Guest Post: Data vampires

Guest post from John Allen of Rural Connect (originally posted 6 June). 

Broadband retail service providers have a tendency to waggle their finger at the consumer when things go awry.  But a review of the telco industry’s proposed Product Disclosure Code does not go far enough to banish this attitude.

The classic example of this blaming attitude occurred back in 2009/10 around Telecom’s ‘Big Time’ and ‘Go Large’ broadband plans.

Released in July 2009, the Big Time plan offered unlimited speed and, more importantly, uncapped data.

At the time, this was the only plan offering unlimited data, so thousands of customers flocked to sign up to it. Which of course is why it was offered.

The plan was pulled less than 12 months later because of an “extreme minority” that downloaded huge amounts of data.  Telecom managed data traffic by throttling speeds, but some users found a way around this, making the plan “increasingly hard to manage and keep in market.”

Telecom placed the blame for the plan’s demise on its customers.  It said that “as the only ISP offering unlimited data, it ended up with all the vampires”.  Meaning tech savvy, high volume users switched to Telecom to take advantage of the uncapped data.

Telecom would have known that an uncapped data plan would result in some users consuming as much data as they could possibly suck down.  The infamous ‘Go Large’ plan from 2006 would have taught them that.

Go Large promised, “unlimited data usage and all the internet you can handle” and “maximum speed internet”.  It did not deliver this and in 2009, the Commerce Commission brought a prosecution that resulted in a $500,000 fine under the Fair Trading Act.

The practice of discussing maximum speeds possible for a broadband technology still occurs but is now not so prevalent.  Witness news reports touting Vodafone’s new 4G mobile broadband service as reaching speeds of up to 100Mbps.

That speed is hypothetical and simply will not be realised in everyday use.

The Telecom example now ensures that hypothetical maximum speeds are not mentioned in contracts or advertsing.

Which is in part what the proposed Product Disclosure Code is about – providing telecommunications Retail Service Providers with minimum standards for the disclosure of information about Broadband Plans.

There are six principles to the code.

First is about making product information clear, readable and easy to find and understand.

Second is that an appropriate level of detailed information is available to consumers at the right point in time.

Third is to use clear, standardised terms and language to allow for easy comparisons.

Number four is that plan information be kept up to date.

Next is providing consumers with accurate and reasonable assessments of how Broadband Plans are priced, will perform, and the technology used.

Finally is transparency around Broadband Plan features and price, including any restrictions.

The first four principles are all fine and proper and will enable Consumers to make easier comparisons between different offers.

The last two is where the issues become grey.

For example, the code does not require telcos to be consistent in what news articles say compared to what their advertising and contracts detail.

The main issue is that RSPs should give the bottom line of their service’s performance.  Not the top line, or even an average line.  For example, the bottom line on Vodafone’s RBI service is that in times of high usage, speeds may drop to the design limit of 45kbps.

That’s around dial-up speed and had Telecom’s Go Large plan detailed that, the vampires would have been fewer and also blameless.

 

 

 

3 replies
  1. maphla
    maphla says:

    Wouldn’t a bottom line just produce meaningless information? If there’s one hour of downtime, a plan will show as slow even if it’s normally providing a good connection?

    The speed people are getting during 8-11pm, and what I can get outside those times, will tell me pretty much all I need to know to pick an ISP.

    Of course, we could always ask for them to disclose the average wait time on their helpdesk!

  2. Simon
    Simon says:

    John, I think you’re being a bit harsh. The code looks to be quite a leap forward. A few points to clarify:
    1. Under the code, average speeds for each plan must be disclosed to consumers (at the point of sale and in advertising). So, consumers would be able to see that Go Large was delivering a rubbish service compared to other plans.
    2. Average speeds during busy-time must also be dislcosed, again for every single plan. So consumers can see that although Go Large might be great at 3am, it is next to useless from 8-10pm.
    3. Detailed information must also be available regarding fair usage and traffic managment policies for each plan. The geeks among us will also benefit from detailed metrics such as latency etc.

    So I have the opposite view – if the proposed Code was in place, it would have pre-warned consumers about the pitfalls of Go Large before they even signed up!

    • Paul Brislen
      Paul Brislen says:

      One of the key issues with the disclosure regime is going to be how much information is too much information. It’s important customers have the information they need in order to make an informed buying decision.

      The problem is that not all customers are created equal – some will want to know CIR, burst speed, latency, international capacity and all the rest, others won’t know what a CIR is and nor should they.

      The way round that, in my mind, is to have an ongoing measurement regime that will provide good quality information on a regular basis about the state of the connection. That way it won’t matter if you know about your connection or not, you’ll be able to compare and contrast successfully.

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