Purpose of the Bill

The purpose of the Telecommunications Amendment (Enhancing Consumer Safeguards) Bill 2025 (the Bill) is to amend the Telecommunications Act 1997 (the Telco Act) to provide for the registration of carriage service providers (CSPs), to mandate compliance with industry codes as well as increase pecuniary penalties and expand the authority of the Minister to increase any infringement notice penalty which the Australian Communications Media Authority (ACMA) can issue.

The Minister for Communications, Michelle Rowland, stated in her second reading speech that the aim of the Bill was to ensure there were ‘the best consumer safeguards in place’ and there was ‘clear recourse if telcos do the wrong thing’:

Nobody wants an industry that sees penalties as the 'cost of doing business'. We've listened to wide-ranging feedback from industry, regulators, the Telecommunications Industry Ombudsman and consumer advocates to develop these reforms. The [Bill] will improve compliance and enforcement of telecommunications consumer safeguards and constitute a comprehensive package of reforms to those arrangements. They will help to ensure that the ACMA is an empowered and effective regulator and that appropriate incentive structures are in place to drive better behaviour by telcos. (p. 6)

At the time of writing, non-government parties and independents have not commented on the Bill.

Structure of the Bill

The amendments of the Bill are contained in 4 schedules:

• Schedule 1 establishes a CSP registration scheme
• Schedule 2 makes registered industry codes directly enforceable by ACMA
• Schedule 3 increases the maximum civil penalties for breaches of industry codes, industry standards and service provider determinations
• Schedule 4 expands the authority of the Minister for Communications to increase infringement notice penalties.

Background

Consumer protection regulation for carriage service providers

Regulatory arrangements in the communications sector are complex and CSPs may be subject to a range of measures relating to consumer protection. Under Part 6 of the Telco Act, bodies and associations which represent sections of the telecommunications industry may develop industry codes. These industry codes may then be registered with ACMA. Once registered, ACMA can direct particular industry participants to comply with industry codes and take further enforcement action when there are refusals to comply with these directions.

For example, the current Communications Alliance Telecommunications Consumer Protections (TCP) Code was registered with ACMA in 2019. The TCP Code provides a range of safeguards for telecommunications consumers which apply to CSPs. The TCP Code is currently under review and the revised TCP Code is expected to be submitted to ACMA for registration in April 2025.

ACMA may also determine telecommunications industry standards in some circumstances under Part 6 of the Telco Act (such as when a registered industry code is deficient). Compliance with industry standards is mandatory and subject to civil penalty provisions. For example, the Telecommunications (Financial Hardship) Industry Standard 2024 requires CSPs to establish and comply with payment assistance policies for their customers.

A set of standard service provider rules are also contained in Schedule 2 of the Telco Act and the Minister and ACMA may also determine service provider rules through legislative instruments in some circumstances (section 99). For example, the Telecommunications Service Provider (Customer Identity Authentication) Determination 2022 requires CSPs to use multi-factor identity authentication processes for high-risk transactions relating to their customers.

The Telecommunications (Consumer Protection and Services Standards) Act 1999 (TCPSS Act) also outlines a number of key regulatory components such as the customer service guarantee and provides for the Telecommunications Industry Ombudsman (TIO) scheme. CSPs are also subject to general consumer protections such as the Australian Consumer Law regulated by the Australian Competition and Consumer Commission.

Recent compliance and enforcement issues

Earlier this year, ACMA received criticism for its approach to compliance and enforcement. Through freedom of information disclosures the ABC reported that ACMA ‘… cut a deal with Optus to reduce its fine for committing serious public safety breaches… [and] sent Optus its draft media release to proofread before it was made public’.

In response to the reporting, ACCAN, the peak communications consumer body, characterised the situation as ‘regulatory capture’ and called for a parliamentary inquiry into the conduct and culture of ACMA. The Greens Communications Spokesperson Senator Sarah Hanson-Young commented:

The public need to know they have a corporate watchdog with teeth, not a corporate lapdog. The truth is the ACMA has been too weak and too cosy with the big corporations it’s tasked with regulating for too long. The ACMA is overdue for a thorough overhaul.

ACMA responded to the reporting, arguing its actions were consistent with its compliance and enforcement policy and regulatory guides. It also pointed to its track record of regulatory action in protecting telecommunications consumers (ACMA lists regulatory outcomes by year on its website).

