Telco group concerned over push for ACMA to oversee TIO

Telco industry group Communications Alliance says it is concerned over a government proposal for the Australian Communications and Media Authority to oversee the complaints body Telecommunications Industry Ombudsman.

“Industry has never controlled the TIO – nor should we,” Communications Alliance CEO John Stanton said. “By the same token, we do not believe that the TIO should be placed under the control of the industry regulator, the ACMA.”

The government today released the outcomes of the first part of a three-part review of consumer safeguards in the telecommunications industry. The first part of the review focused on complaints handling and consumer redress.

The government is backing 32 recommendations that it says will offer additional protection for telco consumers, including a range of significant changes to the TIO’s processes, board structure and relationship with the ACMA.

The report said that during the review there were significant differences expressed between consumers and industry stakeholders, and between Australia’s largest telcos and small and medium sized operators.

However, the report said there was near-universal support for the TIO to continue providing external dispute resolution (EDR) services for the sector.

“Overall, given the strong support by both industry and consumer groups for the TIO to continue in its role as the EDR scheme provider, the Review suggests that it would be appropriate to implement reforms to the current TIO Scheme rather than establish a new EDR body at this time,” the report stated.

Currently the TIO board includes a mix of directors with consumer and industry backgrounds, and includes among the industry members a representative of Telstra and a representative of Optus. Among the changes the report advocates is that no director “should be in the current employ of or be engaged by any telecommunications provider”.

The government should institute a process whereby the communications minister authorises the operation of the TIO scheme for a specified period of time (up to five years, for example), the report said. The authorisation would be administered by the ACMA and renewed or withdrawn “at the reasonable discretion of the ACMA, taking into account the performance of the scheme and after consulting with the Commonwealth Ministers responsible for Communications and Consumer Affairs policy, and subject to relevant regulatory obligations.”

“The ACMA’s remit should be expanded to include regulatory oversight of the TIO Scheme,” the report recommended, including the power to enforce compliance with any standards determined by the minister under Section 128 of the Telecommunications (Consumer Protection and Service Standards) Act.

Communications Alliance also expressed unease about changes to record-keeping rules and the ACMA Complaints Handling Standard canvassed in the report.

Stanton said that many of the review’s recommendations “would act to drive up the cost of what is already an expensive scheme, and the cost of delivering telecommunications services to consumers and small businesses.”   

“We need to look critically at whether additional layers of regulation would add real value, or just extra expense,” he said.

“A Regulation Impact Statement (RIS) would help do that, but, in its absence, we look forward to working with government, consumers, the TIO and other stakeholders to help draw out the best and most practicable elements of the recommendations.”

“The consumer safeguards we have in place today are designed around the old telephone network,” communications minister Senator Mitch Fifield said.

“The ongoing relevance and usefulness of these protections is diminishing as Australia’s telecommunications environment and consumer use evolves.”

Fifield said the government had called for the TIO to voluntarily implement within 12 months the relevant recommendations of the review. The minister said the government is working with the ACMA and industry to implement the remaining recommendations contained in the report.

A TIO statement said the Ombudsman and the board “are pleased the report on Part A of the Government’s Consumer Safeguards Review... recognises the importance and strength of the work of the Telecommunications Industry Ombudsman in resolving complaints that residential consumers and small businesses have been unable to resolve with their provider.”

“The report proposes some fundamental changes to the Telecommunications Industry Ombudsman scheme, which will need to be carefully considered by the Board and the Ombudsman, in consultation with stakeholders,” the statement said. “It is important to ensure that reforms for policy settings and the Telecommunications Industry Ombudsman are tested against overarching and enduring principles.”

The government today issued a paper for Part B of the review, which is focused on the reliability of services.

The TIO in October released its annual report. The Ombudsman Judi Jones said that telco complaints appeared to “be turning a corner”, with complaints dropping 17.8 per cent in the final quarter of FY18.