The Next Wave of ASEAN Consumer Protection in Telecommunications
Chinang Rai Province, Thailand
Billing and Metering Integrity Scheme
in Hong Kong
Ms. Connie Lau
Chief Executive
Hong Kong Consumer Council
Introduction
A major source of complaint from consumers has traditionally been disputes regarding the bills and statements received from telecommunications operators.
In 2000, the Hong Kong Office of theTelecommunications Authority (OFTA) determined that all fixed carriers, mobile carriers and mobile virtual network operators were required to participate in a Billing and Metering Integrity Scheme (BMIS) on a mandatory basis. It was considered at the time that dial-up Internet Service Providers, International Value-Added Network Services operators and External Telecommunications Services operators need only participate on a voluntary basis.
Operators participating in BMIS were required to comply with the accuracy and integrity standards for metering and billing in accordance with standards set out in a Quality Assurance Manual .
In short, the Manual required that insofar as metering standards were concerned, the number of inaccurately metered calls should not exceed 1 in 10,000 of total calls, and insofar as billing was concerned, an absolute summation error value of inaccurately billed calls in a bill shall not exceed 1 in 10,000 of the value of the total billed sum. The sampling model for the metering system was developed in accordance with ISO standards.
In addition, operators were required to submit on a quarterly basis, under the supervision of a designated officer within the organization, a self-declaration that it had complied with the manual. The compliance status was also to be subject to examination by a certified public accountant.
Consumer Council' s views
At the time, the Consumer Council made a number of comments in relation to the proposal, as follows.
Billing and metering integrity standards
Notwithstanding the competitive environment, and the possibility that service providers could promote their service by reference to billing performance, it was by no means certain that a high standard would develop through this approach. Given the major focus on price competition, it could not be expected that service providers would have much incentive to direct resources to maintaining high quality billing services.
Therefore, the Council thought it possible that a' lowest common denominator'standard of billing services could arise that would not adequately address the problems that arise in the market. OFTA would there fore need to have reference to world' s best practice in relation to the standards that were being applied.
Self-appraisal system and auditing system
The Council had some reservations that operators could employ their own certified public auditors to audit and certify the measurement results under the self-appraisal system. The Council believed that in order to increase consumer confidence in the self-appraisal system, the auditors used in audit and certification process should be employed by the service provider, but engaged in a way that removed any suspicion that the process had not been undertaken in a completely impartial manner. One way in which such an outcome could be achieved, would be for OFTA to assign an auditor, or auditors, selected through competitive tenders for the provision of those services.This suggestion was not accepted.
Monitoring system
The Council welcomed the proposal requiring all operators to submit certified BMIS measurement results. However, the Council considered that unless OFTA standardized the format for reporting by operators, the picture on individual operator performance could be inadequate or distorted. The latter would be a particular concern for those operators who are more transparent and frank about their problems than others, as it could disadvantage them compared to the less scrupulous. Some standardisation in regard to reporting does exist.
Review of BMIS
In 2005,OFTA conducted a review of the BMIS, noting that the nature of billing complaints had changed and that the major causes leading to billing dispute complaints were now largely
- financial penalties due to premature service termination;
- different understanding of contractual terms/promotional materials between service providers and consumers; and
- consumers not being aware of various surcharges imposed by service operators.
Moreover, telecommunications hardware and services had evolved since the inception of the original BMIS, to the point where metering standards as set out in the manual were not entirely appropriate.
The changes that were taking place in the marketplace were as follows.
Mobile voice
Mobile voice call services are now offered as service plans with a certain amount of bundled conversation minutes covered under a flat charge, and the usage charge only applies after consumption of all these minutes. Consumers have a variety of plan choices and with a trend towards much more conversation minutes at the same price level, mobile customers were therefore less likely to be exposed to problems of metering and billing inaccuracies.
Mobile data service
The increase in mobile data services had resulted in the emergence of other charging schemes. For example, services are typically metered or billed according to the number of events or the volume of data traffic. Event based charging is commonly applied to information downloading, for example, ring tones, wall papers, pictures etc. and messaging such as mobile betting or banking. Consumers are generally aware of the cost implications in advance for event services. In regard to volume-based charging, which is only a small portion of the market, this is deployed to wireless data services (e.g. Internet access), which are charged per kilobyte or Megabyte.
Because of its transparent and simple pricing structure, event-based charging was considered to result in few metering and billing disputes. In addition, advanced handsets now have the capability of monitoring usage and providing relevant data to users.
IP Telephony
The emergence of IP telephony was predicted to affect existing IDD pricing models.The lack of a geographic boundary in the operation of the Internet implies that flat-rate charges can be offered for many modes of IP telephony services for calls to any other countries. There was potential for IP telephony to gradually replace the conventional telephone service and an increasing portion of over seas calls will bypass conventional time-base IDD services.
Mandatory BMIS not now required
As a consequence of the changes that were taking place, and after considering industry submissions and assessing the possible consequences of lifting the mandatory participation requirement, OFTA decided to dispense with mandatory compliance for some operators, and extended the option of voluntary participation in BMIS to all operators.
Nevertheless, it should be noted that operators not participating in BMIS are still bound by their licence conditions to ensure accurate and reliable metering for billing purposes. Removing the mandatory requirement for BMIS participation would not mean that there is no expost enforcement undertaken by OFTA in order to monitor problems in metering and billing inaccuracies.
Future proposal
To encourage wider industry support for full voluntary participation, OFTA also examined whether there was scope for relaxing the existing BMIS requirements.
With regard to Internet services, OFTA had previously issued a Quality of Service (QoS) scheme for residential broadband Internet access service providers. Under the QoS scheme, a participating Internet access provider is required to submit its statistics of service key performance indicators prescribed by OFTA and have the submitted statistics certified by an external audit or or by a senior management member of the service provider.
OFTA considered that the same flexibility could be introduced in BMIS by allowing the participating operators to submit declarations signed by the chief executive officers, directors, or company secretaries certifying that the status of compliance with BMIS requirements is true and fair. In addition, the interval for submission of the compliance declaration was extended from 3 months to 6 months.
OFTA stated it would conduct random checks on the relevant telecommunications services. Regulatory measures such as financial penalty, and mandatory imposition of the BMIS on the licensee under concern, would also be taken if serious inaccuracy problems were detected.
Conclusion
Successful implementation of a full voluntary integrity scheme largely rests with market forces, as consumers are assumed to favour those operators that demonstrate a high standard of billing and metering accuracy. However, in order that market forces function properly, consumers must be provided with timely and clear information so that they can make informed choices as to whether operators are scrupulous in their standard.
In this regard OFTA noted that it would step up its publicity efforts to promote voluntary BMIS, as well as public awareness in respect of the metering and billing accuracy of telecommunications services.The Consumer Council will also do its part in this regard.
In this regard OFTA noted that it would step up its publicity efforts to promote voluntary BMIS, as well as public awareness in respect of the metering and billing accuracy of telecommunications services. The Consumer Council will also do its part in this regard.