Support from major interest groups

The Bill received support from a number of industry stakeholders when it was introduced. ACCAN characterised the legislation as a ‘vital step forward for consumers who have too often been left in the lurch by failures of a regulatory framework that has been largely voluntary, too weak, and poorly enforced’. The TIO supported ACMA ‘having a better view of who is operating in the sector through a register’. The Communications Alliance called for bipartisan support for the Bill ‘which will uplift regulatory protections for telecommunications consumers’. The Consumer Action Law Centre considered that the Bill was a ‘… big step in the right direction’ and would strengthen consumer protections and increase ACMA’s ‘…enforcement ability to punish poor conduct by telcos towards their customers’.

Financial implications

The Explanatory Memorandum (EM) states the Bill will have ‘Nil’ financial impact (p. 4). However, facilitating regulatory action or increasing civil penalty amounts can result in small increases in government revenue.

Key issues and provisions

Schedule 1 — Register of carriage service providers

Context

Under the Telco Act, there is a broad distinction between ‘carriers’ which operate telecommunication networks and infrastructure and ‘carriage service providers’ or CSPs which provide a range of telecommunications services such as phone or internet access. Currently only carriers are required to be licensed and registered with ACMA.

In September 2023, the Department of Infrastructure, Transport, Regional Development, Communications and the Arts (the Department) released a discussion paper concerning whether a CSP registration or licensing scheme should be developed for the telecommunications industry. The paper noted that ‘there has traditionally been a low barrier to enter the telecommunications market as a CSP’:

This low barrier has enabled a large and diverse market for the supply of telecommunications services. However, some stakeholders have argued it has also allowed some providers to operate in a manner that causes significant consumer detriment … The market is open and competitive, with a significant number of CSPs – with estimates there may be approximately 1,500 ‘eligible CSPs’ and a much larger number of general CSPs [‘Eligible CSPs’ are defined in the TCPSS Act and are required to join the TIO scheme]. Telecommunications have become firmly entrenched as an essential service in general life and commerce. Against this backdrop, it is appropriate to revisit fundamental aspects of the framework, including whether CSPs should be covered by a registration or licensing scheme. (p.7)

The discussion paper noted that both Canada and Singapore operate telecommunication service provider registers or licence systems (p. 7). The paper outlined that the arguments in favour of a CSP registration/licensing scheme included:

• increasing visibility of CSPs operating in the market, which would assist regulatory agencies such as ACMA to provide education on CSP obligations and
• facilitating an effective mechanism for ACMA to stop CSPs that pose unacceptable risk to consumers or cause significant consumer harm operating in the market.

The discussion paper indicated that a large number of stakeholders supported the implementation of a CSP registration or licensing/authorisation scheme (p. 7) and that a ‘light touch’ CSP registration scheme had been proposed by various stakeholders (p. 11). Nonetheless, some concerns were raised regarding the proposal in the submissions received through the consultation.

For example, in its submission, the Internet Association of Australia Ltd (IAA) agreed that a ‘very simple and light-touch registration scheme may be helpful in the telecommunications sector’. However, it highlighted potential issues with the implementation of the proposed scheme:

… [W]e note that any Scheme, even if it is simple, will still result in increased regulatory burdens for CSPs. Regardless of how light touch the Scheme is, it would add yet another obligation for CSPs in what is already a very heavily regulated industry… [T]his in turn, will result in increased costs for end-users as CSPs will no doubt have to pass on the costs to end-users associated with complying with such new regulation… [W]e do not believe there has been sufficient analysis or research done to study the scale of the harm caused by those phoenixing CSPs who do not comply with their obligations (p. 2).

The Communications Alliance submission did not agree that a proposal in the discussion paper to limit unregistered CSPs from exercising their contractual rights with carriers should ‘form part of the ACMA’s method of compelling CSPs to join the register’. It stated:

Although regulators have spoken in the past about their fears of seeing the emergence of ‘hordes of rogue operators’, we believe that this type of behaviour is rare. More often, non-compliance arises because some smaller operators are not aware of the full suite of compliance obligations and/or struggle to comply with an ever-increasing set of often complicated regulatory requirements (p. 5).

Key provisions

The key amendments made by Schedule 1 insert new Division 3A—Registration of carriage service providers (consisting of proposed sections 96A to 96T) into Part 4 of the Telco Act (which deals with telecommunications service providers) setting out the essential components of the proposed CSP registration scheme. However, a number of matters are left to be determined by legislative instrument by the Minister. For example, it is not clear if the Minister will determine requirements for CSP applications to be registered or what those requirements could be. The amendments also leave open the possibility that some or all of the management of the register could be contracted out rather than managed by ACMA.

