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Stiff new penalties for telcos that fail to meet customer service standards

IT Policy - Regulation

The Government has imposed penalties of up to almost $1m on telcos for failing to meet the standards of performance set by the retail customer service guarantee and the Universal Service Obligation (which will apply only to Telstra at present).

The new penalties apply to the Universal Service Obligation (USO) payphone performance benchmark and retail customer service guarantee performance (CSG) benchmark.

The CSG standard came into effect on 1 October 2011 and replaced an earlier standard. When it was announced last August, communications minister, senator Stephen Conroy, said:

"The CSG Standard is designed to protect consumers against poor customer service by setting timeframes to be met by service providers for the connection, fault repair, and keeping of appointments in relation to standard telephone services provided under the Customer Service Guarantee (CSG) Standard.

"This instrument makes larger CSPs meet the timeframes under the Customer Service Guarantee Standard 90 percent of the time for connecting new services, repairing existing ones and turning up to appointments.

'If the CSPs don't meet the timeframes in 90 percent of cases, then the Australian Communications and Media Authority (ACMA) can fine them using the infringement notice powers provided by the Parliament at the end of 2010."

He added: "The maximum penalty will be set following the soon to commence public consultation period and could be as high as approximately $2 million (18,000 penalty units)."

That consultation has now concluded and after taking into account submissions received, the Government has set the penalties for failing to meet the CSG standards and the USO payphone performance benchmarks at:

- $330,000 where a benchmark is missed by less than two percentage points

- $660,000 where a benchmark is missed by two percentage points or more but less than five percentage points, and

- $990,000 where a benchmark has been missed by five percentage points or more.

Conroy has also set infringement notice penalties, ranging between $22,000 to $99,000, for the breach of a number of other regulatory requirements relating to the CSG; location and removal of payphones; and marketing of premium-priced mobile services.

The Government is also examining the imposition of penalties on telcos that fail to comply with the Telecommunications Ombudsman scheme.

Conroy said: "In its submission the Australian Communications Consumer Action Network (ACCAN) suggested that a higher penalty could be considered where a telecommunications provider does not comply with the Telecommunication Industry Ombudsman (TIO) scheme in accordance with section 132 of the Telecommunications (Consumer Protection and Service Standards) Act 1999.

"A number of submissions to the TIO review also separately highlighted the importance of compliance with the TIO scheme, but stakeholders have not provided specific feedback on what penalty would be appropriate. Therefore the Government will shortly progress further consultation to inform setting an infringement notice penalty to encourage compliance and assist enforcement with the TIO scheme."

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