Analysis: Don’t let regulators be the champions of customer experience

From Australia to Washington, via London, regulators have recently hit the spotlight with warnings and new rules aimed at clarifying pricing and billing.

In Australia, in a long, drawn out dispute between the telecom industry and the regulator, the Australian Communications and Media Authority is imposing rules to reduce “bill hock” for customers. Down under, the ability of telcos to provide advice of charge is causing serious concern for customers, who receive bills for overage and over use of texts that they did not know about. The proposal is that telcos should advise customers when they hit 50% of their allowable texts, and then 80% and 95%.

The industry has responded that their post-paid systems are not capable of providing that level of real time or near real time information to customers, requiring a major overhaul of their IT systems. The suggestion that customers who need to be advised should be moved to prepaid plans was pushed aside by the authority, which initially proposed that customers that went over their limits and were not warned should not have to pay the full amount of their overages.

As the battle continues in Australia, the focus in London is again on providing clarity for customers.

In a country known for its inertia when it comes to changing service providers, the practice of automatic renewable contracts is the target for U.K. regulator Ofcom. This practice, employed by BT and several other U.K. telcos means that customers have to opt out of contracts, or face auto-renewal. Ofcom is aiming to reverse the automatic contract renewal by the year-end, making it the rule that telcos must inform customers that they are coming to the end of their contract and offering them a renewed one.

In the U.S., meanwhile, the FCC is keeping a keen eye on tiered mobile plans as operators scrap fixed rate, ‘all you can eat’ plans. Now that customers have to choose a plan that suits their data consumption needs, there is concern that this will lead to complex and sometimes misleading offers.

Although many North American telcos have the technology to warn customers that they are nearing their usage limits, the FCC doesn’t appear to be pushing for that at this stage. However, with one in six U.S. mobile users complaining of bill shock, though, it may force to FCC to take action if the situation gets worse.

There is already concern at the FCC about the fog that surrounds broadband, with customers not aware of the speed of their broadband service compared to advertised rates (and research showing that in some cases it is only 50% of what it should be).

Regulators around the world are beginning to tighten the rules about clarity and billing practices and in effect are becoming the customers’ champion. This may well provide the incentive for telcos to stay ahead and get to grips with the customer experience before they are forced to do so.