Kill Bill Shock

Can our monthly risks of receiving high bills for our electronic communications be completely eradicated?

The phenomenon of Unexpected High Bills (UHB), also commonly known as Bill Shock, is fairly common in the electronic communications sector. The wide availability of fast mobile data further augmented this problem, especially when one puts into the equation our dependency on mobile electronic communications and the constant roll-out of new products on the market. But whilst quite a lot of legislative effort has been put into controlling the cross-border roaming sector, new technologies are continuously challenging the local landscapes.

Only a few weeks ago, the British tabloids reported the story of Paula Cochrane who managed to rack up a bill of over 1,200 Pounds with her mobile operator and this mostly through the use of emoticons in her sms. Even though under a fairly generous 40 quid monthly plan, Cochrane was flabbergasted to be informed that she was being charged data prices for the emoticons that she was innocently sending as part of her sms. The ever-changing technology has, irrespective of improved consumer legislation within the telecoms sector and the varied European attempts to limit bill shock, created new challenges on how we can be sure that we don’t suffer cardiac arrest when opening our telecom bills.

From a European perspective, Bill Shock was mostly traditionally associated with mobile data usage whilst roaming outside of Malta. The high charges related to mobile data usage came as a complete surprise to others whist it deterred some of us of making full use of our devices when abroad. This does not mean that sending SMS and making and receiving calls when abroad was cheap. 

As from 2007, pursuant to Regulation (EC) No. 717/2007, better known as the Roaming Regulations, the European legislators have ensured that roaming prices in Europe, for data, calls and SMS would be controlled. First introduced under Vivianne Redding, the Roaming Regulations introduced the concept of compulsory capping with the ultimate intent of making such services more affordable across European borders. The Regulations have been amended and improved throughout the past years, in an effort to reflect demands of consumers. In 2012, Internet roaming price caps where introduced and as of July 2014, general prices on all services have been further slashed. Needless to say, since 2007, retail price reductions across calls, data and sms went down by over 80%. Furthermore, within the same time period, data roaming brew by a whopping 630% whilst data roaming prices are now up to 91% cheaper than they were in 2007.

But the lowering of prices did not automatically resolve bill shock.  Controlling prices would only reduce the tendency towards bill shock and not eliminating it in its entirety. A different legislative approach was required. This was partly addressed by means of Regulation (EC) No. 544/2009 which introduced, as part of other amendments to the Roaming Regulations, the obligation on service providers to implement a 50 Euros monthly cut-off mechanism on roaming. Such cut-off mechanism would need to be enabled by default and it was up to the consumer to instruct his service provider and decide whether to leave such cut-off mechanism enabled from the very start. 

The complete removal of roaming charges has been quite high on the European agenda for the past few years when the principle of Roam like at Home (RLAH) gained strong momentum under the watch of Commissioner Neelie Kroes as part of the Connected Continent Regulation. The legislative proposals submitted by the Commission were overwhelmingly approved by the European Parliament in April of last year and everything seemed to be on track to have roaming charges abolished by 2016. 

However, a proverbial Italian torpedo hit the proposals when Italy took the EU presidency last year. Italy suggested a number of changes to the proposals which were approved by the EU Parliament especially through the proposed introduction of a fair use limit. The Italians argued that one had to proceed with caution in the total elimination of roaming charges as this could have detrimental effect on the market. The arguments raised were not without any merit as the total removal could push consumers towards ‘operator shopping’. A Maltese consumer, currently connected with a Maltese operator and subject to Maltese pricing could decide to purchase his mobile services from another EU jurisdiction where consumer prices and the packages available are available for less. This would essentially mean that, with the removal of all roaming charges, the Maltese consumer could be using his Romanian service whilst being comfortably at home in Mosta without incurring any additional costs. The introduction of a Fair Use Limit mechanism would essentially curb such practices but it is still not certain how these schemes will function and what limits and restrictions will be imposed. The elimination of roaming charges by 2016 is increasingly turning into a mirage whilst a long glide path seems to be more realistic.

The convergence of products and the take up of mobile data has again placed UHB or bill shock at centre stage. But whilst a lot of work has been done to limit bill shock from a roaming point of view, various cracks are still appearing in the specific local domestic usage. Paula Cochrane is just one example of a recurring phenomenon of how sometimes we are still being juiced through our innocent telecom use.