Telcos warn proposed consumer data rules could stifle innovation

Telcos call for changes to government’s proposed consumer data regime

The government should avoid introducing rules that duplicate existing telecommunications industry mechanisms allowing customers to change service providers and access key data, major Australian telcos have argued.

The government last year announced its intention to legislate a new Consumer Data Right as part of its response to the Productivity Commission’s data inquiry. The legislation will potentially allow consumers and businesses to get access to data held by service providers and share it with third parties.

The right will potentially make it easier to for individuals to compare products or transfer to a new service provider.

Banking, energy, and telecommunications are the first industries expected to be covered by the Consumer Data Right. Under the government’s proposed legislation, the Australian Competition and Consumer Commission (ACCC) will be in charge of drawing up key guidelines describing how the data-access regime will apply to a particular sector. The ACCC has already begun drawing up proposed open banking guidelines.

In submissions lodged in response to an exposure draft of the Treasury Laws Amendment (Consumer Data Right) Bill 2018, both Optus and Telstra raised a range of concerns about how the new regime will operate — including over potential duplication of existing guidelines for shifting between telcos and over access to value-added data.

Optus argued that the bill “should make clear that industry rules only be imposed where there are no existing industry switching processes; or where there are existing processes, that the incremental benefit of the new rules outweigh the additional costs to industry and consumers”.

Similarly, Telstra said that the telco sector “already incorporates mechanisms for access to, and sharing of, data”.

“We recommend that the draft legislation be reviewed to allow a much simpler approach to satisfy the requirements of the CDR for any designated sector,” Telstra’s submission states.

“This could mean a customer- or industry-led framework for data sharing may be used as a substitute for the standards imposed by Data61 [which will be tasked with drawing up CDR data standards]. One way to achieve this is to formally recognise alternative frameworks and switch off parts of the CDR framework when an alternative exists. Another way is to make the standards a self-regulatory mechanism, with the ability for the standards to be imposed should the self-regulatory mechanism fail.”

Submissions from Telstra and Optus and a joint submission from Communications Alliance, DIGI and the AIIA all argued that value-added data should not be covered by the new rules.

An explanatory memorandum accompanying the government’s draft bill states that CDR data “will also include value-added data which is derived from the CDR data” specified in the legislative instrument the minister uses to designate a sector covered by the CDR regime.

The joint submission from industry associations states that “such a wide definition of CDR data” would be “detrimental to Industry, innovation and, consequently, also to consumers”.

“Derived and value-added data is likely to be proprietary information of the data holder and any other party seeking access to such derived data should invest themselves to acquire the information,” the submission states. “The draft CDR Bill would likely have a large detrimental impact on the data analytics industry and the development and use of data analytics by other industries (such as communications).”

Telstra argued: “Forced disclosure of value-added data (including derived and inferred datasets) to competitors, even on a ‘per consumer’ basis, risks undermining investment by businesses in competitive markets, and will reduce investment in data and its analysis.”

Optus said that the provision “would likely have a chilling effect on investment and innovation in the data analytics industry.”

The full submissions are available online.

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Tags Australian Competition and Consumer Commission (ACCC)open bankingConsumer Data Right

More about AIIAAustralian Competition and Consumer CommissionBillCommunications AllianceOptusProductivity Commission

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