Good morning everyone and thanks to Grahame for the introduction.
I would like to begin by acknowledging the Traditional Owners of the land on which we meet today. I pay my respects to Elders past, present and emerging and to Aboriginal and Torres Strait Islander peoples attending this Summit.
Thanks, CommsDay for providing the sector with a forum to discuss what’s happening across the industry.
In current conditions, it is challenging to speculate about the year ahead.
But this morning, I would like to:
- update you on the work we’ve been doing in response to both bushfires and COVID-19
- update you on some of our recent enforcement activities, and
- announce the ACMA’s compliance priorities for 2020–21.
To say it’s been a challenging start to the year is an understatement. For some, it has been heartbreaking.
Firstly, extreme weather conditions over the Australian summer have tested the sector’s ability to keep Australians connected. From the provision of interim services and emergency repairs, to providing relief packages to affected areas, the telcos have really stepped up.
In late January, the Minister for Communications, Cyber Safety and the Arts, the Hon Paul Fletcher MP, asked us to work with industry to review the impact of the bushfires on networks, and how the operators responded. We are currently finalising our report and will provide it to the Minister shortly.
Now COVID-19 is placing a heavy strain on the networks.
Not surprisingly, we have received calls from industry associations and regulated entities asking us to slow down our processes and grant regulatory forbearance across the full ambit of our activities.
We understand the pressure the industry is under. And as we have stated publicly, we have already:
- delayed consultation processes for non-urgent matters such as the review of the Radiocommunications Act prohibitions/exemptions framework
- suspended consultation on proposed revisions to NBN consumer experience rules
- extended the time for submissions and suspended some planned investigations, and
- implemented deferral or payment by instalment arrangements for apparatus licence renewals.
We will also consider the difficult circumstances when assessing compliance. That said, we are very conscious that in times like these, there is a heightened need to ensure consumers are protected, particularly those who are vulnerable.
We will be making further decisions in response to industry’s requests over the coming weeks and will continue to keep industry informed of our decisions.
Financial hardship state of play
Now more than ever, it is important that consumers are aware that their telco must offer financial hardship arrangements. Last year, new provisions were introduced into the TCP Code to improve safeguards available to Australian consumers.
To improve our understanding about what’s happening in the industry, we asked 11 telcos to provide us with information about their financial hardship arrangements. We’ve compiled this information to create an industry ‘state of play’. It shows that:
- 36,500 customers entered into a financial hardship arrangement with their telco during the 2018–19 financial year. That was 0.25% of the residential customers across the 11 telcos covered in our report.
- around 10,000 remaining on these arrangements owed more than $5.71 million at 30 June 2019, with 77.8% of this debt relating to mobile services
- telcos offer a range of options for customers experiencing financial hardship
- the proportion of financial hardship customers, and the average financial hardship debt, appears relatively lower compared to the gas and electricity sectors.
With the current circumstances, many consumers are having a tough time. We are using the public release of the state of play report to let consumers know that financial hardship arrangements are there, should they need them.
Compliance and enforcement update
At last year’s summit, my colleague Creina Chapman announced our inaugural ACMA-wide compliance priorities. Agency-wide compliance priorities reflect the Authority’s increased focus on transparency of its work and its decisions.
I’m pleased to report that our enhanced compliance focus is showing improved consumer outcomes in several areas.
I would particularly like to call out two areas.
Over the last year, we have had a sustained focus on telcos complying with our NBN rules. Our latest consumer complaints report (released last week) shows encouraging signs:
- total complaints to telcos are down nearly 26% from December 2018
- NBN broadband complaints to telcos have fallen nearly 37%; and
- median resolution time has gone from six days to four days.
New policies and procedures implemented by telcos to comply with our rules are resulting in improved consumer outcomes. We will continue to monitor compliance with our rules closely.
We have also seen significant improvements in the telemarketing practices of the solar industry. This has been one of our recent compliance priorities. And I’m pleased this is one of our success stories after the industry has consistently been one of the worst performers.
