Chapter 2Key issues
2.1This chapter explores the extent of support for the Telecommunications Legislation Amendment (Enhancing Consumer Safeguards and Other Measures) Bill 2023 (the bill) and concludes with the committee's views and recommendation.
Overall views on the bill
2.2There was general support for the intent of the bill to refine and improve the operation of the statutory infrastructure provider (SIP) regime. The need to deliver improved safeguards for Australian consumers accessing broadband and voice services was acknowledged by most submitters. For example, the Australian Communications Consumer Action Network stated its support for the key elements of the bill and noted that it was 'an important step in refining the telecommunications consumer safeguards framework'.
2.3Similarly, the Telecommunications Industry Ombudsman (TIO) expressed support for the bill's clarification of the TIO's powers to investigate and make determinations in relation to disputes and complaints about SIP connections. The TIO also supported enhancing the Australian Communications and Media Authority's (the ACMA's) powers to identify telecommunications carriers and carriage service providers (CSPs) in public reports on their performance.
2.4The Department of Infrastructure, Transport, Regional Development, Communications and the Arts (the department) noted that the proposed amendments reflected the lessons learned since the SIP regime was introduced in 2020 and would address 'a number of areas where the regime could be fine-tuned to provide greater certainty for consumers, industry and the ACMA'.
2.5However, some submitters raised issues for further consideration or amendment. For example, the Communications Alliance (CA) questioned the need for the expansion of the ACMA's reporting powers, while Telstra called for further clarification around the proposed changes to the conditions to be satisfied for CSPs to become the SIP for certain areas.
Comments on specific aspects of the bill
2.6This section examines the issues raised by submitters in relation to specific aspects of the bill, including:
notification requirements for SIPs;
issuing of evidentiary certificates;
triggering of SIP obligations;
compensation framework; and
disclosure of performance information.
Notification requirements for statutory infrastructure providers
2.7There was broad support for stricter notice requirements for the exit of carriers when they declare service areas and when they are unable to fulfil their SIP obligations. This included a 12-month notification requirement where the SIP expects NBN Co Limited (NBN Co) to assume SIP responsibilities, and 90 days in cases where the SIP has arranged with another carrier to take over SIP responsibilities.
2.8According to the department, the current exit notification requirements for SIPs operate in a limited way and can often lead to notifications being provided to the department and the ACMA at the last minute. In some cases, these late notifications have led to service disruptions and uncertainty for consumers and industry trying to access broadband and voice services.
2.9While supporting the proposed changes, the TIO noted the importance of up‑to‑date information to enable it to fulfil its role in resolving disputes between consumers and SIPs. In line with the requirement to notify the ACMA, the TIO suggested that the bill be amended to require carriers to also notify the TIO when they declare or exit a nominated service area.
2.10In response, the department explained that instead of 'amending the bill to achieve the outcome the TIO is seeking, the department considers that administrative arrangements can be put in place between the TIO and the ACMA to ensure the TIO has access to this information in a timely manner'.
The issuing of evidentiary certificates
2.11Under the proposed changes, the TIO or the ACMA would be able to issue a consumer with a statement that a SIP has contravened a compensable standard or a designated compensable rule. While supporting the proposed compensation scheme, the TIO sought clarification in relation to how evidentiary certificates would be issued:
Before consenting to the conferral of these powers, ideally it would need to be made clear through subordinate instruments when it would be appropriate to issue this evidentiary certificate, supported by clear obligations and remedies in the compensable standards and rules.
2.12The department noted in response that it would be a matter for the TIO 'to determine whether it wishes to issue evidentiary certificates, and if so, at what point in its dispute resolution process'. It argued that:
…this would be done at a point at which it became clear that a dispute was unable to be resolved through the TIO's processes and legal action may be required, or in a situation where legal proceedings are threatened by one of the parties to a TIO complaint process.
As the TIO notes, the circumstances in which such certificates may be issued are best dealt with through secondary measures, such as delegated legislation. The department will discuss this further with the TIO after the passage of the bill.
Triggering of statutory infrastructure provider obligations
2.13Currently, a provisional nominated service area is only declared when the network infrastructure installed by a carrier can supply services to premises in the whole of a real estate development project (REDP) or a building redevelopment project (BRP). The bill would extend this requirement to installations that would enable the supply of eligible services to premises in 'the whole, or a part of the project area'.
2.14While Telstra supported restricting the contractual trigger for the SIP, it argued that there was 'scope to make this even clearer than drafted, by changing the definition of "person responsible for the REDP or BRP" to the "person responsible for undertaking the REDP or BRP"'.
2.15In addition, Telstra raised concerns in relation to the deployment of infrastructure to only part of an REDP or BRP. It argued that this arrangement could result in multiple SIP areas within a single REDP or BRP which could make it 'very difficult for CSPs to apply accurately and for wholesale customers to understand'. Telstra explained:
The SIP should be applied only at the level of the whole of an REDP or BRP. Carving out individual premises does not provide a cost-avoidance benefit to NBN Co as the default SIP because it must have infrastructure installed in the REDP or BRP to serve the remaining premises anyway. In contrast, NBN Co would have a cost-avoidance benefit if another carrier contracts to connect the whole of an REDP or BRP, because it would then not need to be present in that area at all.
2.16However, the department highlighted that the proposed changes would address any gaps where houses are constructed and occupied, but the carrier has not yet installed telecommunications network infrastructure. It argued that, in some instances, this has led to NBN Co becoming the default SIP for that area despite not having the network infrastructure in the development. The proposed changes would ensure that the entire project area is serviced by carriers.
