On Friday 17 June 2022, Ofcom announced a new set of rules coming into force requiring customers of telecoms services (including broadband, mobile and landline services) to be provided with “short and simple” contract details when signing up to a new deal, and an expanded right to exit from their contracts.
These changes follow a series of modifications to the General Conditions of Entitlement (General Conditions), the regulatory conditions published by Ofcom that all providers of electronic communications networks and services must follow in order to provide services in the UK.
This article sets out:
- a summary of the regulatory background underpinning the new rules;
- a brief overview of the new rules; and
- a quick update in respect of further rules being introduced by Ofcom in 2023.
It should be noted that telecoms operators to whom the new rules apply, must be compliant with the new rules right away (i.e from 17 June 2022).
In the UK, the activities of providing electronic communications networks (ECNs) or electronic communications services (ECSs) can be undertaken pursuant to a “general authorisation” regime. Providers of ECNs and ECSs do not need a licence, but must provide their services subject to compliance with the General Conditions.
In December 2018 the European Electronic Communications Code (EECC) updated the EU regulatory framework for electronic communications services. The EECC, among other things, contains measures designed to protect customers of electronic communications services including broadband, mobile and landline services.
In December 2020 the UK implemented this EU directive into domestic law pursuant to the terms of the EU Withdrawal Agreement through a number of amendments to the main communications legislation (the Communications Act 2003). More granular changes introduced by the EECC, however, needed to be implemented into Ofcom’s General Conditions.
In December 2020, Ofcom confirmed a package of new customer protections that reflect the EECC through various updates to the General Conditions to be introduced in several rounds. Most of the changes to the General Conditions came into effect a year later, on 17 December 2021.
The new rules, as announced by Ofcom last week, relate to a number of rules taking effect from 17 June 2022, including rules relating to the provision of contract information and extended customer rights to exit, as explained in further detail below.
June 2022 changes to the General Conditions
The new rules provide that:
- General Conditions C 1.3 – 1.7, 5.16: Customers must be given a short, one-page, summary of the main contract terms before entering a contract – including clear examples of how any price increases will affect the price they pay.
The summary must include key information about the speed of the service, price and length of the contract. The rules also require that providers must outline the terms and conditions if a customer decides to end their contract early. Customers with disabilities can also request to receive the summary documents in an accessible format.
Importantly, a contract will only become effective once the customer has given express consent to enter the contract after receiving the contract summary (General Condition C1.6).
- General Conditions C 1.14 – 1.20: Customers must be given at least one month’s notice of any contractual modifications relating to a relevant communications service or a bundle.
If any modifications are being made to a contract, then Customers must be given a right to terminate the contract (for no additional charge and without any early termination charges) which is subject to the contractual modification and any contract forming a part of a bundle with that contract, within one month after notification of the relevant modification.
The new rules address other matters including fees which can be charged on termination, and impacts to terminal equipment provided as part of the service (such as removal of any handset locking restrictions etc.).
Apart from the changes noted above, there are a number of other consequential changes to the General Conditions entering into effect as a result of implementing of the EECC including amendments to defined terms used.
Ofcom state the new rules are designed to help customers better understand price rises at a time when household budgets are under greater strain. For example if providers offer deals that include a price rise linked to inflation firms are required to explain how this is likely to affect the price of the contract, including a full cost breakdown.
Cristina Luna-Esteban, Ofcom’s Director of Telecoms Consumer Protection, stated:
“our new rules will give customers key information about the contract they’re signing up to, in a short and simple way. This will mean that people will be provided with a straightforward example of any price rises, which will help them make a fully informed choice about the deal that works best for them”.
Scope of application
The new rules in relation to the provision of a one page contract summary apply to providers of public electronic communications services to consumers, micro-enterprise or small enterprise customers, or not-for-profit customers (but excluding providers providing machine to machine transmission services).
The rules in relation to new exit rights apply to providers of public electronic communications services when provided to “subscribers”, and providers of machine to machine transmission services where the subscriber is a consumer, microenterprise or small enterprise customers, or not-for-profit customer.
Upcoming changes to the General Conditions
Communication providers will now need to prepare for the next round of changes to the General Conditions, due to come into effect from 3 April 2023. Such changes relate to new switching and porting rules, and were intended to come into effect on 19 December 2022, but have been noted by Ofcom to be pushed out by several months.