From a position where the solar industry has over the last three years consistently topped the number of telemarketing complaints, we have finally started to see improvement, with a 55% reduction in the number of complaints. During this time as we raised the industry as a compliance priority, we have:
- given 1,148 (informal) compliance alerts to 259 solar or related businesses
- conducted 16 investigations into solar businesses, and
- issued a range of enforcement actions, including accepting three enforcement undertakings, and collected $36,600 in infringement notices. There is a range of action also pending, including matters currently before the Federal Court.
Encouragingly, it appears complaints have stopped completely against 90% of the solar industry businesses we have engaged with, either as part of an investigation or by putting them on notice about our compliance priority.
Today then I would like to announce the ACMA’s annual compliance priorities for the coming financial year.
I want to say upfront that we are extremely mindful of the current pressures that COVID-19 is placing on the communications and media sectors. We are not blind to the impact of the pandemic on the activities of those we regulate and those we seek to serve through that regulation. Clearly, we are all dealing with high priorities in managing the impact.
Our compliance priorities are for the coming financial year, that is, 2020–2021. Hopefully the situation will look more optimistic as we start the new year. However, we will continue to monitor the situation and will take a pragmatic and realistic approach as we action our compliance priorities.
We used the same process to determine our annual compliance priorities as we did last year. We focused on areas of high non-compliance and a range of other factors. These included:
- matters of significant public interest or concern
- potential and actual causes of harm to consumers
- areas with high level risks of non-compliance, including from technological developments
- the emerging issues where we can encourage compliant behaviour, deter non-compliance or boost public confidence
- technological or market developments that test the ongoing efficacy of the regulatory framework
- specific areas where we can clarify the scope and reach of the law.
This year, we conducted a public consultation process inviting feedback on what should be ACMA’s compliance priorities. Thanks to those tuning in today who took the time to provide us with your views.
The ACMA has identified seven compliance priorities for 2020–21. These are:
- Protecting telco consumers, with a focus on disadvantaged and vulnerable consumers.
- A better move to the NBN.
- 5G and EME.
- Telecommunications scams.
- Unsolicited communications in financial services marketing.
- Online casinos targeting Australians.
- Interference, with a focus on mobile phone repeaters and the construction and resources industries.
I’ll explain each briefly this morning.
The first of our seven compliance priorities is protecting telco consumers.
Many in the room will recall that we registered an updated TCP Code in July. Amongst other things, the revised Code incorporates new rules on telcos in their dealings with consumers. These rules include a responsible approach to selling, credit assessment processes and financial hardship.
As part of our continuing focus on safeguarding consumers, we will be prioritising our activities to ensure compliance with the new Code. We will have a particular focus on interactions with disadvantaged and vulnerable consumers.
The information gleaned from our financial hardship state of play report will provide us with a good foundation for this work.
We are also focused on a better move to the NBN for Australian households and small businesses.
We are getting to the end of the NBN rollout. However, there is still a significant number of consumers that need to move their services to the new network. This includes more complex migrations and those that have been deferred to a later date, including small businesses.
We will continue to closely monitor compliance with these rules until the end of the migration cycle.
Our third compliance priority is 5G and EME.
The deployment of 5G networks has increased concerns in some sections of the community about potential harmful effects from electromagnetic energy (EME) emissions. As the 5G deployment ramps up, there will be a substantial increase in the roll-out of base stations and small cells.
While we don’t set the limits for safe exposure—that is a job for ARPANSA—we can, and will, make sure that these limits are met. Our job is to check that providers are doing the right thing through audits, investigations and site inspections.
Our program this financial year included a measurement exercise to ascertain the cumulative EME exposure levels present near a sample of 59 4G small cell sites nationally. We found that cumulative EME levels were a small percentage of the EME reference level for exposure to the general public set by ARPANSA. In all cases, the average EME levels measured were well below 1% of the ARPANSA limit. We’ll be releasing the results of our activities in the coming months.
