The telecom ombudsman

As we rapidly approach the next millennium, there is no doubt that the Internet world with all its facets, communication, information and commerce, will most surely evolve into one of the most important elements in the development of any country. The way we can take advantage of it will depend on how it is commercially regulated.

In Venezuela we are today at a crossroads. Either we allow access to the Internet to be the main business, to the benefit of the telecommunication companies and the national government who ultimately issues the corresponding concessions, or we allow the users, our children and future entrepreneurs to capitalize on the opportunities by way of free and cheap access.

Recent efforts at privatization seem to not have favored the end users of the services. CANTV was sold on the basis that it generated high income for the Nation and expectations of high returns for the investors. Evidently, the only outcome of this equation are high tariffs. Likewise, Margarita knows more than well that the price to be paid for success in the sale of its power sector is just that, high tariffs.

With frequency, the State, due to conflicts of interests, cannot adequately manage its role as representative or defender of the public’s rights, or in this case in particular, the end users rights. It is precisely because of this that all around the world, the figure of the Ombudsman becomes important. The Ombudsman is an independent, capable and responsible person. Adequately provided with the resources necessary to fulfill his role, he dedicates his time to the users interest.

One prime example of this is the TIO in Australia. Its initials come from the words Telecommunications, Industry and Ombudsman and it is an independent entity established in 1993 to help solve disputes between the telecommunications companies and the small users, residential and commercial. As of 1997 it has also been entrusted the processing of complaints about Internet services.

TIO’s service is free but it only intervenes after the user has initially tried to solve its disputes directly with the purveyor of the service. It’s authority includes the investigation of matters relative to billing, service cuts, mobile service, access to the Internet, privacy, operator and directory assistance, public phones and basic telephone service.

Today TIO processes about 1,200 complaints per week. Approximately 95% of these cases are solved within 48 hours and only 0.05% of these end up in court. As do most arbitrage processes, the TIO does not analyze cases from a strictly legalistic viewpoint but rather on the base of merit and reasonability.

The costs incurred by TIO are covered by all of the telecommunications companies depending on the number of complaints raised against them.

In spite of all this success, however, and to the detriment of all Australian users, aspects related to tariffs are unfortunately out of TIO’s jurisdiction. I personally am convinced that in order to truly comply with his role of defender of the rights of the users of public services, the Ombudsman must be involved in the process of establishment of tariffs. Evidently, this role in tariff fixation must be based on reasonability and not on the blocking of tariff increases which are necessary in order to continue to guarantee an adequate service.

How good it would be to see the incorporation of the figure of the Ombudsman of Telecommunications to help with our own privatization efforts. He could most certainly help insure that the awarding of concessions does not result in a penalty for future users. Likewise, his support of the inclusion of norms and regulations in the concession agreements that would guarantee a good level of service as of day one would save us a lot of the grief we are shouldering today.

An Ombudsman would be most welcome in what has up to now been a negotiated process strictly between telecommunications companies and the Nation. If the players do not accept this, we should require it of the Constituent Assembly.

In closing, I remind the users of cellular phone services in Venezuela, that tariffs in Israel, for example, are 10 times lower than theirs. The explanation? In Israel, the concessions were awarded to those operators who offered to install the most lines and the lowest tariffs. In Venezuela the concessions are awarded to those that offer the best deal for the taxman.