Advertising guidelines for Carriage Service Providers

This article gives an overview of the requirements set out under the Telecommunications Consumer Protections Code 2019 (TCP Code) for advertising by Carriage Service Providers (CSP).  The TCP is a binding code under the Telecommunications Act 1997 (Cth) and the Telecommunications Industry Ombudsman can take enforcement action CSP’s which breach the TCP Code.

Content of advertising

A CSP must include any important conditions, limitations, qualifications or restrictions about an offer in its advertising of the offer, to allow consumers to make informed choices and to avoid consumers being misled.   According to the TCP Code, CSPs must not use the following in their advertising:

  • Headline representations as to a price or offer in circumstances where the overall impression of the price or offer is subsequently qualified by fine print terms and conditions that make it unlikely or impossible that a consumer could reasonably achieve the benefits offered in the headline representation;
  • The term ‘unlimited’ or an equivalent term in an unqualified manner when referring to usage, unless the ordinary use of the service in Australia is genuinely unlimited and not subject to exclusions, including exclusions for various types of usage or selected parts of the network;
  • The terms ‘no exceptions’, ‘no exclusions’ or ‘no catches’ or equivalent terms without sufficient disclosure when referring to a price or service offer, unless there are genuinely no exceptions to the offer;
  • The term ‘free’ or an equivalent term to promote of advertise any hardware product or service unless the cost of that product or service is not recovered from the consumer over the life of the contract by way of higher costs, including by way of higher network access fees, early termination fees or unlock fees, compared to the costs that would be payable by the consumer over the life of the contract were the product or service not free of charge;
  • Headline representations as to bundled products or services unless that product or service is available for purchase at the advertised price without being part of a bundled product or service or the advertised price is clearly identified as the price for that product or service;
  • Headline representations as to prices for an offer unless any exclusions are prominently displayed;
  • Unqualified headline representations as to ongoing prices for specified data allowances in circumstances where the price for that data is likely to increase within a reasonable use period;
  • Advertise or promote network coverage unless the network coverage is generally available to consumers in the claimed coverage area;
  • Advertise or promote a periodic price to be paid for a telecommunications product without also prominently displaying the minimum quantifiable price;
  • The term ‘cap’ to advertise any new offers launched after 1 September 2012 unless the offers contain a hard cap;
  • The term ‘cap’ to advertise offers in existence as at 1 September 2012 in any television, radio and print advertising provided that the CSP can still:
    • use the term ‘cap’ or an equivalent term to advertise existing offers that contain a hard cap and
    • refer to existing offers that use the term ‘cap’, or an equivalent term, by their existing name in online information, billing information, customer contracts, reference materials for customers, partners and staff, and one-on-one communications with customers; and
  • Claims in relation to broadband speeds, network coverage and other performance characteristics of a telecommunications product unless the CSP is able to substantiate such claims.

In addition to the above, CSP’s must have regard to the Competition and Consumer Act, in particular the Australian Consumer Law contained in Schedule 2, when advertising or promoting broadband speeds or data transfer rates on their networks.   CSP’s may also wish to refer to the Australian Competition and Consumer Commission (ACCC) Broadband speed claims: Industry guidance for additional information on advertising fixed-line broadband plans.

Advertising medium

A CSP must provide a level of detail in its advertising which is appropriate to the manner in which the advertising is displayed to consumers.   A CSP must take the following actions to enable this outcome:

  • Clarity: ensure the principal message and the main terms are captured in the body of the Advertising;
  • Detail: ensure that use of any disclaimers does not negate the principal message and main terms of the advertising; and
  • Format: take into account the typical amount of time that consumers are able to view the particular advertising in deciding how much information to include in the advertising.

For small online advertising where the CSP is unable to contain all the required details of the offer, including special promotion end dates, the CSP should provide the required details at any linked destination from that small online advertising.

Special promotions

CSP’s must communicate any important limitations which apply to its special promotions so consumers are informed of the limitations.   A CSP must take the following actions to enable this outcome:

  • Principal terms: disclose the key terms of the special promotion and any key limitations, such as whether stocks are limited and the period during which as customer will receive any associated promotional offering(s);
  • Timeframes: if the special promotion has a set end date, the CSP must disclose the end date for the special promotion; and
  • Eligibility: if there are special eligibility requirements, such as provision of coupons, bundling with other products and services or restriction to a specific class of consumers, the CSP must disclose each requirement of the special promotion.

Advertising for post-paid internet plans with an included data allowance

When advertising the price or dollar value of a post-paid service which is an internet only plan with an included data allowance, a CSP must prominently display in text advertising the cost (prior to any discounts being applied) of using one megabyte of data within Australia, provided that if the usage is unlimited or subject to shaping, the CSP is not required to quote a cost for the data usage that is unlimited or subject to shaping in the text advertising.

For the purposes of this:

  • Certain text advertising: the cost referred to above will be deemed to be prominently displayed in a single item of text advertising of 8 pages or more in length, provided it appears in a clearly referenced section of that item of text advertising; and
  • Small online advertising: the cost referred to above will be deemed to be prominently displayed in small online advertising if it is displayed on the linked webpage that details plan information.

Disclaimers

A CSP must ensure disclaimers are clear and understandable, having regard to the type of advertising.   A CSP must take the following actions to enable this outcome:

  • Effect of disclaimers: ensure a disclaimer does not negate the principal messages of advertising; and
  • Content of disclaimers: ensure a disclaimer is clear and understandable, having regard to the type of advertising including the medium or format used and its intended audience.

It is preferable to design advertising as clearly as possible to minimise the need for disclaimers and possible confusion.

Takeaways

Complying with the advertising requirement of the TCP Code requires careful attention and the failure to do so can result in significant financial and reputational risk.

Further references

Cases

ACCC customer compensation order against iiNet and Internode

Related articles

The use of IRUs in a telecommunications capacity

Telco reseller agreements – legal issues

Dark fibre agreements for telcos

What is in a network access agreement?

Standard form telecommunications service agreements

Managed services agreements for IT companies

Further information

If you need advice on complying with the advertising requirement of the TCP Code, please feel free to contact me for a confidential and obligation free discussion.

 

Michael Adami - Dundas LawyersMichael Adami LLB.,GDLP.,BA.
Special Counsel
Telephone: (07) 3221 0013
e: madami@dundaslawyers.com.au

 

 

Disclaimer

This article contains general commentary only.    You should not rely on the commentary as legal advice.    Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

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