Edificio con Refuerzo 2

This section looks at provisions in the Mobile Law, one of the main components from the decomposition of the Communications institution, concerning the definition of consumer interest. The concept of the consumer allows for wide variations in definition (CI, 2014).

Therefore, in order to highlight the significant difference and thrust of the definition of the consumer in the Act, a comparison is made with the definition of the consumer in the Consumer Protection Council Act, 1992 (CPC Act, 1992), the definition by the Consumer Affairs Bureau, and the Nigerian Communications Act 2003.

The CPC Act defines the consumer as:

“An individual, who purchases, uses, maintains or disposes of products or services”

(CPC Act, 1992: Part V, Section 32).

The Consumer Affairs Bureau (CAB), a department of the Nigerian Communications Commission in its ‘Consumer Web Portal’ has defined a telecommunication consumer as

‘A person who subscribes to the services of telecommunications service provider’

The Nigerian Communications Act 2003 in its definition of a consumer makes no distinction between the ‘consumer’, ‘customer’ and ‘subscriber’, all of which it defines as:

“Any person who subscribes to and uses a communications service”: (NCA, 2003:

section157).

165 The terms ‘subscribes’ and ‘uses’ are significant. The Registration of Telephone Subscribers Regulation, 2011, defines a subscriber as, “a person who subscribes to mobile telecommunications services by purchasing a subscription medium or entering into a subscription contract with a licensee” (Section 1(2)). The Regulations also interprets subscription medium to mean a Subscriber Identity Module (SIM) smart card or any other phone subscriber medium, containing the telephone number of a subscriber, encoded network identification details, the personal identification number and other user data normally provided by a licensee for the provision of network services. This implies that the ordinary consumers on the prepaid platform (pay-as-you-go) also enjoy the full status of ‘subscriber’ even if they had not entered into any other formal subscription contract with a licensee. This is very important but it is often overlooked by services providers and will be referred to in section 5.2.4.2 when discussing consumers’ right at the point of purchase of SIM pack.

It is significant that in the CPC Act the purchase or use of, say, a mobile device is a sufficient condition for qualification as a consumer. Similarly, the CAB’s definition would imply that the purchase of a SIM card qualifies one as a consumer. Both definitions are incomplete; they differ significantly from the definition of consumer in the Communications Act. In the Act, the dual condition – ‘subscribes to’ and ‘uses communications service’ – is necessary for qualification as a consumer. First, this implies that non-subscribers are excluded from the definition in the Act. In other words, with regard to the definition in the Act, it would appear that an individual who uses the mobile phone of another is not a ‘consumer’. For example, a child who uses the phone of the parent is not a ‘consumer’. Secondly and more importantly, the Act’s definition of consumer implies a contractual relationship between a user and the service provider and the term ‘and uses a communications service’ is part of that contract. The significance of the term

‘and uses’ becomes clear in the rule for the disconnection and withdrawal of a pre-paid subscriber number.

The Registration of Telephone Subscribers Regulation, section 14(2) stipulates that a SIM card that is not used for a revenue-generating event within 48 hours of registration will be disconnected. Thereafter a subscriber’s line “if it has not been used” within six months or twelve months for a revenue generating event, may be disconnected or withdrawn (Quality of

166 Services Regulations 2007, schedule 1, section 36). These conditions have grave implications for both consumers and network operators. For a network operator failure to abide by the first rule attracts a fine of N 200,000 (US$ 1000) per SIM card. For example, in 2015, the failure by MTN, (a network operator) to abide by the first rule has led to the imposition by the regulator, of what appears to be the heftiest fine in global telecommunications history (See Section 5).

For the ordinary consumer, violating the first and second conditions would result in inability to use his/her number until he/she completes the reregistration procedures and the second condition implies forfeiture of the number.

As stated above, the definition of the consumer by CAB does not align with the Act because it excludes the term ‘uses’ which is a necessary condition. This is an example of the lack of consistency in the definition of consumer and consumer interest, which prevails across the mobile organisation – the personnel (players) of the Commission. In this instance, it has led millions of subscribers to violate the SIM card registration rules with dire consequences. Later in Chapter 6, CAB’s misconception of consumer ‘right to be heard’ which portends grave implications for consumer representation will be highlighted.

Therefore, in the context of this study, ordinary consumer is defined as a person – as distinct from a corporate body or partnership – who subscribes to and uses a mobile communications service. As was noted earlier, the Nigerian Communications Act 2003 is the primary source for the definition of consumer interest. Keeping in view the reasons for government delegation of power to regulators and that the nature of the regulator has implications for the interest of the ordinary consumers the next section reviews the regulatory framework instituted by the Act.

5.3.1. Independent and Impartial Regulator: Consumers’ ally?

The Nigerian Communications Act 2003 (Act) states as its primary object the creation and provision of a regulatory framework for the Nigerian communications industry and Section 1 (b) extends this by specifying the creation of an effective, impartial and independent regulatory authority. This objective is realised with the establishment of the Nigerian Communications Commission (Commission) as an independent regulatory body for the communications sector with full legal mandate. The Act also established for the Commission a Governing Board, with

167 a completely independent organisational structure distinct from the civil service structure of the Ministry of Communications (Act, sections 1, 2, 3, 5, 12). This distinction is further emphasised by stating the Commission’s operational independence from the Ministry of Communications as follows:

“In the execution of his function and relationship with the Commission the Minister shall at all times ensure that the independence of the Commission in regards to the discharge of its function and operations under this Act, is protected and not compromised in any matter whatsoever” (NCA, 2003: section 25 (1-2)).

