ISPs unhappy at data retention funding split

Internet service providers have expressed their concerns after learning that the limited government funding to compensate them for the costs of implementing the Data Retention Act will be split over three years, said Internet Australia (IA).

The peak body representing internet users said they are calling for an urgent review of the Act, currently scheduled for 2018, calling it “fundamentally flawed”.

“Our ISP members will have to pay upfront for their equipment and salaries, so why should they have to wait to get all their funding from the government?” asked Laurie Patton, CEO of IA.

“The amount allocated is well below what the government was told it would cost the industry. Unless the government expects ISPs to subsidise the data retention scheme, it will be consumers who foot the bill via higher internet access charges.”

The IA said funding for ISP costs incurred complying with the Data Retention Act has been a sore point within the industry since the allocation of $128 million in the federal Budget was announced earlier in the year.

“PwC provided the government with an estimate of the implementation costs, putting it at between $189 million and $319 million. So the industry had already been short-changed,” said Patton.

A recent Senate Estimates hearing was told that ISPs would be paid in two parts with a payment made upfront and another towards the end of the implementation period.

Patton revealed that their ISP members believe this indicates the government is asking them to bankroll the implementation process.

“Along with our colleagues at the Communications Alliance, we’ve been asking for months for some indication of how they intend to distribute the funding. Our ISP members are already incurring costs with no idea how out of pocket they will be,” said Patton.

George Fong, chair of IA, who runs a regional ISP and has deep knowledge of the Act, as well as direct experience of the implementation process, commented: “The collaboration between the Attorney-General’s Department and ourselves is not in question, nor are the earnest and sincere efforts of the industry in attempting to comply. But moving forward requires us all to face up to and deal with the significant challenges presented by this flawed legislation.”