Opinion: Telco disputes scheme is a winner

The scheme has empowered the customer where previously there was a sense of impotence

With its second quarterly report having just been published, it’s time to assess how the Telecommunications Disputes Resolution Service is performing. And by any standard, its proving a great success.

Back in 2004, then minister Paul Swain complained to the industry that far too many complaints about telecommunications services were landing on the desks of Members of Parliament and other community leaders. He said unless the industry smartened up its act the government was ready to regulate.

Several groups, including TUANZ, while understanding the problem, were opposed to a government-run scheme except as a last resort. There were stories of mandated schemes in other industries racing out of control and creating their own momentum, at the ultimate cost of consumers.

So we encouraged the industry through the Telecommunications Carriers Forum to develop an industry code of practice on the handling of complaints.

The code took forever to complete — in itself an illustration of the divergence among the practices of the major players. And along the way it became apparent that a code in itself was not enough — it would require a disputes resolution process in parallel. But finally, late in 2007, the scheme was launched.

So it is satisfying to read the quarterly report and conclude that it is working well.

New “disputes” are coming into the service at the rate of three or four a day — in line with the industry’s forecasts. About a third of these are non-relevant — for example they relate to matters that happened before the scheme started, or they have not yet reached the trigger point of “deadlock” between the service provider and customer.

Indeed, the really heartening aspect is a very large proportion, 98%, being resolved speedily at “level one” — a simple phone conversation between the resolution service and the service provider to establish whether “deadlock” has been reached.

Often the mere existence of an enquiring call from the service prompts a quick settlement. This is way higher than the 75% the industry anticipated, and a tribute to all parties as well as to common sense.

It also shows that the scheme is doing one of its jobs very effectively in neutralising the perceived imbalance of power between a residential or SME customer and a large, impersonal corporation operating in a complex essential service industry.

The breakdown of types of disputes handled is predictable. Nearly half relate to billing and credit. The next biggest group is the delivery of products and services, then customer service. Technical stuff such as faults and network performance is low down the scale.

The report notes that communication difficulties appear to play a big role in many of the complaints. The challenge of contacting and getting responses from providers is a major one for many customers. And problems are especially likely to occur when there are multiple service providers involved, such as when the customer is changing carriers or where there is a wholesale service somewhere in the chain. Again that is predictable, but shows the added complexity in the new way of doing things.

The introductory months have not been entirely free of friction at the industry end.

This is understandable — scheme members in signing the code have delegated to the TDRS the right to make substantial monetary awards against them with little recourse, and are anxious about the cost over time.

Yet, the benefits of this scheme have been enormous. It has forced the industry to tidy up complaints-handling processes.

It has empowered the customer where previously there was a sense of impotence. It has provided a means to measure where the industry is getting things wrong so the focus can go onto fixing them.

It has elevated the standing of the industry through its voluntary nature. And it has avoided the establishment of yet another government agency that would have been the inevitable alternative.

All those involved — those who devised the detail of the scheme, everyone involved in dealing with it from the industry end, the governing council and the arbitrators themselves — should take a bow.

It’s early days, but right now common sense has been the winner.

Newman is CEO of the Telecommunications Users Association of New Zealand

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