Australia is considering the introduction of increased regulation for its approximately 1500 telecommunications retailers due to concerns surrounding the proliferation of phantom carriage service providers (CSPs) in the sector.
A discussion paper released by the government has highlighted challenges for consumer regulators and identified the Department of Home Affairs and the Attorney General’s Department as being concerned about the lack of proper oversight in the CSP market.
The government is seeking public input to help determine whether to implement a relatively light-touch registration scheme or potentially introduce a CSP licensing system, a method employed in only one other country, Singapore.
The paper also noted that there is currently no comprehensive list of CSPs, as the Telecommunications Industry Ombudsman cannot confirm that every organization reselling telco services is a TIO member.
The push for greater scrutiny is partly driven by the government’s growing cybersecurity concerns. Government agencies like the Department of Home Affairs and the Attorney General’s Department are unable to verify compliance with data breach reporting schemes or check whether CSPs have provided information to the Register of Critical Infrastructure Assets when these providers operate under the radar.
The Australian Communications and Media Authority (ACMA) has indicated its lack of a mechanism for dealing with rogue CSPs and its inability to prevent bad actors from restructuring and re-emerging under new names to evade regulatory scrutiny—a practice known as “phoenix-ing.”
For the ACMA, the only enforcement avenue is through the courts, and legal proceedings have been slow and ineffective in achieving the desired outcomes.
The introduction of registration or licensing could potentially simplify the regulatory responsibilities of the Australian Competition and Consumer Commission, which oversees consumer law compliance, and the Telecommunications Industry Ombudsman, which resolves disputes between consumers and service providers.
