Audits will benefits all parties. Having an audit process will help the market grow, because consumers will be more confident that they’re making a purchase they can rely upon and that will show up on the bill accurately, says Spencer. “The more they have confidence that the industry is fair and square, the more they will use the services to buy not just ringtones but other items that are offered for sale.”
“If consumers have a mechanism where they can use their phone to purchase every day items—using it for vending machines, ski tickets, parking meters— their phone can become an e-wallet,” Spencer continues. This presents huge revenue opportunities for carriers. “But if the market is not adequately monitored and policed, first of all the customer care calls fill up, but more critically, unhappy customers turn off the carrier. Carriers are risking not just a five dollar ring tone, they’re risking a $60- or $70-a-month subscriber.”
If consumers are satisfied with downloaded content, third-party providers will enjoy increased market penetration and acceptance of these premium services, and, because charges appear on customers’ wireless bills, a good payment mechanism, Spencer adds. Having an industry-wide audit program is likely over time to reduce the variations in how an application must look and feel for the different carriers as well. This makes the content providers’ job easier. “It will never be 100 percent the same, and we accept that, but the differences will be less as time goes on,” Spencer says.
Finally, the investment community, which has poured money into content and application providers based on revenue projections, will benefit as the market’s successes attract even more money. “It’s a virtual cycle of investment and market growth,” Spencer continues.
Auditing process will be real-time and ongoing. CTIA expects to select an auditing firm and have the auditing process in place by the fourth quarter of 2006. Although the details have not yet been finalized, the process will most likely be similar to the auditing process currently used by Cingular and some other wireless carriers.
As currently planned, a third-party auditor will be selected that will constantly monitor all the short code subscriptions and check those offerings to make sure that enrolling, using, opting out, and billing all work as advertised. A “score card” will be developed for each content provider, and providers will have to meet a certain “score” or face more constant auditing, as well as potential penalties.
When a problem with a content or service program is discovered, audit managers will immediately get in touch with the providers of the program and let them know what changes need to be made and give them a deadline for making them. (The time frame will likely depend upon the severity of the problem.) Audit managers will also alert the carriers to the problem.
