Portfolio Committee on Trade and IndustryPortfolio Committee on Trade and Industry
3 September 20083 September 2008
Lessons In SA Mobile Self RegulationLessons In SA Mobile Self Regulation
Leon PerlmanLeon PerlmanChairman, WASPA
Mike SilberMike SilberRegulatory Advisor, WASPA
www.waspa.org.za
��Wireless Application Service Providers Association
� Represents ‘Wireless Application Service Providers’• WASPs provide novel mobile services
• Compulsory membership
�� Formed 26 August 2004• Worldwide recognition for its work
• WASPA modus implemented in other countries
� Self Regulatory• Consumer protection using enforced Code Of Conduct
• Power to close services, Check QoS, provide immediate refunds etc
� Industry promotion
WASPA Broad OverviewWASPA Broad Overview
BackgroundBackground
SA & African Mobile StatsSA & African Mobile Stats
� +/- 32million mobile users
• Biggest in Africa
� +/- 84%+ prepaid• Vulnerable as no access to billing like post-paid
�High SMS use (>1billion/month)
�Content and digital services delivery
via mobile phone very popular
• Huge growth worldwide
SA Mobile StatsSA Mobile Stats
Evolution: 2002Evolution: 2002-->>
Mobile Convergence
Mobile Services EvolutionMobile Services Evolution
Shopping Radio TV Shopping Radio TV Banking Phone Banking Phone VideoCamVideoCam
GPS Camera IPods
New ‘SmartPhones’
New Services
� Mobile TV
� Interactive TV (eg Voting for Idols)
� Banking via cellphone
� Search Engines
� Payment services etc
� Music Downloads
� Picture Downloads
� Games
� Competitions
� Location Services
� Yellow Pages
� Tracking services
� News alerts
� Financial Info and Alerts
Services WASPs ProvideServices WASPs Provide
M-Commerce(e-commerce+ via mobile)
MM--CommerceCommerce(e-commerce+ via mobile)
� Majority of services still ringtones, competitions
� 170+ WASPs
� Over 1,000 Information Providers (brands etc)
connect to consumers via WASPs acting as aggregators
� Lots of new international IP entrants in 2007/8
SA WASP StatsSA WASP Stats
WASP (aggr)Information Provider Network Subscriber
� Consumers SMS a ‘keyword’ or a number to common
5-digit shortcode to obtain content or to enter a
competition
� Billing once-off or via periodic billing (subscription)
� Uses premium rates for payment
• Greater than standard rate
Keyword
34567To:
Payment For WASP Services Via ShortcodesPayment For WASP Services Via Shortcodes
Money FlowsMoney Flows
WASP Information ProviderNetworkSubscriber
R10R10 = R5 + R1 + R3.50 + 50c
IPR
ExampleExample: Sale of Ringtone for R10: Sale of Ringtone for R10
New ServicesNew Services
Produce New Legal, Produce New Legal,
Consumer &Consumer &
Regulatory ChallengesRegulatory Challenges
� Hard Regulation (National Law)
� Self Regulation (Soft Law)
WASP Regulatory EcosystemsWASP Regulatory Ecosystems
Mobile Regulatory RegimesMobile Regulatory RegimesType State Role Advantages Disadvantages
Pure Self Regulation
(WASPA now)None • Reflexive
• Coordination
• Lobby for acceptance
Co-regulation Cooperative Framework
•State acceptance
•Legislative Advantages
•Carrot+stick
Non-reflexive
State Control Peremptory supervision•State acceptance
• Possible sunset clausesNon-reflexive
USA: Pure Self Regulation
SA: Self-Regulatory (WASPA through ECT Act 2002)
UK: Co-regulatory (PhonePayPlus through Ofcom)
Current Regimes:
General state/hard regulation or rules
may not speedily provide answers to
highly complex technology scenarios.
___________________________
Hence, we submit, there is a cogent
need for flexible self (soft) regulation
via sector-specific agencies.