The EM states (p. 7):

The framework provides flexibility for the Minister to define and shape elements of the CSP registration framework over time and to delegate certain functions and powers to the ACMA. Simultaneously the ACMA is also provided with powers, for example, to determine the specific form of application required for registration. This allows the framework to be adapted and adjusted as needed over time, to address practical issues that may arise and noting the dynamic and evolving nature of the telecommunications market.

Requirement to be registered

New subsection 96A(1) will provide that registrable carriage service providers ‘must not supply, or offer to supply, a listed carriage service to the public’ unless registered.

Under new subsection 96A(2), registerable CSPs will either be:

• an eligible CSP – which are CSPs defined under section 127 of the TCPSS Act and must enter into the TIO scheme or
• a CSP declared by the Minister (this could be a declaration as a specified CSP by notifiable instrument under new subsections 96A(3) or as a class of CSPs by legislative instrument under new subsection 96A(4)).

The Minister will also be able to, by notifiable instrument, declare that a specified CSPs is not a registerable CSP and declare, by legislative instrument, that a member of a specified class of CSPs are not registerable CSPs (new subsections 96A(5) and (6)).

The EM states that it is appropriate that the Minister’s declarations that particular CSPs are, or are not, required to be registered be made by notifiable instrument as ‘they would be administrative in character’ (p. 7). Notifiable instruments are not subject to parliamentary disallowance.

New section 96B provides that carriers and wholesale CSPs must not supply or offer to supply listed carriage services to a CSP unless the CSP is registered. The Minister will be able to make determinations by legislative instrument which specify circumstances where these obligations do not apply. This obligation will impose an additional administrative burden on these carriers and wholesale CSPs to ensure that the CSPs they deal with are, and continue to be, registered.

Registration process

New section 96C outlines that registerable CSPs may applying in writing to be registered and that these applications must comply with requirements (if any) determined by the Minister. Under new section 96D AMCA will be able to request further information about an application and refuse to consider applications until this further information is received.

Grounds for refusal

Under new subsection 96E(2) ACMA must register an applicant unless it is satisfied that a ground for refusal exists. The grounds for refusal are:

• the application contains information that is false or misleading in a material particular
• the application does not comply with new subsection 96C(2) (necessity for the application to be in a written form approved by ACMA and comply with the requirements determined by the Minister)
• the applicant has not paid any fee or charge that is payable in relation to the application
• the applicant has previously had an application for registration, or an application for renewal of registration, refused by the ACMA or had their registration revoked
• the applicant is required to be, but is not at the time of making the application, a member of the TIO scheme
• the applicant is a member of the TIO scheme but ‘has engaged, or is engaging, in conduct that constitutes a contravention, or likely contravention of the scheme’ or ‘has failed to pay a fee or charge payable in respect of the scheme’
• a person in the ‘immediate circle’ (defined in section 23) of the applicant ‘is or has been’ a person disqualified from managing corporations, convicted of an offence against a telecommunications law or an officer of a CSP whose registration was revoked within 3 years of the application
• the applicant has engaged, or is engaging, in conduct that poses a significant risk to consumers or constitutes a contravention of the telecommunications law.

The Minister will also be able, by legislative instrument, to prescribe circumstances which will be grounds for refusal (new subsection 96E(4)).

Conditions of registration

Under new section 96F, ACMA may impose conditions on the registration of a CSP if ‘satisfied that the condition is reasonably necessary to promote compliance by the provider with its obligations’ under the Telco Act and the TCPSS Act. As conditions of registration, CSPs must also notify ACMA of ‘any changes’ to matters which are determined by the Minister by legislative instrument and comply with the TIO scheme (if a member of the scheme).

Duration of registration and renewal

Under new subsection 96E(7), the duration of CSP registration will either be 1 year or another period determined by the Minister by legislative instrument (whichever is greater). New section 96G provides for registered CSPs to apply to ACMA for renewal and new section 96H outlines the registration renewal process. In particular, ACMA must renew the registration of applicants unless satisfied one of the ‘ground for refusal’ outlined above in new section 96E exists.

The CSP Register

ACMA will be required to establish, or contract with another person to establish, the CSP register. The register must be made publicly available but will not be a legislative instrument (new section 96P).

