The jungle drums are sending negative messages about the new TCP Code proposed by Communications Alliance. If the rumours are correct, ACMA is on the verge of refusing to register the draft Code, opting for more aggressive legislative regulation of the telco industry instead.
What’s it all about?
In a nutshell, the Australian Communications and Media Authority has been calling for stronger telco consumer protections since it completed its ‘Reconnecting the Customer’ enquiry last year. In response, Communications Alliance developed an upgraded version of the current Telecommunications Consumer Protections Code, hoping it would be accepted and registered by ACMA. (That’s how industry codes become ‘legal’.)
But signs are appearing that ACMA might reject the new draft Code as being too soft … despite the fact that it is by far the most demanding code of its type that the industry has ever faced.
ACCC has its say
First, the Australian Competition and Consumer Commission lodged its own submission during the public exposure stage of the code process. In a blunt assessment, ACCC rated the new draft as too little, too late. The regulator was highly sceptical that any consumer protection system based on industry self-regulation would cure the ills that, as far as it and ACMA are concerned, plague the retail telco sector.
A knowing wink from The Age
On 8 January 2012, The Age newspaper ran a piece that reeked of a little inside information from ACMA. Nothing improper, we hasten to say, but the journo clearly has a strong feeling that the proposed new code is doomed.
So what would happen instead?
If the draft TCP Code is binned by ACMA, the authority will draft its own set of rules, called an Industry Standard. Obviously, it would make them even tougher than the proposed code, and the Standard would have the force of law under section 128 of the Telecommunications Act. Apart from other enforcement options, the Federal Court can impose penalties of $250,000 per contravention of an Industry Standard.
Good news and bad news
For telcos and ISPs that were dreading the burdens of the proposed new TCP Code, a delay in the introduction of new rules will be welcome. And an Industry Standard might omit some elements of the draft TCP Code. But overall, we have to assume that it would be significantly tougher on telco retailers than the draft code.