Michelle Rowland (Greenway, Australian Labor Party, Shadow Assistant Minister for Communications) Share this | Hansard source

I am delighted to be speaking on the first substantive bill before this House for the year on the very important issue of consumer protection in the telecommunications framework in Australia. It is one in which I have an abiding interest from practical experience working as a telecommunications regulatory specialist both within a firm and as an in-house counsel. These amendments reflect some critical changes that were proposed by the Labor government and reflect a very precise and a very diligent process of consultation with a wide variety of stakeholders within industry.

The Telecommunications Legislation Amendment (Consumer Protection) Bill 2013 covers a number of very important matters, including the do-not-call requirements, the Telecommunications Industry Ombudsman and the codes process. I think it is important to return to first principles and this bill is about reflecting what was meant to be achieved in legislation by what is called a co-regulatory scheme, which governs the Telecommunications Act, its related acts and also its instruments.

The co-regulatory scheme is quite unique in Australia. It is an ideal model in many ways for an area which is dynamic and one in which there is sectoral governance by a number of interest groups. Often network industries employ this approach. In order to work, in order to have compliance, it really needs multiparty buy-in, it must be capable of implementation and it must be capable of being updated. I think that this bill really reflects all of those attributes.

These are sensible amendments proposed in this bill. In many ways, they reflect standard practice in the telecommunications space. It has been a consultative process that has led to this point. The Senate reported in June last year on the various items in this bill and recommended that the bill proceed essentially the same but with a minor but important commitment on the co-development process. That has been incorporated in this bill as a recommendation from the Senate report.

It is very useful to go part 6 of the Telecommunications Act to remind ourselves about the importance of self-regulation and the self-regulatory environment under the industry codes and standards. It is very useful to reflect on section 112 of the Telecommunications Act, which contains a statement of regulatory policy. This has been a longstanding provision within the legislation. It states:

The Parliament intends that bodies or associations that the ACMA—

the regulator—

is satisfied represent sections of the telemarketing industry should develop codes … that are to apply to participants in the respective sections of the industry …

Again, that reflects the co-regulatory structure. I will skip to subsection (2) because it is important to reflect on the regulator exercising its powers. It states that the regulator will:

.. act in a manner that, in the opinion of the ACMA, enables public interest considerations to be addressed in a way that does not impose undue financial and administrative burdens on participants in sections of the telecommunications industry …

It goes to other industries within the sector as well. These are not novel principles when we hear a lot of talk about removing red tape; these are the principles that have long stood within the sector and have long stood as best practice not only in theory but also in reality.

Subsection (3) in this statement of regulatory policy sets out a very useful test for determining whether public interest considerations are being addressed in a way that does not impose undue financial and administrative burdens. Some of the things that the regulator needs to have regard to include:

(a) the number of customers who would be likely to benefit from the code or standard—

that is developed under these provisions and—

(b) the extent to which those customers are residential or small business customers; and

(c) the legitimate business interests of participants in sections of the … industry; and

(d) the public interest, including the public interest in the efficient, equitable and ecologically sustainable supply of:

(i) carriage services; and

(ii) goods for use in connection with carriage services; and

(iii) services for use in connection with carriage services …

Having taken all that into account, I think it is wise to have a look at the code scheme and what these precise arrangements mean in practice. The way that the self-regulatory rules operate within these provisions is that compliance with an industry code is voluntary unless directed. That is summarising it, but it is an area which is criticised—and I will go to some of the criticisms that have been made in one particular document. It is certainly consistent with the statement of the regulatory policy.

It has been very useful to have these codes develop not only as provisions to enable consumers to know their rights when interacting with carriers or carriage service providers; these codes also operate as default mechanisms for many intercarrier arrangements and access agreements, setting the minimum standards that apply to consumers as well as to industry. You will see that in many contracts that occur between participants in the industry, those contracts will often defer to the code and have had the effect in the past of minimising disputes but also enabling the implementation of new aspects of innovation to work well.

By no means is Australia novel in this respect. We have seen the adoption of innovations such as number portability—be it local number portability, mobile number portability or free phone number portability—and the predictability that arose out of developing an industry code certainly worked well in the implementation of the underlying networks and IT structures that needed to happen so that industry participants could cooperate. But in the end of course it served consumers well. Mobile number portability in Australia across the various forms has been working well for over 10 years now in many aspects of our telecommunications framework.

