Monday, September 20, 2010

A grab-bag of telco stuff

Ahhh what a great day to return to work. Reports emerged today about both the industry and consumer submissions to the ACMA's Reconnecting the Customer inquiry.

The industry submission (which I couldn't find at the Comms Alliance or the AMTA website. UPDATED - available here) is reported to blame "technology-challenged customers for the surge in complaints about phone and internet services." As I argued in my CPRF paper (subsequently printed in the TJA) this predicament is of the telcos making.

There remains a possibility that the current predicament occurs because the marketing departments of telcos are over-estimating the ability of both customers and call centre staff to understand the details of increasingly complex products. This would then compound the difficulties created by language in the conversation between customers and their service providers.

An extension of that hypothesis would be that the industry collectively needs to take action to manage its use of language to better enable customers and providers to converse. The ACCC
has seen fit to take the industry to task over language that might be misleading within the definition of the law. However, well before that threshold the industry’s way of using language (e.g. ‘uncapped’, ‘unlimited’, ‘cap’ and ‘coverage’) can be sufficiently confusing customers so that providers cannot be seen as offering quality.

Meanwhile Jessica Irvine writing in the SMH of her own personal telco experience argues that all would be well if we just got the competition structure right. I agree with her that there is an important issue of market design here, but I don't think it is as simple as structural separation and all competition is good. There are reasons of information asymmetry that mean competition alone does not improve customer service - as customers are limited in their ability to asses service standards. Equally simple price comparison is not sufficient.

Finally we come to the campaign launched today by ACCAN over the price of calls to 1800 and 13/1300 numbers from mobiles. The issue over the higher than fixed calls pricing of these has emerged now because they are not included in the so-called "caps" on mobile plans. With the increased prevalance of 13/1300 and 1800 numbers this is only now becoming an issue.

The matter could have been resolved by the operators providing 13/1300 and 1800 services years ago by invoking the declaration on mobile originated calls - a declaration that applied only to these B party pays type services. The fixed line operators had no incentive to do so because the price of the access would have looked like the price of terminating access. In those days this was about 23c per minute.

As the declaration was not used it has now been revoked so the ACCC has lost its ability to fix the problem. The possible solution might be for the ACMA to provide claritry through the numbering plan about the charging principle - but even then the ACMA is out of step as everyone charges the old local call fee (25c) for fixed 13 calls - not the current price cap figure (22c) nor the more logical rule that they actually be charged the same as an actual local call.

The mobile network price structures are becoming more perverse, with proliferation of free "on-net" calls and strange caps being subsidised by these outrageous 1300 and 1800 charges.

Meanwhile I note that the ACCC has initiated action against Optus for its think bigger and supersonic campaigns. I don't think the action is based on my own criticism of these plans. I do note that my friend Bob Kuhn (the voice of the Queen My Lord is Much Much Better) noted that the supersonic claim was simply dumb - you'd actually like your internet connection to run at the speed of light not the speed of sound! (Let's not confuse "speed" as in metres per second with "speed" as in bits per second again!).

In the same conversation I relayed the story of Stephen Conroy comparing fibre to wireless and saying something to the effect that fibre was faster because it is light. For the record they are both forms of "light" - that is electro-magnetic energy (waves or particles). The "c" of reltivity is the speed of light in a vacuum - it is slower in the air (radio) and even slower in glass (fibre) - the slowing depends on frequency, hence why a prism splits the frequencies of the rainbow.

Now there is heaps more of stuff to read on the NBN and stuff.

Oh - back to the topic of this post. It looks to me like ACCAn's campaign and their "super-complaint" has been timed to accompany their submission on Reconnecting the Customer. They have made their "super complaint" to back the case for "super complaints". I haven't read the detail - but I'm not sure the addition of a specific complaint provision is required to achieve the outcome.

Meanwhile everyone continues to talk at cross purposes. ACCAN specifically wants the Act to de-prioritise "self-regulation" while they really are criticising "co-regulation". As I've argued elsewhere, self-regulation hasn't really been tried. The difficulty I have with the position of the pro-regulation crowd is that it does stiffle the innovative benefits of competition, but I also don't buy the idea that competition alone provides better customer service or that "more information" solves the information problem.

What everyone should be able to agree on is that there is a great deal of customer confusion and there is a great deal of customer dis-satisfaction. If we could spend a few days discussing what we agree on then we might be able to move forward on what the solution is.

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