Market spotlight

Trends and developments

What is the current state of the telecoms market in your jurisdiction, including any trends and recent developments/deals?

The Australian telecoms market can be broadly divided into markets for landline services and mobile services (in both cases covering voice and data), where the relevant key regulatory bodies are the Department of Communications and the Arts (DOCA), the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC).

For landline services, Telstra and Optus – the incumbent network owners – are each both retailers and wholesalers of a wide range of landline services. This market has seen significant transformation in recent years, in particular since the Australian government established NBN Co Limited (nbn), a government-owned enterprise tasked with designing, building, deploying and operating a next generation high-speed (internet) access network across Australia. The nbn network is wholesale only and services must be acquired via a retail service provider. Most recently, the government’s policy has shifted towards a ‘multi-technology model’ for this network (whereby the network comprises a mixture of access technologies depending on location and environment). Further, the government also introduced the ‘Telecommunications Reform Package’ to Parliament on June 22 2017, which, among other things, makes nbn the default infrastructure provider of last resort, clarifies certain wholesale-only rules applying to high-speed broadband networks, and establishes a scheme intended to ensure long-term sustainable funding arrangements for broadband services to regional areas.

For mobile services, Telstra, Optus, Vodafone and TPG own mobile spectrum. Given the wide coverage and high speeds available via modern cellular networks, and the rise in portable internet-enabled devices, many Australians are moving to mobile-only solutions and away from fixed line voice or Internet. Recent developments in the mobile market relate to the use and sale of spectrum rights. In particular, DOCA recently proposed new spectrum legislation that is intended to simplify Australia’s spectrum management frameworks. Further, ACMA’s current priorities for spectrum are to complete the 1800 megahertz band auction and to plan for the wave spectrum required to run 5G (fifth generation of wireless technology) broadband.  

Regulatory framework

Legislation

What is the primary legislation governing the telecoms market in your jurisdiction?

The Telecommunications Act 1997 is the primary legislative instrument governing the Australian telecommunications market. The Telecommunications Act administers access to telecommunications services and regulates the activities of participants in the market, including carriers and carriage service providers. 

The Competition and Consumer Act 2010 (CCA) also contains provisions that regulate matters concerning competition in the Australian telecommunications market. Part XIB of the CCA prohibits anti-competitive conduct in the telecommunications industry and contains record keeping and disclosure rules designed to increase transparency in the telecommunications market. Part XIC of the CCA provides for a telecommunications access regime to promote the long-term interests of telecommunications service users.

Reform

Are any regulatory reforms or initiatives envisaged?

Two bills currently before the Australian House of Representatives propose a number of telecommunications reforms. The Telecommunications Legislation Amendment (Competition and Consumer) Bill 2017 and the Telecommunications (Regional Broadband Scheme) Charge Bill 2017 were introduced to Parliament on June 22 2017. The relevant changes proposed by the bills include:

  • the introduction of a regional broadband scheme, funded by a A$7 monthly charge, payable by the relevant carrier for each premises that has an active fixed-line superfast broadband service connected on its network;
  • the introduction of a statutory infrastructure provider regime to develop infrastructure that supports the delivery of superfast broadband services to all premises across Australia; and
  • amendments to the superfast network rules that would allow the Australian Competition and Consumer Commission (ACCC) to exempt smaller networks from separation rules which currently apply to all network providers.

These reforms reflect the recommendations of the Telecommunications Universal Service Obligation Report published by the Productivity Commission in June 2017. The report recommended abolishing the current mandatory telephone service access requirements and reframing the objective for universal telecommunications services to provide baseline broadband and voice services to all premises throughout Australia.

The Department of Communications and the Arts also proposed new radiocommunications legislation that is intended to simplify Australia’s spectrum management frameworks. These reforms aim to rewrite the current Radiocommunications Act 1992. Some of the key changes in the proposed Radiocommunications Bill 2017 include:

  • repositioning the role of the minister of communications and the Australian Communications and Media Authority (ACMA), with the minister being removed from operational decisions and ACMA having stronger administrative powers; and
  • operating a single licensing regime where a single licence will replace the current apparatus and spectrum licences, and the introduction of spectrum authorisations will effectively replace the current class licences.

Universal service obligations

What universal services obligations apply?

