iBoss, Conec2 fallout sparks Comms Alliance review

The Communications Alliance will investigate whether current industry arrangements are sufficient to ensure that customers can keep their services alive in the event their telco provider goes under.

The telco industry representative announced the move today, following months of troubles resulting from the collapse of several small telcos linked to service provider Conec2.

The collapse of the group of businesses has affected over 50,000 customers who have been forced to find new providers after a domino-like series of Conec2-related providers fell into administration.

Comms Alliance said today it would look at whether existing arrangements need to be modified, and whether new co-regulatory measures needed to be introduced to minimise the frequency of customers losing services as a result of their provider going under.

The investigation was first flagged by the office of Communications Minister Malcolm Turnbull yesterday. A spokesperson for the Minister told iTnews his Department was working closely with the Comms Alliance and major carriers to find an “industry-based” solution to the problem.

A number of Comms Alliance members - namely AAPT, Telstra and Optus - were indirectly involved with the collapsed businesses prior to their entering administration.

Turnbull's spokesperson said the Department is also looking into whether current market arrangements are providing adequate protection to consumers.

Comms Alliance CEO John Stanton said in a statement the industry must strive to minimise the damage done by incidents like the Conec2 collapses.

“In previous – thankfully rare – situations of this type, industry players have typically been able to mobilise cooperatively and minimise disruption to customer services," he said.

“Each financial event is unique, however, and the current situation has been made more difficult by the complex structures and inter-relationships between some of the involved entities."

The announcement follows comments made yesterday by independent Senator Nick Xenophon, who called for changes to the Telecommunications Act to legislate a “default telco provider” - namely Telstra - to become the fallback option should customer services be disconnected after a company’s collapse.

Xenophon said customers need to have another provider to turn to when their telco goes under, a proposal he said he is currently discussing with Communications Minister Malcolm Turnbull.

Conec2 went into administration this month after two of its business divisions - part of the package Conec2 acquired when it purchased collapsed telco provider ispONE last year - went under and were sold off to Vocus.