Review of the TDR Scheme

Thursday, November 5, 2009

The full text of the Terms of Reference is laid out below, and a copy of the Terms of Reference document can be downloaded using the link at the bottom of the page. To view or download the document you will need Adobe Reader software. This is free software that you can download from the Adobe website.

Terms of Reference for an Independent Review of the Telecommunications Dispute Resolution Scheme

Introduction

The Telecommunications Dispute Resolution Scheme (TDR) was established in November 2007. Its purpose, as defined in its terms of reference, is to:

  • encourage scheme members to resolve customer complaints effectively themselves;
  • provide prompt, independent resolution of disputes, having regard to the code and the service it sets out, as well as relevant legal requirements; and 
  • educate the industry about systemic issues arising from disputes and determinations.

The scheme is governed by a council of eight members, four representing the interests of industry and four that of end-users. The chair is elected from the end-user council members. The council’s role is to provide independence and ensure industry and public confidence in the scheme.

The council oversees the operation of all aspects of the TDR, except the overall level of funding and the TDR review, which for the first two years must be approved by the New Zealand Telecommunications Forum (TCF).

The operation of the scheme is contracted to an independent Scheme Agent. The agent’s prime responsibility is to investigate valid disputes in accordance with the Customer Complaints Code. The present scheme agent is Dispute Resolution Services Ltd, an independent Crown Owned Company.

The TCF sponsors the scheme. It is an incorporated society established as a requirement of Telecommunications Act 2001. The TCF’s role is to facilitate co-operation among telecommunication carriers to provide efficient services for the benefit of New Zealand consumers.

The scheme is similar to other industry/consumer self-regulatory dispute resolution systems. However, it differs from other New Zealand schemes in that there is not an ombudsman or commissioner. The scheme agent is a surrogate for the role. A significant difference between an ombudsman scheme and TDR is the autonomy given to telecommunication consumers to drive complaints through the escalation path.

The Review

Under clause 6.1(o) of the scheme’s terms of reference the Council must:

Instigate a review of the Scheme two years from the date of implementation, with a view to the Scheme being established under an entity independent of the TCF;

While a test of the desirability of independence from the TCF is the primary objective of the prescribed review, the TDR council and the TCF have agreed that a wider view of the scheme’s operation and effectiveness is necessary if the answer to the independence question is to be firmly founded.

It has been decided that the scheme should be measured against the six benchmarks established in 1997 by the Australian Department of Industry Science and Tourism in its publication, “Benchmarks for Industry-Based Customer Dispute Resolution Schemes”. These benchmarks are Australasian industry best practice and were used as the guiding principles in the development of the TDR.

 They cover:

  • Accessibility
  • Independence
  • Fairness
  • Accountability
  • Efficiency
  • Effectiveness

While the review should be as comprehensive as possible, there are some elements of the scheme that may not need to be reviewed in depth, and also some that may need particular attention.

Overall, the four main questions for the reviewer are:

  • Is the scheme meeting internationally recognised standards of best practice?
  • Is the scheme meeting the needs of New Zealanders and their telecommunications carriers with a demonstrably independent, effective and efficient resolution process for the resolution of disputes between carriers and their customers?
  • Is there a need to establish the scheme under an entity independent of the TCF?
  • Are there alternative models that would better deliver the scheme’s purpose?

Application of the Benchmarks

1. Accessibility

Is the TDR scheme sufficiently accessible to those who may need its services? In particular:

  • Are publicity materials and promotional activities undertaken by the scheme adequate and appropriate?
  • Are the publicity and promotional activities undertaken by the scheme members adequate and appropriate?
  • Is the scheme known and understood at all customer contact points and by managers of customer contact staff in participating telecommunication companies?
  • Is the scheme known and understood by consumer advisory agencies such as community organisations, legal professional, relevant government agencies and the like?
  • Is the scheme accessible to and easy to use for consumers regardless of their location, resources (intellectual and material), literacy, language skills, health state and other personal circumstances?
  • Does it cover all telecommunication services which may give rise to a consumer complaint?

