Consumers face "internet tax" from data retention law

Consumers will lose out hardest if the government fails to address implementation issues with the Data Retention Act, Internet Australia has warned.

The costs imposed by the industry in gaining compliance with the new legislation are likely to be passed on to consumers, Internet Australia CEO Laurie Patton said.

He said an “internet tax” is a real possibility once the true costs of the scheme come to light, noting that it is widely believed that the funding allocated by the government to help alleviate the costs — down to just $128 million — is insufficient.

“The as-yet-unknown costs of the Data Retention Act will end up being passed on to consumers in the form of increased internet fees,” he warned.

“Does the government really expect Telstra, Optus, Vodafone and the hundreds of smaller ISPs to carry the costs for this problematic legislation?”

Besides capital expenditure there is the question of ongoing operational costs, he said. While the law allows ISPs to charge a small fee for each request to access stored metadata, there is no guarantee that this will cover the costs of keeping the required systems in place.

Patton was also sharply critical of the implementation process for the new legislation. While the law came into effect earlier this month, industry surveys suggested that few if any ISPs are currently compliant and only around 58% have even submitted the required data retention implementation plan.

“The Act is fundamentally flawed and it’s no surprise that so too is the implementation process,” he said. Among the body's ISP members, he noted that “the general feeling is that the officers in the Attorney General’s department are trying hard to assist, but the plain fact is they’re stuck with a very confusing and poorly drafted Act”.

The confusing process means there is little to no visibility of the true costs of implementing data retention capabilities and complying with the legislation, he said.

“We tried to assist the government by putting together some figures on what the real implementation costs might be. However, at this stage many of our ISP members tell us they’d just be guessing.”

Image courtesy of Dan Moyle under CC