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The problem with ISPs' new product disclosure regime

Last year, under threat of regulation, the telco industry came together to put together a broadband product disclosure regime.

The idea was a good one. Let’s provide the same information across various ISPs so customers can better understand what they’re buying and what goes in to each plan.

The minister of communications, Amy Adams, likened it to the car industry’s window ticket, which details just how many kilometres the car has done, whether the odometer is accurate, that sort of thing.

Telcos had to consider how to boil down all the information they have about the services they offer and make it user-friendly, or at least readable. Apparently the goal was to make an offer summary card that would make sense to the minister’s mother. No, really.

Putting aside my misgivings about building an entire disclosure regime around the needs of (forgive me) the lowest common denominator customer type, the final product is acceptable.

If you want to know how much international bandwidth your ISP is buying, or how many customers are sharing your line, or what national backhaul arrangements your ISP has, you’re out of luck. All of that was deemed too “techy” for customers.

Instead, the product summary will tell you how much you’ll pay each month, what the upfront costs are, whether there’s an early termination clause and how much that will cost and whether or not the company belongs to the Telecommunications Dispute Resolution scheme.

This kind of basic information has always been available, but at least now you’ll get it on one page and in a format that should allow you to compare plans before you buy.

Given the lack of technical information, the one thing I did kick up a stink about during the working party process is that traffic management schemes must be explained in some detail. Customers who want to download a lot of stuff have in the past found themselves added to a pool of like-minded downloaders, and so have an “unlimited” plan that has major limitations on the one thing they want to do.

I don’t have a problem with traffic management plans, but when the telcos hide that information away it makes buying decisions doubly tricky, and I pushed in a big way to have the information disclosed in enough detail. After all, the idea behind the product disclosure regime is that customers are informed and make informed buying decisions.

Today, Telecom has announced an “unlimited” range of plans. They’re unlimited in terms of how much you can download and at $139/month for the fastest of the fibre plans (100Mbit/s down and 50Mbit/s up), they look like a good idea.

But in the product summary sheet, the section on traffic management is less than helpful.

“We may use traffic management policies to make sure that the available bandwidth on the network is shared fairly and efficiently between all users. Certain types of traffic may be de-prioritised so that general web-browsing, real time applications like Skype, online games and streaming video services perform better.”

Using words like “may” and “certain types of traffic” does nothing to help the customer. If you throttle P2P traffic, say so. If you apply the rules at certain times of day, say when they are.

I had a quick look at the other major ISPs with similar plans and their statements.

Vodafone’s traffic management statement is quite a bit better:

“P2P (Peer to Peer) is primarily used by a small number of higher-end broadband users. We are not anti-P2P however if our network is congested then P2P-type traffic will be the first to feel the pinch. We will always prioritise the more mainstream traffic types (such as web and email) over P2P as this will have the greatest benefit for the greatest number of customers.

If you are a customer who uses P2P a lot, then we ask that you try to keep your usage to our off-peak (10pm - 6am)  when there is the most capacity available.”

Slingshot does have an unlimited plan and its offer summary says:

“We may use traffic prioritisation policies for our plans at any time to improve the overall performance amongst our customers. Our Unlimited One plan throttles P2P downloads. If you require P2P downloading you should opt for our Unlimited Plus plan.”

Which helps guide your buying decision.

Orcon’s is cleanest, I think:

“Our policy is to provide our customers with the best possible internet experience. This means that we do not shape internet traffic when you (and everyone else) are streaming videos, sharing files (P2P), gaming or browsing the web at any time. We always make sure that we have tonnes of national and international bandwidth to cater to all users.”

although since you can't cut and paste from the PDF it's also the most annoying.

These kinds of things are important because without that kind of information, customers simply don’t know enough about the product they’re buying.

I’m encouraged by the growing number of unlimited data plans that are coming into the market. Telecom, Orcon and Slingshot all have them at a range of prices and as three of the top four telcos, that means most customers are within reach of not having to worry about over use charges ever again.

And I’d encourage Telecom to have a closer look at what it’s telling its customers. It’s nearly there, just needs a nudge in the right direction.

Paul Brislen is CEO of the Tuanz, the Telecommunications Users Association of New Zealand.

Comments and questions
4

I completely agree that full-disclosure is a good idea. In theory.

The challenge is making the call what's useful to 'most people' and how much needs to be disclosed at which communication touchpoints.

Reading over the article above, it looks a lot like the market has settled itself into a place where customers will win. ie: "We'll slow things down where you don't really notice, but keep things steaming ahead if you're chatting to Nana on Skype". Is it legislation or customer experience that's landed them all with similar solutions?

More importantly: the last thing this (or any) industry needs is more rules about how to talk to people.

As someone who does a fair bit of work trying to create comms that adhere with FMA guidelines the rules can often create the problems.

Like I say, a rule book is good. A code of practice is useful. And a market that makes common sense out of the above to clearly communicate with customers is a must. Any more than that is usually a self-defeating exercise in over-thinking that tells customers stuff they're really not interested in knowing.

Got to go, need to buy a dishwasher with a 6.2 rating, because my 6.7 must be wasting power.

Is this the same as "Big Pipe" which required users to do away with their landline? The $106 per month here is more for less than the current "unlimited" from Telecom which has a landline.

Haven't we seen Telecom do this before?

http://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2009/telecom-fined-500-000-for-misleading-over-go-large-plan

I think there is no substitute for education at the buyers end. I commend Paul for wading in even though he's on his way out to PR land.

I hope his replacement has the cajones to hold the telcos to account as they tend to use a lot of weasel speak