Chapter 1Introduction
1.1Digital connectivity has become essential for our livelihoods and wellbeing. Buton 8 November 2023, millions of Australians were reminded just how precarious this connectivity can be as the country's second largest network provider, Singtel Optus Pty Limited (Optus), suffered a 12-hour unplanned nationwide outage. The outage began in the early hours of the morning, cutting internet, cellular and fixed-line services for a third of Australians. The outage disrupted nearly every aspect of Australian’s daily lives, severing online banking, disrupting access to emergency services, bringing public transport to a halt, freezing access to government services, and derailing the ability of businesses to take payments.
1.2In the early hours of the crisis, Australians were left with little in the way of proactive and timely updates on the status of the outage. It was many hours into the outage before what little information there was began to reach Optus' 10million customers across the country. While services were eventually restored later on 8 November 2023, questions remained about the adequacy of Optus’ response to the crisis and the appropriateness of the regulatory safeguards for those Australians reliant on telecommunications services.
1.3The nationwide outage on 8 November 2023 serves as a stark reminder of just how fragile and vulnerable telecommunications networks are, and just how reliant modern society is on them.
Referral of the inquiry
1.4On 9 November 2023, the day after the outage, the Senate referred the following matters to the Environment and Communications References Committee for inquiry and report by 9 December 2023:
The Optus network outage that occurred on 8 November 2023 and its impact on Australians and the services that they rely on, with particular reference to:
(a)the communication from Optus to affected customers;
(b)the steps that Optus is taking to ensure that this does not happen again;
(c)the compensation offered to affected customers, including:
(i)compensation offered by Optus,
(ii)the role of the Telecommunications Industry Ombudsman and its compensation scheme, and
(iii)actions taken by the Federal Government to support affected customers to receive fair compensation;
(d)the role of government in ensuring Australians have reliable access to telecommunications technology;
(e)steps taken by the Federal Government to ensure the access to essential service in response to the outage, including:
(i)identification of affected government services,
(ii)the establishment of alternative contact arrangements for affected government services, and
(iii)communication with Australians on those alternative arrangements; and
(f)actions taken by the Federal Government and the Australian Communications and Media Authority on the day of the outage; and
(g)any other related matters.
1.5Following several extension requests, the committee was granted an extension of time to report until 27 September 2024.
Conduct of the inquiry
1.6The committee advertised the inquiry on its webpage and wrote to relevant organisations and individuals, inviting submissions by 17 November 2023.
1.7The committee received 39 submissions, which are listed at Appendix 1 and available on the committee's website.
1.8The committee also received around 900 campaign submissions from individuals that argued the importance of cash in the economy, opposed the phasing out of cheques, and called for a government alternative to banks. Thecommittee accepted these as correspondence and has taken into account the views expressed.
1.9The committee held a public hearing on 17 November 2023 in Canberra. A list of witnesses that appeared at the hearing is available at Appendix 2.
1.10Submissions published, Hansard transcripts of evidence from the hearing, tabled documents, answers to questions on notice, and other information received are available on the committee's website.
Acknowledgement
1.11The committee thanks all those who made submissions and gave evidence at the public hearing.
1.12The committee also acknowledges the considerable efforts of Optus staff in responding to requests for detailed information.
Note on references
1.13References to the committee Hansard are to the proof Hansard. Page numbers may vary between the proof and official transcript.
Structure of the report
1.14This report is comprises five chapters:
This chapter provides an introduction and background to the inquiry;
Chapter 2 provides background on the network outage, including a timeline of key events, the impact and cause of the crisis, and further details;
Chapter 3 details Optus' response to the outage, including its communications, actions concerning the Emergency Call Service, and offer of compensation for affected customers;
Chapter 4 describes the state of Australia's telecommunications networks, including ongoing risks and measures to improve their resilience; and
Chapter 5 provides the committee's views on these matters and makes a number of recommendations.
