Chapter 2
Key issues
2.1
The department submitted that the amendments in the bill are supported
by industry and consumer advocates.[1]
This was reflected in submissions received by the committee during the inquiry.
2.2
This chapter discusses the comments received in relation to each of the
three measures contained in the bill.
Reforms to the TIO Scheme
2.3
Submitters were largely supportive of the reforms to the TIO scheme
contained in the proposed amendments to the Consumer Protection Act.
2.4
For example, Vodafone acknowledged the fundamental role of the TIO 'in
providing an alternative dispute resolution scheme for consumers and industry
to resolve complaints on a case-by-case basis'.[2]
Vodafone stated that it was 'largely comfortable' with the proposed amendments
to the TIO scheme. It believed that the changes will 'help to further clarify
the TIO's role and the standards by which it should operate'.[3]
2.5
The Australian Communications Consumer Action Network (ACCAN) was also
supportive of the amendments to the TIO scheme, expressing the view that 'they
improve the clarity around the TIO and its expected standards of operation'.[4]
2.6
Both Vodafone and the TIO provided the committee with the comments that
they had submitted to the department on the exposure draft of the bill. In
those comments, they were both concerned that the Explanatory Memorandum
accompanying the bill should make it clear that the intention is for the
ministerial standard to reflect the Benchmarks for Industry-based Customer
Dispute Resolution Schemes (DIST benchmarks).[5]
The committee notes that the Explanatory Memorandum does mention the DIST benchmarks
in two places. In particular, the Explanatory Memorandum states that:
If the Minister decides to exercise the power to make a
legislative instrument under subsection 128(9), he or she must have regard to the
matters set out in new subsection 128(10), which are derived from the Benchmarks
for Industry-based Customer Dispute Resolution Schemes.[6]
2.7
The only other submission to raise any issue with the TIO scheme reforms
was from iiNet. While supporting the 'high level principles' behind the
amendments, iiNet was concerned that, in making a TIO Determination, the minister
is not required to consult with industry, nor have regard to the administrative
and financial burden that may be imposed on participants of the TIO scheme.[7]
2.8
iiNet pointed out that, under proposed subsection 128(11) of the
Consumer Protection Act, the Minister is required to consult with the
TIO and the ACMA. iiNet argued that, given that the TIO scheme is funded by
industry, and a TIO Determination has the potential to have onerous
administrative and financial impacts on industry, it would be 'reasonable and
appropriate' for the minister to be required to consult with industry before
making a TIO determination.[8]
2.9
iiNet noted that the Telecommunications Act states that parliament's
intention is that telecommunications be regulated in a manner that 'does not
impose undue financial and administrative burdens on participants in the
Australian telecommunications industry'.[9]
iiNet therefore suggested that the criteria for the minister to consider when
determining the TIO scheme standards (as set out in proposed subsection 128(10))
should be expanded. They suggested the criteria include a mandatory requirement
for the minister to have regard to the financial and administrative burden on
participants in the Australian telecommunications industry.[10]
iiNet noted that the minister could have regard to this matter under the
last criterion; that is, 'such other matters (if any) as the Minister considers
relevant'. iiNet were nevertheless concerned that the minister could 'simply
ignore the effect that a TIO Determination would have on the financial and
administrative burden on participants in the Australian telecommunications
industry'.[11]
2.10
However, the department submitted that:
There are clear boundaries on the determination making power
in the proposed amendment:
- before making a determination, the Minister must consult with the
ACMA and the TIO;
-
when making a determination, the Minister must have regard to the
DIST benchmarks, and any other relevant matters; and
-
if a determination is made, it will be disallowable pursuant to
section 42 of the Legislative Instruments Act 2003 and subject to
scrutiny by the Senate Standing Committee on Regulations and Ordinances.[12]
2.11
The department submitted that the amendments to the Consumer Protection
Act will 'make the TIO scheme more effective and transparent, and compatible
with other industry dispute resolution schemes in Australia'.[13]
The department explained that, at present, the Consumer Protection Act:
...provides no guidance about the expected standards for the
operation of the TIO scheme. While the TIO Constitution refers to the DIST
benchmarks, there are currently no framework principles set out in legislation
or regulation to which the TIO must abide.
This gives rise to a perception that the TIO is not bound by
any particular regulatory standards, and there is some uncertainty as to the
status and binding nature of the DIST benchmarks in respect to
telecommunications services.[14]
2.12
The department further explained that the proposed amendments will
enable the minister to establish framework principles to underpin the TIO's
operations which are both consistent with best practice for other external
dispute resolution schemes and relevant to the telecommunications industry.[15]
The department suggested that:
Any such determination by the Minister will provide clarity
and reassurance to end users, industry and other stakeholders that the
principles in the benchmarks are reflected in the operations of the TIO.[16]
2.13
The department also submitted that the provisions for statutory review
of the TIO scheme will 'strengthen the TIO's public accountability and ensure
that the scheme remains in step with public expectations'.[17]
2.14
Finally, the department advised that, in developing the amendments to
reform the TIO scheme, it consulted broadly with industry and consumer groups,
including the Communications Alliance and ACCAN. The department submitted that
the TIO, industry and consumer groups support the proposed amendments.[18]
Reform of industry code processes
2.15
Submitters were also supportive of the proposed amendments to the
Telecommunications Act to allow for the variation of industry codes of practice.
