As more and more discover the cheap attractions of ‘Voiceover internet protocol’ telecom services, Ofcom has been looking at consumer protection issues and marketing transparency.
Who: Ofcom and the Voiceover IP ("VoIP") Industry
When: March 2006
Ofcom kicked off a consultation on proposals for further regulation of VoIP services, with a deadline for responses of 3 May 2006.
In response to rapid developments in Voiceover Internet Protocol ("VoIP") Services, Ofcom has determined that a revised approach is needed for fostering the development of VoIP services to ensure they best meet consumer's interests.
VoIP services typically use a broadband connection to provide voice calls using VoIP technology via a PC with handset/headset or a special adapter connected to a traditional telephone handset. They have the potential to deliver significant consumer benefits through reducing the cost of delivering existing services, enabling new and innovative services and increasing competition.
Key marketing proposal
The key proposal in the consultation document from the point of view of marketing is as follows:-
"to specify the information that providers must offer their customers to ensure customers are well informed of the capability of the VoIP services".
Moreover, Ofcom believes the specification should come by way of a new Code with statutory backing.
Self-regulation was another option but, in a telling passage the ASA will have noted, Ofcom's view is that the industry should not be left to self-regulate at this stage of its development.
A risk of self-regulation in Ofcom's view is that providers may choose not to disclose appropriate information, with the burden of consumer protection falling on some key players while other companies misuse the flexibility of self regulation and rely on information provided by others or cause consumer detriment.
Emergency call issue
One issue that came up in focus group research conducted by Ofcom before the consultation paper was published was access to emergency calls. The possible exclusion of VoIP access to emergency calls was very controversial and due to widespread ignorance that this was the case in relation to VoIP, participants wanted to be able to pick and choose according to their individual preference and believed that informing consumers about new voice services and what they could and could not offer was the service providers' responsibility, with Ofcom providing an industry code.
Ofcom has formed the strong belief as a result that consumer choice needs to be underpinned by an understanding of what services are on offer. It has also concluded that information needs to be provided at various stages including during the sales process and at the point of signature, prior to a contract being entered into.
A draft code is contained in the consultation document. It sets out the information which providers must supply to their customers under four key headings. These are:
- service reliability;
- emergency calls;
- ability to port numbers; and
- other information for domestic and small business customers.
Under each heading, the code sets out what information providers must supply their customers with, and when and where they must provide this information, for instance at "point of sale", "point of signature," "point of use" (for example by way of labels and announcements), in the terms and conditions and/or in a user guide.
Here, one of the matters which the code requires providers to be clear on before the point of sale is where the service could cease to function because the broadband connection fails or there is a power cut or failure.
Access to emergency calls
Where the service in question does not provide access to emergency calls, the code requires that customers should be informed during the sales process and at subsequent stages. The code also requires that service providers take appropriate steps, at the point of signature by the customer, to ensure that the customer acknowledges at that time that they understand that the service will not provide access to emergency calls.
Ability to port numbers
Ofcom considers it important for consumers to be informed of their number portability rights before signing up to a service. The draft code therefore requires that if a provider does not offer number portability, customers must be informed, not only during the sales process, but also within terms and conditions of use and in a user guide.
Other information for customers
Ofcom considers that customers have come to expect certain standard features from their telephone services. Accordingly the draft code will require that pre sale materials describing the service state clearly if any of the following are not included:
- access to a directory enquiry facility;
- access to operator assistance services;
- calling line identification facilities;
- provision of a directory on request;
- special measures for end users with disabilities;
- the non-itemisation of calls which are made from a subscriber's telephone which are free of charge.
Ofcom also seeks views on what techniques might be used and made available to consumers to combat SPIT, or SPAM over internet telephony, where a user is subjected to unsolicited voice calls. It cites the example of commercial email industry measures such as white lists, SPAM filters and email address authentification. Whether requirements in this regard might end up in the proposed code is unclear but has to be a possibility.
Why this matters:
The VoIP industry has welcomed this move by Ofcom to introduce a code for consumer VoIP services in the UK. However, service providers should be clear that the regime which will come with the code will not be self regulatory as with the CAP Code of Advertising and the Advertising Standards Authority. Ofcom fully intends that if the consultation proposals are adopted, the code should be in place by perhaps August 2006, with breaches of the code punishable by fines of up to 10% of turnover.