Background to the inquiry
1.15This section will provide a broad overview of the existing regulations and legislation applicable to telecommunications providers in Australia, as relevant to this inquiry.
Telecommunications Act 1997
1.16The Telecommunications Act 1997 is the primary regulator of the telecommunications industry. The Act, among other things:
identifies and provides definitions for participants in the telecommunications industry who are subject to regulation;
establishes the Emergency Call Service (Triple Zero);
sets out the security obligations of stated industry participants; and
provides a framework for consumer protections.
Industry participants
1.17Under the Telecommunications Act 1997, there are two types of organisations that can provide carriage services (telecommunications services) to the public— carriers and carriage service providers—which are defined as follows:
carriers own telecommunications network infrastructure and provide transmission on which carriage and content services are supplied to the public; and
carriage service providers are those industry participants that use a carrier’s network to provide telecommunications services to the public.
Triple Zero Emergency Call Service
1.18The Emergency Call Service, also called Triple Zero, is a free national telephone service in Australia that allows callers to contact police, fire, and ambulance services during an emergency by dialling 000.
1.19Regulatory arrangements for Triple Zero in Australia, as relevant to this inquiry, are set out in the following legislation and regulatory instruments:
the Telecommunications Act 1997 establishes the Emergency Call Service;
the Telecommunications (Consumer Protection and Service Standards) Act 1999 provides that the Australian Communications and Media Authority (ACMA) regulates and monitors the emergency call service;
the Telecommunications (Emergency Call Persons) Determination 2019 provides that Telstra is the Emergency Call Person (ECP) for 000 and 112. This means that Telstra has responsibility for providing the service which answers calls to these numbers and transfers them to the requested emergency service organisation;
the Telecommunications (Emergency Call Services) Determination 2019 sets out specific obligations for telecommunications carriers and carriage service providers (CSPs), including that they must:
maintain emergency call networks and facilities;
tell ECPs and other providers that rely on them for access if there is a large network outage;
do a welfare check on people who have tried to call during a large network outage;
monitor disruptive and non-genuine calls and work out a process to stop these; and
put together a communications process for when disruptions happen.
1.20There are also a number of other instruments, such as the Numbering Plan 2015, and industry standards, codes and guidelines.
Security obligations of telecommunications providers
1.21Telecommunications providers have security obligations under the Telecommunications Act 1997 and the Security of Critical Infrastructure Act 2018 (SOCI Act).
1.22Part 14 of the Telecommunications Act 1997 sets out the requirements of carriers and CSPs with regard to national security risks such as espionage, sabotage, and foreign interference in Australia's telecommunications networks and facilities.
1.23The SOCI Act establishes a regulatory framework to protect critical infrastructure sectors vital to Australia's national security by imposing security obligations on asset owners and stakeholders. It currently applies to 11 sectors. It imposes obligations on 'responsible entities' (those with operational responsibility for the asset) and 'direct interest holders' (those with significant interest or influence over the asset), with definitions varying by asset. Failure to comply with obligations under the SOCI Act may result in significant penalties for the entity, which are based on the form and level of non-compliance.
1.24Not all obligations apply uniformly across specified sectors and asset classes. For example, while Optus and other carriers are considered 'responsible entities' for critical telecommunications assets, they currently do not have specific obligations, such as establishing a Risk Management Program, which is required in other sectors.
Consumer protection framework
1.25In Australia, telecommunications consumers have rights and protections under the Australian Consumer Law (ACL) and statutory arrangements specific to the telecommunications industry. Consumers also have access to internal and external complaints procedures, as discussed below.
Australian Consumer Law
1.26The ACL sets out consumer guarantees for services including that products and services provided to consumers come with automatic guarantees. Services must be supplied with due care, skill, and be suitable for their stated purpose. If these those are not met, consumers may be entitled to a remedy.
