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MDA to allow shorter terms for pay-TV contracts

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Following extensive public consultations and feedback, the Media Development Authority of Singapore (MDA) has finalised its slate of measures to enhance protection for consumers of pay-TV content.

Singapore

Following extensive public consultations and feedback, the Media Development Authority of Singapore (MDA) has finalised its slate of measures to enhance protection for consumers of pay-TV content.

These measures under the Media Market Conduct Code kick in next month.

Most of the changes are along the lines of what the MDA has articulated before, but an important new one is that pay-TV operators will have to give their customers the option of going for contracts lasting 12 months or less for all pay-TV packages and bundles. This means consumers can opt for shorter contracts if they are uncomfortable with entering into a longer-term commitment.

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Through this raft of measures, the MDA aim to address three key consumer concerns:

  • Unilateral contract changes: Pay-TV operators will be required to allow their customers to exit fixed-term contracts without paying Early-Termination Charges (ETCs) if changes made unilaterally by the operators cause a rise in subscription fees, or if channels or content are removed, or if the operator has dropped at least 20 per cent of the channels in the entire service since the start of the subscription.

MDA had initially proposed to allow consumers to exit without ETCs when any channel or material content is removed. But it realised that it needed to give the industry some flexibility to innovate its content offerings, even as it kept an eye on protecting consumers from unilateral contract changes.

The regulator has decided to drop its proposal to let operators charge ETCs if they take mitigation measures such as by lowering subscription fees when channels or content are removed.

MDA's other recommendations in the area of unilateral contract changes will take effect.

One of these is that consumers be allowed to exit their contracts without paying ETCs no later than 30 days from the date of change.

Another is that operators are allowed to charge ETCs for equipment not essential to the provision of the service, such as for laptops and tablets.

  • Forced upgrades of non-pay-TV services: MDA will proceed with its recommendation that operators be barred from forcing subscribers to upgrade their non pay-TV services (such as broadband or phone service contracts) in order to make changes to their pay-TV services.

But operators will be allowed to offer such upgrades as options for their customers' consideration.

With regard to bundled-service contracts, MDA said the exit option will apply only to the pay-TV service component of the contract. However, operators must disclose at the point of contracting the applicable charges of the remaining non-pay TV services in the bundle if the subscriber exercises the exit option for the pay-TV service.

The charges for the remaining non-pay TV services in the bundle must not exceed the subscription fee which the subscriber paid for the original bundled service contract. Operators may choose to offer consumers the option to exit the entire bundled service contract without ETCs, so long as there is also the option to only exit the pay-TV service component.

  • Lack of awareness of the terms and conditions of contracts: MDA will push through its initial proposal to ensure that consumers are better informed on the terms and conditions of their pay-TV contracts.

It will also require operators to provide consumers with a critical information summary (CIS) highlighting the important terms and conditions clearly and accurately.

Pay-TV operators will also be required to give their customers a written copy of the contract and the CIS within 14 days of contracting, and obtain their customers' confirmation that they have understood the contract terms.

MDA will require pay-TV operators to retain records of their marketing materials and details of agreement for two years - down from three - and supply such materials upon request; the retention period has been reduced because the maximum contract term allowed for pay-TV services is only two years.

The regulator will keep its initial recommendation requiring operators to obtain their customers' consent to continue with a trial or complimentary service before charges apply.

Both Singtel and StarHub said they are reviewing the proposed amendments by MDA.

A Singtel spokeswoman said the company supports initiatives to enhance consumer interests. "We are reviewing the proposed amendments. Virtually all our pay-TV plans have been available to our customers on 12-month contracts for some years now.

"We understand our customers have differing needs and our approach has always been to offer them the flexibility of shorter contracts."

A StarHub spokesman said the company was studying the decision and reviewing the implementation issues that may arise. "We continue to offer our customers the flexibility of choosing between a contract-free subscription and pay-TV packs which combine attractive savings with a contract," he said.

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