The universal service obligation (USO) regime is set out in Part 2 of the Telecommunications (Consumer Protection and Service Standards) Act 1999. The USO mandates that Australians have reasonable and equitable access to standard telephone, payphone and prescribed carriage services. Access to these services must be provided by the primary universal service provider and the current nominated provider is Telstra. The USO is co-funded by the Australian government and an industry levy that provides Telstra with A$290 million in funding per year to ensure that the USO is met.

The current USO regime is subject to potential change. The Australian government has foreshadowed that if the proposed statutory infrastructure provider obligations (referred to above) are passed into law, they will replace the current USO regime.

Regulators

Which authorities regulate the telecoms sector and what is the extent of their powers?

ACMA is the independent statutory authority with specific regulatory powers conferred onto it under multiple pieces of legislation, including the Telecommunications Act 1997. In addition to regulatory and enforcement action, ACMA is also responsible for issuing licences, determining industry standards, collecting taxes and levies in relation to media and telecommunications, and providing information to consumers and industry stakeholders.

The Australian Competition and Consumer Commission (ACCC) also has specific regulatory and enforcement powers in relation to competition matters under the CCA. The ACCC can take action if carriers engage in anti-competitive conduct, breach record-keeping rules, or fall short of minimum access rule requirements.

Foreign ownership

Restrictions

Are there any restrictions on foreign ownership or investment in the domestic telecoms market?

Yes, the Foreign Acquisitions and Takeovers Act 1975 imposes restrictions on foreign ownership and investment in Australia, including in the telecoms sector, if actions satisfy the criteria of ‘significant actions’ or ‘notifiable actions’ under the act, or if the Foreign Acquisitions and Takeovers Regulations 2015 (Regulations) prescribe that actions are significant or notifiable actions. In summary, the implications of an action being classified as a ‘significant’ or ‘notifiable’ action are as follows:

  • If an action is a significant action, and the action has not been taken, the treasurer may:
    • object to and prohibit the action;
    • not object to the action, but imposed certain conditions; or
    • neither object to the action nor impose any conditions.
  • If the action has already been taken, the treasurer may make a disposal order to unwind the action; and
  • If an action is a significant and a notifiable action, the treasurer must be notified prior to the action being taken. Offences and civil penalties apply if a significant and notifiable action is taken before notifying the treasurer.

In relation to investment in the telecoms sector, the general rules are as follows:

  • An action will be a ‘significant and notifiable action’ if the action is taken by a ‘foreign government investor’ to acquire a direct interest in an Australian entity or Australian business, where a direct interest means:
    • an interest of at least 10% in the entity or business;
    • an interest of at least 5% in the entity or business if the person that acquires the interest has entered a legal arrangement relating to the businesses of the person and the entity or business; or
    • an interest of any percentage in the entity or business if the person that acquired the interest is in a position to influence or participate in the central management and control of the entity or business, or influence, participate in or determine the policy of the entity or business.
  • An action will be a ‘significant transaction’ if the action is taken by a non-foreign government investor and the value of the relevant action is greater than A$252 million. This action will be a ‘significant and notifiable action’ if a substantial interest is acquired, which means at least a 20% interest in the relevant entity.

A ‘foreign government investor’ is broadly defined to mean an entity that has   government interests of at least 20%.

There are various exceptions to the general rule that apply in specific circumstances.

Licensing and authorisation

Licences/authorisations required

What licences/authorisations are required to provide telecoms services?

Telecommunications or carriage services can be provided by carriers or carriage service providers (CSPs). Carriers are persons that own a telecommunications network unit to supply carriage services, while CSPs use a telecommunications network (owned by a carrier) to supply carriage services.

There are four categories of network unit:

  • single line links connecting distinct places in Australia;
  • multiple line link units connecting distinct places in Australia;
  • a designated radiocommunications facility; and
  • a telecommunications facility specified by the minister of communications.

A carrier licence is required to supply carriage services using a network unit, unless a nominated carrier declaration is in force in relation to the network unit (where a carrier accepts the carrier-related responsibilities for the network unit).

CSPs are not subject to any licensing requirements, but must comply with various legislation and service provider obligations.

Procedure

What are the eligibility, documentary and procedural requirements to obtain a licence/authorisation?

Constitutional corporations and eligible partnerships or public bodies may make an application for a carrier licence.

