20 Jul 2010—Determination 2
Determination
Issue
The charging of voice call rates for dial up internet connection.
Jurisdiction
I confirm I have jurisdiction to determine this matter.
The Scheme Member submits there is no jurisdiction for me to consider the legality or definition of local calling as set out in the Ministry of Economic Development’s Service Definitions for Local Residential Telephone Service. I have considered that submission. I confirm jurisdiction because clause 33.6 of the Telecommunications Carrier’s Forum Customer Complaints Code provides that I should have regard to the following matters:
• The fairness in all the circumstances
• Any relevant contractual or other legal requirements
• The Code and its service standards
• Any other relevant Telecommunication Carrier’s Forum Code.
Background
The Customer entered into a contract with the Scheme Member in 1998 for the provision of home telephone services. He chose a line rental plan (“the plan”), which excluded free local calling.
In September 2008, the Scheme Member started charging the Customer for his local calls. It did not charge for the calls made between 1998 and 2008.
The Customer has an internet connection with an Internet Service Provider (“ISP”). The ISP provided the Customer with a number for his connection. The Scheme Member has charged calls to this number as local calls. The Customer made a complaint regarding this charge.
Positions of the parties
The Customer’s position:
The Customer submits the internet calls are not local calls and he should not be charged for these. His position is:
• His ISP provided him with the number for his dial up internet connection.
• From 18 September 2008, the Scheme Member started charging for dial up internet calls made using the number provided by ISP. The Scheme Member did not notify him that it was going to start charging for these.
• The number provided by ISP does not meet the criteria for a local call made in the Customer’s residential area.
• The call is not a toll call.
• The Scheme Member’s terms and Conditions do not mention that internet calls will be charged at a particular amount per call.
• He does not wish to relinquish the plan, as it is no longer offered by the Scheme Member and he would not be able to transfer back to it if not satisfied with the alternatives.
The Scheme Member’s position:
The Scheme Member’s response to the complaint is as follows:
• The Scheme Member did not start charging for the calls in September 2008 without notification. The Scheme Member discovered in September 2008 that it had failed to bill the Customer for his local calls. It started charging for all local calls from that date. These calls had been payable since 1998 but the Scheme Member had not been billing him for them.
• Charges for local calls are applicable under the Customer’s line rental plan.
• The Scheme Member acknowledges it did not notify the Customer when it had discovered the mistake. As a gesture of goodwill it offered a credit for two months local call charges. This was accepted by the Customer and the Scheme Member considers the issue relating to non notification was settled.
• Local calls are defined in the Scheme Member’s Contractual and Statutory Obligations, and include local calls for dial up internet access.
• The Customer cannot dispute the definition of local calls through the Scheme Member’s Dispute Resolution process.
• The Customer has the option of changing his line rental plan or changing to a broadband service for internet connection.
Relevant contractual terms
The Scheme Member’s Terms and Conditions
Clause 10 – Our normal charges to you
Our charges to you will normally include:
• A residential line rental
• A wiring maintenance charge for our optional standard wiring service.
Examples of other charges for commonly used services include charges for:
• Local calls if you have selected one of the available alternatives to our standard residential line rental.
The Scheme Member’s List of Charges
Clause 3.2.2 – the plan
This service is no longer available to new customers from July 2004.
This plan features a monthly residential line rental and local call charge. The service provided by the Scheme Member to customers is currently the same as other line rental services except that the charges are as set out below:
Monthly Line Rental
• Line Rental $XX.XX (plus GST)
Local Call Charge
• Local call charge of XX.XX cents (plus GST) for each local call lasting X hours or less. Local calls lasting longer than X hours are charged an additional XX.XX cents (plus GST) for each X hours.
Telecommunications Carrier’s Forum – Customer Complaints Code (“the Code”)
Clause 33.6 of the Code provides that the adjudicator will have regard to the following matters:
• The fairness in all the circumstances
• Any relevant contractual or other legal requirements
• The Code and its service standards
• Any other relevant Telecommunication Carrier’s Forum Code.
Clause 10 of the Code provides that the Scheme Member must advise customers if there is to be an increase in price for services provided under a specific plan.
Scheme Member’s Contractual and Statutory Obligations for Local Residential Telephone Service
Part 1 – Service Definitions
1. Local residential telephone service means:
1.1 local residential voice telephone service; and
1.2 local residential dial up data service.
Clause 13 of the Scheme Member’s Contractual and Statutory Obligations includes the Scheme Member’s ‘number initiative’, for dial-up Internet data service.
Draft Determination and Parties responses
The Customer was sent a draft determination and has provided a response. He has provided a detailed background which is set out below.
1. In 1999, the Scheme Member first advertised the plan with a lower monthly line rental and XX cents for each local call up to X hours in length, and XX cents for each X hours after that, or part thereof.
2. The Customer thinks he first signed up for the plan in March 1999.
3. The Telecommunications Act 1987 was the relevant Act in force at the time. The Act had no definition of dial-up Internet calling or local calling.
4. On 2 July 1999, the Customer signed up to an ISP for dial-up Internet.
5. On 1 November 1999, the Scheme Member introduced the new number range for dial-up Internet data service.
6. In May 2000, the Customer moved from his previous address to his current address. He continued his line rental plan with the Scheme Member.
7. Between 1999 and 18 November 2008, the ISP number for dial-up Internet data calls were not charged by the Scheme Member to the Customer.
8. While on the plan since 1999, no correspondence was received by the Customer from the Scheme Member notifying a change in respect to the local call charges.
9. The ISP number for dial-up Internet data service can only be accessed through a live Scheme Member telephone line connection at a property.
