Consumer Data Right lands in telecom; ‘Open Finance’ is next


Brandon How
Reporter

Consumers will have greater direct control over their own customer data held by internet providers and phone companies after the Treasurer on Monday designated telecommunications as the third sector covered by the Consumer Data Right.

The designation comes after the telecommunications sector was recommended by the Treasury in November and defines the type of data that should be made available on request. Any obligation to release the data comes from the sector specific CDR rules and standards which have yet to be finalised.

Following its implementation, consumers will get more control over information about their billing, internet consumption, phone usage, and product plans.

Crowd
Consumer power and data rights

The government says this flexibility will make comparing and switching providers easier – encouraging competition, lower prices, and innovation. A consultation with industry stakeholders regarding the sector-specific CDR rules and standards for telecommunications will begin soon.

Despite the touted benefits, the telecommunications industry peak body Communications Alliance immediately pushed back against the plan. It says much of the upside had already been delivered through other government policies and that the industry is not in favour of a CDR.

“Modelling undertaken for Government suggests that the costs to industry (and ultimately, largely, consumers) during the first two years of CDR operation could be close to $120 million,” Communications Alliance chief executive John Stanton said.

Further, the CommsAlliance called for a regulatory impact statement (RIS) to quantify the net benefits of the CDR designation. They cited the explanatory memorandum for the Consumer Data Right Bill in 2019 that also identified the need for a regulatory impact statement.

“Undertaking this type of assessment would assist the creation of the CDR rules that will underpin the framework. It is also vital that industry and other stakeholders be given adequate time and opportunity to engage in the upcoming rule-making process,” Mr Stanton said.

Telecommunications is the third sector to be included in the rule, following the roll out to the banking and energy sectors.

Responsibility for making sectoral assessments and CDR rules lies with the Treasury. This came after the reallocation of powers away from the Australian Competition and Consumer Commission in 2020 after a slower than expected uptake of the scheme.

The government also plans to expand the Consumer Data Right regime to Open Finance, building on the Open Banking scheme deployed in 2020. Open Finance will allow the transfer of personal financial data beyond banking to include financial products such as general insurance, superannuation, merchant acquiring and non-bank lending service providers. Consultation on Open Finance is also due to begin soon.

The announcement of Open Finance comes after a large number of Open Banking reforms were made in December, including permitting companies to act on behalf of consumers in some transactions.

With the economy-wide roll out of the CDR in mind, the Treasurer’s office highlighted the potential creation of “personal finance and life administration apps” that could consolidate financial, banking, energy, and telecommunications data to provide consumers a “more holistic picture of their financial circumstances that is all held in the one place.”

The Treasurer’s office hopes that the ability to share such data – with consumer consent – will generate new innovative services that “could help consumers achieve savings goals, get better deals and change their consumption behaviours to better suit their lifestyle and needs.”

In last year’s budget, $111.3 million was designated to help “accelerate” the rollout of the CDR in banking, energy, and telecommunications.

The CDR roll out is also a part of the federal government’s wider ‘Digital Economy Strategy 2030’ which aims to “assess and designate a new sector each year.”

Do you know more? Contact James Riley via Email.

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