A completed carrier licence application form (available on the website of the Australian Communications and Media Authority (ACMA)) must be completed and sent to ACMA. The application also sets out compliance requirements under the Telecommunications Act 1997, the Telecommunications (Interception and Access) Act 1979, the Telecommunications (Emergency Call Service) Determination 2009, the Telecommunications (Consumer Protection and Service Standards) Act 1999 and the Telecommunications (Interception and Access) Amendment (Data Retention) Act 2015.

If ACMA decides to grant a carrier licence, it will give the applicant written notice and publish a notice in the Commonwealth Government Notices Gazette stating that the licence has been granted.

Validity period and renewal

What is the validity period for licences/authorisations and what are the terms of renewal?

There is no specified validity period of a carrier licence. If a carrier no longer meets the eligibility requirements or has failed to pay an annual charge or a telecommunications industry levy, then ACMA may cancel the carrier licence by written notice after providing an opportunity for the carrier to make a submission.

Fees

What fees apply?

Carrier licences are subject to application and annual charges. Currently, the application charge is A$2,076 as determined by ACMA in the Telecommunications (Carrier Licence Application Charge) Determination 2012.

Further annual charges apply to participating persons (carriers with eligible revenue greater than A$25 million), and include:

  • the annual carrier licence charge (as set out in the specific year’s Annual Carrier Licence Charge Determination) to recover the cost of regulating the telecommunications industry; and
  • a telecommunications industry levy to pay both contractor and grant recipients, and administrative costs to ensure the continuity of key telecommunications safeguards.

Timeframe

What is the usual timeframe for obtaining a licence/authorisation?

Where no further information from the applicant or consultation with the communications access coordinator is required, ACMA has 20 business days from when the application is received by the communications access coordinator to decide whether to grant the licence.

Network access and interconnection

Regulation

What rules, requirements and procedures govern network-to-network access and interconnection?

Generally, a carrier is required under Schedule 1 of the Telecommunications Act 1997 to provide other carriers with access to telecommunications facilities owned or operated by it, and access to telecommunications sites and towers and underground facilities.

The obligation to provide access to telecommunications facilities applies only in circumstances where:

  • the access is provided for the sole purpose of enabling the second carrier to provide competitive carriage services and/or to establish its own facilities;
  • the request is reasonable and reasonable notice is provided; and
  • the facilities (excluding customer cabling or equipment) were installed prior to June 30 1991 or, if installed after that date, were not obtained solely by commercial negotiation.

The obligations to provide access to telecommunications transmission sites and towers or underground facilities applies only where:

  • access is provided for the sole purpose of enabling the second carrier to install a facility or a line for the supply of a carriage service (as applicable);
  • reasonable notice is provided; and
  • the Australian Communications and Media Authority (ACMA) has not certified that granting access is not technically feasible.

Carriers must also comply with the Australian Competition and Consumer Commission’s (ACCC) Code of Access to Telecommunications Transmissions Towers, Sites of Towers and Underground Facilities, which – as the name suggests – sets out non-price terms of access to telecommunications transmission sites and towers and underground facilities.

Pricing

Are access/interconnection prices subject to regulation?

The Competition and Consumer Act 2010 (CCA) provides that the ACCC may set terms and conditions, including price terms, for access to facilities through an access determination for declared services. A ‘declared service’ is a specified eligible service (being a listed carriage service or a service that facilitates the supply of a listed carriage service) that has been declared by the ACCC after certain criteria are met, including that the declaration will promote the long-term interests of end users.

Where an access provider of a declared service also owns or controls one or more telecommunications facilities, there is also an obligation to supply ancillary facilities access services. Accordingly, the ACCC may also impose terms and conditions that relate to facilities access services that are ancillary to obtaining access to a declared service.

Disputes

How are access/interconnection disputes resolved?

Disputes on access/interconnection issues must be resolved between the carriers themselves on terms agreed in the negotiated access arrangement, or by mediation. If the carriers are unable to resolve the dispute themselves, the carriers must refer the dispute to an independent arbitrator. If the parties fail to agree on the appointment of an arbitrator, the carriers must refer the dispute to the ACCC to arbitrate the dispute.

Next-generation access

Have any regulations or initiatives been introduced or proposed with respect to next-generation access?

Although no formal regulations have been introduced in Australia, there is an increasing interest in considering 5G (fifth generation of wireless technology) capability. In February 2016 ACMA released an occasional paper titled “5G and mobile network developments: Emerging issues”. More recently, in September 2017, ACMA released a consultation paper to progress consideration for the release of the millimetre wave spectrum (mmWave) for 5G broadband. Once responses have been received, ACMA’s intention is to make a decision on progressing one or more mmWave bands to be used to provide broadband services.

