Little Action from UK Regulator Bill Shock Review

This month Ofcom, the UK’s communications regulator, published an action plan to tackle bill shock – the modern phenomenon of customers receiving phone bills much higher than they expected. Although Ofcom’s news release mentions taking action, the news is that there will not, in fact, be any new action taken.

After investigating the causes of bill shock, Ofcom concluded what we knew all along. Bill shock is mostly caused by mobile roaming, especially when using data services. There are some, but fewer instances of bill shock relating to stolen phones and customers exceeding the minutes in their allowances. As mobile roaming stands out as most needing a measured response, Ofcom has been left in the wake of the EU. The EU Roaming Regulation has already tackled the issue of roaming charges within Europe, and the EU is considering a plan to extend the regulation’s safeguards to protect European customers whilst roaming outside of the EU. In short, the EU regulation demands there are warnings as the bill climbs, and an automatic cut-off if the customer’s bill reaches 50 Euros. If applied to all roaming, this would conclusively tackle the problem of roaming bill shock for subscribers from EU countries. Hence Ofcom’s current action plan is mostly to wait to see if the EU implements its proposed action plan. If the EU does not do so, there is a vaguely stated possibility that Ofcom could go solo and bring forward similar regulation to protect UK phone users. However, the likelier outcome is that they would just maintain their existing approach of cajoling CSPs to voluntarily introduce and improve alarms and caps.

The EU will consider the proposal to extend its regulation in April 2012. Whilst politics drives again, the political issues may be more acute than usual. On the one hand, the EU wants to show it delivers benefits to its citizens – even whilst the economies are grinding them down. On the other hand, EU efforts to ‘go global’ with the scope of carbon taxing international airlines have more than a little resistance. Burdening operators for the responsibility for worldwide roaming charges might be treated as regulatory overreach at a time when less government interference is thought to be important. Either way, the EU’s actions are likely to establish an important precedent for how bill shock is tackled globally.

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.