MDA Finalises Proposals to Enhance Consumer Protection in Pay-TV Sector

16 March 2016 - The Media Development Authority (MDA) has finalised its recommendations to enhance pay-TV consumer protection measures under the Media Market Conduct

Background

• The Media Development Authority (MDA) has finalised its recommendations to enhance pay-TV consumer protection measures under the Media Market Conduct Code.

• These measures aim to address three key consumer concerns namely, unilateral contract changes, forced upgrades of non pay-TV services and the lack of awareness of the terms and conditions of contracts.

• MDA's recommendations were finalised following careful consideration of the feedback received from the public consultation ^[1] held from September to November 2014.

• MDA received a total of 39 written responses ^[2] from pay-TV operators, content providers, consumer and industry associations, and members of the public. To facilitate participation, seven focus group sessions were also conducted with members of the public. In addition, MDA engaged industry bodies such as The Consumers Association of Singapore directly to seek their feedback on the recommendations.

Key changes to the Media Market Conduct Code

MDA carefully considered the feedback received from the industry and public, and refined some of its initial proposals to better balance consumer and industry interests. The key recommendations and the changes are:

1. Unilateral contract variations: MDA will require pay-TV operators to allow consumers to exit fixed term contracts without paying Early Termination Charges (ETCs) if unilateral changes by the operators are detrimental to subscribers due to a/an:

   • Increase in subscription fee;

   • Removal of material channel/s;

   • Removal of material sports content within a channel ^[3] ; and/or

   • Removal of at least 20 percent ^[4] of total number of channels in entire pay-TV service since the point of subscription

   MDA had initially proposed to allow consumers to exit without ETCs when any channel or material content is removed. This proposal was refined as MDA recognises the need to provide the industry with some flexibility to innovate in their content offerings, while safeguarding consumers against detriment arising from unilateral contract changes.

   In view of the narrowed scope, MDA introduced a new requirement for pay-TV operators to provide options of 12-month or shorter contract term for all packages or bundles ^[5]. This will give consumers the option of going for shorter contracts if they are uncomfortable with entering into a long term commitment.

   MDA had also initially proposed to allow pay-TV operators to charge ETCs if they take mitigating actions such as reducing subscription fees when channels or content is removed.  MDA will not proceed with this recommendation following feedback from both the consumers and industry players that they do not find such mitigating factors effective or practical to implement.

    

   MDA's other recommendations in the area of unilateral contract variations remain unchanged. These are:

   • Consumers are allowed to exit without ETCs no later than 30 days from the date of change

   • Operators are allowed to charge ETCs for equipment not essential to the provision of the service, such as for laptops and tablets, subject to certain conditions such as the determination of the retail price of such equipment being not excessive.

2. Forced upgrade of non pay-TV services:  MDA will proceed with its initial recommendation to disallow operators from forcing subscribers to upgrade their non pay-TV services (such as broadband or phone service contracts) to make changes to their pay-TV services. 

   However, operators are allowed to offer such upgrades as options for their consumers' consideration.

3. Lack of awareness of important terms and conditions of service:  MDA will also retain its initial proposal for ensuring consumers are better informed on the terms and conditions of their pay-TV contracts.

   MDA will additionally require pay-TV operators to provide consumers with a critical information summary (CIS) highlighting the important terms and conditions in a clear and accurate manner.

   Pay-TV operators are also required to provide consumers with a written copy of the contract and CIS within 14 days of contracting. They would also need to retain consumers' confirmation on having understood these contract terms.

   To facilitate the enforcement and investigations, MDA will require pay-TV operators to retain records of their marketing materials and details of agreement for two years and to supply such materials upon request. The retention period was reduced from three to two years in view that the maximum contract term allowed for pay TV services is only two years.

   MDA will retain its initial recommendation to require operators to obtain consumers' consent to continue with the trial or complimentary service, before they can start charging.

   These proposals are expected to take effect in April 2016.  

   Click here for details of the changes to the MMCC and feedback received.

^[1]The news release on the launch of this public consultation on 24 September 2014 can be found here.

^[2]The following organisations had submitted written responses to MDA: StarHub, SingNet, M1, Discovery, FOX International Channels, Viacom International Media Networks, Consumer Association of Singapore, and Cable Satellite Broadcasting Association of Asia.  

^[3]Pay-TV operators will be excluded from this provision if they state upfront the availability period of material sports content to consumers.  

^[4]If a consumer is subscribed to basic pack (10 channels), with add-on pack A (4 channels) and add-on pack B (6 channels), the 20 percent is calculated based on the total number of channels (ie: 20) in the entire pay-TV service. If the pay-TV operator added in 3 new channels since the consumer's subscription, and removed 5 channels subsequently, this would be considered a nett removal of 2 channels.  

^[5]Applies to packages or bundles with contract terms of more than 12 months.

About Media Development Authority of Singapore (MDA)

The Media Development Authority of Singapore (www.mda.gov.sg) promotes the growth of globally competitive film, television, radio, publishing, games, animation and interactive digital media industries. It also regulates the media sector to safeguard the interests of consumers, and promotes a connected society. MDA is a statutory board under the Ministry of Communications and Information (www.mci.gov.sg).