Edificio con Refuerzo 1

Redress mechanisms are usually based on a country’s licensing regime, which may provide for regulatory enforcement with sanctions and Alternate Dispute Resolution (ADR). ADR usually involves “recourse of the injured party against the responsible party in front of a tribunal” (CI, 2011:17). Hence, when the operator fails to resolve the complaint, consumer and consumer representation bodies may have recourse to the three accessible options: mediation, arbitration and litigation. Mediation provides consumers with a viable alternative way to resolve consumer complaints. It involves negotiation and reconciliation without applying rules and setting up procedures that impose costs on the consumer. Mediation is a useful low cost but non-binding way of resolving consumer complaints with an operator. Its major shortcoming is “even if the consumer wins its case, a satisfactory outcome may still depend on the goodwill of the operator”

(Stevens, 2009:17). Individual ordinary consumers are unlikely to proceed to litigation not only

156 because of the delay they may encounter but also more importantly because of the substantial cost (are usually high) usually associated with courts cases and the small value of the claims involved. According to Stevens (2009), arbitration is binding like litigation but involves a quicker procedure and it is regulator’s first choice of ADR. However, it presents daunting challenges for the consumer. Arbitration, apart from the cost implications, requires the consumers to present their evidence and state their cases – something that not all consumers may be able or willing to do.

In some countries, depending on their national policies, certain types of consumer complaints may activate other governmental consumer protection agencies to intervene in the telecoms consumer complaint handling process. For instance, if the dispute concerns a matter under competition or consumer protection legislation, the agency responsible for the enforcement of such legislation may become directly involved at an early stage in the dispute.

For example: “the Federal Privacy Commissioner of Canada held a number of hearings in 2002 on complaints he received about the misuse of personal information by telecoms service providers. In a number of cases, the Privacy Commissioner held that consumer complaints were well-founded, and he recommended measures that service providers should take to come into compliance with the Canadian Personal Information Protection and Electronic Disclosure Act” (Bruce & Macmillan, 2004: 42).

On the contrary, in Nigeria, the Communications Act (section 90) states: "Notwithstanding the provisions of any other written law” the Commission has exclusive powers with regards to all issues pertaining to telecommunication. Hence, intervention by any other agency is to no avail.

In 2004, the Nigerian Communications Commission issued guidelines for arbitration in disputes involving small claims. The objective is to provide a forum for consumers to resolve disputes with their service provider in an inexpensive, fair, impartial and effective arbitration. The short form arbitration procedure is for claims not exceeding N 1,000,000 (GBP 3850) and which does not involve complicated issues of law. It also requires that the consumer has exhausted all dispute resolution procedures established by the service provider without resolution of the complaint. The guideline provides for a sixty days’ limit for the arbitration proceeding. The

157 Nigerian arbitration guidelines make no distinction between ordinary consumer and corporate consumers. The practical implication of this strategy is discussed in Chapter 7.

In Saudi Arabia, the regulator, the Communication and Information Technology Commission (CITC), requires service providers to establish a separate division to handle consumer complaints and approves the procedures that are put in place. If the consumer and provider are unable to resolve their dispute amicably, the customer may refer the dispute to CITC in writing, for resolution. The CITC has a period of 10 days to consider the complaint and to dismiss it if it decides it is vexatious or frivolous (Stevens, 2009). If it decides the complaint merits investigation, a copy is sent to the service provider who has five days to respond, after which the complainant has a further five days in which to reply. The CITC then has a period of 30 days to consider the complaint and reach its conclusions. During this time, the provider is not allowed to disconnect the customer’s service without the prior permission of the CITC. If the CITC concludes that the provider has breached the Telecommunications Act, it will refer the provider to the Violation Committee that can impose financial sanctions on the operator. The Committee may impose a penalty (subject to a minimum threshold) which it considers appropriate for the gravity of the violation (Stevens, 2009).

EU member states are governed by a package of directives revised in 2009. The dispute resolution mechanism for consumers is highlighted in Article 34 of the EC Universal Service and User Rights Directive and Article 8 (4) of the Framework Directive which provide that:

“transparent, simple and inexpensive out-of-court procedure” must be available for reaching a broad range of consumer (i.e. non-business user) dispute” (Brisby, 2005:5).

The UK communications providers, subject to the terms of general authorisation implemented by the regulator OFCOM, are mandated to set up complaint handling and dispute resolution procedures. The procedures, as established by OFCOM, require that all communications providers that provide services to individual consumers and small businesses with not more than 10 employees must belong to one of the two OFCOM approved ADR schemes, the Office of the Telecoms Ombudsman (OTELO) and the Communications and Internet Services Adjudication Scheme (CISAS). Both OTELO and CISAS require that a complainant must first exhaust its communications provider’s internal dispute mechanism before turning to either of

158 the two disputes mechanism schemes. OTELO members include fixed telephony companies and two of the four mobile operators while CISAS members include ISP companies and two of the four major mobile operators. OTELO was established by industry working group, originally sponsored by the UK telecommunications regulator - Oftel and currently industry funded. For the OTELO scheme, the member companies do not have rights to appeal and have no veto over the ombudsman decisions while a complainant can take up the dispute with the court, if unsatisfied with the decision of the ombudsman. On the other hand, CISAS is run by the Chartered Institute of Arbitrators (Brisby, 2005).

