Telcos warned on false ads to entice Internet consumers
MANILA, Philippines—The Department of Justice-Office for Competition (DOJ-OFC) warned telecommunication companies that they would face possible sanctions if found to be using false or misleading advertisements to entice customers to avail themselves of their Internet services.
In a nine-page advisory by the Office of the Competition, which was signed by Justice Secretary Leila de Lima, the DOJ-OFC said telcos should include in their advertising materials the minimum, not the maximum speed connection, service rates and service reliability.
The DOJ said any misrepresentation in their advertisements is in violation of the provisions of Republic Act No. 7394 or the Consumer Act and the Public Telecommunications Policy Act.
“Advertisements and promotions materials on broadband and mobile Internet services must not therefore present specifics that lead consumers to choices that are based on erroneous facts or representations,” the advisory stated.
The DOJ-OFC noted that most telcos are inducing consumers by showcasing various arrangements — either bundled with gadgets or fixed with specific data usage.
It is also the common practice of ISPs, according to the DOJ-OFC to specify only the maximum speed for downlink/uplink connections in their advertisements and other promotional materials.
“Such practice thus creates confusion among consumers. In reality, subscribers are short-changed because they are not guaranteed fast, consistent and reliable Internet service but pay for a quality of service that is below par,” it added.
The DOJ-OFC added that ISPs fail to reveal the implementation of Fair Use Policy (FUP) or data cap in their advertisements.
FUP is being imposed by the companies to give end-users equal opportunities to access their services but heavy Internet users who have exceeded their data limit are expected to experience slow Internet connection.
“The consumers must be fully informed about this term of use. It follows that non-specification of FUP is an indication of a false, deceptive or misleading advertisement,” the advisory added.
The DOJ-OFC noted that the National Telecommunications Commission (NTC) has issued Memorandum Order No. 07-07-2011 to provide guidelines on minimum speed connections for Internet services.
It directs service providers to indicate in their advertisements and other promotional materials as well as in their service agreements not only the service rates of their Internet offers but also the minimum connection speed and the service reliability.
ISPs are required by the memorandum, according to DOJ-OFC to provide a minimum service reliability of 80 percent.
The DOJ-OFC said the NTC may file appropriate administrative case against ISPs for failure to comply with the memorandum.
“The NTC should religiously assess the monthly service reliability of the various ISPs in order to ensure stable, fast, and undisrupted Internet connection. There must be a mechanism that will enable the Commission to compile and compare the monthly measures for systematic scanning,” the DOJ-OFC said.
The DOJ-OFC said the Department of Trade and Industry (DTI) and the NTC are tasked to implement the Consumer Act and the Public Telecommunications Policy Act, respectively.
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