Watchdog names and shames ISPs outside free disputes scheme — but they bite back

The Commerce Commission has named and shamed internet service providers who do not belong to the Telecommunications Dispute Resolution Scheme (TDRS) — a free, independent service for resolving disputes customers have with their phone or broadband provider.

The watchdog said non-members — including Contact Energy, Inspire Net, Lightwire and Voyager — leave over 100,000 Kiwi consumers locked out of the free dispute process and “left with a harder road to complain”.

But the hold-outs are not taking the criticism lying down.

“It’s disappointing that the ComCom has effectively chosen to smear and savage us for their pet scheme,” Voyager founder Seeby Woodhouse told the Herald.

“Customers already have a route to resolution — the Disputes Tribunal. Why New Zealand needs the overhead of a separate system is unclear and the benefits of the TDRS unproven.”

The Disputes Tribunal (formerly called the Small Claims Court) provides general dispute resolution for fees starting from $45.

Woodhouse said the TDRS was funded by set fees levied on providers. While these fees were indexed to revenue, he said only a small amount of Voyager’s revenue came from consumers.

“TDRS charges a set fee, not a cost per complaint — so there is no incentive to actually address the complaint before it gets to the TDRS, meaning bigger overheads and time wasted handling a complaint back and forward,” Woodhouse said.

He pointed out a July 2022 submission to the Commerce Commission from ISPANZ — the Internet Service providers Association of New Zealand, a group of mainly smaller to mid-tier providers.

It said, “TDRS membership has an additional cost that brings no discernible benefit either to them or to their customers.”

One of the deterrents to TDRS membership is the cost. Small companies manage their cashflows carefully, and vigorously prune unnecessary expenses.

The TDRS fee structure is weighted heavily in favour of larger ISPs, the submission claimed.

“For example, Spark has around 701,000 broadband connections, 2.4 million mobile devices, and a TDRS fee of $485,465 per year. If just counting the broadband connections they pay $0.69 per connection per year. Counting their total connections it is $0.16 per connection per year,” it said.