The Telecommunications Consumer Protections (TCP) Code is a bulwark built by industry, consumer representatives and regulators to ensure appropriate consumer safeguards. Brought in two years ago some of its provisions only took effect in September 2014. It was designed to address ballooning consumer dissatisfaction with the telco industry. So the proposed removal of some of its most important components so soon after its introduction comes as a surprise.

Despite some major reservations, ACCAN feels many of the changes are appropriate and will streamline obligations and aid overall compliance. In one instance we even believe the reform process could go further to remove an unused area of the Code.

There are two important measures of the TCP Code's success - improved customer satisfaction levels and reduced TIO complaints. Communications Alliance's customer satisfaction survey shows the percentage of dissatisfied and very dissatisfied customers fell from 19 per cent in mid-2013 (when the survey began) to 14 per cent in September 2014. Meanwhile TIO complaints have dropped by 28 per cent since 2012 to the lowest point in six years.

Given these improvements, we think there needs to be some justification for change. An opportunist approach to deregulation, unguided by evidence will lead us back to the dark days of consumer mistrust. And we don't need to look back far to see the cost of getting the balance wrong.

A major component of the proposed repeal is the removal of clauses aimed at poor advertising and sales practices. The primary justification for controlling the use of terms such as 'cap', 'unlimited' and 'free' is to remove duplication with the Australian Consumer Law (ACL). Many of these Code obligations were created over and above the ACL to give guidance or address particular deficits in telco practice. The ACL and its previous incarnations existed prior to the Code and despite the ACL's existence this was still a time of record high complaints.

The ACMA's 'Reconnecting the Customer Final Report' (RTC) gave a clear indication that a key driver of complaints was the lack of quality information available to consumers in the pre-sale marketing and advertising and pre-contract phases of the customer lifecycle. The ACMA's number one proposal in the Report was to introduce clear and enforceable rules that applied to advertising practices. As the RTC Report identified complaints manifest when "consumers have incorrect (but not unreasonable) expectations about key features of their products". The Code has been instrumental in managing this disconnect between expectation and reality.

For industry, the Code provisions are also designed to be specific and relatively easy to comprehend. They outline obligations which would otherwise require an understanding of a number of pieces of legislation and a plethora of case law. This can be a costly exercise; disproportionately so for small and medium size suppliers. Removing either enforceability or the ACMA's role in guiding compliance will not just risk adverse outcomes for consumers, but is likely to dramatically increase overall compliance costs.

This approach isn't just appropriate from a consumer safeguard perspective; it actually encourages properly functioning markets because informed consumers make markets work. As markets and technology evolve they become infinitely more complex, perhaps none more so than in telecommunications. This information asymmetry leads to poor purchasing decisions which in turn damage the allocative efficiency of a market.

The great leap forward for the TCP Code in 2012 was its recognition of this potential for consumer confusion and the subsequent attempt to curb sales practices which sought to exploit consumers. The ACMA's careful graduated response approach using the current code places an emphasis on guiding and educating industry towards positive outcomes. Whilst at the time many argued for a stronger set of regulation with more powers for the ACMA. Without doubt the lighter touch co-regulatory industry code has been instrumental in better outcomes for consumers. With a demonstrable decrease in complaints it is an approach which is just beginning to create lasting change in the telco industry. However the nearly 139,000 complaints in the past year, the timing of proposed code changes is premature. Now is not the right time for wholesale change, as we are still busy consolidating the most important shift in telco industry practices in over a decade.

ACCAN's TCP Code submission can be downloaded here: https://accan.org.au/our-work/submissions/968-submission-on-the-tcp-code-and-operations-codes