Government slammed over data retention funding delay

Telcos remain uncertain about impact on their operations, Communications Alliance says

It’s close to a year since the Coalition government with the support of Labor pushed the data retention legislation through parliament, and the regime kicked in in October.

However, telcos remain in the dark about how much funding they will receive to compensate for the cost of implementing the regime, according to Communications Alliance.

The industry body today issued a statement assailing the government for not revealing to telcos how much funding they will receive to defray the capital costs associated with compliance.

In the 2015-16 federal budget the government set aside a total of $131.3 million over three years for implementing data retention. That figure include the cost of administering the grants program and providing technical guidance to the telco sector and the development of standards related to data retention.

The government in January officially launched the grants program, which will funnel up to $128.4 million to telcos. The application period for the program closed in late February.

A government-commissioned study has estimated that the capital cost to industry of setting up the regime would be between $188.8 million and $319.1 million.

Over the first 10 years of the data retention scheme ongoing costs to the telco industry will reach $738 million according to the government’s estimates, Communications Alliance said today.

Despite the 2016-17 budget looming, telcos are still unclear about how much they will receive, the group’s CEO, John Stanton, said in a statement.

“They therefore don’t know how much their business – and ultimately their customers - will have to contribute to the costs of the data retention regime.”

“The next step is for the Government Data Retention Implementation Working Group to meet and review the weightings that are to be used to help calculate how much subsidy funding each eligible service provider will receive,” a statement from the industry group said.

“That meeting has not yet been scheduled.”

Internet Australia CEO Laurie Patton said his organisation had not been invited to join the Implementation Working Group despite requesting to participate.

“When it comes to the review of the weightings for the data retention funding, the risk is that the industry as a whole will not be happy with the outcome,” Patton said.

“Moreover, IA seeks to have an involvement in this process on behalf of all Internet users. The best estimates, including those from PwC obtained by the government, indicate that the funding allocated to ISP’s is well less than half of what will be the full cost.

“Inevitably this shortfall will result in increased Internet access fees. There is a danger that if the weightings are not appropriate some of the smaller ISP’s will close up shop.”

“This could be particularly unhelpful in regional areas where smaller ISPs are able to provide a more personal service because they actually know their customers and often provide them with other IT products and services,” Patton added.

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