Telcos face $10m fines and sharper watchdog teeth


Joseph Brookes
Senior Reporter

The communications regulator will be handed tougher enforcement powers and much larger fines to clamp down on telcos breaching agreed industry standards after complaints current penalties are seen as a cost of doing business by large players.

Communications minister Michelle Rowland on Tuesday announced the government will bring forward several telco consumer protection reforms, including the end of a two-step enforcement procedure.

Currently, regulator the Australian Communications and Media Authority (ACMA) must respond to breaches of co-developed industry codes with a direction to comply before taking enforcement action with fines capped at $250,000.

The Albanese government’s proposed change would allow ACMA to take enforcement action immediately and seek fines of up to $10 million for industry code breaches.

The regulator and telco ombudsman have raised serious concerns with key industry code the Telecommunications Consumer Protections Code and related enforcement, warning it is inadequate for protecting consumers and small businesses.

A refreshed consumer code is currently open for consultation, but the government’s proposed changes are focused on enforcement options through amendments to the Telecommunications Act 1997.

In addition to the much steeper fines, the government said it will move to allow courts to impose proportional penalties based on financial turnover of the provider and the scale of the breach.

A new Carriage Service Provider registration scheme is also planned to disclose market operators, with a focus on telecommunications retailers.

Australian Communications Consumer Action Network CEO Carol Bennett said the proposed change would bring more transparency and compliance to the telco industry.

“The Australian Government’s reforms address longstanding consumer concerns about the relatively weak regulatory settings of the telco industry and will go a long way towards improving trust in the telecommunications industry,” she said.

Communications minister Michelle Rowland said the government is acting on mounting warnings from industry, regulators and the Telecommunications Industry Ombudsman.

“Nobody wants an industry that sees penalties as the ‘cost of doing business’,” Ms Rowland said. “These changes provide a powerful deterrent, improve the likelihood of compliance and lead to a better functioning telecommunications sector.”

Peak industry group the Communications Alliance said it will back the increased enforcement powers alongside changes to the consumer code it helps develop.

“Australians expect the highest standards of business behaviour from telcos, and these new direct enforcement powers will ensure they are held to account by the regulator,” the goup’s CEO Luke Coleman said.

Do you know more? Contact James Riley via Email.

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