Legal & Practical LacunaeLegal & Practical Lacunae
Soft/Self RegulationSoft/Self Regulation
� Cogent alternative to direct statutory/state
intervention in a nascent, evolving industry
� Provide Ex Ante Rules/Code Of Conduct
� To protect children and other vulnerable
consumers
� Peer-pressure on rogues
� Sanctions imposed, services closed
� Build consumer confidence
‘‘Light TouchLight Touch’’ Self RegulationSelf Regulation
16
Complaints about a specific few
Rules Tightened
Consumer IssuesConsumer Issues
Vast majority of WASPs Act EthicallyVast majority of WASPs Act Ethically
WASPA Code Of Conduct + Ad RulesWASPA Code Of Conduct + Ad Rules
� Code Of Conduct in force from 1 Sep 2005
� Advertising Rules in effect from 1 Jan 2006
� Both ‘integrate’ many national laws
� In some cases, stricter than national laws
� Rules revised constantly as issues arise
� Similar ‘WASP’ issues in other jurisdictions
� WASPA Rules applied in other countries
WASPA Code Of Conduct & Ad RulesWASPA Code Of Conduct & Ad Rules
� Spam
� Adult Services
� Access by Minors to adult content
� Subscription Services
� Display of Pricing
� Display of Terms & Conditions
� Competitions
� Dating Services
� Charity Services
Code Of Conduct ScopeCode Of Conduct Scope
Promotes GoodPromotes Good
Governance & Governance &
Best PracticeBest Practice
� TV:
� Show price in top corner of screen
� Minimum Display times for cost and T&C
� Minimum font sizes & type
� Radio:
� Voice-over must state price
� Indicate T&C
� Print:
� Minimum size for price
� Minimum size/position of T&C
� Billboards:
� Minimum % size for price
� Minimum size/position of T&C
� Plus: Web, Below-The-Line, SMS, MMS
Advertising Rules Advertising Rules –– Media SpecificMedia Specific
Now Media
Specific
Guidelines
s
R3/weekSubscription
This is a subscription service. You will be charged Rx per week until you unsubscribe
plus R4 per content item.
R3/weekSubscription
Eg Vodacom Only. Helpline 0xx-xxx-xxx. Adults only. Java/WAP/GPRS required.
Price must be on screen 100%
of ad time in any top corner
Show ‘subscription’
100% of ad time in price block
Subscription service T&C must be
on screen alone for at least 5 sec
After Subscription info shown,
remaining T&C must be on
screen for at least 5 more seconds
Screen 1
Screen 2
Price and “subscription” text
must remain on-screen while the
T&C’s below change to include
the remaining T&Cs
Price text at 18 points
Use Zurich font
‘Subscription’ text at 12 points
Use Zurich font
Price text at 20 points
Use Zurich font
‘Subscription’ text at 12 points
Use Zurich font
Title Safe BorderTitle Safe Border
Remaining T&C text all at 15 points
Use Zurich font
‘Subscription’ text all at 15 points
Use Zurich font
Price and subs text placed in
box, in contrasting colour to box
� R300 a month max billing on services
� Need consumer’s explicit consent to continue billing
� Services ads cannot be aimed at children
� No TV advertising within children programming on TV
� TV stations also made membership compulsory
� Must provide confirmation via SMS when subscribed to a
service
Latest UpdatesLatest Updates
� Full Time Monitor for compliance with Code
of Conduct/Ad Rules
� More proactive than reactive
� Uses TV & print clipping services
� Range of live SIMs live to check for reminder
messages, spam, QoS, correct billing etc
� May lodge formal complaints against
offenders
WASPA Media Monitor
� Formal process
� Pool of 8 WASPA Adjudicators
� Adjudicator decision appealable (some in part)
� 3-person Appeals Panels
� All are ICT-lawyers
� Fast turnaround from receipt of complete case file (48 hrs)
� Emergency Procedure (3 adjudicators at once, immediate)
� All have powers to:• Order refunds to consumers
• Suspend WASP/IP
• Impose punitive fine
• Withhold revenue
• Shut down services immediately
• Blacklist providers
• Expulsion from WASPA etc
WASPA Adjudicators & Appeals PanelWASPA Adjudicators & Appeals Panel
� Immediate shut-down/blacklisting of rogue services
� Fines of up to R200,000 levied
� More emphasis on closing down rogue services than
on primarily only issuing fines, which they have
invariably built into their business cases.
� Ordered refunds to consumers
� Networks executed on WASPA sanctions
recommendations
� TV stations made WASPA membership compulsory
� Required doubling of adjudicator pool
� Required Media Monitor – preemptive
� Cooperation with ASA & ICASA
ResultsResults
� Over 4,500 complaints/enquires
� Took 1.5 years to get first 1,000 complaints
� Took 3 months to reach third 1,000 complaints
� Hundreds of adjudications
� 85 adjudications took place during 2007
• 114 formal, many informal
� All adjudications & appeals on WASPA web site
• www.waspa.org.za
Complaints Process Stats from 1/9/05
1. Subscription Services
• Issues:
• Did not know I subscribed
• How do I un-subscribe?
