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Draft BEREC Report on Terminating Contracts and Switching Provider BoR (18) 229

Starting: 12 Dec Ending

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BEREC invites stakeholders to comments on the draft BEREC Report on Terminating Contracts and Switching Provider.

The ability and willingness of consumers to terminate contract or to switch between service providers is in the respect of electronic communications services (ECS) a key facilitator of consumer choice and effective competition in a competitive telecommunications environment. All consumers should have the right to choose their service provider at any time.

This report collates information on the approaches to switching across different communications services focusing on nine categories. It discusses the processes used in MS and the applicable rules in each MS to ensure that there are robust safeguards and adequate protection for consumers against any failures or drawbacks within the switching process.

This public consultation will run from 12 December 2018 to 18 January 2019, 17:00 CET.

Enquiries about the consultation, including registration problems with the online platform, should be sent to the following email address: BEREC_PC_Contract_Termination@berec.europa.eu

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CONTRIBUTORS (9)

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4.5.3. M2M

P22

Only 7 NRAs[119] identified switching obstacles in case of M2M, the most important being the availability of offer/technology mentioned in CZ, HU, PL and SI.

Other important categories of obstacles identified are actions by the TP to hinder/burden the switching decision by the consumer mentioned by CZ and NO, contractual obstacles which have the effect of discouraging switching, or which create disputes between the consumer and TP due to the consumer’s intention to switch mentioned by CZ and PL and issues relating to the changing of SIM cards mentioned by CH and NO.

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4.5.4. Bundled offers as defined in the Glossary

P23

19 responding NRAs[120] identified factors/obstacles that can inhibit switching in the case of bundled offers (as defined in the Glossary), the most important being shown in Figure 18 below.

- For “Contractual obstacles, which have the effect of discouraging switching or which create disputes between the consumer and TP due to the consumer’s intention to switch”, identified by 8 NRAs[121], also had contract length, including long minimum contract periods as the most of often-mentioned factor by CZ, DE, PL, RO and SK.
- For “actions by the Transferring Provider in order to hinder/burden the switching decision by the consumer” identified by 8 NRAs[122], the activities to save or retain the consumer and prevent them from switching before or during the switching process was the most frequently mentioned by CZ, DE, EL, ES, IE and PT.
- In “the lack of consumer information” category of obstacles identified by 8 NRAs[123], the most important aspect is the lack of consumer awareness of the switching process, mentioned by BE, ES, HR and IE.

Figure 18: Number of NRAs who identified the most significant factors inhibiting switching of Bundled Products as defined in the Glossary (Annex)

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4.5.5. Bundled Offers that are defined differently to the Glossary

P24

12 NRAs[124] identified switching obstacles in case of bundled offers that are defined differently to that in the Glossary. The most important obstacle is the availability of offers and technologies mentioned by CZ, HU, PL and SI. Other important categories of obstacles identified are:

- the lack of consumer information mentioned by ES, HR and LV,
- actions by the Transferring Provider to hinder/burden the switching decision by the consumer mentioned by CZ, ES and HR,
- at least one service being part of a bundled offer mentioned by ES, FR and PL,
- contractual obstacles which have the effect of discouraging switching or which create disputes between the consumer and Transferring Provider due to the consumer’s intention to switch mentioned by CZ, PL and SK,
- technical issues or other deficiencies within the switching process which may impact switching mentioned by CH and PL,
- current provider’s services and reputation vs alternative provider’s offers and reputation mentioned BE and CH, and
- obstacles resulting from a switch of infrastructure mentioned by RS and SK.

Three categories of obstacles are mentioned once by NRAs:

- irresponsible or misleading sales and marketing activity by the Receiving Provider (HR),
- difficulties arising from the number porting process (RS), and
- issues relating to the portability of end users equipment (SK).

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P25

The responses to an extensive questionnaire/survey provided the content for this report. Section 2 of the report sets out the approaches to switching in different categories of ECS in each MS and the safeguards that are provided to consumers. It is clear from the responses received to the questionnaire that, for the MS where there are rules defined (namely for switching processes involving number portability), the processes in operation in most MS to switch between CPs are largely led by the RP but, in some MS, this is dependent on the TP and RP being on the same technology platform for particular ECS types.