Infrastructure access

Land access

What rules and procedures govern telecoms operators’ access to land (both public and private) to install, maintain and repair infrastructure?

Schedule 3 of the Telecommunications Act 1997 grants carriers certain rights to inspect, install and maintain telecommunications facilities. The right to install a facility may be exercised only if the carrier holds a facility installation permit (issued in accordance to a set criteria), the facility is a low-impact facility or is a temporary facility for use by a defence organisation for defence purposes.

A carrier must comply with certain conditions when inspecting, installing and maintaining telecommunications facilities. This includes providing written notice to the owner of land specifying the purpose of the activity, doing as little damage as practicable and restoring the land, complying with industry standards and codes of practice, and entering into agreements with public utilities.

Infrastructure sharing

Are infrastructure sharing agreements among operators popular and/or encouraged by the regulatory authorities? Which infrastructure sharing structures/agreements are commonly used? Do any regulations apply?

Infrastructure sharing is encouraged by the ACCC and ACMA to promote competition by facilitating the entry of new mobile and fixed-line operators. The types of common sharing agreement include co-location agreements, master access agreements, shared services agreements, resale of telecommunications capacity and spectrum leasing agreements. Standard contractual principles will apply to a private agreement between parties.

Pricing and consumer protection

Retail pricing

What rules govern retail pricing for telecoms services?

In practice, no retail price controls (RPCs) apply in Australia. Previous RPCs over Telstra (the nation’s historic monopoly telecommunications company) were revoked in March 2015 following a study by the Centre for International Economics that found that the state of competition in Australia’s retail telecommunications market made price controls redundant.

Consumer contracts

What rules govern consumer service contracts?

The Telecommunications Consumer Protection Code (TCP Code) sets out certain minimum protections for consumers of mobile, internet and landline products and services. These protections cover such things as advertising and selling practices, billing requirements, credit and debt management, rights to change service providers and complaint handling processes. In addition to the TCP Code, general consumer laws (including the Australian Consumer Law set out in Schedule 2 to the Competition and Consumer Act 2010) also apply to such consumer contracts.

In addition to contracts with consumers, telecommunications service providers that supply standard telephone services must also meet the performance requirements of the Consumer Service Guarantee (CSG) (eg, in relation to corrections to faults and priority assistance services) and provide compensation to customers if they do not comply with the CSG.

Disclosure requirements

Are telecoms service providers bound by any consumer disclosure requirements?

Under the TCP Code, telecommunications service providers must ensure that consumers of landline, mobile and internet products and services can view and download relevant terms and conditions about the service provider’s products and services from its website. This includes providing a summary of each offer (known as a ‘critical information summary’) and the service provider’s financial hardship policy.

Competition

Issues and concerns

Are there any particular competition issues or concerns in the domestic telecoms market?

The Australian Competition and Consumer Commission (ACCC) had expressed some concerns regarding the advertisement of the nbn network by retailers, in particular in terms of the available speed. The issue centres around the lack of clear and accurate information about typical broadband speed that would enable customers to make informed decisions about which provider to purchase a service from. This stems from the fact that retailers tend to advertise an ‘up-to’ speed, which can give the impression that the speed advertised is achievable at most times, even during busy periods.

To address this issue, the ACCC had published industry guidance for retailers on how to advertise speed for nbn network broadband services, including clearly identifying typical minimum speeds during peak periods. In the guide, the ACCC included standard labels for retailers’ use that consists of tiered offerings based on available evening speed to give consumers better information about what they can expect during the evenings and, thus, better enable them to compare plans.

This guide seeks to move retailers from advertising their services based on the maximum internet speed that may be delivered during off-peak periods to the speeds that consumers can expect to achieve during the busy evening periods. The ACCC plans to review the guide after 12 months to determine its effectiveness.

Sector-specific regulation

Do any sector-specific competition regulatory/legal provisions apply (eg, special conditions for dominant telecoms market players)?

Part XIB of the Competition and Consumer Act (CCA) contains industry-specific prohibitions against anti-competitive conduct in the telecommunications sector (the Competition Rule). This regime applies in addition to Part IV of the CCA, which deals with restrictive trade practices. This part applies to telecommunication carriers and carriage service providers.

