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Speech by Nerida O’Loughlin PSM, ACMA Chair, CommsDay Summit – 1 May 2024


Good afternoon everyone. I would like to acknowledge the Gadigal people of the Eora nation on whose lands we meet today. I pay my respects to elders past and present and extend that respect to First Nations colleagues joining us today.

Thank you to Grahame and the team for the invitation to speak today and for organising such an interesting and diverse program of speakers. 

And that diversity includes having the CEO of Communications Alliance speaking directly after the Chair of the telco regulator. 

As this will be John’s last Comms Day, I would like to congratulate John for his 14 years of leadership at Communications Alliance and acknowledge him as a forthright and tireless advocate for the industry’s interests—and often an entertaining one too! Thank you John.

Corporate accountability

In around four weeks’ time I will be in Canberra for Budget Estimates. We attend three Estimates hearings annually and are called to various other hearings and inquiries as required by Parliament throughout the year.

If you have ever watched or been a witness to these hearings, you’ll know how robust and rigorous they can be.

And in the last year or so we’ve had no shortage of business leaders having to also front up to some of these inquiries.

It’s evident that in what are straitened times for many, there is both political and public appetite for industries across the board to be called to account for matters of public interest. 

Whether it’s about cost-of-living pressures, executive pay and performance, or corporate governance, there has been heightened scrutiny of some of the most dominant consumer businesses in Australia – including banks, airlines, supermarkets and telcos.

And in some cases there have been swift and severe consequences when the collective public gaze sees responses from business leaders that fail the pub test or in the political arena.

Now, the pub test may not always be the best barometer of how a company is performing, but there are other measures that can be more telling. 

The annual Roy Morgan survey of trusted brands, released in March, includes a range of companies from the sectors I just mentioned scattered across both the most and least trusted lists. 

Regrettably for the telco industry, its companies feature more on the negative side of the ledger than the positive.

According to Roy Morgan:

“Australians' distrust in companies has grown in the last year, with reasons including corporate greed, poor customer service, unaffordable prices, dishonesty, unethical practices, and poor privacy practices.”

The old adage that trust is lost by the bucket and gained by the teaspoon should not be lost on anyone here today. Once customers metaphorically walk out the door, it is very difficult to persuade them to turn around and walk back in.

TCP code review

As an industry regulator, we recognise the impact that a loss of trust and reputation can have on a business, but it is not our primary concern. 

Our concern is that the regulatory environment operates such that competition and innovation are not inhibited while customer experience and safeguards are not diminished. 

And that regulatory processes evolve with the sector and as societal expectations and needs change.

Since 2007 the Telecommunications Consumer Protections Code has been the primary mechanism for, as it says on the tin, protecting telco consumers.

The TCP code has been reviewed periodically over that time and Communications Alliance currently has another review in train that commenced almost 12 months ago. 

I believe this review process is a great opportunity for the industry to make a step-change in how it manages its customer relationships and deals with the most vexing consumer issues. 

The review must be considered in the context of the evolving telco market, enduring economic and social conditions, and what are entirely reasonable customer expectations.

Particularly with this last point in mind, in July 2023 the ACMA produced a paper – What consumers want – consumer expectations for telecommunications safeguards, setting out our guiding position as we work our way through the code review process.

What we found was that under the conditions of the code as it stood, telcos are failing consumers in numerous ways. Through their selling practices, credit assessments, payment methods and disconnection processes, telcos are letting consumers down. 

Or worse, adding to their woes. 

We appreciate that the industry is giving deliberate attention to these areas during the current review, including taking on board the ACMA’s views, which I am not going to cover again now.

I am going to comment briefly on financial hardship, payment methods and the experience of people who have experienced family and domestic violence.

Financial Hardship Standard

Crucially, in difficult economic times, we have found that telcos have failed to be proactive in identifying the need for, and delivering, financial hardship assistance.

One of the key takeaways from research we published in May last year into the experience of telco customers undergoing financial hardship, was that while there were obligations in the TCP code for dealing with people facing disadvantage, telcos reported fewer than 5,000 financial hardship customers. 

And this was in an environment where our research indicated that just under 2.4 million Australians were experiencing difficulty or concern regarding their telco bills.

The massive disconnects identified by the ACMA were so stark that in July last year, the Minister for Communications directed the ACMA to make an enforceable standard to replace the financial hardship-related requirements in the code. 

The new standard, which came into effect at the end of March, provides the ACMA with strong enforcement powers to ensure telcos are following through on their obligations.

Some of the practical improvements in moving from the code to the standard include:

  • The requirement for telcos to determine whether a customer is experiencing financial hardship, and if so, prioritising keeping them connected;
  • Greater promotion by telcos of information to consumers on options for financial hardship assistance; and
  • The requirement for telcos to offer customers tailored options for assistance, including payment plans.