The financial independence of the Commission is equally provided for as the Act empowers the Commission to establish and maintain a fund from which to defray all expenditures incurred by the Commission. The main sources of funds include fees charged by the Commission under the Act or its regulation like Annual Operating Fees or under any license issued in pursuant to the Act (Act, Sections 17(1b-c), 18, 19). In 2013, the Commission’s fund amounted to N 39.6 billion (USD 200 million) (Commission Annual Report, 2013).

The Act confers expansive powers on the Commission for the economic regulation of the communications sector which state that the Commission shall have power to:

“Do all such things as are necessary for or incidental to the carrying out of its functions and duties under this Act” (See section 5.3.4) and

"Notwithstanding the provisions of any other written law, the Commission shall have exclusive competence to determine, pronounce upon, administer, monitor and enforce compliance of all persons with competition laws and regulations, whether of a general nature or specific nature, as it relates to the Nigerian communications market" (NCA, 2003: Section 3(2c), 90).

Hence, in the telecommunication sector the Act has precedent over other competition laws and therefore exclusive jurisdiction over all issues relating to the interest of the consumer in the telecommunications sector. Thus, the promotion and protection of the interests of the telecommunications consumer are safeguarded under the regulatory independence and

168 expansive powers of the Commission. However, in practice the Commission is burdened with acute agency problem and conflict of interest, which distract it from focusing on the ordinary consumer. Examples of the manifestation of these issues are discussed in Section 5.5.2 of this chapter.

5.3.2. Organisational values are essential for effective consumer representation

To complement its independence, the corporate values of the Commission, which the Act envisages in Section 1(b), are further expanded in Section 4(2). It states that the Commission shall always carry out its functions and duties in an efficient, effective, non-discriminatory and transparent manner. This is necessary for the Commission’s credibility, which is required to engender consumers and other stakeholders’ trust and confidence in the Commission.

Two evident mechanisms established by the Act to foster the realisation of these corporate values and accountability are: 1) the power of the Commission to conduct public enquiry on any matter of a general nature which serves the objects of the Act and in all instances that mandatorily require that public inquiry be held under the Act or its regulation. This is to ensure transparency in the activities of the Commission while creating room for consumers’ influential participation in regulatory decision process; 2) the submission of the Commission’s annual report of activities to the National Assembly through the President not later than six months after the end of its financial year, including the Commission’s audited accounts and the auditor’s report for the year under review. The detailed guidelines for the preparation of this report are specified in section 89. These provisions facilitate the oversight function of the legislators (NCA, 2003: Sections 4(2), 21(1), 57(1-3)). These are important provisions. The implications of the Commission’s inability to abide by these provisions are discussed in later section of this chapter.

The Act is wide-ranging in its provisions and amply meets the requirement of an independent regulatory framework. This is important and has implications for consumer interests. An effective regulatory framework, rooted in a firm legal base is essential for the creation of institutions, organisations and structures, for the administration of pro-consumer laws;

institutions are crucial (North, 1993). Under the Act, the Commission’s legal mandate ensures

169 its organisational, financial and operational autonomy. These factors are fundamental for a sustained campaign for the promotion and protection of consumer interest because, as noted in Chapter 2, the performance of the mobile telecommunications market depends not only on the individual and interactive actions of stakeholders, but also on the intervening influences at the regulatory level (Saleth and Dinar, 1999).

In practice, the regulatory framework of the Commission, like those of other regulatory agencies in Nigeria is susceptible to political corruption and interference such that the independence and impartiality of the regulatory are compromised from the onset with grave implications for the efficiency of the market and the interest of the consumer. The prevailing socio-political environment, which is heavily weighed down by cronyism and non-transparent transactions finds its way into the Commission through its institutional framework: the politicians appoint the leadership. It spreads through the organisation because the favoured agents create their own internal clientele network. This has far-reaching negative impact on the commitment of the regulator towards the attainment of policy objectives.

5.3.3. How is ‘Consumer Interest’ Defined?

The concept of consumer interest, like the term ‘consumer’, is open to various definitions because it embodies a wide range of variable concepts. In Britain, Ofcom’s Consumer Panel, in its Consumer Toolkit, upholds that “the consumer interest is implicitly the inverse of the consumer detriment” (Consumer.Panel, 2006:74). Therefore, in determining what constitutes ordinary consumer interest, this study considered the provisions in the Act that would ordinarily enhance or promote consumers’ quality of experience and serve the consumers welfare by eliminating or reducing the factors that are capable of giving rise to consumer detriment. Hence, two basic criteria were considered:

1. Factors that enhance/promote the quality of experience of the consumer or reduce/eliminate consumer detriment.

2. Factors that are specifically provided for in the Act and regulations.

170 5.3.4 Consumers Interest is Part of the Law

The interests of the consumer which the Act undertakes to promote and protect are not explicitly defined and listed in the Act but are subsumed in, and are deducible from the objectives of the Act; the functions of the Commission; Consumer Affairs; General Consumer Code of Practice, 2007; Registration of Telephone Subscribers Regulations, 2011; Quality of Service Regulations, 2012; Number Portability Regulations, 2014; and other regulations/guidelines.

Apart from its primary objective of creating a regulatory framework for the Nigerian communications sector, the Act in delineating the scope of activities of the Commission, defines nine objectives and twenty-three functions for the Commission. Five of these objectives and eight of the functions, have direct bearing on the promotion and protection of the interest of ordinary consumers and consequently define how the legislators, the regulator (Commission) and the market players construe the interest of the ordinary consumer. The main objectives include promoting the provision of affordable and easy to access communication services, ensuring fair competition and the protection of the interest of consumers and services providers.