ISPs and telcos must choose between two dispute schemes

The obligation is found in the UK's Communications Act, passed earlier this year. It says that all ISPs and other communications service providers must provide access to an external dispute resolution scheme for their customers and address this in their Codes of Practice.

The first approved dispute resolution scheme was the Office of the Telecommunications Ombudsman, known as Otelo. Launched in January 2003 and formally approved in September, it has attracted significant membership, claiming 96% of the fixed-line telecoms market, 50% of the mobile market and around one third of the ISP market.

Today, telecoms watchdog Oftel gave approval in principle for the Communications and Internet Services Adjudication Scheme (CISAS), funded by some members of the ISPA (including AOL and Freeserve), Telewest and the two mobile operators.

Each scheme will deal with disputes from the customers of their member ISPs and telcos where the disputes cannot be resolved between the parties.

David Edmonds, Director General of Telecommunications, today said of CISAS:

"I am pleased that these communications providers have developed an independent scheme to help consumers resolve disputes. This service will be promoted by the companies to ensure that consumers have access to a free, independent dispute resolution service."

The ISPA said in a statement that it was invited to join Otelo's service, but declined because it wanted a service that would be tailored to its membership. It also points out that its service is free to members, unlike Otelo's. However, Otelo's head, Elizabeth France, today told OUT-LAW.COM that the cost of joining her scheme can be as little as £100 per year for small ISPs.

France, who acted as Britain's Information Commissioner until last year, said that the setting up of CISAS shows that the Communications Act is being used in the way it was written: it provides for a choice of dispute body.

But the key, says France, is that all ISPs and telcos must now choose one of them.

"We are not a regulator," she explains. "We are a creature of industry, formed to help industry improve its consumer dispute handling. While we hope to be the dispute resolution service of choice, the introduction of this second scheme makes it easier for us to go out to non-member companies and tell them at least to join one of the two schemes."

The closing date for applying to the regulators to operate a dispute scheme was 30th September 2003 – and at this date, Otelo and CISAS were the only applicants. So ISPs and telcos must choose between them.

According to France, around 1,000 companies covered by the Communications Act are still not members of any dispute scheme – which, technically, amounts to a breach.

It's not clear from the announcement on CISAS whether it is limited only to members of the ISPA and the founding telcos or if it is also open to others. However, not all members of the ISPA are members of CISAS.