A change of policy

A change of policy Dominic Smith looks at the rise of policy management and argues for a different approach to how service policies are communicated.

Policy Management has undoubtedly become one of the hottest topics in the telecoms industry. I first wrote about the subject back in the September 2009 edition of Evolve, when ISPs were complaining about high-bandwidth OTT video services swamping their networks, and mobile operators were pre-occupied with the introduction of the EU roaming bill shock regulations.

Over the last 2 years, the level of interest in policy management and charging solutions has ramped up dramatically, underlined by a whole host of articles and vendor announcements at the recent Mobile World Congress in Barcelona. CSPs are now faced with a plethora of options for the types of policies that can be used and the way in which they can be deployed.

However, one recent policy-related news item that caught my eye, was the story that AT&T had been taken to court by one of its customers over the policies that were being applied to throttle users on its data plans. Matt Spaccarelli has become famous for being the David to AT&T’s Goliath, after winning a payout of $850 in a small claims court. The unemployed truck driver has unwittingly become the consumer champion, standing up to the corporate might of AT&T over its claims of ‘unlimited’ data plans, when in fact users were having their data speeds reduced after using between 1.5GB and 2GB of data in a month.

There has been much commentary on the subject over the past few weeks, with some arguing that AT&T’s throttling policy was always in the contract, you just have to read the small print. However, it’s brought into focus again the need for CSPs to be more open and transparent about what they are doing and what this means to their customers. And misleading marketing campaigns that twist words are not helpful.

For example, you can argue that AT&Ts ‘unlimited’ data plans were doing exactly what they said – there was no upper limit to the amount of data that could be consumed. It’s just that after a certain undefined threshold the speed was reduced from the original headline rate. Similarly Apple have just found themselves in hot water in Australia for advertising the ‘iPad with WiFi + 4G’ when in fact it only works with ‘4G’ networks in the USA and Canada and doesn’t support the particular type or speed of ‘4G’ that is available in Australia. And don’t even get me started on whether it really is 4G according to the ITU definition!

The world of social media means that the balance of power has shifted to the consumer, and large corporations can’t simply do as they please and get away with it. It only takes a few clicks to cause a tidal wave of negative publicity – just look at the debacle over Carrier IQ. So it’s now high time that CSPs were more open and upfront about what limitations may apply to their services and not hide the detail in the depths of their contract terms and conditions.
Interestingly, the four main wireless operators in the USA all have contract terms prohibiting their customers from filing class action lawsuits, forcing them instead into arbitration or a small claims court – as was the case with Matt Spaccarelli. By settling in a small claims court, AT&T may have reduced their immediate financial exposure on this occasion, however the surge of negative publicity surely goes much further.

Applications of policy management can have a huge impact on the customer experience provided by the CSP, both positive and negative. On the one hand they can be used by the CSP for additional control and management of their finite network resources, but on the other they can be used to enhance the customer experience by providing added value through boosters, promotions and additional customer controls. But with the plethora of options available, it is no longer a case of what can be done, but how it should be done. And this requires a change of policy.

Companies in the communications business must really focus on communicating clearly and transparently what they are doing and why. If you are going to apply a throttling policy, then you need to explain when this will be invoked and what exactly will happen to the service that is delivered – will the bandwidth reduce by 90% or 50%? This also then opens up the opportunity to create more value – why throttle a service, when you could potentially upsell an improved service level?

Policy management and charging solutions open up a whole new world of opportunity, however CSPs must plan very carefully how and where they should be deployed to ensure they deliver on their marketing promises, and provide the best possible customer experience.

The corollary to the story of Matt Spaccarelli is that having received his payout from AT&T, he is still actually an AT&T customer as there is no other provider who offers coverage in his local area. And his service is still subject to throttling, although AT&T has made some changes to the thresholds at which this applies. Now everyone knows where they stand, let’s hope they have a rather more harmonious relationship from here on.