Misbehaving telecommunication providers facing $10m fines for breaching industry codes

Australian telecommunication providers who are caught breaching industry codes will no longer be warned before being slapped with new multi-million dollar fines.

The Federal Government will scrap a two-step process that will enable the Australian Communication and Media Authority to take direct and immediate enforcement against telcos that have breached their obligations to customers.

Currently, ACMA must first issue telcos a direction to comply, no matter how significant the breaches are. ACMA can only take further action if non-compliance continues.

Under the proposed changes revealed on Tuesday, the communications regulator will now be able to act quickly to hold telcos to account and will no longer be tied to issuing a warning before cracking down on serious breaches.

The Government will also increase maximum penalties for breaches of industry codes from $250,000 to $10 million, bringing telcos in line with sectors like energy and banking.

“Nobody wants an industry that sees penalties as the ‘cost of doing business’,” Communications Minister Michelle Rowland said.

“These changes provide a powerful deterrent, improve the likelihood of compliance and lead to a better functioning telecommunications sector.”

Courts will also be able to determine penalty amounts based on financial turnover and the scale of the breach.

Optus last November paid more than $12m in penalties for its nationwide network outage the year prior that left more than 10 million customers without phone and internet access for up to 14 hours. Customers were also unable to contact triple-0.

Telstra was also slapped with a $3m fine in December after an outage in March stopped triple-0 phone calls getting forwarded to emergency services.

Australian Communications Consumer Action Network chief executive Carol Bennett on Tuesday hailed the changes as a major win for customers.

“These reforms will promote increased accountability, transparency and compliance within the telecommunications industry and contribute towards improving diminishing consumer trust in telcos,” she said.

“The Australian Government’s reforms address longstanding consumer concerns about the relatively weak regulatory settings of the telco industry and will go a long way towards improving trust in the telecommunications industry.”

The peak body of the telecommunications industry, Communications Alliance, also backed the changes.

Communications Alliance chief executive Luke Coleman said it had consistently called for stronger enforcement powers for ACMA. “Australians expect the highest standards of business behaviour from telcos, and these new direct enforcement powers will ensure they are held to account by the regulator,” he said.

The Government will also establish a carriage service provide registration scheme to increase the visibility of telecommunication retailers in the market.