10. On 20 December 2001, the Telecommunications Act 2001 came into force. It replaced the Telecommunications Act 1987.
11. Between 1999 and 2004, the line rental plan was referred to in a publication. In 2004 the Scheme Member advertised the line rental plan for the last time, specifying that it was not suitable for dial-up Internet connections.
12. On 1 July 2004, the plan was no longer available to new residential customers of the Scheme Member, but existing connections were able to continue.
13. Under the standard terms and conditions for the Scheme Member’s residential customers, the Scheme Member has an obligation to give at least one month's notice before any changes take effect. The Scheme Member must notify the Customer one month in advance in respect to introducing new fees or changes to existing fees while he is on the plan.
14. Clause 10 of the current residential terms and conditions for the Scheme Member’s residential customers, “our normal charge to you,” only commenced on 25 September 2007.
The Customer also made the following responses to the draft determination.
The Customer does not agree with the Adjudicator’s Draft Decision finding there has been no breach of the provision of the Code. The facts are:
• When the Telecommunications Act 1987 came into force there was no clear definition for “local calling”. I refer to the “Local Calling Options” section above, “to make the call, just call the number listed in this Telephone Book’”. This lead the Customer to believe that only numbers listed in the White Pages incurred the local call charge on the plan.
• When the Customer subscribed to the plan, the ISP number range had not been implemented by the Scheme Member. The ISP number range came into effect from 1 November 1999. If the ISP number range was chargeable as a local call from that date, the Scheme Member had an obligation under the standard terms and conditions to notify the Customer, giving one month notice in advance in respect to introducing new fees or any changes to existing charges.
• However, the Scheme Member never advised the Customer that dial-up Internet calls with the ISP number would be charged as a local call from 1 November 1999.
• The facts given above show that, on the plan, internet dial up calls with the ISP number were not charged before 20 December 2001.
• When the Scheme Member’s Contractual and Statutory Obligations for Local Residential Telephone Service commenced on 20 December 2001, the Scheme Member never advised the Customer that dial-up Internet data service with the ISP number would be charged as a local call.
• The issue of Jurisdiction over the definition of local calls has been covered and I do not wish to challenge this finding.
• There was therefore, clearly a breach of Clause 10 of the Telecommunications Carrier’s Forum- Customer Complaints Code, because no notifications of any change to his plan charging regime were advised to the Customer.
I have carefully considered the submissions of both parties and the response filed by the Customer.
Final Determination
There are two broad grounds upon which the Customer’s complaint is brought. Firstly, there are issues with regard to the Scheme Member charging for the calls to the Internet Service Providers. Secondly, there is the issue that the Scheme Member did not give notice of the charges to be imposed. I will consider each separately.
The Charges
The Customer submits the calls to the ISP number do not meet the definition of a local call within the Customer’s residential area, which is a free calling zone. Therefore it is not a local call that can be charged for by the Scheme Member.
I have considered this submission and the contractual provisions between the Customer and the Scheme Member. The Customer contracted for a line rental service. This service incurs a cost for local calls. The Scheme Member’s Contractual and Statutory Obligations define local residential telephone service as including local residential dial up data service. It specifically includes ISP numbers such as the one provided to the Customer by his ISP.
The Customer further submits that there was no clear definition of local call in the Telecommunications Act 1987. I have perused both the Telecommunications Act 1987 and the Telecommunications Act 2001. Neither Act contains a definition for local calling. The definition is contained in the Scheme Member’s Contractual and Statutory Obligations for Local Residential Telephone Service. The Customer submits the Scheme Member’s Contractual and Statutory Obligations did not come into effect until 20 December 2001 and before that date the internet calls were non-chargeable. Therefore he submits the Scheme Member had an obligation to notify him of the changes. As a result, the Customer submits there has been a breach of Clause 10 of the Customer Complaints Code.
I have considered this further submission and find that there has been no breach of Clause 10 of the Customer Complaints Code. The Customer Complaints Code came into force on 30 November 2007; therefore any complaints about matters before that date are excluded from the scope of the Code pursuant to Clause 20.1.a).
I also find there has been no breach of the residential terms and conditions. These provide that the Scheme Member will charge for local calls if the Customer has chosen one of the available alternatives to the standard residential line rental; this applies to the Customer.
I find that the Scheme Member is entitled to charge the Customer for the cost of the local residential dial up service.
Notice of Charges
The Customer submits the Scheme Member did not give him advance warning there would be charges imposed for the local calls. The Customer entered into an agreement with the Scheme Member in 1998. The terms of that agreement included charges for local calls. The Scheme Member then made an error and neglected to charge for the local calls until September 2008. The Scheme Member submits it did not notify the Customer because it was a standard term in his agreement and he should have been aware of the charges. When the Customer made the billing complaint, the Scheme Member credited the charges from September 2008 to December 2008 as a gesture of goodwill.
I find there was no change to the terms and conditions of the agreement between the Customer and the Scheme Member. From the date the Customer entered into the agreement with the Scheme Member in 1998, he was liable for the cost of local calls. The fact that the Scheme Member made an error and failed to bill him for 10 years does not remove his liability for the cost of local calls. Therefore, the Scheme Member was under no duty to notify the Customer of a change to his billing.
I also find there has been no breach of the provisions of the Code. The Scheme Member is required to notify its customers if there has been an increase in the prices for services provided. There has been no increase in prices for the services received by the Customer. The Scheme Member has simply commenced billing for services that it has failed to bill for during the previous 10 years.
Remedies
I have found there is no breach of the code. Therefore no remedies are available to the Customer.
Outcome
For the reasons set out above, I find there has been no breach of the Code. Neither has there been any breach of the contractual terms between the parties.
The Customer’s complaint is unsuccessful.