Telkom's insistence on bundling its ADSL data service with a compulsory voice service may mean that the company is acting in a way that contravenes SA's new Consumer Protection Act (CPA).
This is according to Internet Service Providers' Association of SA (ISPA), which says section 13(1) of the CPA has clear prescriptions against bundling goods and services in a manner that forces consumers to enter into agreements or transactions they do not require as a condition of buying a certain product or service.
The new legislation sees such practices as a limitation on the consumer's right to choose suppliers for each service.
According to the Act, compulsory bundling of services is forbidden unless the supplier can prove that it offers economic benefits and convenience to the consumer that outweigh the drawbacks of limiting choice.
“Telkom's ADSL lines are not available in 'naked' DSL options, though one can buy a voice service without DSL. Forcing a client to take a voice product and pay a rental fee for a voice line when he or she simply wants a data line is a form of product bundling that is contrary to the CPA,” says ISPA GM Ant Brooks.
He also notes that Telkom would be hard-pressed to prove that the bundling of a voice service and ADSL line offers economic benefits or convenience to the subscriber, since many subscribers either want the option of using an alternative voice service provider or do not want a voice service at all, says Brooks.
“Many users regard the voice line rental fee as a 'Telkom tax'. In many cases, the voice service is not wanted yet consumers are forced to pay for it if they want an ADSL line,” says Brooks. “Telkom is constraining consumer choice with this practice.”
Structural flaws
World Wide Worx MD Arthur Goldstuck says it has long been one of the structural flaws in telecommunications in SA that ADSL has required a voice subscription to Telkom services.
“The CPA has finally given the consumer a tool with which to challenge this bundling. It's something ICASA should have addressed a long time ago but, as with so many other structural aspects of telecommunications, it is a battle that may be best fought by a consumer-oriented body,” he says.
Goldstuck also points out that, however, it is not the first, and will, by no means, be the last, such CPA-linked challenge to telecommunications industry practises that add unacceptable costs to consumers.
Kathleen Rice, director of technology, media and telecommunications at law firm Cliffe Dekker Hofmeyr, says thorough investigations have to be done through the National Consumer Commission (NCC), the regulator that enforces the CPA, to ascertain if Telkom is in breach of the legislation.
She says depending with the magnitude of the breach, offenders of the new Act are punished accordingly. “Orders of compliance will also be given by the NCC, and in this case, to force Telkom to comply,” says Rice.
Suppliers that breach section 13 of the CPA may face an administrative fine up to 10% of annual turnover or R1 million, according to Michaelsons law firm.
Brooks also advises consumers who believe Telkom's voice and data service bundling does not advantage them to file a complaint with the NCC.
Telkom would not comment on the matter at this time.
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