Amendments in relation to the compensation framework
2.17The TIO highlighted several issues that could be addressed through minor drafting changes in relation to the proposed compensation framework in Division 4A of the Tel Act. This included replacing the term 'customer' with 'end user' and—given most SIPs do not have a direct contractual relationship with the end user—implementation of a two-step process, where SIPs pay compensation to the retail provider, who then passes that on to the end-user.
2.18In its response, the department indicated that the term 'customer' covers both retail provider and end user customers. It also noted that the ACMA has previously considered a two-step compensation arrangement, but that significant difficulties existed in this approach:
…the SIP would be required to pay compensation when it breaches a SIP standards or rule. However, it does not automatically follow that the retail provider has then also breached the terms of its agreement with an end-user. Retail providers also have differing approaches to compensating their customers that may be linked to their differing service standards.
2.19The department argued that these issues were 'best addressed through delegated legislation at the time any compensable SIP standards or rules may be made' and that the department 'would look to engage with interested parties, including the TIO, in advance of any arrangements being made'.
The disclosure of performance information
2.20Submitters generally welcomed the proposed new powers for the ACMA to link telecommunications carriers and CSPs in public reports on their performance on key customer service issues. For example, the TIO strongly supported the amendments and argued that:
Improved transparency and accountability of telco market performance will benefit industry, consumers, and regulatory bodies and help build trust and confidence in the market. For example, it could provide transparency over the types of telco issues commonly experienced by consumers that do not contact the TIO for assistance.
2.21The department emphasised the current limitations of the ACMA in disclosing more high-quality data to consumers and noted that current reporting rules prevent the disclosure of information that allows the public to identify and compare the performance of providers. It further argued that the proposed changes would 'enable the ACMA to highlight good performance and those providers delivering exceptional services to their customers'.
2.22In contrast, the CA argued that the new requirements could make it more 'confusing for consumers to determine the relative performance of providers with which the consumers have services or from which the consumers are considering making a purchase'. It expressed concern that the ACMA did not provide comparative context for the complaints data that it reported and that 'there can be differences in the ways that different providers categorise contacts received from customers'.
2.23In addition, the CA questioned whether the proposed new reporting powers for the ACMA were necessary given existing reporting requirements:
he actions proposed under Schedule 3 are not necessary, […] given the existing channels of information about the performance of individual service providers as detailed in [CA's] submission, and including the Complaints-in-Context index, the ACCC's Measuring Broadband Australia program, quarterly and annual reports published by the TIO on complaints it receives in relation to specific providers, and various other publications from the ACMA and ACCC.
2.24However, the department pointed out that current reporting data from organisations such as the TIO and the ACCC failed to cover 'individual provider performance regarding the support they provide customers experiencing financial hardship, or customer service more broadly, or faults and service difficulties and rectification, customer appointment keeping or various other relevant matters'.
2.25The department emphasised that as a professional regulator, the ACMA 'would take a rigorous approach to its reports, and consult industry and other relevant stakeholders in relation to its reports as appropriate'. It also noted:
…that the proposed amendments do not expand the ACMA's ability to collect information, and do not expand on the scope of matters that the ACMA can report on. The proposed changes do not compel the ACMA to publish any specific information. The changes only empower the ACMA to identify the performance of service providers in its reports, if the ACMA sees value and benefit in doing so. The power would be discretionary, enabling the ACMA to decide what data to publish and the manner in which it does so.
Committee view
2.26The committee acknowledges the general support for refining and improving the operation of the SIP regime, with key participants welcoming the key proposals to reform the telecommunications consumer safeguards framework.
2.27The importance of clarifying how SIP service areas are determined and the powers of the TIO to resolve complaints about SIP connections was recognised by most submitters. Indeed, it was noted that the proposed amendments will provide certainty to consumers living in new development areas and reduce delays in telecommunications access for occupants of new buildings.
2.28The committee acknowledges the desire of some submitters for further explanation and or amendment. The TIO for example requested clarification in relation to how evidentiary certificates would be issued. The committee notes that this will be clarified in secondary measures and that the department will hold further discussions with the TIO after the passage of the bill.
2.29Similarly, the department has advised that administrative arrangements can be put in place between the TIO and the ACMA to ensure the TIO has timely access to information relating to the declaration of nominated service areas. Inaddition, the department has advised that the TIO's suggested amendments to the compensation framework are best addressed through delegated legislation at the time any compensable SIP standards or rules may be made.
2.30The committee welcomes the department's responses on these issues, and urges the department to engage with interested parties, including the TIO, in advance of any arrangements being made.
2.31The committee recognises the concerns raised by some participants in relation to the proposed new reporting powers for the ACMA. However, the proposed amendments do not expand the ACMA's information gathering powers, nor do they expand the scope of matters the ACMA can report on. The committee is satisfied that the amendments will provide a clear public benefit by enhancing accountability and transparency across the telecommunications sector.
2.32The committee also notes the department's advice that the amendments do not constitute an uncommon conferral of powers upon the industry regulator and will simply bring the telecommunications sector in line with other essential service sectors in Australia. Indeed, the proposed changes will give providers an incentive to lift performance if new standards or rules are implemented.
2.33Overall, the committee believes that the bill will enhance the operation of the SIP regime and represents an important step in delivering improved safeguards for Australian consumers accessing broadband and voice services.
2.34The committee recommends that the bill be passed.
Senator Karen Grogan
Chair