Australian government reveals data-retention operating costs

Attorney-General George Brandis has revealed that the estimated average cost for storing telecommunications data will be close to AU$4 per customer, per year.
Written by Josh Taylor, Contributor

While the Australian government has been reluctant to reveal how much it will contribute to setting up new systems for telcos to store data under the proposed mandatory data-retention regime, Attorney-General George Brandis has said that the operating cost of the scheme will cost approximately AU$4 per customer per year.

The legislation -- which would force Australian telecommunications companies to retain customer call records, signed IP addresses, call locations, email addresses, and other data for two years for warrantless access by law enforcement -- was debated in the Senate late into Tuesday night, ahead of the expectation that the legislation will be passed on Wednesday night or Thursday.

One of the major uncertainties about the proposed legislation is that the cost for the scheme is unknown. The government commissioned PricewaterhouseCoopers to work with the industry to determine a cost estimate for setting up and operating the scheme, but the report has not been made public.

As the Bill was debated on Tuesday night, Brandis downplayed how much it would cost for the telcos to operate the mandatory data-retention regime once it was in place, stating that the average cost to carriers would be approximately AU$4 per customer.

"In relation to the ongoing costs, a PricewaterhouseCoopers review has estimated that even if there were to be no government funding, the average cost over 10 years would equate to between AU$1.83 and AU$6.12 per customer per annum, with a median price of AU$3.98 per customer per annum," Brandis told Greens Senator Scott Ludlam.

"That is not, it seems to me, with all due respect, senator, a vast cost for what this legislation seeks to do to preserve -- not to extend; in fact, in important ways to limit -- an important investigative capability."

Based on Australian Bureau of Statistics data, this would cost internet service providers in total approximately AU$49.68 million per year to operate. The mobile industry would face costs of over approximately AU$120 million per annum.

The government's own estimates have put the annual figure of compliance to the industry at AU$73.8 million in increased costs, according to the government's latest red tap repeal documentation.

Although Brandis has indicated that telcos will be made to bear the costs of operating the scheme, the government has pledged to make a substantive contribution to the costs of setting up the scheme. On Monday, the Communications Alliance called on the Senate to delay the passage of the legislation until the government had revealed the dollar figure, estimating that the scheme will cost the industry AU$319 million to set up.

"We are not asking Senators to block the Bill, but simply to delay its passage until government provides some detail about the contribution it has promised to make -- given that telecommunication users will inevitably shoulder much of the burden of any government shortfall," Comms Alliance CEO John Stanton said.

On Tuesday night, Brandis indicated that the costs would not be revealed until Budget time in May.

"There has been a quite long negotiation between government and industry, and there are very diverse estimates of the capital cost. As to which of those within that diverse range the government will settle upon as a reasonable estimate of the capital cost across industry and as to the percentage contribution the government will make to that figure as its substantial contribution, as promised, to the capital cost, those are matters currently before the government," he said.

"They are a matter of deliberation as part of the Budget process, because there will be an outlay here, of course. Those matters, because they are part of the Budget deliberations at the moment and are Cabinet in confidence, I am not at liberty to share with you."

The funding model would not be detailed until the Budget, Brandis told independent Senator Nick Xenophon.

"All I can say to you is that the funding model, which the government has developed, will be approved through the Budget process. When the Budget is published, you will know," he said.

On Tuesday, the Greens announced a number of amendments that the party would propose to the legislation, including limiting the storage to three months, expanding the warrant scheme for journalists out to all citizens, and forcing telecommunications companies to store the data in Australia -- something not guaranteed under the current legislation.

The majority of the cross-bench looks set to vote against the Bill. On Tuesday, independent Senator Jacqui Lambie also confirmed that she would oppose it.

"This level of invasion of privacy, which will be committed on every Australian who uses online phone services, is completely over the top to achieve the purpose the government claims it will achieve. In order to catch a few hundred or thousand terrorists, it wants essentially to search every Australian household in this nation via electronic devices," she said.

"Giving away this level of privacy of every Australian to that level of invasion by the government and its agencies no longer makes us a free society in my view and in the view of many courts and respected privacy advocates throughout the free world. I say this: I have a very, very strong suspicion that this is going to come back and bite the Coalition. When it does, there will be a few of us on this side standing up to say, 'I told you so!' I will be looking forward to that. I oppose this legislation."

Xenophon, Liberal Democrat Senator David Leyonhjelm, and Palmer United Party Senator Dio Wang are all attempting to add their own amendments to the legislation. But with Labor backing the proposal with its own amendments, the government has the numbers to pass the legislation through the Senate.

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