“International Consultants” Strike Again

It was my birthday a few days ago, and every birthday I tend to wonder what the heck I am doing with my life. Another year goes by, and somehow I find myself engaged in trench warfare with the most absurd people in the world. And losing. Usually I find myself losing the battle very slowly. But this year the common sense gang suffered its biggest defeat ever, and paranoid as I am, I missed the whole thing.

So Hong Kong woke up to reality and ditched their metering and billing scheme as a waste of time. Australia rewrote theirs, and proved that industry does a much better job of writing technical regulations than government appointees. Combined populations of HK + Aus = 27m. Two small victories for the forces of common sense. After those two victories, I must have got complacent. Luckily, Nitin Patel tipped me off about what was happening in the sub-continent from his safe haven at C&W – thanks to him for keeping an eye on the enemy. India has fallen; leaving a population of 1.08bn victim to the most ill-conceived piece of telecommunications regulation ever.

I should have seen it coming. There was an Indian guy in the UK last year looking for advice on how to regulate bill accuracy. I told him what I thought. He obviously did not like my advice, because the Indian regulator TRAI has employed some “international consultants” and come up with a new metering and billing code. However much the Indian taxpayer contributed towards these international consultants they were robbed – the new Indian code is a word-for-word take of the UK Direction. They should have just downloaded it for free from Ofcom and changed the name on the front. All round, this is a crushing defeat for the forces of common sense.

The Indian code is funny because it has even copied the words that nobody knows the meaning of. For example, they copied the product materiality threshold that never gets applied in the UK – because the Approval Bodies established it was not their responsibility to check it. They copied it right down to applying materiality to 5% of the “target” market. Unfortunately, nobody ever volunteers to have a target market smaller than the whole market (why would they? don’t they want to sell to everyone?). Luckily, there is some audit guidance to sort out that rule. What does it say about how to audit this? Ah yes, the test to be performed to determine if all the material products were covered is “observations, if any”. Then that’s all clear, then.

But, it gets better. To be fair, they did not copy every word. Because, per the new Indian code, when you implement a Canadian switch in India it presumably cannot keep time the same way as it does in the UK. A switch accurate to measure duration within 0.5s in the UK is only accurate to 1s in India. Its clock is less accurate in India. Obviously. Must be something to do with the electricity supply. Or the temperature. Something like that. Not that something like ripping off 0.5s is a big consumer protection issue. Oh no. I mean how much can 0.5s*1,000,000,000 people be worth?

So our “international consultants” persuaded the Indian Regulator, TRAI, that some meaningless words had to be copied word for word, but trivial things like the expectations for design and operating specs of technology sold and implemented world-wide should be tailored to the local market. All those telcos outsourcing to India better be careful – seems like the Indian watches are going to run slow compared to UK standards.

It is no wonder the Indian regulator did not make a fuss about the odd half second here and there. They made it clear why they introduced the regulation. Apparently, people complain about bills. Could this be a worldwide phenomenon we ask? Could it be that there are people all over the world who when asked to pay for something do not like paying so complain instead? The solution seems so obvious: audit the telco, and then you will see a demonstrable reduction in billing complaints. Except for one thing: the demonstrable reduction in billing complaints. Because they are not going down in the UK after many years of regulation. That is a bit of an inconvenient truth if you are a regulator wanting to act tough, so Ofcom generally avoids drawing attention to it. Is it just me, or is there a pattern forming here?

Of course, if you are worried about complaints, what do you focus on? Yes, the need to regulate to prevent undercharging. At least that is what TRAI has done by copying that bit of the UK rules too. Doubtless they bought the argument that there is a demonstrable, ahem, I mean totally unproven connection that customers lose “confidence” in their bill if they get undercharged. As opposed to just not noticing. After all, the supposed reason why telco bill accuracy needs to be regulated to standards 100 times more stringent than any other sector is because phone bills are complicated and customers cannot check them. Until you walk through the looking glass and find that an argument that customers are unable to check their bills supposedly in no way contradicts arguments that customers are checking their bills and complaining and losing confidence all the time. No doublethink there, it must just be me who struggles to believe both can be true at the same time. The funny thing is that one regulator now does agree with me and sees a contradiction – the UK regulator. After spawning the worst ever telco regulation, even the UK is starting to own up to its mistakes. Which is why Ofcom has said it is going to scrap the rules to audit undercharging. Perhaps those “international consultants” forgot to mention this to TRAI? So TRAI not only copied the UK, they even copied the rules that are now considered to be excessive regulation in the UK.

There is an unholy alliance between regulators and niche audit firms. One gets to boast of being tough on telcos. The other gets to play at being tough, independent and a friend to telcos and customers all at the same time, whilst earning a splendid constant revenue stream, in a controlled market with hardly any competition and no real supervision over the quality of their work. Better still, they even get to lever their regulatory stranglehold into markets that need no regulator intervention – preventing revenue loss – and get to play at being international consultants! Of course I am paranoid. Everyone knows that. But take a quick look at the half-a-dozen firms given a concession by TRAI to do the metering and billing audits in India. 5 companies I have not heared of, and 1 that I have. TUV, parent to BABT, can look forward to increasing metering and billing audit revenue flows from the Indian subcontinent to compensate its gradual decline in the UK market. And where will that money come from? From the pockets of Indian customers of course. Let us keep our fingers crossed and hope that the Indian customer keeps doing the one thing that may actually protect them – complain, complain and complain again.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.