No More 2nd Chances for Telcos Who Fail Customers

Telecommunications companies whose systems fail, or disrupt the lives of consumers, will now face immediate fines.

Currently, the Australian Communication and Media Authority (ACMA) must first issue a warning to encourage the company to comply no matter how serious the breach.

However, the federal government has now eliminated the need for warnings, meaning telcos could be liable for millions of dollars in fines if failures are found to be their fault, and not for instance, due to a natural disaster.

To align telcos with other sectors like energy and banking, the maximum penalties for breaches of industry codes and standards—which set out minimum criteria for service delivery—will also increase from $250,000 to $10 million.

A Carriage Service Provider registration scheme will also be established to increase the visibility of telecommunication retailers in the market.

“Nobody wants an industry that sees penalties as the ‘cost of doing business,’” Communications Minister Michelle Rowland said. “These changes provide a powerful deterrent, improve the likelihood of compliance, and lead to a better-functioning telecommunications sector.”

The telco’s turnover and the scale of the breach become factors a court can determine in assessing whether the fine issued by ACMA is proportionate to the harm caused.

Optus, Telstra Have Both Been Fined Millions

Optus was fined $12 million for its major network outage in 2023, when millions of customers lost phone connections and internet access, meaning thousands could not contact triple zero.

ACMA said then that the size of the fine was based on the seriousness of the telco’s responsibility to maintain the essential service of triple zero.

Telstra was also fined $3 million for its 90-minute outage in March 2024, where its call centre could not transfer more than 100 callers to triple zero.

The new rules mean that, in exceptional cases, ACMA could stop a telco from operating in Australia if they’ve been found to pose “unacceptable risk to consumers or have caused significant consumer harm.”

The Communications Consumer Action Network—which recently received a $2.5 million grant for its advocacy work for NBN customers—welcomed the changes.

Its Chief Executive Carol Bennett said it will mean more accountability, transparency, and compliance in the industry.

“The Australian government’s reforms address longstanding consumer concerns about the relatively weak regulatory settings of the telco industry and will go a long way towards improving trust in the telecommunications industry,” she said.

Communications Alliance CEO Luke Coleman also supported the move.

“Australians expect the highest standards of business behaviour from telcos,” Coleman said, “And these new direct enforcement powers will ensure they are held to account by the regulator.

“A major revision of the Telecommunications Consumer Protection (TCP) Code is currently open for public comment and—if accepted by ACMA—will provide stronger safeguards for consumers when combined with these new measures.”

AAP contributed to this story