Telecoms operators to face new regulations

Telecoms firms will face new regulations in the autumn designed to increase consumer protection and force operators to provide accurate bills to users.

Telecoms firms will face new regulations in the autumn designed to increase consumer protection and force operators to provide accurate bills to users.

Firms that breach the regulations could be brought to court or lose their authority to operate in Ireland, the Commission for Communications Regulation (ComReg) confirmed yesterday.

ComReg said the changes to the regulations governing telecoms firms were being introduced because of several cases of overcharging by some of the biggest mobile and fixed operators.

ComReg said it was proposing to make billing accuracy a condition of operators' authorisation to provide a service in the Republic.

Any operator found to have over-billed consumers could be forced to have its billing systems audited by an independent party. Firms could also be taken to court by ComReg and face a criminal conviction under the terms of the current regulatory regime.

"In the light of recent developments and the need to ensure the protection of the interests of consumers, it is timely to consider what amendments are necessary to the current authorisation process," said Mr John Doherty, chairman of ComReg. "Recent experience indicates that it is necessary to ensure that we have clear, robust and enforceable requirements in place."

Over the past two months Eircom, Vodafone and O2 have admitted that they overcharged Irish consumers during 2004.

In these cases ComReg intervened to protect consumers but found its authority was limited because of the introduction of a new EU regulatory framework.

The proposed changes to the "general authorisation framework" - a new licensing scheme which governs telecoms operators - would formalise its powers in the domain of overcharging.

ComReg is also seeking to strengthen its powers to prevent telecoms operators from over zealous marketing to consumers who move to rivals. Last September ComReg ruled that operators could not contact consumers for at least three months after they switch telecoms operator.

This action was taken because of the large numbers of customers that were leaving rival firms and returning to Eircom as a result of aggressive marketing.

Since the imposition of the no contact period in September 2003, the churn rate of customers moving between firms has fallen by 35 to 40 per cent.

However, there have been repeated breaches of the ruling by firms, including incumbent operator Eircom. So far, Comreg has not penalised any company for breaches of its ruling.

Even after the introduction of the regulations, gaps will remain in ComReg's enforcement powers as the maximum fine that can be levied on a firm for being found to have broken conditions of the regulations is just €3,000.

ComReg is also unlikely to use its ultimate sanction of withdrawing a firm's authority to operate in Ireland because of the potential impact on consumers.