Telecomms industry needs reform

Consumer protection in the telecommunications industry falls short of good practice.
Learn more
  • Updated:16 Oct 2008

01.The issue

Man screaming down the phone

In March 2009, the Minister for Communications, Senator Stephen Conroy announced an examination of the consumer code development process and implementation of new enforcement powers for the Australian Communications and Media Authority (ACMA). Under the reforms ACMA will be provided with incentives to encourage compliance with codes and regulations, including making amendments to the Telecommunications Act.

Consumer complaints about telecommunications issues are soaring. There was a 31% increase in the number of complaints to the Telecommunications Industry ombudsman in 2007.

This followed significant increases in complaints in the two previous years — for example an 81% increase in complaints about mobile phone services in 04/05. In 2007 the TIO received more than 1,000 complaints every month about mobile premium services (19x numbers) alone.

But consumer protection in this industry falls far short of good practice.

Consumer protection in telecommunications is almost wholly based on a self regulatory (or 'co-regulatory') system. The Telecommunications Act provides for the development and registration of industry codes of conduct on consumer issues, with a regulator in place to monitor codes of conduct and enforce non-compliance.

We believe that co-regulation, properly designed, can play a role in producing effective consumer protection rules with reduced cost and increased responsiveness. But the current legislative scheme, consumer advocacy arrangements and code development culture are not working.

The legislation itself is silent on consumer protection issues, the codes of conduct are not subject to an effective system of signing and compliance, and monitoring and enforcement are applied inconsistently.

What we want

CHOICE suggests the following key elements are required to move forward on better consumer protection in telecommunications:

  • A comprehensive review of current co-regulatory arrangements for consumer protection.
  • Establishment of regular effective communication processes between consumer organisations and government.
  • Strengthening consumer representative processes.
  • Strengthening funding for telecommunications consumer advocacy and research.

What we're doing

  • CHOICE prepared a submission to the Department of Broadband, Communication and the Digital Economy on the review of the code development process.
  • CHOICE has prepared a report identifying what we believe are some of the weaknesses in the current co-regulatory arrangements and some suggestions for improvement.
  • We have also written to the Minister for Communications congratulating him on his interest in reform in this area, and making the points set out above.
  • Mobile premium services are a particular problem area. See Scamtones, our parody video. 

More information

CHOICE's joint report  with Galexia Consumer Protection in the Communications Industry.
CHOICE's letter to the Minister for Communications
Visit The Department of Broadband, Communications, and the Digital Economy 



Sign up to our free

Receive FREE email updates of our latest tests, consumer news and CHOICE marketing promotions.