So, in a relatively short time we have identified a systemic problem, the Minister has directed us to develop a standard and it has come into force, making a tangible and meaningful difference for consumers. 

We will shortly release our compliance priorities for the coming financial year, and compliance with this standard will be a key area of focus for the ACMA.

Payment methods

Our What Consumers Want paper also highlighted that alternative methods to direct debit or auto-payments should be offered to all telco customers. 

The ACMA acknowledges that these payment arrangements can be convenient for customers and definitely advantageous to telcos. But they can also take control and choice away from the consumer.

Our research has found that across the telco, energy, water and banking services, the telco sector had the highest experience of failed direct debits, at 25 per cent, by those in financial difficulty or experiencing concern about bills.

Research last June from ACCAN and the Public Interest Advocacy Centre also found that First Nations Australians and low-income consumers did not find direct debit an easy method to pay telco bills.

Further, our telco customer financial hardship report and associated research identified the need for more than one fee-free payment method to be offered to customers.

There are currently no requirements in the telco consumer framework around providing flexibility with payment methods, and this needs to be addressed. 

Customers in vulnerable situations

The measure of any society is how the most vulnerable are treated and supported.

Many Australians experience being in some form of vulnerable circumstances during their lifetime. This can be caused by environmental challenges like bushfires, floods or drought, through serious illness, domestic or family violence, or low income.

Telcos need to display sensitivity and discretion in their interactions with customers experiencing these situations.

For very good reasons there is a particular focus in the community at the moment on people who experience family or domestic violence.

It is a huge societal issue that is complex and deeply personal. 

And increasingly it is facilitated by technology. 

According to research from the Office of the eSafety Commissioner, more than 99 per cent of Australian victims have experienced technology-based abuse as an extension of the coercion and harassment they experience in their daily lives. 

So, it is essential that people in these circumstances take back control of their communications and are treated with care, respect and efficiency by their telco provider.

Hearing some examples of how some telcos have interacted with people going through this trauma is incredibly alarming.

The Consumer Action Law Centre reports of complaints from customers who have said that their telco provider insisted they obtain consent from, have a three-way call with, or even attend a store with the violent perpetrator in order to separate services on their account.

One of many examples we have been provided involves a woman whose ex-partner purchased three handsets and accessories under her account. The woman had an intervention order against her ex-partner. 

After the women fled, she contacted her telco to inform it of her circumstances and seek assistance. Despite being made aware that she was a victim of family violence, the telco requested that she attend a store with her ex-partner (and alleged perpetrator of that violence) to organise a change of ownership. When she explained that she could not see her ex-partner because of family violence, the telco agent insisted that attending the telco’s store with her ex-partner was the only way the contract could be changed.

We are aware of other cases where customers affected by domestic and family violence are facing the added financial stress of being billed for debts incurred by their ex-partners on services linked to their accounts, and the difficulty they have in separating their accounts from their abusers.

And we see examples where desperate people who need to retain their, or in some cases their children’s, telco services to remain safe have been threatened with, or indeed been subject to disconnection and debt collection processes.

Now, I can’t imagine anyone here thinks these were acceptable responses by any telco, and yet, these examples are not even outliers based on the information we’re seeing. 

Telco providers must be able to adapt their systems and processes – and even more, their understanding of and empathy towards the needs of their customers facing domestic and family violence.

It is commendable that some of the larger telcos are now starting to put policies in place with more specialised support measures for people experiencing vulnerable circumstances.

But the magnitude of these issues is such that they cannot be left only to those companies who are willing to commit resources.

Which is why this is an area we are concentrating on as part of the review, with specific codification of domestic and family violence provisions. 

I can assure you that the ACMA will be paying early and close attention to how industry is proposing to uplift the consumer protections for this category of vulnerable Australians when the draft code comes to us later this month.

TCP code process and industry

For the ACMA’s part, our registration of the code will depend on the shape of this draft.

As far as we are concerned though, the concerns I have just mentioned and their remedies are necessary and non-negotiable.

One of the challenging but necessary parts of the process is that Comms Alliance must attempt to bring a diverse industry together to form a consensus on the commitments it will make to its customers. 

This co-regulatory approach has been the default position since the 1997 Telecommunications Act was introduced. 

But, and as I have said previously, including at this event last year, it is not clear to me that co-regulation is the best approach in a sector that needs to accommodate large numbers of diverse retail service providers.

The telco sector is quite possibly unique in the varying scale of businesses within the industry. 

At one end we have some of the largest corporations in Australia. Like Telstra, which has a market cap of over $42 billion, provides more than 22 million retail mobile services and 3.4 million retail bundle and data services. And has more than 37,000 employees.