The ACCC may issue telecommunication carriers and carriage service providers with a competition notice stating that they have engaged or are engaging in anti-competitive conduct, or that they have contravened the Competition Rule. In addition, the ACCC has the power to:

  • issue an order exempting specific conduct from the scope of the definition of anti-competitive conduct;
  • direct carriers and carriage service providers to file tariff information with the ACCC;
  • order carriers and carriage service providers to make certain reports available to the ACCC; and
  • make record-keeping rules.

Additionally, Part XIC of the CCA provides a telecommunications access regime. Its aim is to promote the long-term interests of end users via a more competitive industry with efficient investment and use of infrastructure, resulting in lower prices, service innovation, greater choice of service for customers and improved quality. It does so by allowing the ACCC to declare specific telecommunication services to be subject to the access regime. The provider of the declared services must provide access on agreed terms (or where terms cannot be agreed upon, terms arbitrated by the ACCC). The ACCC has published a comprehensive guideline to the declaration provisions under Part XIC of the CCA setting out various ways in which the telecommunication services can be declared and outlines the ACCC’s general approach to declaration issues under Part XIC.

Separation

Are there any requirements for structural, functional or accounting separation of operators’ activities?

The telecommunications industry was recently subject to reform. Central to this reform was the view that Telstra’s high integration in both the wholesale and retail telecommunications markets, as well as across all the telecommunications platforms, had hindered the development of effective competition in the sector. Subsequently, Telstra chose to separate its business structurally by migrating its retail services from its fixed-line networks onto the nbn network. Telstra provided a structural separation undertaking to the ACCC, which was approved in February 2012. This structural separation was intended to lead to a national outcome where there is a wholesale-only network operating across the country that is not controlled by any retail company – thus providing better and fairer infrastructure access for service providers, greater retail competition and better services for consumers and businesses.

The operator of the nbn network is prohibited from selling the nbn service on a retail basis. The National Broadband Network Corporation Act 2011 expressly states that nbn must supply the service on a wholesale basis only.

Spectrum

Allocation

What rules and procedures govern spectrum allocation?

The allocation of spectrum is regulated under the Radiocommunications Act 1992 (Radcomms Act) and the Australian Radiofrequency Spectrum Plan 2017. Spectrum in Australia is managed through a licensing regime operated by the Australian Communications and Media Authority (ACMA). There are three types of radiocommunications licence issued:

  • spectrum licences, which authorise the licensee to operate devices within a specified parcel of the spectrum;
  • class licences, which authorise a person to operate a device of a specified kind, or for a specified purpose, or of a specified kind for a specified purpose; and
  • apparatus licences, which authorise the licensee to operate devices to which the specific licence relates (eg, specific types of transmitter or receiver licence).

The Australian Radiofrequency Spectrum Plan divides the Australian radiofrequency spectrum into frequency bands to be regulated by ACMA. These frequency bands can be used only for the general purpose as specified in the relevant frequency band plan, or otherwise in accordance with a spectrum licence, class licence or in certain other circumstances set out in the Australian Radiofrequency Spectrum Plan.

The current radiocommunications legislation is presently under reform, and a consultation process is being undertaken by the Department of Communications and the Arts to modernise and simplify the spectrum management framework. ACMA has also issued a five-year spectrum outlook for 2016 – 2021 that sets out ACMA’s approach and key priorities to spectrum management in Australia in the coming years.

Fees

What fees apply to spectrum allocation/authorisation?

There are fees and costs associated with the issue of spectrum and apparatus licences. There are no fees payable for class licences as there is no application associated with a class licence, and is automatically issued to users in the same spectrum segment, and subject to the same licence conditions.

The fees applicable to an apparatus licence are set out in an apparatus licence fee schedule that includes administrative charges and an annual licence tax (which generally remains fixed over the term of the licence).

Spectrum licence holders pay three fees:

  • ACMA charges (on a direct cost recovery basis);
  • spectrum licence taxes calculated on an annual basis; and
  • spectrum access charges (value-based fees) generally set by auction or through renewal of existing licences.

Transferral

Can spectrum licences be transferred, traded or sub-licensed?

The Radcomms Act contemplates the transfer, trading, sub-licensing or other assignment of spectrum licences. Any assignment must be subject to the rules made by ACMA as set out in the Radiocommunications (Trading Rules for Spectrum Licences) Determination 2012. These include requiring the licensee to trade all or part of its licence as a single whole trading unit or multiple whole trading units, the trade cannot result in the assignee or assignor having a bandwidth less than the minimum contiguous bandwidth without ACMA’s permission, and providing all information required by ACMA about the assignment.

