In April 2008, ACMA announced a ‘new approach’ to VoIP regulation.
The ‘new approach’ is to start explaining, then enforcing, the current laws that apply to VoIP telephony services. Peter Moon has prepared a ‘least you need to know’ guide.
Background
As VoIP services have developed in the marketplace, the Australian Communications & Media Authority has largely adopted a ‘wait & see’ approach to regulating it.
ACMA has not been completely inactive, however. Importantly:
- It has decided that certain existing laws automatically apply to some kinds of VoIP service.
- It has sponsored certain changes to the law to address VoIP issues.
Laws ‘honoured in the breach’
Although ACMA has previously stated, in general, how it sees the law applying to VoIP, its views have been largely ignored by providers.
Case study
A good example is the allocation of phone numbers to VoIP services. Number allocation is regulated by the Telecommunications Numbering Plan 1997.
Under the TNP, standard ‘geographic’ numbers should not be allocated to ‘nomadic’ services that can easily be relocated to other premises by an end user. This is actually quite an important restriction, as emergency services and law enforcement rely on geographic numbers corresponding to known areas and locations.
As of 31 May 2007, the TNP introduced a new number range – 0550 – for new services like ‘nomadic’ VoIP. It is against the law for a standard ‘geographic’ number to be allocated to a ‘nomadic’ or ‘portable’ service.
But … providers have continued to allocate conventional numbers to nomadic VoIP services, and ACMA has not prosecuted them for doing so.
What ACMA has announced
First step is ‘engagement’ with industry and consumers. This will be an education phase.
Second is a compliance program. This will be an enforcement phase.
What’s the least you need to know ?
1. Four types of VoIP
ACMA classifies VoIP as:
- Type 1: on-net services
- Type 2: outbound only
- Type 3: inbound only
- Type 4: inbound and outbound
2. Unless a VoIP service is basically locked down to a particular address, it cannot use a geographic number.
3. Type 4 services:
- count as a standard telephone service (‘STS’)
- CSG applies
- must offer free calls to emergency numbers (‘ECS’)
- provider must give IPND accurate name and address information for subscribers
4. Type 3 services:
- are not an STS
- CSG does not apply
- ECS access not mandatory
5. Type 2 services:
- are not an STS
- CSG does not apply
- ECS access not mandatory
- ACMA considering mandating ECS access in future
- provider must give IPND accurate name and address information for subscribers
6. Type 1 services:
- are not an STS
- CSG does not apply
- ECS access not mandatory
7. TIO scheme membership
A VoIP service provider (‘VSP’) must belong to the TIO scheme if:
- they provide an STS (i.e. most Type 4 services) to residential or small business
- they provide an internet access service
- they resell either of the first two, or
- they hold a carrier licence
8. Local Number Portability (‘LNP’
- ACMA ‘strongly’ encourages LNP
- will work with industry to facilitate
- no specific compliance actions yet
9. CSG
- may apply to Type 4 services
- applies to residential and small business with up to 5 lines
- customers can waive rights – but a very specific set of rules apply for doing so
10. Specific audits announced
- compliance with geographic number rules in IPND: no fixed line geographic numbers for portable services
- will include review of VSP web sites to see who may be breaching
- compliance with provision of accurate subscriber info for Type 2 and Type 4 services
ACMA as an enforcer
Many providers regard ACMA as a ‘toothless tiger’, and historically that is a fair assessment.
However, 2006 and 2007 saw ACMA bare its teeth. Spurred on by its new powers under the Spam Act and the Do Not Call Register Act it has relied more heavily on its investigative powers, followed up by enforcement action.
Warning letters
Except in extreme cases, ACMA sends warning letters in relation to possible breaches of laws it administers.
Do not ignore an ACMA letter. Doing so is a sure means of being further investigated. Take prompt and appropriate action.
Section 521 / 522 notices
The next sign that something is seriously wrong is the issue of an ACMA evidence-gathering notice. ACMA can demand a wide range of documents and information, and there are heavy penalties for non-compliance or false answers. Self-incrimination is not a defence.
These notices are often expensive to comply with, and equip ACMA with the evidence required to launch legal action.
Enforcement steps
ACMA has several enforcement options in most cases, including financial penalties.
We shall detail one option in particular: Enforceable Undertakings. ACMA is extending its use of this tool.
Basically, an Enforceable Undertakings is a detailed written promise by a provider and its management to behave in a compliant way in future.
Increasingly, ACMA is looking for very detailed undertakings that create new operational rules for the provider – enforceable by court action if they are breached.
Often, the undertaking will include requirements for:
- ongoing staff / management training to assist compliance
- regular reports to ACMA to help it detect breaches
- assessment and reporting by an independent auditor.
ACMA sees the value of negotiating an undertaking before it decides on more severe action, like court action or financial penalties. It recognises that providers are more ‘agreeable’ while they have the threat of major action hanging over them.
By that point, a quite severe undertaking looks like a better outcome than other ACMA enforcement options.
A particular risk
There is a risk that providers fail to heed ACMA’s ‘new approach’, believing that it does not have a history of active enforcement. Many providers will ‘take their chances’ until / unless they are caught out.
Our experience is that ACMA is ramping up its activities, and that as soon as matters go beyond a warning letter there is a major, expensive problem.
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