And at the other end of the spectrum, we have small independent businesses run by a handful of people.

Firstly, it has to be incredibly time-consuming and difficult to get agreement across the board when these companies have quite divergent operational environments.

And secondly, I think it is questionable whether all parties actually fully participate in the co-regulatory code-making process.

Optimal factors for co-regulation

As far back as 2014, the then Department of Communications (and a disclosure, I worked on this issue) proposed that various conditions needed to be in place for co-regulation to be effective. 

These included that:

  • the industry consists of a fairly small number of players operating in competitive markets,
  • that there is a homogeneity of products,
  • that there are incentives for industry to address problems, and
  • that there are relatively low levels of consumer harm and a relatively stable operating environment.

Does this sound like the 2024 Australian telecommunications market?

At first glance, the Australian communications sector looks diverse with strong competition from more than 1500 retail service providers. 

In the mobile market alone, there are more than 50 virtual network operators offering consumers choice across plans and products.

But I am not sure this points to a strong competitive market when, of those 50 operators, the big three hold 93 per cent of the mobile subscriber market. 

The broadband market is a bit healthier, but small and medium enterprises still only share 24 per cent of subscribers. 

Telecommunications products may be reasonably homogenous, but services and service providers are not and it’s increasingly complex and difficult for customers to navigate through the system when they enter a contract.

In terms of incentives to fix problems, the industry has shown a collective will when these incentives have been strong, such as for issues that make for effective network operations.

And I acknowledge that the telco industry has made great inroads into reducing the amount of phone and text scam messages reaching consumers. 

However, there has been much less willingness to address many other consumer concerns that have fewer residual benefits for industry. 

As examples, the making of both the Financial Hardship and Complaints Handling Standards are a direct response to the industry being unwilling to improve its support for its customers to a level considered acceptable for today’s consumers. 

The Minister’s recent announcement of actions to be taken to ensure access to Triple Zero services during major network outages also indicates that these system-wide issues have not been adequately addressed by industry itself.

Next steps with regulation

The Department’s 2014 paper identifies a number of weaknesses in the co-regulatory approach which I personally think are evident in the current environment.

Industry‐wide codes in diverse markets can result in either non-compliance from those who think they can fly beneath the radar, or the code settles on the lowest common denominator so that they can apply to all, including very small players.

In some circumstances, participants may consider code compliance as voluntary or some may be unaware of their obligations. 

Certainly, we have had a number of smaller operators claim ignorance of their responsibilities when we have alerted them to compliance problems.

To be clear though, compliance with an industry code is as mandatory as it would be if a standard was in place, even if the regulatory sanctions may differ.

And finally, consensus may not be possible when many businesses are involved and code development reaches an impasse where conflicting views are intractable. 

We have seen at least one recent example where industry itself has not been able to reach consensus in a code development process where it looks to the regulator to come in and resolve the matter.

Closing remarks

We are often reminded by industry that the Telecommunications Act has an objective of practicable self-regulation where possible.

My proposition to you is that we may have reached that peak. And that is not a criticism of the industry and the work of Comms Alliance and its members. It is simply a response to an industry which has grown and diversified since 1997 and is now providing a service that is seen as essential by Australians. 

Self-regulation and co-regulation have their place at some points in time and for specific circumstances. But for a service industry like telecommunications that is ubiquitous and almost universally needed, the risks may be becoming too great and the impacts on people too real to leave important consumer protections to be settled through protracted industry negotiation.

I expect the next stage of regulatory arrangements may become a hybrid mix of self-, co- and direct regulation, not unlike the approaches taken in the UK for telcos or to broadcasting and increasingly digital platforms domestically. 

But whatever that future shape, I consider that the industry itself still must be given the opportunity to respond to consumer concerns in the first instance. 

You know your customers, you know how your networks operate and the services you offer. 

Through cooperation and deep engagement, industry has within it its own power to raise its performance for its consumers and deliver on the regulatory philosophy of the Tel Act. 

The current TCP Code review process presents such a powerful opportunity for the industry to demonstrate its commitment to the co-regulatory regime.

If not, and as we have made clear throughout this process, the ACMA will move to direct regulatory approaches in areas of most consumer harm.

As we have seen with recent events played out in parliament and in the media, the best interests of business are irrevocably entwined with the interests of your customers. Clear accountability and regulatory guardrails can circumvent corporate crises and build consumer trust.

I am sure we will continue to have a mature debate on how we get the balance right and the best form of regulation that provides certainty, is efficient, supports industry growth and innovation, and delivers for consumers. 

I look forward to continuing that debate with you all.

Thank you.

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