2. Independence

The question of independence needs to be addressed beyond the direct relationship between the TDR and the TCF.

  • Is the existing structure of the scheme sufficient to ensure both the independence of the TDR and public perception of independence?
  • If not what changes should be made and if so, what can be done to enhance the perceptions of independence?
  • Is there sufficient separation of operational and governance roles of industry council members?
  • Is the composition of the council, its structure and its responsibilities effective?

3. Fairness

Fairness is a key attribute for both consumers and industry participants. Customer research supports a general acceptance of fairness by consumers. However, some scheme members are expressing concern about fairness of processes.

  • Are surveys conducted to establish consumer and scheme members’ views on fairness comprehensive enough?
  • If not what more should be done?
  • Are the terms of reference and the rules of the customer complaints code fair and effective? In particular, are the complaint escalation steps equitable to both consumer and scheme member?

4. Accountability

Does the scheme through its terms of reference, policies and practices provide adequate accountability by its constituent parts (TCF, TDR, scheme participants and scheme agent) to each other and by so doing to users of the scheme? In particular:

  • Does the monthly operational and financial reporting by the scheme agent provide appropriate information to allow the TDR to monitor the scheme and make policy decisions?
  • Should the requirement for the scheme agent to identify systemic issues be broadened to make the reporting process more active in predicting issues that might arise in the future?
  • Is the TDR council providing the scheme agent with an appropriate level of support and feedback?
  • Is the scheme sufficiently accountable to participants’ customers?

5. Efficiency

Is the scheme efficient in its structure and does it provide an efficient service to consumers? In particular:
Is the organisational structure of the scheme agent efficient in view of the fluctuating nature of the caseload?

  • Are staff appropriately qualified and trained for their roles?
  • Is the budgeting and financial reporting providing the correct detail to allow for the efficient operation of the scheme?
  • Are the customer complaint code’s processes delivering efficient and timely resolution of customer complaints?

6. Effectiveness

There are two measures of effectiveness to be reviewed. The first is the service that is offered by the scheme agent to customers of participant companies, and the second is the rapport between the three-way relationship of the TDR council, the industry and the scheme agent. In particular:

  • Are the current limitations imposed by the scheme’s terms of reference and the customer complaints code still appropriate or do they require amendment to make the scheme more effective?
  • Is the measurement of user satisfaction sufficiently robust to give a true indication of the effectiveness of the scheme to individual complainants? 
  • Is the scheme’s fee structure a deterrent to companies joining the scheme or others electing to leave? If so, what opportunities are there to revise the fee structure to better reflect the value of the scheme to telecommunication carriers?
  • Should greater emphasis be placed on encouraging companies to develop good complaints handling practices?
  • Is the relationship between the TDR council and the scheme agent affecting the effectiveness of the scheme?

The Review Process

It is expected that the reviewer will consider:

  • Investigation files
  • Council meeting minutes
  • Administration files
  • Scheme agent reports to the TDR council
  • Internal policy and process documents
  • Publicity and information material
  • Complainant survey reports
  • Constitutions, structures and processes of similar dispute resolution schemes.

It is also expected that the reviewer will consult with the following people and organisations. In the interests of efficiency and timeliness, discussion groups may assist the review.

  • Scheme agent including staff
  • TCF board
  • Scheme participants
  • Companies who are not members or have resigned from membership
  • Relevant government departments and agencies.
  • Consumer and special interest groups
  • Similar industry/consumer dispute resolution schemes in NZ and overseas.

It is expected that the reviewer will report on the criteria set out above and in doing so will:

  • Critically analyse issues raised by those consulted during the review process
  • Test assertions made by those consulted by seeking reasoning and supporting evidence
  • Provide a balanced analysis of the key issues identified during the review
  • Make recommendations that are in keeping with the fundamental nature of an industry/consumer dispute resolution scheme
  • Supply a record of issues raised that were not covered by the criteria set out in these terms of reference

The review will commence early in the New Year (2010). A draft report will be discussed with the TDR council in early March 2010. A final report will be presented on 31 March 2010.

David Russell
16 Sept 2009