Section 3 of the report summarises the legislative and regulatory framework, which describes the rules that have been put in place in the MS to facilitate termination of services and switching between CPs. It includes information on the practices, decisions or legal requirements that apply in the MS relating to topics such as Switching and the validation process, Contract termination requirements, Charges & fees and Compensation initiatives.

Section 4 of the report summarises what NRAs consider, based on their experience, are the key factors and the biggest obstacles that consumers face in each MS, when it comes to switching between CPs in respect of each of the categories of ECS. NRAs were asked to consider all of the issues relevant to each of the nine categories of ECS and indicate the four most significant issues which, in the NRAs experience, represent the biggest obstacles to switching between communications providers for that category of ECS in that country.

Stakeholder’s views will be sought on the following matters before the report is finalised:

1. Do you have any comments or observations regarding the processes set out in Section 2 above, related to the switching of provider for different categories of ECS and the safeguards that are provided to consumers?

2. Do you have any comments or observations regarding the rules (practices, decisions or legal requirements) that have been put in place in the MS to facilitate termination of service and switching between communications provider as set out in Section 3 above?

3. Do you have any comments or observations regarding the key factors and obstacles to switching different categories of ECS, set out in Section 4 above? In particular, what, in your view, are the possible solutions that could be applied to solve these issues?

4. Several NRAs identify obstacles for switching in case of bundles, do you consider that specific processes and rules for bundles may be of help to address these issues?

5. Which barrier(s) to switching should NRAs focus on in the future, in order to reduce or remove?

     a. For which category of ECS is this relevant?
     b. What should be the aim for the regulatory measure intended to reduce each of the barriers?

6. Do you have any suggestions to improve the switching process, including any measures that providers of ECS could initiate to reduce or remove barriers to switching?

7. Are there other barriers to switching that are not mentioned in the report? If so, please provide relevant details.

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P26
V01
Author: marek.prsin Date: 12 December 2018

Does the stakeholder have any additional or summarizing comments to make on the Draft BEREC Report on Terminating Contracts and Switching Provider?

If so, please provide it by clicking the 'Add comment' button.

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Annex 1 – Glossary

P27

Given the technical nature of some of the issues involved in this report, the following glossary of terms and phrases used to describe different aspects of switching applies:

* Electronic communications service: (ECS) means a service normally provided for remuneration via electronic communications networks, which encompasses 'internet access service' as defined in Article 2(2) of Regulation (EU) 2015/2120; and/or 'interpersonal communications service'; and/or services consisting wholly or mainly in the conveyance of signals such as transmission services used for the provision of machine-to-machine services and for broadcasting, but excludes services providing, or exercising editorial control over, content transmitted using electronic communications networks and services.

* Interpersonal communications service: (ICS) means a service normally provided for remuneration that enables direct interpersonal and interactive exchange of information via electronic communications networks between a finite number of persons, whereby the persons initiating or participating in the communication determine its recipient(s); it does not include services which enable interpersonal and interactive communication merely as a minor ancillary feature that is intrinsically linked to another service.

*Number-based interpersonal communications service: (NB-ICS) means an interpersonal communications service which connects with publicly assigned numbering resources, i.e. a number or numbers in national or international telephone numbering plans, or by enabling communication with a number or numbers in national or international telephone numbering plans.

* Number-independent interpersonal communications service: (NI-ICS) means an interpersonal communications service which does not connect with publicly assigned numbering resources, i.e. a number or numbers in national or international telephone numbering plans, or by enabling communication with a number or numbers in national or international numbering plans.

* Switching: for the purpose of this questionnaire, switching means the act carried out by a consumer to move their individual ECS or bundled offers from one communications provider to another.

     * Bundled offers: For the purpose of this questionnaire, a bundled offer is an offer which includes:
     * two or more ECS (e.g. fixed line voice or broadband and mobile services), or
             * one or more ECS together with:
             * one or more devices or pieces of equipment (e.g. set-top box, router Wi-Fi, tablet, smartphone, etc.), or
*one or more services other than ECS (e.g. technical support beyond general customer services such as technical maintenance and software upgrades).

as one combined offering, at a joint price.

(This definition of ‘bundled offers’ is based on the provisions of Article 100 of the EECC. However, it is understood that in some MS ‘bundled offers’ may be defined differently and for that reason appropriate accommodation has been made in the report, which facilitated NRAs to respond to the questionnaire.