• What’s it costing me?
• Solution: WASPA implements monthly reminder messages � Bans auto-subscriptions
2. SMS Spam
• Issue: Unwanted SMSs
• Solution: WASPA implements ‘recent’ & relevant clauses � STOP command � No active number harvesting
3. Unclear pricing on ads
• Issue: TV Ads unclear, smaller fonts than allowed
• Solution: WASPA agreement with TV stations for Ad declaration & blacklisting of rogues
4. Adult Content
• Issues:
• Cross-selling via SMSing to persons who have bought non-adult content like ringtones
• Access By Minors
• Solution: No cross-selling allowed � No content > topless � No Adult Ads on TV > Programme
5. WASP/IP Contact Details
• Issue: Who do I contact about complaint? Refunds?
• Solution: WASPA implements call-centre � Plans self-help system via USSD
Consumer IssuesConsumer Issues
Requirements:
� Sector-specific rules/code needed
• Technology is VERY complex
• General rules not effective
• Must have teeth/enforcement
� Requires multiple Code of Conduct & Ad Rule revisions
• Allows Rapid Response to evolving technologies/business models
� Revisions adopted coincident with results from:
• WASPA complaints system & adjudicator reports
• Media Monitor observations of trends
• Market research
Change Process:
� WASPA Code of Conduct Sub-Committee deliberates, Mancom OKs changes
� Fast turnaround of revisions to prevent consumer harm
Reflexive Code of Conduct NecessaryReflexive Code of Conduct Necessary
Thoughts:Thoughts:
Consumer Protection Bill &Consumer Protection Bill &
Self RegulationSelf Regulation
� Promotional Competitions– SMS has revolutionised promotional competitions
– Recognise the rogues• 1 millionth SMS wins a Ferrari (R10 an SMS)
• Have dealt with in terms of the Code
– Many consumers and promoters PREFER premium-rated SMS• Standard rate – pre-paid users pay more than (often wealthier) contract users
• PR SMS has same cost irrespective of the wealth of the entrant– Wealthy contract customers don’t get cheaper rates than poorer pre-paid customers
• PR SMS has higher quality of service (equivalent of registered post vs ordinary post)
– Welcome Section 36• Refers to “reasonable costs of posting or otherwise transmitting an entry form or
device”
• No definition – could be debates
• Suggest a practical approach from the UK Gambling Act– Cost of entry limited to cost of standard post
– Can have higher cost PROVIDED also a free entry mechanism
– No discrimination between paid and free entries
– Sub-section 11 provides for an exception based on monetary limits• Could be delay
• Suggest a monetary amount be inserted as an interim until the amount is determined by the Minister and amended from time to time
Specific CommentsSpecific Comments
� Recognition of Codes of Conduct
– Could be delays
� May stifle evolution of Codes of Conduct
– NCC/Ministerial approval for changes in Codes will take
months, while consumer harm may continue unchecked
– Provisions in ECT Act from 2002 still unimplemented
– Technology regulation is VERY complex
� WASPA proposes services exemption (like in ECT
Act) or interim recognition
More Specific CommentsMore Specific Comments
“WASPA is one of the best
examples of self
regulation in the world”
Former ICASA Councillor Zolisa Masiza22 February 2008
Closing ThoughtsClosing Thoughts……
s
This is a subscription service. You will be charged Rx per week until you unsubscribe
plus R4 per content download.
Text must be placed in
in solid white box with visible
black border.
R7.50/week+ R8/SMS
Show white block with
‘Subscription Service’
100% of ad time
Total/Upfront price
must be on
screen 100%
of ad time in top
right hand corner
Title Safe BorderTitle Safe Border
18+
T&C text:Mandatory info16 pointsZurich fontText in black only
with white border
Restrictions 14 Pt ZurichBlack text
Price Text
Total/Upfront price
Text in black colour
20 pt Zurich Font
No pixelating, smudging
or smoothing of text
SUBSCRIPTION SERVICESUBSCRIPTION SERVICE
Network charges extra. Stop 31234. Network charges extra. Stop 31234.
Competition closes 31 Jul 08. Competition closes 31 Jul 08.
Errors billed. XYZ Company. Errors billed. XYZ Company.
Help 082123456 (VAS). xyz.co.zaHelp 082123456 (VAS). xyz.co.za
.