I now turn to some of the most important aspects of the changes proposed in this bill. One of the most important aspects, and one that I think is very welcomed by the industry, is that where a variation is taking place in the future in a code there is not a need to replace the code in its entirety. The industry can choose to vary that particular component rather than having to completely replace a code. In some cases, this lack of flexibility in the past has led to a number of items being, as you would put it, 'parked' and dealt with at a later date so that the industry did not have to open up what would often be a very cumbersome process. So in a very practical sense, opening up the code process means that not only are you able to deal with issues that are most pertinent but also you are able to do this in a much more efficient manner.

It is important to note that it is proposed under this bill that publication of code variations can be made on the website of the relevant industry group—something which was not there in the past—which certainly contributes to the transparency of this process and enables industry to have a much broader understanding of the issues being faced in particular areas of the sector. Another important one is where a draft variation is minor in nature and the requirements for publication do not apply. Examples of minor things might be updating references, including references to instruments which may already have been amended. Those sorts of things do not need to be subject to the publication rules—again, a much more efficient way of doing things by waiving variations if they are minor in nature. These are all very sensible changes.

In an era when we seem to be talking a lot about red tape reduction, I note that section 120 has not been substantially amended. There were some minor changes in 2000, when the privacy provisions came in and the name changed following the new regulator being established, but otherwise there has been nothing substantive. Nevertheless, I am very pleased that these provisions will be enacted. I know the industry certainly welcomes them and I think that all these will, in the end, contribute to a much more positive user experience, and for that we should welcome them.

I want to highlight some of the criticisms of the self-regulatory scheme because, while I do not agree with them entirely, they are worth mentioning. In particular, I would like to mention a paper commissioned by Choice in 2008. Consumer protection in thecommunications industry: moving to best practice contained a number of recommendations including that the industry and the structure should:

… concentrate resources on a limited number of comprehensive codes rather than numerous fragmented codes.

It was probably shortly after this report was prepared when that occurred in the industry, with the Telecommunications Consumer Protections Code replacing several smaller codes—for example, the billing code—consolidating all these into one consistent document. In section 2.2 of this report there is a critique of some of the provisions going to the code development process. It is interesting to focus on the precise criticism, which reads:

The legislation is vague on the code development process. There are no provisions that require independent consumer input to code development or prevent ACMA from registering a code which does not have consumer input.

The question arises: how prescriptive do we want to be in the legislation? Also, the reality is that consumer groups have had a long involvement in formulating these codes and the transparency offered by the amendments in this bill will go some way towards addressing some of those concerns.

I would like to turn to the amendments relating to the Telecommunications Industry Ombudsman. As anyone in the industry would know, one of the objectives of operators is to engage as little as possible in the formal complaints process of the Telecommunications Industry Ombudsman. The proposed provisions are that there be a dispute resolution standard. Previously this operated in terms of the TIO publishing both its charter and expectations. So I do not necessarily think this was an issue of lack of transparency by the TIO but certainly the minister being able to make a standard under a legislative instrument should be useful in going some way towards addressing these criticisms.

Lastly, I point to an excellent analysis done by one of my former colleagues from Gilbert and Tobin, Sarah Alderson, who compared Australia's alternative dispute resolution scheme for telecommunications against that of the UK. In 2010, she noted when comparing and contrasting the numbers of complaints between the UK and Australia:

As … detailed ... in 2009-10, the TIO registered 215,000 cases. This means that in a country with less than a third of the amount of people—

Australia—

had almost 25 times more complaints than the UK.

As can be seen from that number and from the TIO's website, the focus of Australia's telcos—and they should be commended for it—really has shifted towards consumer satisfaction, particularly in this age of user-generated content where you have people giving succinct views on the operation of their carriage service provider. I think that has driven substantially the improvements we have seen in the TIO resolution levels. It is noteworthy that it is, in fact, in the industry's interests to keep these complaints at a low. As Sarah Alderson points out:

… acquiring new customers can cost 5 to 7 times more than satisfying and retaining—

them. So it certainly is in the interests of consumers for telcos to remain focused on their end users.

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