Cracking the Code: New Customer Contract Obligations

Topic #2: New Customer Contract Obligations

This second instalment of our ‘Cracking the Code’ series on the European Electronic Communications Code (the “EECC”) outlines the key retail aspects and end-user rights that apply to the electronic communication service providers (“ECS”) under the EECC.   

This Insight focuses on Article 102 of the EECC and focuses on the upcoming obligations in relation to the sign-up of new customers.

ECS providers will be obliged to provide two sets of information before a customer is bound by a contract: (i) the Pre-Contractual Information, and (ii) the Contract Summary.  This requirement applies to consumers as well as microenterprises, SMEs and not-for-profit organisations, (unless the latter three explicitly agree to waive their rights).  These requirements do not apply to business or enterprise customers.

(1)   Pre-Contractual Information – Article 102(1) and (2) of the EECC

ECS providers will need to provide customers with a minimum set of pre-contractual information (“Pre-Contractual Information”) [1] The contract must contain details set out in Annex VIII of the EECC including: details of the provider, characteristics of services, pricing, arrangements for delivery and performance, duration and renewal, personal data provided pre-performance of service, etc (most of which is covered in existing legislation).

Pre-Contractual Information should be provided on a durable medium or an easily downloadable document.  The relevant contract information must be easy to download, coupled with the capability to be opened and consulted on devices commonly used by consumers.  

(2)   Contract Summary – Article 102(3) of the EECC

Article 102(3) of the EECC imposes a new obligation on ECS to provide a ‘summary’ document to customers free of charge before signing up to a new contract (the “Contract Summary”).  The purpose of the Contract Summary is to provide end-users with a clear, concise, transparent and standardised document to facilitate easy comparison between multiple service providers or offers, prior to finalising a contract.

The Contract Summary should include the main elements of the contract and should be presented in a format prescribed pursuant to a Commission Template provided in the Implementing Regulation [2], and following BEREC Guidance [3], in particular, it should adhere to the following requirements:

• Easy to read: Headings should be clearly distinguishable from text, which must be presented in short sentences and in plain English, avoiding the use of jargon and complicated terms.  Easy to read fonts should be used (such as Calibri or Arial in size 12 / 14 for headings and size 10 / 12 for the text below). The Contract Summary should not exceed one single sided A4 page in readable font and not exceed three single sided A4 pages for bundles (longer format may be justified to accommodate the needs of disabled end-users);
• Direct information: The required summary information is to be provided in the actual Contract Summary (ie, not by reference to other documents / information); and
• The Contract Summary must include all required information in Part A and Part B of Annex 1 to the Implementing Regulation (ie, services and equipment, price, duration, renewal and termination, disabled end-user features and other such provisions as required).

The Contract Summary must be provided prior to the conclusion of a contract (both in-person and distance contracts), unless for objective technical reasons it is impossible to provide the Contract Summary, then it should be provided as soon as possible. 

It is likely that the Irish regulator, the Commission for Communications Regulation, will take the view that this requirement should apply to all customers (ie, ‘new’ customers and potentially ‘re-contracting’ customers) in line with the overall purpose of the Contract Summary. 

Both Pre-Contractual Information and the Contract Summary will form an integral part of the contract and will together with the actual terms and conditions constitute the final contract with a customer.  The contract becomes effective once the customer has confirmed his or her agreement on receipt of the Pre-Contractual Information and the Contract Summary.  The terms of the final contract cannot be changed without the customer’s express agreement.

How can operators prepare?

The EECC intends to level the playing field and extends rules to providers that were not regulated on the basis of the current framework, such as over-the-top (“OTT”) players offering services such as interpersonal communication, content and cloud services. This extension is reflective of the fact that end-users are increasingly substituting ‘traditional’ communications services with number-based interpersonal communications services (“ICS”) and that such services should therefore be regulated in the public interest.  

The enhanced end-user rights under the EECC (including the right to receive the Contract Summary and the Pre-Contractual Information) is reflective of the need identified to allow the end-user to make a well-informed choice. As a result, number-based ICS that connect with numbers in national or international numbering plans will be regulated in the same way as traditional ECS and will be subject to the full regulatory regime.  Number-independent ICS that do not connect with numbers in numbering plans will be subject to fewer obligations.

What does the EECC enhance / change?

Pre-Contractual Information

Pre-contractual information obligations are already contained in existing EU and Irish legislation (eg, open access / net neutrality regime and under the Universal Services and Users Rights regime).  These existing rules will be updated and fine-tuned under the EECC once implemented.  However, the inclusion of interpersonal ICS within the scope of ECS will mean that telecoms players outside the current scope of the regulatory regime will be subject to the EECC and have to adapt how they contract with customers.

Operators should carefully review Article 102 of the EECC, to ascertain which category (or categories) of ECS their services fall into and which specific obligations apply. [4] However, we expect that most of the contract information requirements set out in Annex VIII of the EECC will apply equally to number-based ICS and to number-independent ICS.

Contract Summary

The Contract Summary is a new mandatory obligation that will apply to all ECS (subject to limited exceptions).   Operators should familiarise with the prescribed form set out in the Commission Template [5] with reference to BEREC Guidance [6] and begin implementing this step into their customer sign-up process.

Please contact Kate McKenna, Simon Shinkwin or Neringa Juodkunaite at Matheson with any questions.

For an overview of the new security and outage reporting obligations for internet-based ICS please see Cracking the Code: Insights Series on the European Electronic Communications Code.