Telcos still in the dark over data retention subsidies

One year after the passage of Australia’s mandatory data retention legislation, telecommunications service providers are still waiting to learn how much of their multimillion-dollar compliance costs will be subsidised.

The Communications Alliance, the industry body representing Australia’s telecom sector, noted that service providers remain in the dark as to the extent of the government’s contributions towards compliance costs.

The government set aside $128.3 million over three years as a contribution towards the capital costs of service providers in the 2015–16 Budget.

But this was just a portion of the government’s own estimates that it will cost the industry up to $319.1 million to implement the technology needed to comply with data retention legislation. The telecom industry estimates that upfront costs will be significantly higher.

In addition, Communications Alliance CEO John Stanton noted that the government has so far been silent about the ongoing data retention compliance costs. The government has estimated that it will cost the industry a total of $738 million over the first 10 years of operation of the scheme.

The application process for operators seeking a share of the government funding closed in February. The Government Data Retention Implementation Working Group now must meet and review the weightings that will be used to calculate how much subsidy funding each provider will achieve. But this meeting has yet to be scheduled.

“No-one doubts that the Attorney-General’s Department has been working hard to implement the regime and sort out the funding question, but the ongoing delays are having perverse consequences,” Stanton commented.

“Many service providers — particularly smaller operators — have told us that they are doing very little or nothing to build their compliance capabilities at the moment. Who can blame them — if they start investing in new systems now, without knowing how much of that investment will remain unfunded once the subsidies arrive, they are putting themselves at risk of bankruptcy.”

Image courtesy of Dan Moyle under CC