Telecom Competition Code Revised for Greater Consumer Benefit

22 December 2010 - The Infocomm Development Authority (IDA) of Singapore has made revisions to the Telecom Competition Code1 after its second triennial review2 of the Code. The revised Code takes into account market developments since the last review between 2003 and 2005, IDA's experience with the implementation of the Code, as well as feedback from consumers and the industry.

Singapore, 22 December 2010 | For Immediate Release

The Revised Code Will Further Promote Competition

The Infocomm Development Authority (IDA) of Singapore has made revisions to the Telecom Competition Code¹ after its second triennial review² of the Code. The revised Code takes into account market developments since the last review between 2003 and 2005, IDA's experience with the implementation of the Code, as well as feedback from consumers and the industry. While the fundamentals of the Code remain sound, relevant and consistent with international best practices, the amendments to the Code³ will further enhance consumer protection and promote competition in telecom markets in Singapore.

Key changes to the Code which further safeguard consumers' interests include first, a clause that prohibits telecom licensees from "cross-terminating" a consumer's service agreement if the consumer breaches the terms and conditions of another service agreement from an affiliated operator or if the consumer is subscribed to a basic telephone service. This would mean that telecom operators cannot exert undue pressure on consumers to make payment of disputed charges through threatening to terminate services offered by an affiliated telecom operator, unless the services are offered under the same service agreement. Consumers' right to enjoy the use of a basic telephone service will also be protected unless there is a breach of the agreement for the basic telephone service in itself.

Second, licensees will no longer be allowed to automatically charge consumers after a free trial of their service has ended, unless they have obtained express agreement from the consumer. This change helps to address consumer feedback about the provision, and also the terms, of free trial services being buried in the fine print of the service contract, which resulted in these consumers ending up being subscribed to, and charged for services which they were unaware of.

IDA believes that these changes will help to ensure licensees treat consumers fairly.

Mr Leong Keng Thai, IDA's Deputy Chief Executive and Director-General (Telecoms & Post) said, "IDA reviews its codes and guidelines periodically to ensure that they would be effective and relevant with the times. We hope this Code, revised following its second review, will continue to protect consumers' interests, facilitate market entry and police anti-competitive behaviour."

Other changes to the Code aim to further promote competition. One amendment allows for IDA to apply a prohibition against abuse of dominant position to any licensees which are found to have significant market power even though they may not yet be classified by IDA as Dominant Licensees. This takes into consideration that licensees may acquire significant market power in certain telecom markets over time, and will allow IDA to investigate and take measures if such licensees' actions restrict competition. This change also brings the competition provisions of the Code closer to Singapore's general competition law framework as enshrined in the Competition Act.

While IDA continues to believe that effective and sustainable competition will be best achieved through facilities-based competition, IDA will also take proactive measures towards promoting services-based competition for the benefit of consumers, particularly in markets where the infrastructure deployment is difficult.

IDA will continue to monitor developments in the telecom sector as well as consumer feedback, and implement measures which are required to improve consumers' experience. Mr Leong explained, "Constructive feedback from industry and public has contributed significantly to the successful review of the Code. This helps to ensure the relevance of the Code in today's market, and the continued development of a competitive telecom environment."

The Code, together with an explanatory memorandum for the revisions, will be available at the 'Policies & Regulation' section of the IDA website at www.ida.gov.sg. The amended Code will come into effect on 21 January 2011. Please refer to the table below for a comparison of the existing and revised Telecom Competition Code.

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ISSUED BY CORPORATE & MARKETING COMMUNICATION DIVISION
INFOCOMM DEVELOPMENT AUTHORITY OF SINGAPORE

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Notes to Editor:

¹ The Code of Practice for Competition in the Provision of Telecommunication Services (Telecom Competition Code) came into effect on 29 September 2000. First introduced in September 2000, the Code provides a regulatory framework that strives to accelerate competition development and aims to foster fair, effective and sustainable competition. It defines the boundaries for competition conduct in a fully liberalised telecom environment. The Code is one of the most comprehensive competition frameworks among countries with liberalised telecom markets, and it was developed in close consultation with the industry, and with local and international telecom experts. It was also based on studies of best practices in other countries.