4.8. Conclusion

This chapter in assessing the new telecommunications industry structure, which is characterised by competition in liberalised markets regulated by agencies independent from government, attributes the need for regulation to imperfect competition. The ultimate aim of regulation is the attainment of national telecommunication policy objectives, which includes the promotion and protection of interest of consumers. It is therefore expedient that regulators should facilitate effective consumer participation in the regulatory process, which will complement the regulatory effort towards engendering a competitive structure that leads to improved market efficiency while promoting the interest of consumers. However, the discrete and diverse nature of consumers pose a difficult challenge, but this researcher holds that that in itself underscores the critical role of consumer representation in regulatory decision-making.

Effective representation of the ordinary consumers involves engaging the consumers through the mechanism of consultation and provision of information. Another important aspect of the fulfilment of the mandate to protect ordinary consumer interest involves maintaining an effective and timely mechanism for resolution of consumer complaints and disputes arising with the operators (ITU, 2013) because delay in the resolution of complaints lead to consumers’

frustration and dissatisfaction. One option, that proves to be both optimistic and viable particularly in the UK, is the use of ADR and Consumer Representation (CR) bodies to vigilantly oversee and ensure that consumer disputes are properly investigated and that adequate compensations are awarded to consumers. Consumer representation bodies, independent of government and regulators, are also useful in monitoring the regulator and

159 services providers with regard to how they discharge their duties towards consumer interest and protection and their license conditions respectively.

To achieve the goal of ordinary consumer influential participation in the regulatory process, various institutional arrangements have been implemented in different countries. The effectiveness of each model is largely determined by the socio-political characteristics the regulatory environment. It has therefore been suggested that greater benefits could be derived by adopting an inclusive framework for consumer representation by combining the statutory and non-statutory models, as in the UK, by harnessing the strengths of the models and safeguarding against their weaknesses so that the ordinary consumer influential participation in the regulatory process in enhanced. This arrangement may be of great benefit to Nigeria and other developing countries with little history of civil society/advocacy groups.

In the first part of this thesis, having established 1) The NIE approach’ as a theoretical basis and Institutional Decomposition Analysis as the framework to guide this thesis 2) that the prevailing socio-political setting in Nigeria which is characterised by non-transparent transactions and weak institutions and which forms the background of the telecommunications market, and regulatory environment has implications for regulatory activities 3) that the ultimate aim of regulation is to implement policy objectives which include promoting the interest of the ordinary consumer, and that the global trend in institutional arrangements for consumer representation favours mixed models in Part One, the empirical part that now follows will look into how the industry key players defined the ordinary consumers’ interests and rights;

examine the structures and processes that have been deployed to engage the ordinary Nigerian mobile consumers to effectively participate in regulatory decision-making process; and evaluate the adequacy or otherwise of the ordinary consumer complaints management processes of the market players and the regulator.

160 CHAPTER 5 Institutional Definition of Ordinary Mobile Consumer Interest in Nigeria 5.1 Introduction

This chapter undertakes an analysis of policy, legal documents and other secondary sources, which specifically deal with the study’s first research question: if and how have the legislators, regulator and market players in Nigeria defined the ordinary consumer interest in the field of mobile communications.

To address the above question, this study will apply the extended Institutional Decomposition Model in analysing the relevant documents in an attempt to answer the research question. First, the Nigerian communications institution is decomposed into its four main components– mobile policy, mobile law, mobile administration and mobile enforcement. The analysis will be based on these four main components and their aspects and internal linkages. The study will also take notice of the extra-institutional factors like the prevailing regulatory environment in drawing conclusions.

With regards to the first research question stated above, this study will seek to find if the mobile policy, National Telecommunications Policy of 2000, in setting out the strategic policy direction for the development of telecommunications in Nigeria, has defined the consumer and consumer interest; what kind of regulatory framework, regulator and market structure was envisioned by the policy and how do these relate to consumer interests. In addition, are there provisions for economic regulation (e.g. tariff rules) to protect ordinary consumer from predatory licensees?

In the second section, this study will focus on mobile law (The Act) to ascertain how the provisions of the mobile law aligns with the mobile policy and if the mobile law has explicit definition of who the consumer is and what constitutes the consumer interest. Still focusing on the research question, this section will look at corporate values, powers and functions assigned to the regulator to facilitate its mandate to promote consumer interest. It will determine if there are legal provisions for the establishment or support of independent consumer representation bodies. Specifically, it will ascertain if there are adequate provisions for ordinary consumer to

161 participate in the development or review of industry codes that define how the services providers engage with ordinary consumers.

Mobile administration encompasses mechanisms, processes, procedures and quality of service standards, research and public forums, pricing and accountability mechanisms established to facilitate the implementation of the mobile policy, mobile law, and mobile enforcement. The third section will investigate how these provisions have been deployed for the realisation of the ordinary consumer interest. It will also ascertain if the definition of consumer interest is consistent across the mobile organisation (Commission– the actors) and if the industry players in the mobile market are consistent in their practice to uphold the consumer interest at a level consistent with the policy and law.

The Institutional Decomposition Model of Saleth and Dinar (1999) was extended by conceptualising mobile enforcement as the fourth component of the mobile institution. In this way, this study emphasises the importance of the application of responsive enforcement mechanisms towards the realisation of policy objectives because how the operators’ response to the rules depend on the efficiency of the enforcement of the rules North (2005). Therefore, the fourth section will examine the adequacy and effectiveness of the mechanisms for monitoring, assessment and enforcement of mobile law and consumer codes of practice. In addition, it assesses the level of industry compliance with the provisions of the Act and if the level of sanctions and fines are adequate to deter errant operators.

Finally, the findings and main argument resulting from this investigation will be presented in the concluding section.