Revocation

Under new subsection 96K(1), ACMA will be able to revoke the registration of a registered CSP. In determining whether to revoke the registration of a CSP, ACMA must have regard to a number of matters listed in new subsection 96K(2). These include:

• the nature, significance and persistence of any contraventions of the Telco Act or TCPSS Act by the provider
• the impact on customers of revoking the registration of the CSP
• the necessity of preventing harm to customers of the CSP
• any other matters that the ACMA considers relevant.

ACMA must also have regard to ‘a matter determined by the Minister for the purposes of this paragraph’. New subsection 96K(3) allows the Minister to make a determination by legislative instrument for this purpose.

Before revoking the registration of a registered CSP, ACMA must notify the CSP, state the reasons for the proposed revocation and invite the CSP to make a submission showing cause why the CSP’s registration should not be revoked (new section 96L). Any submission made is another matter which ACMA must have regard to in making its decision. ACMA must also consult the Minister and the Communications Access Coordinator before making a registration revocation decision (new subsection 96K(4)).

ACMA’s registration revocation decision will be a reviewable decision (initially internally within ACMA and then by the Administrative Review Tribunal).

CSPs may also request the revocation of their registration (new section 96M). Regardless of whether a CSP’s registration has been revoked on the initiative of ACMA or on request, ACMA will be able to impose post-revocation obligations on the CSP (new subsections 96K(7) and 96M(5)). Under new section 96N, the CSP must give written notice of the revocation to its customers and make arrangements to transfer them to another registered CSP.

Disclosure of information

New section 96R will require ACMA (or the contracted service provider managing the register) to disclose information obtained under new Division 3A of Part 4 to certain entities unless ACMA ‘believes on reasonable grounds that disclosure of the information is not necessary to enable or assist the entity to perform its functions or exercise its powers whether under this Act or otherwise’. These entities are:

• the Department
• the Attorney-General’s Department
• the Home Affairs Department
• the TIO.

The Minister may also, by legislative instrument, determine additional entities to which disclosures are required to be made (new subsection 96R(7)).

Delegation

New section 96S will allow the Minister to delegate certain functions and powers to ACMA under new Division 3A. However, this will not include the Minister’s proposed powers to:

• prescribe grounds for ACMA to refuse registration (new subsection 96E(4))
• determine matters to be considered in revoking a registration (new subsection 96K(3)) or
• determine entities who may request disclosures of information (new subsection 96R(7)).

The EM states ‘it would not be appropriate and could create real or perceived conflict for these powers to be delegated to the ACMA’ (p. 9).

Review of decisions

Schedule 4 of the Telco Act lists the reviewable decisions of ACMA. Item 7 of Schedule 1 will insert new paragraphs 1(fa)–(fg) to make a range of ACMA decisions under new Division 3A reviewable decisions.

Application and transitional rules

Item 8 of Schedule 1 will apply the new CSP registration requirements to carriers and CSPs ‘after the end of the period of 6 months starting on the day’ the item commences. Presumably, this will provide for an additional implementation period to establish the arrangements for the CSP register. Similarly, item 9 of Schedule 1 will allow the Minister, by legislative instrument, ‘to make rules prescribing matters of a transitional nature…’. According to the EM, transitional rules may be necessary due to ‘… the need for the ACMA to manage the initial registration applications for a considerable number of existing eligible CSPs - with estimates there may be over 1,500 eligible CSPs’ (p. 10).

Schedule 2 — Mandatory compliance with industry codes

Context

As indicated above, under Part 6 of the Telco Act, industry codes may be developed by industry bodies and associations for the telecommunications industry and then registered with ACMA. Compliance with an industry code is voluntary, however ACMA may direct an industry participant to comply with a registered industry code. Failure to comply with an ACMA direction to comply with an industry code is subject to a civil penalty.

Key provisions

Sections 5 and 106 of the Telco Act provide simplified outlines for the whole legislation and Part 6 (which deals with industry codes and standards) respectively. Items 1–4 of Schedule 2 will remove references in these sections to industry codes being voluntary and substitute ‘Compliance with industry codes and industry standards is mandatory’.

Currently, section 121 deals with the written directions which ACMA may give to participants in the telecommunications industry (and the telemarketing and fax marketing industries) requiring them to comply with an industry code. New section 121 will provide that if an industry code is registered then each participant in that section of the industry must comply with the code. Non-compliance may result in a civil penalty. This removes the need for ACMA to direct a provider to comply with an industry code in the first instance before taking further enforcement action if the provider does not comply after a formal direction or warning.

