Product disclosure

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.

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.