The Internet Service Providers’ Association (Ispa) has welcomed a recent ruling by the National Consumer Tribunal that cancelled a compliance notice served on MultiChoice by the National Consumer Commission, suggesting the decision could give pointers to ISPs to fight compliance notices that have been served on them.
“The ruling by the tribunal demonstrates that proper compliance with the National Consumer Act is being enforced,” says Ispa co-chair Jaap Scholten.
Ispa says the commission served a compliance notice on MultiChoice for various alleged infringements of the act. Section 100(2) of the act states that the commission must consult with the Independent Communications Authority of SA (Icasa) before serving a compliance notice on an entity regulated by telecommunications and broadcasting authority.
The tribunal found that the commission did not properly consult with Icasa before it issued the compliance notice and therefore ruled the compliance notices invalid, Ispa says.
It adds that the tribunal further ruled that the commission had not fulfilled the requirements of section 100(2) in that it did not consult with Icasa about the specific company alleged to be in noncompliance with the act and did not provide information about these alleged contraventions.
They also did not provide Icasa with the outcome of the investigation it had conducted about the alleged noncompliance.
“The act places considerable onus on the commission in this section, and I wonder whether most of the compliance notices already served actually met this standard,” Scholten says. “It’s particularly important because of the compliance notices issued to ISPs relating to the commission’s application of section 63 of the act.”
Ispa says the issue revolves around the commission’s apparent desire to apply section 63 to the payment in advance for data and other electronic services. The section refers specifically to transactions in which some form of actual prepayment device (“prepaid certificate, card, credit, voucher or similar device”) is issued by the supplier. Ispa says that payment in advance for bandwidth does not fall under section 63 because there is no prepayment device which “holds” the value to be exchanged for services in the future. Rather, it is a simple payment in advance for future access to services, which is specifically excluded by section 63(1).
“If applied to data and electronic services, section 63 would force providers to allow customers to roll over unused bandwidth until it is used up, or three years have passed. Ispa advises that this would materially change the business model of ISPs and cause prices to be driven upwards,” the Internet body says.
“Clearly, ADSL services that are uncapped would not be affected if Section 63 were to be applied to data services. What concerns [us] is the application of section 63 to contracts where the consumer buys the option to consume ‘up to’ a fixed amount of bandwidth per month,” says Scholten.
In this case, Scholten says, the business model for the ISP would have to change quite considerably, with the net effect of driving up prices.
“It will further become impossible for ISPs to manage their networks effectively. ISPs manage the capacity of their networks based on the anticipated amount of bandwidth usage in a particular month, sourcing capacity from upstream providers based on this forecast. If data starts to roll over every month, Internet service providers will have no idea how much bandwidth would roll-over at the end of the month and would have to purchase extra capacity for possible roll-overs,” he says.
“It would also be difficult for them to manage their networks to avoid congestion and deliver acceptable performance If Section 63 were to be applied to data services, it would not only drive up prices as ISPs have to provide for potential roll-over, it would also affect the effective management of networks,” says Scholten. “Ispa therefore urges the Commission to apply the law in the manner it was clearly intended and not to strain its interpretation in a manner that would ultimately be to the consumer’s disadvantage.” — (c) 2012 NewsCentral Media
