Australia’s telecommunications regulator is stepping in to take direct control of consumer protections, abandoning a long-standing experiment with industry self-regulation after repeated failures across the sector.

The Australian Communications and Media Authority (ACMA) will scrap the industry-led Telecommunications Consumer Protections (TCP) Code and replace it with enforceable rules, marking a decisive shift in how telcos are held to account.

The move follows years of mounting problems — from Triple Zero outages and network failures to contentious sales practices and a troubled 3G shutdown — that have eroded confidence in the sector’s ability to police itself.

While the TCP Code was introduced in 2019 on the premise that telcos could set and uphold their own standards, the regulator now says that approach has fallen short.

Despite technical progress in areas such as blocking scam calls, ACMA has been forced to intervene over the years with measures mandating specific standards – for example, its December ban on telcos allowing customers to send deceptive SMS messages.

Because it was not directly regulating companies in the telco sector, ACMA’s enforcement powers for breaches of industry codes and standards were limited to issuing companies with directions to comply, then waiting until they were breached.

Frustration with this process last year led to a government push to increase telco penalties from $250,000 to $10 million.

Communications Minister Michelle Rowland said the changes – which included a carrier service provider (CSP) registration scheme – would “better equip ACMA with the tools and powers it needs to protect telco consumers and hold providers to account.”

ACMA’s latest move consolidates control of a sector recently slammed for its handling of repeated Triple Zero outages linked to deaths, inadequate reporting, “unconscionable” sales conduct by Telstra and Optus, and a bumpy 3G shutdown.

“Consumer reliance on telecommunications is far greater today than when the current code was made in 2019,” ACMA chair Nerida O’Loughlin said, and “the harms to consumers are also greater when services are unavailable or protections are lacking.”

Consumer advocates welcome the changes

The changes – which will see ACMA undertake a formal process of policy drafts and consultations before it finalises the new regulations – cap years of steadily increasing fines for telcos that have also been dealing with data breaches and ongoing service failures.

ACMA’s decision is a “watershed moment” for the sector, Carol Bennett, CEO of telco consumer advocacy group ACCAN, said in welcoming the decision to regulate telcos as “the only way to ensure Australians are treated fairly when purchasing and using telco services.”

Citing research showing that 22 per cent of consumers feel pressured to purchase a more expensive contract than they wanted, Bennett slammed the “dysfunctional and long-winded process” of fighting to incrementally strengthen TCP protections over the past decade.

Nearly three years ago, Consumer Action Law Centre CEO Stephanie Tonkin noted, “consumer organisations made the decision to walk away entirely from the code process because it was no longer delivering meaningful accountability or outcomes for the public.”

“Direct regulatory oversight is a recognition that telecommunications is an essential service,” she said, “and it must be treated as such…. At last, the telco sector will be subject to clearer rules, stronger oversight, and expectations consistent with other essential industries.”

ACMA has also copped its share of criticism, with consumer advocates last year panning the agency for a light-touch enforcement process in which telcos were negotiating the amounts of fines for issues such as Optus’s breach of emergency standards.

Industry group the Australian Telecommunications Alliance (ATA) talked up telcos’ work to improve customer service, citing progress in reducing chronically high volumes of consumer complaints to the Telecommunications Industry Ombudsman (TIO).

“Telcos are committed to working with regulators and government to deliver the best outcomes for consumers,” Australian Telecommunications Alliance (ATA) CEO Luke Coleman said in the industry response to ACMA’s announcement.

“Every Australian relies on the services provided by telcos every day,” he continued, “and consumer expectations have increased significantly as connectivity has become an essential part of life.”

Arguing that a “vibrant competitive market” has dropped prices by over 20% since 2016, Coleman said that “as an industry, we are committed to rebuilding trust and confidence in the essential connectivity we provide.”

Pushing telcos to do better

ACMA’s new policies come on the eve of the expected resolution of a long-running dispute that has directly affected consumers: claims by Telstra rivals that it has been winning customers by overstating its mobile coverage, particularly in regional and remote areas.

Optus, TPG and Telstra have bickered over what technical limits should be applied to service guarantees – with Telstra alleging that ‘coverage’ should include signals as weak as -122dBm and its rivals insisting that the more conservative standard of -115dBm should be applied.

Imposing the stricter standard could see around 1 million square kilometres wiped from Telstra’s coverage map – and a tacit confirmation that the company has effectively been lying to customers for more than a decade by misrepresenting its coverage to win subscribers.

It’s the kind of grey-zone marketing that ACMA wants to eradicate, with its eventual industry regulations – which will manage telecommunications as a critical industry as is already done with industries like healthcare and finance – aiming to eliminate policy grey zones.

Telco customers “must have confidence,” O’Loughlin said, “that selling practices are fair and that they will not be sold services they cannot afford, do not deliver the service for which they paid or the coverage they have been promised.”