² Following three years of liberalised market development, IDA started its first triennial review of the Code in October 2003 to ensure relevance to current market environment. As part of an extensive review, IDA launched a public consultation exercise on proposed revisions to the Code from 7 October to 5 December 2003, and a second public consultation from 11 May to 22 June 2004. A revised Code was launched on 18 February 2005. On 12 November 2008, IDA initiated the second review of the Code, with two consultation exercises from 12 November to 30 December 2008 and 23 November 2009 to 18 January 2010.

³ Please refer to the attached table for details on some key revisions to the Code.

About Infocomm Development Authority of Singapore

The Infocomm Development Authority of Singapore (IDA) is committed to growing Singapore into a dynamic global infocomm hub. IDA uses an integrated approach to developing infocommunications in Singapore. This involves nurturing a competitive telecom market as well as a conducive business environment with programmes and schemes for both local and international companies. For more news and information, visit www.ida.gov.sg.

For media clarification, please contact:

Ms CHIA Wan Fen
Assistant Manager, Corporate and Marketing Communication
Tel: +65 6211 0555
Fax: +65 6211 2227
Email: chia_wan_fen@imda.gov.sg

Mr Sheo S RAI
Assistant Director, Corporate and Marketing Communication
Tel: +65 6211 1073
Fax: +65 6211 2227
Email: sheo_s_rai@imda.gov.sg

Comparison of Existing and Revised Telecom Competition Code (TCC)

TCC 2005	TCC 2010
Licensees offering multiple services through themselves and their affiliates would insert a clause in their service agreements with the subscribers that allows them to terminate a contract if the consumer had breached a different contract with the affiliate (e.g., a mobile provider might terminate the consumer's mobile service if that consumer had breached the terms of a broadband service offered by the mobile provider's affiliate).	The Code now prohibits licensees from terminating an End User Service Agreement (EUSA) if the consumer breaches the terms and conditions of another EUSA where: (a) the telecom service to be terminated/ suspended is a basic telephone service; or (b) the other EUSA that has been breached belongs to a different Licensee (including affiliates of the Licensee). In introducing this change, IDA seeks to strike a balance between protecting and ensuring fairness to consumers, while at the same time taking into consideration licensees' need to manage credit risks.
It was common for licensees to offer services on free trials for a few months, following which the End Users are automatically subscribed to, and charged for, the services.	Licensees will now be disallowed from automatically charging consumers after a free trial has ended, unless the licensee has: notified End User of the date on which the free trial period will end; and obtained express agreement from the consumer to subscribe to and be charged for the service after the end of the free trial. This requirement was introduced due to increasing number of complaints received by IDA from consumers. IDA's intent is not to stop the free trials, which could be beneficial to consumers, but to ensure that licensees keep consumers clearly informed upfront of the terms of any free trial services and when charging will begin, and to obtain the consumers' express agreement to subscribe to the service to minimise disputes.
Only those licensees classified by IDA to be dominant could be found in breach of the prohibition against the abuse of dominant position.	Prohibition against abuse of dominant position will be applied to any licensees who, through the course of an investigation, are found to have significant market power (including telecom equipment dealer licensees) even though they may not yet be classified by IDA as Dominant Licensees. Licensees already classified as dominant will be presumed by IDA to have significant market power. This change aligns IDA's rules with the general competition law principles.
Licensees requesting for unilateral termination of an Interconnect Agreement had to submit a written response to IDA and IDA would issue its decision within 45 days of the initial notification.	Where IDA requests additional information from licensees in relation to a licensee's request for unilateral termination of an Interconnect Agreement, IDA may extend its review period by up to 21 days (i.e. up to 21 days after the 45 days of the initial notification). Although, IDA acknowledges that this extension of time may expose the requesting licensee to further financial and operational risks, IDA holds the view that unilateral termination may affect services to consumers, and IDA may require more information to assess such requests before agreeing to the unilateral suspension. However, IDA will also exercise extension of the review period judiciously.
IDA's regulatory principle is that effective and sustainable competition is best achieved through facilities-based competition. However, where there were technological, market or other impediments that would hamper competing Licensees' ability to build facilities, IDA would seek to strike a balance between providing the economic incentives to build facilities and permitting services-based competition to take place for the benefit of consumers.	IDA continues to hold the view that effective and sustainable competition is best achieved through facilities-based competition. However, where there are impediments that hamper Licensees' ability to deploy facilities, IDA will seek to strike a balance between providing the economic incentives to build facilities and taking proactive measures to facilitate services-based competition for the benefit of consumers.