Government considers licensing scheme for telco retailers

Australia’s roughly 1500 telecommunications retailers could face increased regulation, with a number of departments warning that the large number of phantom carriage service providers (CSPs) are making the sector hard to regulate.

As well as posing challenges for consumer regulators, a discussion paper released by the government late last week identified the Department of Home Affairs and the Attorney General’s Department has having concerns about poor oversight in the CSP market.

The consultation would help the government decide whether to pursue a relatively light touch registration scheme, or some kind of CSP license - an approach the paper conceded is only in use in one other country, Singapore.

The paper noted there is also “no comprehensive list” of CSPs, since the Telecommunications Industry Ombudsman cannot be certain that every organisation reselling telco services is a TIO member.

The push for greater scrutiny is partly driven by the government’s growing cyber security concerns. 

Agencies like the Department of Home Affairs and the Attorney General’s Department can’t confirm compliance with data breach reporting schemes or check if they’ve provided information to the Register of Critical Infrastructure Assets, if a CSP is flying under the radar.

The Australian Communications and Media Authority (ACMA) says it lacks a mechanism for getting rid of rogue CSPs and has no way to prevent bad operators from “phoenix-ing” (restructuring and re-appearing under a new name) to avoid regulatory scrutiny.

The ACMA’s only enforcement pathway is via the courts, and proceedings are slow and “have not achieved desired outcomes”.

Registration or licensing could also make life easier for the Australian Competition and Consumer Commission, in regulating consumer law compliance and the TIO, which resolves disputes between consumers and providers.