Telcos reject Abbott's claims on data-retention costs

The telecommunications industry group the Communications Alliance has rejected claims from Australia's prime minister that mandatory data retention wouldn't be costly to the industry.
Written by Josh Taylor, Contributor

The telecommunications industry has rejected claims from Australian Prime Minister Tony Abbott that the cost impact of storing customer data for two years is "modest".

Under mandatory data-retention legislation before the parliament, Australian carriers will be forced to retain an as-yet-undefined set of customer data for at least two years. It is expected that call records, billing information, and assigned IP addresses will be retained as part of the scheme.

The costs on telcos for retaining this data for access by law enforcement without a warrant are unlikely to be made public. Telstra, Optus, and other major telcos have provided confidential submissions to PricewaterhouseCoopers to allow the company to advise the government on the likely cost, but neither the public, the parliament, nor the parliamentary committee investigating the legislation will be made aware of the costs.

In a press conference with the Australian Federal Police (AFP) on Thursday morning, Abbott dismissed industry concern about the costs of mandatory data retention.

"Even if the costs are in the order of a couple of hundred million, you've got to remember that this is a AU$40 billion-plus sector, so the costs involved are comparatively modest, and obviously, we the government are prepared to work with the sector to ensure that we bear our fair share of the costs as well," he said.

John Stanton, CEO of the Communications Alliance, told a Baker & McKenzie telecommunications industry event in Sydney on Thursday that the regulatory burden on telcos is already quite high, and would only climb higher under the proposed legislation.

"It's fair to say that the telecommunications sector already makes an extremely large contribution to the Australian economy, and in a very positive way. It also bears heavily the cost of regulation, whether it comes to the ACMA, TIO, ACCAN, and a range of other bodies," he said.

"[Abbott's comments] don't resonate particularly well with me."

He slammed the government's decision to hold back on releasing information on the total cost to industry.

"We are more than a little interested in to the extent that service providers, and ultimately customers, will have to pay under these new arrangements," he said.

"It now appears that the industry won't see [the costs] and neither will the [committee]. That will make it a little bit difficult to understand whether the reasonable contribution the government is offering to make to support this scheme is reasonable, because we won't know the overall estimate.

"There is a bit of consternation about that with industry."

The law-enforcement agencies have said that they would like data to be kept for up to seven years, but have admitted the two-year minimum is a "compromise", despite a number of comparative Western nations holding the data for between six months and one year.

Stanton said that the government should rein in the agencies in their push for two years.

"There is a case in data retention for ensuring there is discipline on the agencies. The agencies want us to retain absolutely everything, because if you're an agency, you'd do the same. Why leave anything out?

"The rest of the world finds that one year or six months retention period for IP-related data is appropriate. Our agencies are saying five to seven years, and two years is a compromise.Why are we so different to the rest of the world?

"If agencies can make requests that cost telecommunications customers money, which is the effect, and do so in a completely unfettered way, well then I don't think that is good public policy."

Parliamentary Secretary to the Minister for Communications Paul Fletcher indicated that despite the push from the prime minister to pass the legislation soon, the parliamentary committee would make adjustments to ease the burden on industry.

"The very purpose of a parliamentary committee is to work through the issues of detail, engage with all the stakeholders, and hear from them," he said.

"It's an important part of the consultation process, as the draft legislation then gets worked through. You certainly see previous pieces of legislation in the national security area, where recommendations made by the parliamentary committee have been adopted by the government," he said.

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