The telecommunications industry has pushed back against federal government plans to expand the Consumer Data Right (CDR) scheme to the sector, calling for a formal regulatory impact assessment as peak body Communications Alliance warns there is “no evidence” that CDR would improve the telecommunications market.

CDR – a far-reaching consumer data and privacy framework that empowers consumers and their agents to access their personal and service-related data from service providers – has been operating in the banking sector since mid-2020 and is expected to be introduced into the energy sector later this year.

Its introduction into the telecommunications sector has been ongoing, with the federal government releasing its final report on the sectoral assessment for telecommunications in November and a draft designation instrument in December.

Now, with the formal announcement that CDR will be introduced to the telecommunications industry, the process will begin in earnest.

“Expanding the Consumer Data Right to the telecommunications sector will allow consumers to access more accurate information about their own Internet consumption, phone usage and product plans,” Treasurer Josh Frydenberg said in announcing the formal designation.

“They can more easily compare and switch between providers, encouraging more competition, lower prices and more innovative products.”

Yet now that the government has formally confirmed its intention to bring CDR to the telecommunications sector, Communications Alliance is concerned that the costs to telecommunications providers could far outweigh the benefits to consumers.

Modelling suggests CDR could cost the sector nearly $120m in its first two years, CEO John Stanton said, warning that those costs would be passed on to consumers and calling for reviews to ensure any telecommunications CDR was “measured and appropriate in delivering benefits to consumers, and to shape policy scope to minimise unexpected costs to participants.”

It is “vital that industry and other stakeholders be given adequate time and opportunity to engage in the upcoming rule-making process,” Stanton said, noting also that the industry’s position is that corporate customers “should not be captured by the framework”.

More industry red tape?

The pushback over CDR echoes earlier controversy over telecommunications data retention laws, a surveillance and investigative framework that the industry said imposed significant additional costs on telecommunications providers forced to retain customer data for at least two years.

The CDR’s potential benefit to consumers, however, has been affirmed by the government – and consumer groups have warmed to its promise of greater transparency in an industry that has not always been forthcoming about the gap between what it promises and what it delivers.

Benchmarking broadband services, in particular, has long been a point of contention, with Internet service providers including TPG, iiNet, Aussie Broadband, Telstra and Optus reprimanded or fined for misleading advertising.

The Australian Communications Consumer Action Network (ACCAN) has pushed for the inclusion of broader data sets, arguing in a submission that the scope of the CDR should include broadband speed information and NBN connection information “when clearly comparable benchmarks can be identified”.

Such benchmarking is becoming more widely used across the industry, with the US Federal Communications Commission recently voting to require broadband providers to provide standardised service descriptors – comparable to the nutrition information panels required on foodstuffs – as part of the Biden Administration’s efforts to improve competition in that country’s broadband sector.

Whatever form it takes, the momentum behind the expansion means that companies in the energy and telecommunications sector should be “planning for the implementation of the CDR in their sector in the relatively near term, as part of their technology and compliance planning,” technology law firm Bird & Bird advised in a recent analysis of the changes.

“Ultimately, the Australian federal government intends that the CDR regime will be available economy wide.”

The next industry to be targeted with CDR, the government announced, will be ‘Open Finance’ – expanding on CDR-enabled ‘open banking’ to include general insurance, superannuation, merchant acquiring and non-bank lending service providers.

Open Finance “paves the way for the creation of new and innovative services such as personal finance and life administration apps,” Frydenberg said, “and combining Open Finance datasets with banking transactions data can also provide a consumer with a more holistic picture of their financial circumstances.”