1.27The Australian Competition and Consumer Commission (ACCC) submitted that the consumer guarantee may extend to the provision of a telecommunications service to a small business. Depending on the nature of the problem, consumers could be entitled to a refund, a repair or replacement, providing the service again free of charge, or compensation for 'reasonably foreseeable' damages resulting from the failure to meet the consumer guarantee. The ACCC further submitted:
If it is determined that Optus failed to provide its services with due care and skill, small businesses that have suffered loss or damage that was reasonably foreseeable due to the failure may be entitled to compensation.
1.28However, the Telecommunications Industry Ombudsman (TIO) published advice that the Optus outage was a one-off outage and therefore 'unlikely to be considered a major failure' under the ACL as telecommunications providers do not offer a fault free service.
The Customer Service Guarantee
1.29The Telecommunications (Customer Service Guarantee) Standard 2023 is an enforceable standard that sets out the Customer Service Guarantee (CSG) for carriers and CSPs. According to the explanatory statement issued by the ACMA:
The CSG Standard sets out the standards for connection, appointment keeping, and fault or service difficulty repair. It also specifies the compensation available to customers under the Act when these standards are not met, and sets out the circumstances in which a consumer can agree to waive their rights under the CSG Standard.
1.30The CSG is intended to complement the Universal Service Obligation, and applies namely to 'specified carriage services', fixed-line services. Mobile and satellite phone services and retail broadband services, including the NBN, are not covered by the CSG. There are circumstances where CSPs may be exempt from their obligations under the CSG, such as during major service disruptions caused by natural disasters, planned maintenance, or damage to the network by a third party. Additionally, the CSG does not provide for compensation to be paid when a service fault is fixed within 24 hours.
1.31The previous Instruments that set out the CSG were due to sunset in August2023. In anticipation of this, in February 2023 consultation on the CSG was undertaken by the Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA). The consultation paper noted, among other things, that 'many aspects of the CSG have not significantly changed in character since 1997', when it was introduced.
1.32Following the consultation, DITRDCA provided advice that:
[T]he Minister for Communications intends to remake the sunsetting CSG instruments for at least three years, with necessary updating and some minor revisions. This will allow time to further consider the long-term future of the CSG and how consumers can best be protected, given the significant changes that have taken place in the industry over recent decades.
1.33The remade instrument setting out the CSG is now in force.
Complaints handling procedures
1.34Telecommunications service disputes can be resolved through internal and external mechanisms. In the first instance, consumers unhappy with their service can pursue internal dispute resolution by making a formal complaint with their service provider.
1.35Telecommunications providers are bound by the Telecommunications (Consumer Complaints Handling) Industry Standard 2018 (CHS), which sets out how telecommunication providers must respond to complaints. The CHS requires providers to have, and comply with, a written complaints handling process, which must include:
an internal process for prioritising complaints that is clear, accessible and transparent;
an internal escalation process; and,
a dispute resolution process allowing consumers to escalate complaints to the TIO.
1.36Additionally, the CHS also requires providers to acknowledge all complaints within two working days, use their best efforts to resolve complaints on the first contact, and otherwise resolve all complaints within 15 working days.
1.37External dispute resolution is available if a consumer is unsatisfied with the outcome of their complaint with their carrier. Consumers can lodge a complaint with the Telecommunications Industry Ombudsman (TIO), which operates an external dispute resolution scheme. The TIO’s specific function within the broader telecommunications industry is to provide:
… fair, independent, and accessible external dispute resolution service for individual consumers, occupiers and owners of property, small businesses and not-for-profits who have been unable to resolve their complaint with a phone or internet service provider.
1.38The TIO Terms of Reference provide that, in exercising its functions and developing complaint resolution procedures, it will deliver a service in accordance with the Benchmarks for Industry-based Customer Dispute Resolution.
1.39The TIO submitted that, under the Telecommunications (Consumer Protection and Service Standards) Act 1999, it has the authority to make decisions related to compensation that are binding on its members up to the value of $100,000. In making such determinations, the TIO stated that it 'assesses what is fair and reasonable in the circumstances having regard to the law, relevant industry codes, guidelines and good practice'.