Consumer Protection in the Communications Industry: Moving to best practice - Issues Paper (July 2008)

2.2. Code development

Part 6 of the Telecommunications Act 1997 provides that industry may develop and implement codes of conduct for consumer protection matters.

Codes can be submitted to the regulator (the Australian Communications and Media Authority – ACMA) by industry bodies for registration and, where ACMA is satisfied that the code meets stipulated criteria, it is included on a codes register. It should be noted that the criteria are largely procedural (discussed in more detail below in Section 2.3 Code content).

If industry fails to develop adequate codes ACMA has the power to either request that a code be developed by industry, or develop a ‘standard’ that is binding on industry.

On at least two occasions ACMA has encouraged the industry to develop a code on a specific issue – this has included threats to develop a mandatory standard. Industry has responded by developing or amending a code of conduct on both occasions.[6]

The legislation is vague on the code development process. There are no provisions that require independent consumer input to code development or prevent ACMA from registering a code which does not have consumer input. There are no requirements for adequate consultation with affected consumers or their representatives. There is no provision for the funding of consumer input, or a requirement that consumer consultation should be adequate and reasonable (e.g. regarding the time allowed for consultation). All of these elements are common in other industry sectors.

The exact status of a registered code is also complex and there are different views amongst the industry, regulators and consumer advocates about code status. A registered code is listed as subordinate legislation – this lends it a certain credibility and gravitas. However there is no proactive requirement for parties to comply with any code, even a registered code. Although the Act contains a specific provision requiring parties to comply with an industry standard (Section 128) there are no similar requirements for compliance with an industry code.

The regulator has the power to direct a particular participant to comply with a code following a breach (where ACMA has registered the code). Sections 121 and 122 can be used to ensure compliance with registered codes through formal warnings to industry participants regarding breaches of the code or directions to comply with the provisions of a code where the code is being contravened. A breach of an ACMA direction to comply may attract civil penalty provisions.

This structure is apparently unique in Australian and international approaches to co-regulation and has caused considerable confusion. In our view, this structure is inappropriate and should be reviewed.

Improvements that could be considered are to:

Concentrate resources on a limited number of comprehensive codes rather than numerous fragmented codes;
Achieve industry buy-in and commitment through a meaningful signature process based on an expectation that all industry members would sign any consumer protection code relevant to their operations (to replace the current bizarre situation where signing a code is not a priority and where a company does sign, it means very little);
Change the emphasis in the code approval / registration process to focus on the content of the code rather than process issues;
Set standards or develop a good practice statement for consultation in the development and review processes; and
Improve resourcing for consumer input.

In addition, at present signing up to industry codes is voluntary. Some codes have multiple signatories (although no code has a significant proportion of this large industry sector). Other codes have no signatories at all. The consequences of signing are not set out in the legislation – to date the only apparent impact is that code signatories are subject to the Communications Alliance Code Administration and Compliance Scheme (discussed below in Section 2.5 Code compliance monitoring).

In practice a multitude of codes on diverse topics have been developed by the industry and registered by ACMA.[7] There are currently 27 codes in force.[8] Six of these codes are considered to relate to core consumer protection issues and they will shortly be replaced by a single code – the Telecommunications Consumer Protection Code (the TCP Code.). However, significant consumer protection issues are scattered throughout the remaining codes. (A summary of the current codes is included in Appendix 1 – Summary of Australian Codes).

The promotion of the codes is also quite subdued, compared with other industries. Communications Alliance published a brochure in March 2007 titled ‘An introduction to Consumer Codes’.[9] The brochure briefly summaries seven codes and provides contact details for the Communications Alliance. It mentions the Telecommunications Industry Ombudsman (TIO) and other relevant bodies without providing contact details. It states that ‘Once a Code is registered, ACMA can direct service providers to comply with its terms’. It does not claim that providers are otherwise compliant with Codes and it does not mention or discuss code signatories.

Industry participants in the telecommunications sector do not generally promote their compliance with the codes. There is no operational ‘compliance mark’ and the websites of major providers do not discuss codes or list the codes they have signed. The TIO website briefly lists some relevant codes (last updated 2005) with links to the Communications Alliance site, but again, does not mention or discuss signatories.

[6] On one occasion this involved a mix of legislation and codes – see the Communications Alliance, ACIF C555:2008 Integrated Public Number Database (IPND), 2008, <http://www.commsalliance.com.au/__data/page/3230/C555_2008.pdf>.

[7] Australian Communications and Media Authority, Register of Codes, 25 March 2008, <http://www.acma.gov.au/WEB/STANDARD/pc=PC_2525>.

[8] The current status of the codes is also important – under the Telecommunications Act a code cannot be revised. Old codes are therefore superseded and new replacement codes are registered in their place. This has resulted in multiple versions of codes with the same number and title but with a different year.

[9] Communications Alliance, An Introduction to Consumer Codes, March 2007, <http://www.commsalliance.com.au/__data/page/13230/Intro_to_Consumer_codes.pdf>





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