The Radcomms Act also permits the transfer of apparatus licences, subject to specific conditions being met.

Voice over Internet Protocol

Regulation

How is Voice over Internet Protocol (VoIP) regulated in your jurisdiction?

In Australia, the regulations applicable to VoIP depend on the type of VoIP services. The Australian Communications and Media Authority (ACMA) classifies four different types of VoIP service:

  • ‘peer-to-peer’ internet only, where calls do not make any use of the public switched telephone network (PSTN);
  • ‘VoIP out’, where users may make calls from the VoIP network to the PSTN; 
  • ‘VoIP in’, where users may receive calls from the PSTN; and
  • ‘two-way’, where calls may be both made to and received from the PSTN.

In general, providers of the second, third and fourth types of VoIP service will be considered ‘carriage service providers’ under (and governed by) the federal telecommunications regulatory regime. In addition, the fourth type of VoIP services (ie, involving two-way calls to and from the PSTN) may be considered a ‘standard telephone service’ and subject to further obligations, including compliance with the Consumer Service Guarantee, access to the National Relay Service, itemised billing requirements. Type 2 services, where the VoIP users may make calls to the PSTN, are also required to provide free access to the 000 emergency services phone number and, if unable to do so, must clearly inform customers that such access is not available. All VoIP services, regardless of type, will be subject to the Competition and Consumer Act 2010 in respect of pricing, anti-competitive behaviour, number portability (where applicable) and other matters.

Telephone numbers

Allocation

How are telephone numbers allocated in your jurisdiction?

The process for allocation of telephone numbers in Australia is outlined in Chapter 6, Part 2 of the Australian Telecommunications Numbering Plan 2015 (Numbering Plan). The Numbering Plan is administered by the Australian Communications and Media Authority (ACMA). ACMA creates a publically available list of geographic, freephone, local rate, premium rate and special service numbers, as well as access codes that are available to be allocated. A registered carriage service provider may then apply to ACMA for the allocation of a number, accompanied by any applicable charges and stating the relevant information such as the zone for a geographic number or the type of service for a special services number. The registered carriage service provider may identify the number(s) that it wishes to be allocated or if no number(s) is identified, ACMA will select the number(s) from those available. Specific requirements outlined in Chapter 7 must also be met for the allocation of smartnumbers (numbers beginning with 13, 1300 or 1800). ACMA must make a decision on an application by a registered carriage service provider within 60 business days of receiving the application, otherwise the application is deemed to have been refused. Once an application is approved by ACMA, the telephone number will be allocated to the registered carriage service provider that in turn provides this number to its customer.

Number portability

What rules govern telephone number portability?

The requirements that must be satisfied in order for a carriage service provider to provide a portable service are outlined at Chapter 10 of the Numbering Plan. A portable service includes a local, freephone or local rate service or a public mobile telecommunications service (other than a satellite telephone service). The Numbering Plan outlines that a carriage service provider or carrier involved with providing a portable service must:

  • have the technical capability required to provide portability;
  • port the customer’s number to another carriage service provider or carrier if requested by that carriage service provider or carrier or the customer; and
  • provide an ‘equivalent service’ with regard to a ported number (meaning no apparent differences in quality, reliability, service or features to the end user) to the extent within the carriage service provider’s control.

The carriage service provider or carrier has an obligation to ensure that the provision of an equivalent service is not interrupted by routing calls to or from a ported number. The originating access carriage service provider generally has routing responsibility in relation to a call to a portable number unless the carriage service provider is preselected, the call originated outside Australia, the call involves number translation, or the call is diverted.

Privacy and data security

Net neutrality

What is your jurisdiction’s regulatory stance on net neutrality?

In Australia, there is no mandated net neutrality rule. As a result, the only protections of an equal playing field over the Internet are contained within general laws regarding anti-competitive conduct. The introduction of net neutrality laws was a recommendation of the former Labour government in its Convergence Review, but it is not currently being pursued by the coalition (conservative) government that took office in 2013. Importantly, though, the Australian domestic telecommunications market differs to the US and European markets in a number of respects that impacts on this issue. For example, in Australia there is significantly less vertical integration than in the United States. Further, Australian internet plans are priced principally by reference to the amount of data downloaded (‘user pays’ model), as well as speed. Additionally, as the Australian network is open to use by competitors, customers are able to choose from a wide range of broadband providers (and indeed different technology mixes) and can easily switch between providers and plans.

