alternate wholesale network provider, the Supplier must notify all Customers being moved in the manner in which the Supplier normally communicates with them prior to that change being initiated.
7.12.1 A Supplier must take the following actions to enable this outcome:
(a) Notification of Transfer: before the Transfer is initiated, notify all its Customers in the manner in which the Supplier normally communicates with them:
(i) that the Customer’s Telecommunications Service will be moved to the new network;
(ii) of any details then known to the Supplier regarding how the Customer’s Telecommunications Service may be the subject of a materially adverse effect regarding its features, characteristics or pricing as a result of the Transfer;
(iii) of any impact this change has on the Customer’s use of existing equipment;
(iv) of any change in the contact details of the Supplier;
(v) of the proposed date by which the move will be completed;
(vi) that the Supplier will use reasonable efforts to notify the Customer of the completion of the move on the day it occurs;
(vii) of the appropriate contact details for lodging an inquiry or a Complaint about any aspect of the change of wholesale supplier; and
(viii) of the applicable termination rights for that Customer that may result from the move, including the applicable notice period and contract termination charges for that Customer.
(b) Termination by a Customer: ensure that, if so notified by the Customer who is exercising the applicable termination right, if any, as a result of a Transfer, the Supplier terminates the relevant Customer Contract relating to the Telecommunications Service within 5 Working Days of receiving the Customer’s notice.
7.12.2 Provided that a Supplier complies with the terms of this clause 7.12 in circumstances of a change of a wholesale network provider, the Supplier is not required to comply with the other provisions of this Chapter in relation to such a move except for clauses 7.6, 7.7 and 7.9.
7.12.3 Suppliers must not take any action that affects Telecommunications Services for which they are not the Supplier of that Telecommunications Service.
So there is a general obligation to notify customers of a change of wholesaler, but none of the detailed rules are activated by such a change.
Can’t you resolve the ambiguity by taking account of the spirit, or intent, or purpose of the Code?
No. There is no ambiguity. The language of clauses 7.12.1 and 7.12.2 is perfectly clear.
*What was the former dumbbell drafting record holder?
We said at the start that clause 7.12 of the TCP Code is the worst piece of regulatory drafting we’ve seen in 15 years.
In case you’re wondering, the last time we saw anything so bad in public regulatory drafting was a monumental foul up in the Retail Tenancies Regulations 1997. But that’s another story …
