NMHH: Users of Communication Services to Enjoy Increased Protection from 1 September

The Authority provides a stronger safety net to users and a more predictable legal environment to service providers

Published: 25 August 2015

The Decree of the President of the National Media and Infocommunications Authority (NMHH) is to renew communication regulations applicable to subscriber contracts. Among other things, it will bring changes in requirements pertaining to the conclusion, amendment and termination of contracts, provider’s liability, the protection of minors and business subscribers. The Authority will raise awareness about some of the most important rules by means of a short video presentation.

The new regulation aims to strengthen the legal protection of subscribers and users. It takes into account the Authority’s work experience and the market and technology changes that have emerged over the past three years since the issue of the Decree. Decree No. 2/2015 (III. 30.) on the Detailed Rules of Electronic Communications Subscriber Agreements will come into effect in two steps, as of 1 August 2015 and 1 November 2015, and providers are required to apply its provisions as from 1 September 2015 and 1 December 2015. Of the numerous novelties introduced by the Decree, the most important 4+3 changes are the following:

4 key changes applicable from 1 September:

1. Improved awareness in contracting decisions, easy-to-track modifications

Subscribers will be able to make even more informed decisions in respect of the conclusion of a specific contract based on a more clear-cut product selection, more transparent general contracting terms, and advance information on all predictable costs. Service providers offering internet access will collect and publish on their website in a uniform, comparable table format the features of all internet access services offered by them, along with the parameters of their offers.

Changes in the contract will be easy to track even after contract conclusion. Bilateral contract amendments will only be permitted in case of the express, mutual consent of the parties, with no possibility for “unnoticed” contract modifications through the silence or inaction of the subscriber. In the case of implied contracts concluded for an indefinite term, service providers will need subscribers’ advance consent to effect contract modifications through the silence or inaction of subscribers or implied action. Upon the unilateral modification of indefinite term contracts, providers will only be permitted to change the service fee if it is warranted by a specific increase in costs (e.g. higher broadcasting fee) or inflation. They must also inform subscribers of the reason of the increase in the notice sent on the contract modification.

In case of a request for the relocation of the subscription, in order to prevent the accumulation of debt, the Decree will allow providers to refuse relocating the service if subscribers have defaulted on their service fee.

2. More fair contract termination for subscribers, longer time for call termination

With respect to contracts on mobile phone, mobile internet, satellite and terrestrial digital television services, if the service fails or fails to perform adequately at the geographic address specified in the contract, subscribers will be permitted to terminate the contract at will within 14 days of the commencement of the services, and will only be obliged to pay service fees for the services actually used. Service providers will be required to bear all the costs of contract termination – such as the exit fee; subscribers will only have to assume termination costs if the contract is terminated out of their own fault, such as an outstanding fee liability. Providers will have to ensure that, upon the termination of the contract, subscribers can return the provider’s devices and equipment – e.g. the set-top-box – at any customer service. They will also have to provide a receipt on the return and, as before, they will not be permitted to render the acceptance of the termination conditional upon the return of the device.

Upon the initiation of calls, phone service providers will be required to provide subscribers with at least 5 seconds for free call termination (instead of the previous 3 seconds) before being routed to voicemail.

3. Extended penalty payment for providers

In case of the failure of the service, subscribers will be entitled to receive penalty payment automatically upon the provider’s late or failed notification on troubleshooting or on the recovery of access to the service (previously subscribers were entitled to such payments only in case of late or failed notification on the diagnostics or the repair itself). Upon the payment of the penalty, providers will be required to offer a more detailed explanation than before regarding the amount, the calculation and the payment method of the penalty, as well as the underlying breach of contract in order to ensure that subscribers are fully aware of the reason for the penalty and understand how the specific amount of the penalty was determined.

4. Stepped up protection of minors against harmful content

Internet service providers will be required to publish information on access to easy-to-install filtering software to prevent minors from accessing harmful content, along with instructions for use. Providers will have to offer such information on an easy-to-access page on their website, i.e. the homepage or on sub-sites dedicated to specific internet packages or to the protection of minors. This has already been recommended for providers by the Internet Roundtable for Child Protection. Information on content filtering software must also be presented in the general contracting terms.

3 key changes applicable from 1 December:

1. Tighter regulations upon contract conclusion and amendment

The Decree clarifies the definition of implied behaviour during contract conclusion. Even upon contracting without a formal written contract, providers will be required to hand over a written document to the subscriber containing the basic content of the contract. Once a year, subscribers may request providers to provide a document, free of charge, outlining the basic content of the contract effective at any given time. Providers will be required to include in their general contracting terms the terms and the modifications of the announced promotions in order to ensure that the promotion’s details can be found easily and in one location, both during and after the promotion event.

Subscribers, in turn, must ensure access to providers to install the service within 3 months of contract conclusion; otherwise, the contract will terminate automatically.

In the case of fixed-term contracts, before contract conclusion the service provider must inform the subscriber of the minimum amount of costs to be charged to the subscriber during the entire term of fixed-term subscriber contracts, so that the subscriber can make an informed decision about concluding the contract, in full awareness of all predictable costs. Subscribers will only be permitted to unilaterally change the key substantive elements of a fixed-term contract – such as the basic charge, or the term of the contract – if they are obliged to do so by a change in legislation or an administrative decision, and fixed-term contracts may no longer be modified by implied behaviour.

2. More favourable settlement upon the termination of card contracts, more options for termination

In the case of card subscriptions, unused amounts will be repaid by providers upon request if the contract was terminated due to the users’ failure to top up its balance at the frequency specified by the contract.

The range of termination events with no legal consequences will increase in the case of fixed-term contracts: subscribers will be entitled to terminate fixed-term contracts without legal consequences if the quality of the service is inadequate on a regular basis for protracted periods, the provider unlawfully modifies a basic element of the contract – e.g. it increases the service charge –, or removes even a single channel from those stipulated by the contract.

3. More protection for small business subscribers, more freedom for large businesses

In the case of smaller business subscribers – e.g. in the contracts of micro and small enterprises – the parties may diverge only from the provisions specifically listed in the Decree, in order to ensure legal and interest protection for small organisations comparable to that guaranteed for subscribers. There will be far more room for divergence in the case of larger business subscribers in consideration of their increased ability to enforce their interests.

The Decree of the President of the NMHH will create a clear partnership between the providers and users. It will ensure more efficient action against unfair provider practices – which are equally harmful to subscribers and to the market – without unnecessarily restricting the market or innovation. In addition to encouraging true competition, it improves the transparency of the communications market and rejuvenates and modernises regulations, thus providing a clear framework and a fair regulatory environment for service providers as well.

The NMHH’s short video presentation: The Prudent family introduces the key changes

After the presentation of roaming charges, in the latest episode of its series of short videos, the Authority calls attention to the new rules of subscriber contracts. In the video, the head of the Prudent family, Mr. Prudent describes in an easy-to-understand manner the new legal options available to the users of communication services from 1 September and 1 December. The new regulation affects the entire Hungarian population and all businesses; i.e. nearly 20 million subscriber contracts (landline telephone, mobile phone, television and internet services). The short video will be available for viewing on the website of the Authority, on its YouTube channel and on its social networking site as well; in addition, the NMHH will raise awareness about the video via paid advertising.