Encryption

Are there regulations or restrictions on encryption of communications?

Generally, encryption can be used freely within Australia. The Cybercrime Act 2001 provides some provision for law enforcement agencies to compel disclosure of encrypted data. The restrictions on encryption of communications are largely contained in the Customs (Prohibited Exports) Regulations Schedule 13E and Section 112 of the Customs Act 1901. Crypto-software is included on the Defence and Strategic Goods List (DSGL) and the Australian Defence Trade Controls Act 2012 (DTCA) prohibits the ‘supply’ of DSGL technology outside of Australia without a permit. There are exceptions detailed in the DSGL Cryptography Note that include, for example, material in the public domain and software/hardware where the cryptographic function cannot be easily changed. Further exceptions exist for technology that is considered ‘basic scientific research’, software which is for personal use and for specific financial products/applications.

A number of laws such as the Privacy Act 1988 require reasonable steps to be taken to protect the security of personal information or other data. In some circumstances, this could be interpreted as requiring particular types of communication to be encrypted.

Data retention

Are telecoms operators bound by any rules or requirements on the retention of consumer communications data? If so, for how long must data be retained?

The Telecommunications (Interception and Access) Amendment (Data Retention) Act 2015 requires telecommunications providers in Australia to collect and store specific types of telecommunications data (‘metadata’) about their customers’ communications for a minimum of two years from the date when the data was generated. The data must be encrypted and protected from unauthorised interference or access. Pursuant to the retention scheme, ‘metadata’ is defined as information about a communication, not the content or substance of that communication. Specific subscriber data must also be retained for two years after the closure of an account.

Government interception/retention

What rules and procedures govern the authorities’ interception of communications and access to consumer communications data?

Pursuant to Chapter 2 of the Telecommunications (Interception and Access) Act 1979 (TIAA), the Australian Security and Intelligence Organisation (ASIO) and certain domestic law enforcement agencies (including the Australian Federal Police and the Australian Crime Commission) may authorise the disclosure of telecommunications data by a carrier or carriage service provider. The information commissioner must be consulted about requirements relating to the form of those authorisations. Except in the case of an emergency, the authorities are able to access such communications only for the purposes of their investigations once a warrant has been obtained pursuant to the requirements set out in the TIAA. In the case of ASIO, a warrant may be issued where the person is reasonably suspected of engaging in activities prejudicial to security and the interception will, or is likely to assist, with obtaining intelligence relevant to that investigation. In the case of law enforcement agencies, interception warrants may be issued where the investigation concerns a ‘serious’ offence. Requests for access to metadata are subject to review by the commonwealth ombudsman or the inspector-general of intelligence and security in the case of ASIO.

Data security obligations

What are telecoms operators’ general data security obligations to consumers?

The general data security obligations to consumers are contained in Principle 11 (Security of personal information) of the Australian Privacy Principles (APPs). Principle 11 requires that organisations take reasonable steps, including active measures, to protect personal information held from misuse, interference and loss, unauthorised access, modification and disclosure. Similarly, where an organisation no longer requires the personal information for a purpose permitted by the APPs, the entity must take reasonable steps to destroy the information or ensure that it is de-identified, save for where the information is either part of the Commonwealth record or retention is required by law (or a court/tribunal).  

In addition to the above security obligations, the Australian Privacy Principles and Part XIII of the Telecommunications Act 1997 impose restrictions on the use and disclosure of personal information and telecommunications customer information respectively.

Most recently, specific telecommunications sector security reforms have also been introduced in the Telecommunications and Other Legislation Amendment Act 2017 (TSSR), which aims to establish a security framework within the telecommunications industry to ensure protection of telecommunications networks and engagement between industry and government to identify and mitigate risks from unauthorised interference or access. The two primary obligations introduced in the TSSR includes:

  • a security obligation - carriers and carriage service providers (CSPs) must do their best to protect telecommunications networks and facilities from unauthorised interference, or unauthorised access for the purposes of security; and
  • a notification obligation – if a carrier or nominated CSP proposes to implement a change to a telecommunications service or telecommunications system that is likely to have a material adverse effect on the capacity to comply with the security obligation, then the carrier or nominated CSP will need to notify the communications access coordinator.