Edificio con Refuerzo 2

An effective regulatory framework facilitates higher telecommunications penetration, improved quality and innovative services, lower prices for the ordinary consumer and economic growth (Blackman and Srivastava, 2011). Optimum regulation exists where the regulator, consumers and operators are adequately informed and the regulator acts in the public interest and protection of the consumers. In practice, however, consumers are often disadvantaged and unable to seize the benefits made possible by effective competition as a result of “information asymmetries, unfair trade practices, unfair standard contract terms, search and switching costs or imperfect decision-making processes” (Cseres, 2008: 78). In this regard, both the developed and developing countries face similar policy and regulatory issues. The difference lies in the circumstances some of which are unique to the developing countries (Melody, 1997), for example, inadequately resourced consumer groups, low level consumer education/awareness and a non-transparent socio-political environment. In spite of the varying circumstances, these issues, which have socio-economic dimensions, highlight the need for regulatory intervention.

4.3 Rationale for Consumer Representation: Complementary efforts towards the achievement of policy objectives

As the issue of the promotion of the interest of consumers is receiving increasing attention globally due to governments’ concern that market forces alone may not achieve policy goals particularly about the promotion of consumer interest and welfare, the need for a strong consumer voice is also being highlighted (DTI, 2004) as a means of achieving inclusiveness.

It can be argued that as a matter of ‘natural justice’ and in line with democratic principles, it is fitting that consumers should have input into decisions that affect their welfare. This is because

138 effective development and implementation of policies and strategies are “the outcome of bargaining within and in between mutually dependent organisations” (Hulsink, 1999: 22;

North, 1993). However, because of the diverse nature of consumers, direct involvement of individual consumers in the decision making process is not feasible. To achieve influential consumer participation necessarily involves consumer representation (Cannock, 2002).

Representation is an established mechanism for enlisting the participation of a discrete and diverse population and in telecommunication, the one avenue through which consumers may participate in the decision-making process and hold regulators and service providers accountable for exercising their mandate with fairness. It is only well resourced consumer representative bodies that will have the capacity to contribute in the decision making process and effectively pursue the interest of the consumer (Simmonds, 2003; ITU, 2006). This in turn presupposes an active and vibrant civil society to form the enabling social setting. For example, the prevailing social environment in Nigeria, which lacks these basic requirements as was highlighted in Chapter 3, portends grave implication for consumer representation. Consumer representation has as its main objective the provision of a wide range of views to decision makers from across the spectrum of consumers in support of the interest of consumers. On their own, consumers’ voices are weak due to their limited knowledge and resources and disparate nature. Consumer representation bodies collect and amplify the discrete and therefore naturally weak voice of the ordinary consumer, so that it is heard loud and clear in the decision making process to balance the strong voice of the services providers in the telecommunications market.

This guarantees that the regulators decisions will be “more robust and more likely to be accepted by all stakeholders” (CCAAC, 2005: ix; BIS, 2011).

The restructuring of the telecommunications market and the rapid deployment of innovative services and products have resulted in enormous challenges for both the operator and the consumer (EU, 2007) and is stretching the consumer’s limited capacity to deal with contemporary economic problems. There is abundant evidence in literature that consumers in general inclusive of the disadvantaged and vulnerable are not always able to make the right choices (BIS, 2011; Muzzini, 2005; Xavier, 2008). This situation, which grows in direct proportion to the complexities of telecommunications services on offer, reinforces the necessity of a consumer representative body. Even the industry, its more robust capacity notwithstanding,

139 still: “lobbies the regulators hard in pursuit of their interest. That is to be expected but it should be balanced by proper and full representation of consumers” to achieve balance of interest (DTI, 2000: para.7.5.3 cited in Harker, Mathieu & Price, 2006: 218).

Promoting consumers interest implies taking consumer issues into policy and regulatory decisions. However: “without independent well informed and properly resourced consumer input into complex regulatory policy and decision making, regulators will find it difficult to achieve this in the face of vigorous and well-resourced industry representations” (Consumer focus, 2011: 3). Moreover, designing a policy framework that will adequately provide for the interest of consumers requires that the real interest of consumers is properly articulated and understood. The consumer representation body, by virtue of being close to the consumer and able to feel the pulse of the consumer, is in a better position to understand the interest of the consumer and focus more on promoting it than the regulator who is separated from the consumer by official barriers and other duties. Therefore, although it is part of the mandate of the regulators to anticipate and protect the interest of the consumer, anticipating the interest of the consumer is a task that is best handled by a dedicated consumer body who understands the consumer and who can persuasively present the consumer’s views to balance the views of the services providers.

Many developed countries, for example USA, UK and Australia, have highly advanced regulatory frameworks and considerable experience in consumer affairs. In the UK for instance, its specialist consumer organisation, like the Advisory Committees on Telecommunications (ACT), established during the privatisation of the utility sectors, has well over 35 years’

experience in representing and promoting the consumer interest. In addition, in the EU there is in every member state at least one ministerial department responsible for consumer protection (Harker, Mathieu and Price, 2006). In these countries the governments and regulators “find it easier to notice and respond to the interest of highly organised interest groups rather than those which are diverse and disparate and this may well be the justification for government intervention in the form of statutory bodies charged with representing such consumer interest”

(Howell, 2000:298 cited in Harker, Mathieu and Price, 2006:219). This strategy is also noticeable in Africa. For instance, the Kenya Consumer Protection Bill, (2011), provides that:

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“An accredited consumer interest group may direct a general stated concern or complaint to the advisory committee in respect of any matter within the purpose of this Act” (KCC, 2011: 66(b)).

This confirms government and regulators’ preference dealing with organised consumer interest groups and that a separate consumer ‘voice’ was compatible with regulation and could engender useful cooperation (Harker, Mathieu and Price, 2006). It is also a confirmation of the consumer representative groups’ invaluable role in the promotion of consumers’ interest and welfare.

Consumer representative body play a complementary role to the regulatory body in assuaging the negative effect of unchecked market force on the realisation of policy objectives as it relates to the promotion and protection of consumer interest. Moreover, the inclusion of consumers requires a vibrant and knowledgeable consumer representative body to engage formally with the regulator and to advocate for consumers’ interests. The implication is that without a well-resourced consumer body the promotion and protection of consumer interest will be jeopardised and regulatory performance will fall far short of achieving the policy objectives. This, it would appear is a major factor in the Nigerian setting.