Relationship between ACMA and telcos raises concerns

The Australian Communications Consumer Action Network (ACCAN) has called for a parliamentary inquiry into the conduct and culture of the Australian Communications and Media Authority (ACMA), following revelations about its close collaboration with major telcos.

Through Freedom of Information disclosures, the ABC this week reported that the ACMA made a deal with Optus to reduce its fine for breaching the Integrated Public Number Database (IPND) in late 2023, and has an established practice of sharing media releases about upcoming enforcement actions with the affected companies to check they are ‘suitable’. According to ACCAN CEO Carol Bennett, these practices raise questions about ACMA’s independence and its ability to act in the public interest.

“Independent research has found the ACMA levied just over $6 million in fines to telcos — some of Australia’s largest companies — for consumer protections breaches between 2010 and 2023, despite the consumer experience of poor services, high prices and exploitative sales conduct,” she said.

“The key regulator for our sector must oversee clear rules to protect consumers, and step in to penalise non-compliance when it occurs. The correspondence found between Optus and the ACMA raises serious questions about the close dealings of the two parties in jointly determining fines and penalties.”

The news comes one week after the government announced that it was strengthening the ACMA’s compliance and enforcement powers. This includes proposed amendments to the Telecommunications Act 1997 to enable the ACMA to take direct and immediate enforcement action against telecommunications providers that have breached their obligations to customers, rather than the current practice of first issuing a direction to comply.

The government will also move to increase maximum penalties for breaches of industry codes and standards under the Act from $250,000 to $10 million, bringing them into line with those for breaches of service provider determinations under the Act. Additional changes will allow for the courts to determine penalty amounts based on financial turnover of the provider and the scale of the breach.

Finally, the government will establish a Carriage Service Provider (CSP) registration scheme to increase visibility of providers operating in the market, especially telecommunications retailers. It will enable the ACMA to undertake more proactive education and compliance work with providers and ultimately empower the ACMA to stop CSPs operating in the market where they’ve been found to pose unacceptable risk to consumers, or have caused significant consumer harm.

While ACCAN has welcomed these reforms, saying they should promote increased accountability, transparency and compliance within the telecommunications industry, Bennett maintained that the ABC’s revelation raises questions about the culture and approach of the ACMA.

“No other sector accepts collusion on fines and penalties between a watchdog and the industry it oversees — a situation that can only be described as regulatory capture,” she said.

“Fining an $8 billion company only $1.5 million for over 200,000 data breaches suggests telcos can treat compliance obligations as inconsequential or just the cost of doing business.

“A parliamentary inquiry with broad terms of reference is the only way to address the issues raised by these documents and more broadly within the sector.

“As an essential consumer service, the public expects that their regulator for this industry is working in their interest — not as a lapdog for industry.”

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