Comms Alliance criticises feds over data retention funding delays

The Communications Alliance has criticised the federal government over ongoing delays around how much it will subsidise Australia’s telecommunications service providers to comply with mandatory data retention legislation.

Telcos are still waiting to learn how much of their multi-million dollar compliance costs will remain unfunded by the government and whether their businesses will be threatened as a result, the Comms Alliance said on Tuesday.

The Telecommunications (Interception and Access) Amendment (Data Retention) bill passed the Senate on 13 April 2015 – one year ago tomorrow – and came into effect on 13 October.

Government consultants have estimated that the requirement to collect and store a huge amount of customer data would cost the industry up to $319.1 million but industry expects the actual capital costs to be higher than that.

The 2015-16 Federal Budget contained funding of $131.3 million over three years to make a contribution to capital costs of telecommunications providers.

Of that figure, almost $3 million will be siphoned off by the Attorney General’s Department for administrative costs, Comms Alliance said.

“Only weeks away from the 2016-17 budget, however, telecommunications service providers are no closer to knowing how much they will receive from the government,” said Communications Alliance, CEO, John Stanton.

“They therefore don’t know how much their business – and ultimately – their customers – will have to contribute to the costs of the data retention scheme,” he said.

The found of applicants from service providers seeking a share of the government funding closed on 23 February this year.

The next step is for the Government Data Retention Working Group to meet and review the weightings that are to be used to help calculate how much subsidy funding each eligible service provider will receive.

That meeting has not yet been scheduled.

“No-one doubts that the Attorney-General’s Department has been working hard to implement the regime and sort out the funding question – but the ongoing delays are having perverse consequences,” said Stanton.

“Many service providers – particularly smaller operators – have told us that they are doing very little or nothing to build their compliance capabilities at the moment.

“Who can blame them – if they start investing in systems now without knowing how much of that investment will remain unfunded once the subsidies arrive, they are putting themselves at risk of bankruptcy.”