We also regulate the consultation practices of mobile carriers with local councils and other authorities in relation to deployment of 5G networks and small cells.
With a more expansive 5G rollout imminent, we will prioritise compliance activity in regard to EME standards and code obligations.
Telecommunications scams is our fourth compliance priority.
Complaint data and our research shows that consumers are frustrated about the level of unsolicited communications in Australia, especially ‘scams’. The impact of scams can be severe, especially where aggressive marketing activity targets people in vulnerable circumstances and when communications are used to facilitate illegal and fraudulent scams.
The telephone remains the preferred contact method of scammers. In 2018, 46.8% of scam reports to the ACCC concerned phone calls. Throughout 2019, we worked closely with the ACCC and the Australian Cyber Security Centre through our Scam Technology Project, looking at ways to fight phone scams.
The action plan flowing out of that project has seen new rules to combat mobile number porting fraud. A new industry code currently out for consultation will further strengthen the regulatory framework to effectively deal with the risk of scams.
We will be prioritising enforcement of these new rules to protect Australian consumers.
Our fifth compliance priority is unsolicited communications from financial services marketing.
Beyond scams, the ACMA continues its efforts to combat illegal marketing through unsolicited communications. In the last 18 months, businesses have paid over $1.1 million in infringement notice penalties. We’ve also taken two solar marketers to court and accepted six court enforceable undertakings.
Complaints about financial services marketing remain high across both spam and telemarketing. It’s our highest telemarketing complaint category behind scams. Financial services marketing has the potential for serious consumer harm, particularly for vulnerable consumers. We will, therefore, pursue illegal marketing for financial services, including where financial service businesses outsource marketing to third parties.
Online casinos targeting Australians is our sixth compliance priority.
Since 2017, the ACMA has taken numerous actions to successfully disrupt illegal offshore gambling activity, with over 90 operators exiting the Australian market since the ACMA started enforcing the new laws. We use a range of tools to get results, including investigations, disrupting supply chains, referring operators to Home Affairs Movement Alert List and requesting ISPs to block illegal sites.
To date, we have requested 25 illegal sites to be blocked with more to come.
I would also like to take this opportunity to thank telcos for their continued cooperation in blocking illegal gambling sites to protect Australians.
Despite these successes a significant number of operators, mainly offering online casino-style services continue to target Australians. Some estimates suggest that these illegal casinos annually lead to millions of dollars in illegal online gambling expenditure.
In the face of this illegal activity, online casinos that target Australians will be a compliance priority for 2020.
Our seventh and last compliance priority is focused on interference.
A core activity for the ACMA is to manage the allocation and use of radiocommunications spectrum to minimise interference between one use of spectrum and another. Pleasingly, complaints of interference have declined year-on-year over the past five years, as a result of advances in technology and improved methods to diagnose and resolve interference.
Even with these improvements, the ACMA remains active in managing interference and will continue to engage with the broad range of spectrum users and industries in its ongoing efforts.
We have identified two key areas often associated with complaints and risk of interference that will be a compliance priority in 2020–21. These are:
- unlicensed mobile phone repeaters often purchased online from overseas that continue to result in interference of mobile networks, and
- interference caused in the construction and resources industry that exposes safety risks.
You can read about our compliance priorities and the activities we intend to undertake to address them on our website.
I would remind you though that our annual compliance priorities do not take away the importance of other ongoing priorities and major projects. Specific matters can emerge at any time that demand a response in a compliance and enforcement context—that is unaffected by the identification of annual compliance priorities.
In conclusion, I would like to reiterate that we are aware of the pressures on the sector to keep Australia connected and open for business during extraordinary times.
We are also aware that where your networks, systems and processes fail, there are real and often serious impacts for consumers.
We will continue to work with the telco industry to achieve the best outcomes for industry and Australian consumers.
I thank CommsDay for the opportunity to announce the ACMA’s compliance priorities for the coming financial year and I hope to see you all in person at the event later in the year.