Speeches and Presentations




LCQ9: Provision of mobile and fixed broadband services

Following is a question by the Hon Leung Yiu-chung and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (March 21):

Question:

The Guidelines for the Implementation of Fair Usage Policy for the Provision of Mobile and Fixed Broadband Services (the Guidelines) issued by the Office of the Telecommunications Authority (OFTA), which also covers mobile data services for mobile phones, came into effect on February 13 this year. A telecommunications service provider announced earlier the cancellation of its unlimited data usage service plan but later revived the relevant plan, and a number of customers complained against the service provider for having allegedly misled them, causing them to renew their contracts well before the expiry date. In this connection, will the Government inform this Council:

(a) whether it knows the respective numbers of enquiries and complaints the Consumer Council (CC) has so far received on the aforesaid trade practice which was alleged to have misled consumers; whether CC will assist consumers in requesting the service provider to refund and rescind the contracts; if it will, of the situation; if not, the reasons for that; and

(b) if OFTA has any measure in place to monitor whether service providers have complied with the guiding principles stipulated in the Guidelines for the implementation of fair usage policy and whether they have enhanced the transparency of the service terms, so as not to mislead consumers; if it has, of the details; if not, the reasons for that?

Reply:

President,

In November 2011, OFTA promulgated the mandatory Guidelines governing service providers, in the provision of mobile or fixed broadband services, should set out clearly that whether the relevant service plan is subject to the service provider's "fair usage policy" (FUP), and such information must be presented in a clear and non-misleading manner. For data service plans with the name simply promoted as "unlimited" without any qualifications, service providers shall not apply any forms of FUP to customers. The Guidelines aim to enhance the transparency of service providers in the provision of services, prevent consumers from being misled, and help consumers make informed choices.

Providing a set of common standards of policy implementation and information disclosure, the Guidelines ensure that service providers will apply FUP in a uniform manner so as to protect the interests of broadband service subscribers. The Guidelines require service providers to specify in their websites, customer service agreements and related advertising and sales materials, and advise their customers before any contracts are concluded, whether their service plans are subject to FUP and, if so, the mechanism that triggers FUP and the forms of restrictions to be imposed. When promoting service plans, if any form of restriction or FUP is applicable but with the word "unlimited" in their names, service providers are required to set out clearly and prominently in the advertising and sales materials the qualifications.

My reply to the question is as follows:

(a) The CC received a total of 58 complaints against a service provider which announced earlier the cancellation of its unlimited data service plan but later revived it. Upon repeated negotiations initiated by the CC, the service provider has made new arrangements. In a notice issued on February 16, 2012, the service provider announced that consumers who entered into unlimited data service contracts between February 2 and 12, 2012 but wanted to change their decisions would be allowed to rescind their new contracts. Those consumers who chose to rescind their contracts could revert to their original contracts. For customers who bought handsets under the new contracts, they could bring their handsets, undamaged, with the associated accessories and related documents in person to any of the service provider's retail stores or customer centres between February 17 and 29, 2012 to complete the necessary procedures.

The CC has individually informed the complainants of the above arrangements.

(b) Since the implementation of the Guidelines on February 13, 2012, OFTA has been closely monitoring the compliance of service plans offered by service providers with the requirements of the Guidelines. If it is found that the provisions of the advertising and sales materials of a service provider are not clear enough and need to be improved, OFTA will immediately request the service provider concerned to make necessary amendments. When a customer complaint is received, OFTA will conduct investigations into the case and take appropriate regulatory actions if any non-compliance with the Guidelines is found. In addition, to ensure that service providers have sufficient network capacity to support their "unlimited" service plans with qualifications and provide satisfactory services, OFTA will request service providers to provide information about their network capacity for assessment.

The Guidelines are issued under the Special Conditions of relevant licences. Failure to comply with the Guidelines means non-compliance with licence conditions. Under section 36C of the Telecommunications Ordinance (Cap 106), the Telecommunications Authority may impose a financial penalty on licensees who fail to comply with licence conditions. The financial penalty will be up to HK$200,000 for the first occasion, HK$500,000 for the second occasion, and HK$1,000,000 for any subsequent occasions. Furthermore, under section 7M of the Telecommunications Ordinance, OFTA may conduct investigations into complaints of misleading or deceptive sales conduct involving the implementation of FUP. If there is evidence that a breach of the Ordinance or licence conditions may have been committed, OFTA will carry out investigations and impose penalties on the service provider concerned if the case is substantiated.

Wednesday, March 21, 2012

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