* Communications Provider: (CP) communications provider for the purpose of this questionnaire is a provider of an electronic communications service.

* Consumer: any natural person who uses or requests a publicly available electronic communications service for purpose which are outside his or her trade, business or profession.

* Customer Validation Process: the process by which the consumer, and the consumer’s request to switch provider, may be validated, perhaps by a third party other than the transferring provider and the receiving provider. It is noted that such practices may not exist in all MS.

* Early Termination Charge: every charge imposed on consumers in order to terminate the contract before the end of any Minimum Contract Period and should be taken to include, for example, termination or switching fees, the reimbursement of discounts enjoyed, the payment (one-off payment) of residual instalments of devices (in particular for the bundled offers).

* Receiving Provider (RP): CP to whom the consumer is transferring at least one of their ECS.

*Transferring Provider (TP): CP from whom the consumer is transferring.

*Authorisation Code: a unique code that a consumer obtains from the Transferring Provider (TP) and gives to the receiving provider (RP) which allows the service to be transferred from an existing service provider seamlessly and with little or no disruption of service.

* Minimum contract period (MiCP): a minimum (fixed-term) contractual period set at the start of a contract (often for 12 to 18 months, sometimes up to 36 months), which the consumer cannot terminate the contract without incurring an early termination charge.

* Maximum contract period (MxCP): a maximum (fixed term) contractual period that a CP is permitted to have with a consumer.

* Mis-selling: sales and marketing activities that can work against the interests of both consumers and competition, which can include the provision of false and/or misleading information (for example, about potential savings or promising offers or gifts which do not actually exist) applying unacceptable pressure to change CPs, such as refusing to leave until the consumer signs, or using threatening or otherwise intimidating behaviour.

* Rollover contract: automatically renewable contracts where consumers sign up to an initial minimum contract period (MiCP) and the contract is then automatically renewed at the end of each MiCP unless the consumer explicitly opts out. Once the consumer is in a MiCP, they can only cancel their contract if they pay an early termination charge.

* Save / win-back: means marketing activity which is undertaken by the transferring CP during the switchover period in an attempt to persuade the consumer not to switch to a new CP or after the switching period in an attempt to recover the consumer.

* Slamming: where a consumer is switched from one provider to another without the express knowledge and consent of that consumer.

* Switchover period: the period between the date indicated in consumer’s agreement to enter into service with a new CP and the new service becoming active.

* Third Party Validation: where the consumer’s request to switch is validated by a third party before the switch can happen.

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Annex 2 - Country Abbreviations

P28

AL

Albania

MT

Malta

AT

Austria

NL

The Netherlands

BE

Belgium

NO

Norway

BG

Bulgaria

PL

Poland

CH

Switzerland

PT

Portugal

CY

Cyprus

RO

Romania

CZ

Czech Republic

RS

Serbia

DE

Germany

SE

Sweden

DK

Denmark

SI

Slovenia

EE

Estonia

SK

Slovakia

EL

Greece

TR

Turkey

ES

Spain

UK

United Kingdom

FI

Finland

FR

France

HR

Croatia

HU

Hungary

IE

Ireland

IS

Iceland

IT

Italy

LI

Liechtenstein

LT

Lithuania

LU

Luxembourg

LV

Latvia

ME

Montenegro

FYROM

Former Yugoslav Republic of Macedonia

Endnotes

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P29

[1] As defined in the Glossary in Annex 1

P30

[2] Member States (MS) is the generic term used throughout this report to include all countries, whose NRAs have responded to the BEREC questionnaire, regardless of the NRAs status with respect to BEREC (e.g. member or observer) or the country’s status with respect to the EU (e.g. member, accession state or member of EEA/EFTA).

P31

[3] For the purposes of this report, the term “rules” is interpreted broadly and is considered to include any practice, decision or legal requirement that is in place in MSs

P32

[4] The term “Interpersonal Communications Services is defined in Article 2(5) of the European Electronic Communications Code (EECC) as currently drafted before the text is finally settled.

P33

[5]NB-ICS” represents Number-Based Interpersonal Communications Services, as defined in Article 2(6) of the EECC as currently drafted before the text is finally settled

P34

[6] “IAS” represents Internet Access Services as defined in Article 2(2) of Regulation 2015/2120.