TIO broadens definition of Small Business

The Telecommunications Industry Ombudsman (TIO) has announced that it is broadening its definition of small business by applying a new criteria to determining what a small business is.

Prior to 1 July 2012 the TIO largely dealt with consumers and also ‘small business’ customers, which until now has left many businesses outside the tent when it comes to TIO intervention.

From 1 July 2012, the TIO has announced that it will be applying the following criteria to determine what a small business is:

• the number of employees – this should be 20 employees or less but the TIO takes a flexible approach to account for variations in employment practices. For example, businesses that seasonally employ more than 20 employees (such as agricultural businesses) or that are engaged in the manufacture of goods and employ less than 100 employees, are not excluded
• the annual turnover – generally this should be under $3,000,000
• the nature of the business, and if that type of business is typically small or not-for-profit or does it operate from the owner’s home. The TIO will also consider whether the nature of the business gives the business little or no bargaining power to negotiate the terms of any telecommunications contracts with its provider
• the way the business is structured or managed. For example, is a business independently owned and funded by a small number of individuals who make most of the important business decisions?
• the issue in dispute. For example, does it relate to basic services generally purchased by residential or small business consumers or to complex technologies or systems used by larger businesses?

While the decision has been welcomed in some circles, some ISPs and Telcos have expressed their frustration that more customers will now come within the jurisdiction of the TIO. Critics claim that instead of operating as an independent party to facilitate a resolution of disputes, the TIO acts as a consumer advocate.