Govt to give telcos $131m for data retention

The Government will give Australia's telecommunications industry $131 million over three years to help companies tweak their systems in order to meet their obligations under the country's new data retention laws.

The announcement ends a long period of silence on how much the Government would contribute to the cost of the scheme, which has been forecast to cost up to $319 million to set up and $4 per customer annually to maintain.

Telcos have just under 18 months to prepare for the new laws before they take effect.

The $131 million allocation will go towards storage costs for the scheme, which requires telcos to hold the non-content data or 'metadata' of every customer for two years to aid law enforcement.

The money will be released to telcos over a period of three years through a program of grants. A total of $153.8 million will go towards the scheme under the federal budget.

“Metadata is essential to most counter-terrorism investigations and for detecting and prosecuting other serious crimes,” Prime Minister Tony Abbott said today.

ISP iiNet has previously estimated the cost of implementing the scheme for itself alone at upwards of $100 million.

The new funding is part of a $450 million package aimed at strengthening intelligence agencies' capabilities and countering extremist messaging.

It comes on top of the $630 million announced last year for Australia's spy and intelligence agencies to fight home-grown terrorism.

Of the $450 million, $296 million will be used to update IT systems to help bolster the capabilities of intelligence agencies, Abbott said.

“To help combat terrorism at home and deter Australians from committing terrorist acts abroad, we need to ensure our security agencies are resourced properly and have the powers to respond to evolving threats and technological change."

Data retention funding not enough

CEO of the Internet Society of Australia Laurie Patton said the Government's promised contribution was inadequate.

"This is less than half the amount the Government itself estimated as the cost to industry when the data retention bill was presented to parliament," Patton said.

He said the implementation process was still being fine-tuned by the Attorney-General's department, and as such it was too early to be capping the amount of funding provided to the industry to cover the cost of compliance.

"The feedback we are giving [AGD] is demonstrating that the Government has greatly underestimated the work involved," Patton said.

"The Government's original cost estimate was not based on widespread industry consultation and the Internet Society is concerned that the costs have been significantly underestimated, especially in respect of small to medium sized ISPs that don't have the resources to undertake the work in-house and therefore will be required to pay for external assistance."

He called on the Government to committ to a funding top-up should there be a significant shortfall once the scheme's final costs have been determined.

"Otherwise the ISP/ telco industry will have to underwrite the difference and this will be passed on to consumers through increased internet fees," Patton said.

Communications Alliance CEO John Stanton said the funding was more than a token contribution, but represented only about a third of the upper point ($319 million) estimates of the scheme's cost.

He told The World Today radio show neither the Government nor the industry had a precise idea of the cost - it would only be at the point the scheme becomes operational that the full cost would be known.

Stanton said he was unaware whether the $131 million was an initial pot of funding for the set-up or the entire amount the Government intended to supply to the scheme, but noted there had been "no indication [the Government] proposes to put its hand in its pocket again".

There was additionally no clarity on how the funds will be allocated to the industry, he said.

"We're going to be up for a pretty healthy debate among the different types of service providers as to the fairest way to share this money," he said.