Telcos warned vs misleading 'unli internet'

by Ina Reformina, ABS-CBN News

Posted at Dec 13 2014 12:31 AM | Updated as of Dec 13 2014 09:18 AM

MANILA - The Department of Justice (DOJ) has warned telecommunications firms against "deceiving or misleading" subscribers with unlimited internet packages that only provide the promised speed and quality of service within a prescribed subscription period.

In a 9-page advisory dated December 9 but released to the media only on Friday, Justice Secretary Leila De Lima said telcos that practice this may be held liable for violations of Republic Act (RA) No. 7394, also known as the Consumer Act of the Philippines, particularly the provisions on fair packaging, and misleading trade practice and advertisements.

The DOJ stressed that "unlimited" should mean unlimited, in its truest sense, without restrictions or a decline in the quality of service after a certain period of time or after the stated subscription period has lapsed.

Under the law (Consumer Act), this kind of deceptive business practice carries a penalty of P500 up to P10,000, or imprisonment of at least five months up to one year, or both.

Those who do not comply with the law's provisions on fair packaging, may be fined not less than P500, but not more than P20,000, or jail time for at least three months but not more than two years, or both.

Those who violate the law's provisions that prohibit false, misleading or deceptive advertisements, meantime, may be fined not less than P500, but not more than P5,000, or an imprisonment of one month up to six months, or both.

Administrative sanctions may also be imposed on erring telcos and/or violators that carry a fine of not less than P500, but not more than P300,000, and an additional fine for P1,000 for each day of continuing violation.

Apart from these penalties, telcos may also be ordered to refund or compensate their subscribers by virtue of Article 164 (c) of the Consumer Act which provides that "an act of restitution may be imposed upon the non-compliant service provider."

The DOJ reminded telcos and internet service providers (ISPs) of the following points;

- unlimited internet promotions must not subject the service to a fair usage policy; as advertised, the plan is either unlimited or not;

- ISPs must utilize network management techniques that optimize data usage instead of imposing restrictions; and

- ISPs must offer internet packages based on data usage, subscription period, and/or software application usage to cater to the specific needs of specific types of consumers.

As for internet users, the DOJ said they "must be responsible and limit large data transfers during peak hours."

Regulatory agencies, meantime, such as the Department of Trade and Industry (DTI) and National Telecommunications Commission (NTC) are reminded of these responsibilities:

- for DTI: carefully check the approval of sales and promotional activities; and

- for the NTC: see to it that the conditions actually imposed by the ISPs conform to prescribed service performance standards.

"This advisory is issued by the DOJ-Office for Competition in line with its mandate to protect consumers from abusive, fraudulent, or harmful corrupt business practices as well as to promote transparency and accountability in markets," the advisory read.