The Internet Service Providers’ Association (Ispa) has warned the “apparent intention” of the National Consumer Commission to force Internet service providers to carry over prepaid data purchased by consumers for up to three years could drive up broadband prices.

“If section 63 of the Consumer Protection Act is deemed by the commission to be applicable to the payment in advance for data and other electronic services, we predict that it will have the effect of driving up prices considerably,” says Ispa co-chair Marc Furman.

Section 63 regulates when various types of prepaid certificates, cards, credits, vouchers or similar devices expire. The prepaid device expires only when its full value is redeemed, or after three years if the full value is still not redeemed. Until the full value of the prepaid device has been redeemed, the unredeemed portion remains the property of the purchaser.

Ispa reckons section 63 applies only to transactions in which some form of actual prepayment device (“prepaid certificate, card, credit, voucher or similar device”) is issued by the supplier. 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), it says.

“In fact, once a consumer buys the bandwidth, it is immediately available for consumption and no further ‘device’ is needed to gain access to it,” says Furman.

Ispa says that if section 63 of the act is applicable to the payment in advance of data and other electronic services, it would imply that it could be applied to all payments in advance. “For example, could a consumer who paid for parking in advance roll over the days she did not use the parking bay in one month into the following month?”

“Internet service providers offer a variety of data bundles and it is up to consumers to choose the one that mirrors what they will use. The price is obviously linked to the amount of bandwidth the customer commits to purchase in the course of the month,” says Furman.

“Applying Section 63 of the act in this way to bandwidth would actually have the unintended consequence of disadvantaging consumers rather than protecting them.” — Staff reporter, TechCentral