New section 121A replaces the existing obligation (contained in subsection 121(1A)) for ACMA to consult with the Information Commissioner before taking enforcement action regarding a contravention that relates to a matter dealt with by the Australian Privacy Principles (APP) or by a registered APP code.

Item 7 of Schedule 2 will repeal the requirement that ACMA maintain a register of all directions to comply with industry codes.

As noted above, Schedule 4 of the Telco Act lists the reviewable decisions of ACMA. Item 8 of Schedule 2 will repeal paragraph 1(j) relating to ACMA decisions made under section 121 to give, vary or refuse to revoke a direction.

Under item 9 of Schedule 2, the changes to the enforceability of industry codes will apply from commencement to ‘conduct engaged in by a person before, on or after the day this item commences’. The EM states the direct enforcement arrangements for existing registered codes will apply from commencement ‘regardless of when conduct occurred’ (p. 11). No further explanation is provided regarding why this has been framed to apply retrospectively to conduct that occurred before commencement.

Schedule 3 — Pecuniary penalties

Part 31 of the Telco Act outlines the pecuniary penalties which may be payable for the contravention of civil penalty provisions. This includes civil penalty provisions in related legislation such as the TCPSS Act, the Do Not Call Register Act 2006, and certain data retention obligations under the Telecommunications (Interception and Access) Act 1979.

Under paragraph 570(3)(b) the maximum penalty for a breach by a body corporate of industry codes and industry standards is currently $250,000. The EM states the proposed amendments will ‘adjust and align maximum penalties for breaches of industry codes, industry standards and service provider determinations to the greater of 30,300 penalty units ($9.999 million); 3 times the benefit obtained or [if the court cannot determine the value of the benefit] 30% of the adjusted turnover of the body corporate during the breach turnover period for the contravention’ (p. 12).

In particular, item 5 of Schedule 3 will insert new subsections 570(3A) and (3B). This will apply the proposed increased penalties to contraventions of:

• service provider rules (section 101) (to the extent it is a breach of a service provider rule set out in a determination under section 99)
• industry codes (new section 121 as inserted by Schedule 2) and
• industry standards (section 128).

New subsections 570(3C) and 570(3E) will clarify the meanings of the terms adjusted turnover and breach turnover period respectively.

The increased penalties will apply to contraventions of a civil penalty provision where conduct ‘occurs wholly on or after the day this item commences’ (item 6 of Schedule 3).

Schedule 4 — Infringement notices given to body corporates

Part 31B of the Telco Act sets out the infringement notices scheme for contraventions of civil penalty provisions which may be issued by ACMA. Schedule 4 makes amendments to section 572G which outlines the process for setting the amount of penalties.

Currently, the Minister may, by legislative instrument, make a determination which sets out kinds of contraventions and specifies a particular number of penalty units for infringement notices for body corporates (subsection 572G(2)). However, this is limited to contraventions under section 68 (compliance with carrier licence conditions) or section 101 (compliance with service provider rules). Item 1 of Schedule 4 will amend paragraph 572G(2)(a) to expand the Minister’s capacity to specify the penalty units of the infringement notice given to a body corporate for any ‘particular civil penalty provision’.

Similarly, new subsection 572G(2A) will allow the Minister flexibility to ‘apply different increased penalties to different classes of bodies corporate’ (EM, p. 14).

Under existing subsection 572G(3), the number of penalty units specified in a determination must not exceed 18,000 penalty units ($5,940,000). Item 3 of Schedule 4 will repeal and replace this broad limitation. New subsection 572G(3) will provide that the number of penalty units specified in the determination for a particular kind of contravention must not exceed 20% of the maximum pecuniary penalty that could be imposed under section 570 (as amended by Schedule 3) on a body corporate. For example, under the proposed amendment, if the maximum pecuniary penalty under section 570 for the contravention was $10 million, the determination must not specify an amount of penalty units for the infringement notice which would exceed $2 million.

The EM states that:

…while the amendments expand the range of contraventions for which the Minister can increase infringement notice penalties, in the process of bringing clarity and consistency to those arrangements, the amendments simultaneously reduce the amount that can be increased to below that originally specified by the Parliament on introduction of the infringement notice framework (p. 14).

Under item 4 of Schedule 4, the amendments to section 572G will apply in relation to infringement notices given in respect of conduct that ‘occurs wholly on or after the day’ the item commences.