Regulation of Industry

At the expense of the general population, the Singapore Government is too friendly to big business and somewhat lax in its regulation. To cite an example, allow me to quote (the original) of my letter to the Straits Times Forum (dated Mar 28, 2011).

I read, with great dismay, Friday's article "WoW... StarHub, why so slow?". Consumers seem to be getting a severely raw deal with respect to broadband access. Violation of the Quality of Service (QoS) obligations warrants a fine of $5000 monthly. This comes to less than two cents per subscriber per month in StarHub's case. Whether violations occur or not is secondary to the magnitude of the punishment, which reveals a lax attitude towards regulation of the broadband industry by IDA. A QoS violating broadband provider incurs a tiny cost per subscriber while all subscribers incur economic losses in terms of lost pleasure, wasted time, or even lost business. Furthermore, subscribers remain locked in by their contracts. Stiffer penalties for violations are needed to ensure satisfactory service in what might today be classified as critical infrastructure.

Allow me to give an example of strong, but fair, regulations. Informally speaking, sustained failure to provide broadband services of the promised quality amounts to breach of contract by a service provider. As such, to protect the interests of consumers, regulations should to be in place that give subscribers the option to void their contracts without penalty, returning any loaned or subsidized equipment if necessary. In addition to that, a sizable fraction of total monthly bills should be refunded to consumers and a similarly sizable fine levied. In this example, the punishment fits the crime although consumers are arguably still on the losing end with the previous losses due to poor service and the trouble to, if they choose to, contract with a different service provider.

Regulation of critical infrastructure such as broadband should be strong. No Singaporean would tolerate intermittent power or water today. Why should we tolerate sustained slow broadband?

IDA's first response (on 2nd Apr 2011, 2nd Apr 2011, Broadband speed not part of service quality standards) was totally off the mark as indicated by the title. Regulations are meant to encourage good corporate behaviour. In this respect, IDA's regulations, at least for ensuring quality of service, are greatly lacking and leave eventual customer flight as the sole real mechanism for encouraging good quality of service. Consumers should not have to bear the majority of the downside risk in service contracts.

Singapore had to be big business friendly when there was no big business to supply jobs. Now Singapore's economy is bustling. It is time to put in place regulations that may be described as having a large basin of acceptable operating standards and tremendous penalties for straying from these standards even a bit (the basin is, after all, large).

Consumer protection also known as protection of the property/contractual rights of the general populace should be a core value of any civilized nation. Why expect less of Singapore?