It was thought that the changes would enable industry codes to be more
responsive and to adapt to changing circumstances.
2.16
For example, the Communications Alliance considered that the amendments
will 'enhance and strengthen the telecommunications self-regulatory framework'.[19]
In particular, the Communications Alliance considered that the ability to vary codes
will:
- allow industry's self-regulatory framework to be more responsive
to changing consumer priorities, industry circumstances and technologies;
- allow industry to amend code provisions that may be ambiguous or
confusing and to correct minor editorial issues without the need to undertake
wide public consultation; and
- allow the inclusion of additional consumer protections within codes
as necessary.[20]
2.17
The Communications Alliance also expressed support for the requirements
to publish draft codes and submissions received during code development. The
Alliance believed that this will ensure transparency in code development.[21]
2.18
Finally, the Communications Alliance supported the extension of the
reimbursement scheme in the Telecommunications Act, stating that:
It is reasonable to expect that industry bodies will be
reimbursed for the costs associated with the variation of industry Codes. Given
that the changes to allow the variation of Codes is anticipated to be minor
issues, the costs associated should be significantly less than that of a
comprehensive revision.[22]
2.19
ACCAN similarly welcomed the amendments, suggesting they will improve
the flexibility and responsiveness of industry codes. It submitted that:
Allowing for variations to be made to Codes, instead of
requiring whole of Code replacement, is a welcome move that will allow for
faster incorporation of new consumer protection provisions and enable the
consumer protection regime to be more responsive to new issues. We also
acknowledge the requirement for consultation with consumers when a draft
variation is being proposed.[23]
2.20
Vodafone was also in favour of the amendments, expressing its view that
they will ensure that industry codes 'can be adapted to respond to changes to
telecommunication technologies, consumer priorities and industry circumstances,
strengthening the Codes to better achieve their objectives into the future'.[24]
2.21
iiNet agreed that the proposed amendments are 'sensible and pragmatic',
and would 'allow industry codes to adapt to changing circumstances in a much
more efficient and transparent manner than under the current legislation'.[25]
2.22
While expressing support for the amendments, the Association for Data‑driven
Marketing (ADMA) requested clarification on one point. ADMA noted that code
developers will be required to publish submissions received about the draft
code or draft variations. However, ADMA were concerned that:
The issue of responsibility for material on websites is
currently the subject of debate. ADMA requests that the Committee seek
clarification that the ACMA has the discretion to provide an exemption from
that requirement in the case of submissions which are defamatory, obscene or
contain other material which if published may cause harm to the organisation
legally responsible for the website.[26]
2.23
The TIO raised a similar issue in its comments on the exposure draft of
the bill.[27]
The TIO noted that some submissions may contain confidential or sensitive
information, and it is not clear that the proposed amendments allow for any
exceptions to the publication of such submissions:
The party making the submission may not wish to have parts or
all of their submission published for this reason, or alternatively may not
provide a submission if a guarantee of confidentiality cannot be given.[28]
2.24
The department did not address this issue in its submission. In terms of
the consultation requirements for draft codes and code variations, the
department advised that:
Transparency and accountability are important for
stakeholders in the development or review of industry codes. At present, code
developers are not required to publish submissions to a code development
process.
Consultation by the Department identified that while code
developers have not previously published submissions they received during
consultation, as a matter of course, code developers do provide submissions to
interested parties on request.
There is a strong view amongst stakeholders that requiring
code developers to publish submissions will improve the transparency and
accountability of the code development and review processes.[29]
2.25
The department further noted that the existing code development process
requires codes to be wholly replaced. There is currently no existing mechanism
for variations of codes. The department explained that:
This places an administrative burden on code developers and
reduces the responsiveness of the code process. It has also led some consumer
stakeholders to criticise the length of time taken for industry codes to react
to changes in technology and the telecommunications market.[30]
2.26
The department submitted that the proposed amendments will allow codes
to be varied through a streamlined process, which is 'particularly important in
the telecommunications industry where changes in market structure and
technology can be rapid'.[31]
2.27
In relation to the extension of the reimbursement scheme for variation
of industry codes, the department advised that both the key parties involved in
industry code development, ACMA and the Communications Alliance, supported the
amendments to extend the reimbursement scheme. The department further submitted
that 'the proposed extension of the reimbursement scheme will continue to only
be available for refundable costs approved by the ACMA regarding consumer
related industry codes'.[32]
2.28
Finally, the department noted that it had consulted broadly with
industry and consumer groups in developing the proposed amendments to the code
development process, and these groups 'were generally supportive of the
proposed amendments'.[33]
Do Not Call Register Act amendments
2.29
As outlined in Chapter 1, the Do Not Call Register Act amendments are a
response to problems encountered by the ACMA, which is responsible for
enforcing the Do Not Call Register Act. The department submitted that ACMA had
advised that:
...it has encountered difficulties in establishing evidentiary
links between the first person (the telemarketer or fax marketer) and the other
party providing the telemarketing or fax marketing services.
This has commonly arisen because agreements between the
parties relating to the marketing of the first person’s goods or services without
any specific reference to the means by which the goods or services are to be
marketed.[34]
2.30
The department continued:
The proposed amendments will enhance the operational
efficiency of the DNCR Act by allowing the ACMA to more readily establish an
evidentiary link between a telemarketer or fax marketer and a third party
providing telemarketing or fax marketing services on their behalf.[35]
2.31
Submitters that commented on the amendments to the Do Not Call Register
Act were supportive. For example, ACCAN welcomed the amendment, which it
thought would allow the ACMA to 'perform more rigorous enforcement including
where telemarketing calls are made by firms acting on behalf of clients'.[36]
2.32
ADMA also supported the amendment, stating an understanding that it:
...aims to correct a potential failure of the legislation to
ensure that a company cannot evade responsibility for compliance with the DNCR,
using third parties (located overseas) to carry out marketing activities on
their behalf in Australia.[37]
2.33
ADMA further submitted that the amendment 'will ensure that all
marketers using this channel of marketing communication do so on an equal
basis'.[38]
2.34
The department advised that it had approached the ADMA for comment on
the proposed amendment, with ADMA advising 'that it does not oppose the
proposed amendment'.[39]
Amendments proposed by Mr Adam Bandt MP
2.35
The committee received no evidence on the amendments to the bill
proposed by Mr Adam Bandt MP, as outlined in Chapter 1. These amendments would
require Telstra, and its subsidiaries, to perform all of the work relating to
the production of the White and Yellow Pages, both print and online, in
Australia.
2.36
Telstra's carrier licence currently requires them to produce the White
Pages and make them accessible to the public, generally as a printed directory.
They are not required under their carrier license to produce either the Yellow
Pages, or the online version of the White or Yellow Pages.
Committee view
2.37
In relation to the amendments proposed by Mr Adam Bandt MP, the concern
for local jobs is shared by the committee. However, in the committee's view,
the Bandt amendments are inconsistent with the scheme of this bill and ought to
be subject of a stand-alone bill directed to the purpose proposed by the
amendments.
2.38
The committee acknowledges that submitters to this inquiry were
supportive of all aspects of the amendments proposed by the bill. Most
submitters considered the amendments to be an improvement on the current
legislative regimes for industry codes, the Telecommunications Industry Ombudsman
scheme and the Do Not Call Register.
2.39
In particular, submitters believed that reforms to the TIO scheme would
provide greater clarity about the TIO's role and its expected standards of
operation. Submitters also welcomed the increased transparency and
responsiveness provided by the amendments to industry code processes under the
Telecommunications Act.
2.40
Only one concern was raised in relation to the amendments to the
Telecommunications Act to allow for the variation of industry codes of practice.
The issue was whether code developers would need to publish submissions that
are offensive or defamatory, or that contained confidential or sensitive
information. On the face of the bill, it seems that code developers would be
obliged to publish such submissions. The committee therefore suggests that the department
consider amendments to the bill to clarify that code developers are not
required to publish submissions containing comments or information that is
offensive, defamatory or confidential.
2.41
One submitter also raised a concern in relation to the changes to the
TIO scheme. This concern was that the minister, in making a TIO determination,
is not required to consult with industry, nor have regard to the administrative
and financial burden that may be imposed on participants of the TIO scheme.
2.42
However, the committee notes that the minister is required to
consult with the TIO and the ACMA. The committee further notes that the
minister is not precluded from consulting industry, nor from considering other
relevant matters. Under proposed subsection 128(10), the minister can have
regard to 'such other matters' as the minister considers relevant. The
committee considers that the impact on industry, if any, would be a relevant
matter that the minister would be likely to consider.
2.43
The committee also recognises the department's evidence that there are a
number of other safeguards in the legislation. In particular, the minister's
determination is disallowable under the Legislative Instruments Act 2003.
Finally, the committee notes that the TIO scheme will be reviewed three years
after the commencement of the new provisions. As such, any problems with the TIO
scheme that may arise in terms of administrative and financial burden on
industry participants could be considered during these reviews.
2.44
The committee welcomes this bill as an improvement to the existing
telecommunications regulatory framework. The committee believes it will help to
strengthen consumer safeguards in telecommunications legislation, while providing
certainty and clarity for industry. Given the strong support for the
amendments, the committee recommends that the bill be passed.
Recommendation 1
2.45
The committee recommends that the Department of Broadband,
Communications and the Digital Economy consider amending the bill to clarify
that, under Part 6 of the Telecommunications Act 1997, code developers are
not required to publish submissions containing comments or information that is
offensive, defamatory or confidential.
Recommendation 2
2.46
Subject to the above recommendation, the committee recommends that the
bill be passed.
Senator Doug Cameron
Chair
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