Australia: Telecommunications Act – Proposed Infringement Notices and Infringement Notice Penalties

September Alert
Last Updated: 12 September 2011
Article by Richard Pascoe

As part of the Government's move to strengthen consumer safeguards provisions in the telecommunications sector, the ACMA and the DBCDE have just released proposed amendments to the Telecommunications Act to (Act) introduce:

  • Infringement Notices; and
  • Monetary penalties to be included in those Infringement Notices,

for certain breaches of consumer safeguard provisions in the Act.

The ACMA and DBCDE describer the rationale for Infringement Notices as:

Infringement notice schemes provide an efficient and cost effective enforcement alternative to court proceedings. Under an infringement notice scheme, a non-judicial officer is empowered to give a notice alleging a contravention of a legislative provision which provides that if the recipient of the notice pays the penalty specified in the notice, any liability of the recipient for the alleged contravention is discharged. 1

In other words, rather than have to go to court, the ACMA can issue an Infringement Notice and if the recipient elects to pay the penalty, then the matter is done and liability for the contravention is extinguished. This is intended to streamline the regulatory compliance process.

The proposed list of infringements

The ACMA has issued a consultation paper on the list of contraventions for which it will issue Infringement Notices.2 In summary, they are:

Contraventions by primary universal service obligation provider

Failure by a primary universal service obligation provider to comply with:

  • STS performance standards and benchmarks determined by the Minister
  • Standards and benchmarks regarding payphones and the process for the location or removal of payphones
  • Standards and benchmarks regarding the Customer Service Guarantee

Contraventions by all carriers and carriage service providers

  • Failure to provide annual reports to the ACMA
  • Failure to comply with the Numbering Plan
  • Failure to comply with relevant record-keeping rules
  • Failure to provide certain information allowing for the maintenance of the integrated public number database
  • Failure to comply with the time requirements to provide Interception Capability Plans

Contraventions by Mobile CSPs

  • Failure to provide customers with the means to bar all premium SMS and MMS services
  • Failure to provide information about the barring of premium SMS and MMS services
  • Failure to comply with a notice from the ACMA regarding the provision of information to customers regarding barring of premium SMS and MMS services
  • Entering into a contract with a content service provider for the supply of premium SMS and MMS services where the content service provider is not listed in the industry register
  • Failure to comply with a ―do not bill‖ order (including an interim orders) or a variation to an order within 1 business day

Contraventions by content service providers

  • Entering into a contract with another content service provider that is not listed in the industry register

The proposed increased penalties

The Minster is proposing greatly increased monetary penalties to be included in the Infringement Notices for some of the above.3 In summary again, however, the Minster is proposing increased penalties as follows:

Contravention Penalty
Contraventions by primary universal service obligation provider regarding payphone performance and customer service guarantee performance standards $990,000
Contraventions by primary universal service obligation provider regarding payphone location $66,000
Contraventions by primary universal service obligation provider of an ACMA direction regarding payphone removal or relocation $99,000
Contraventions by mobile CSPs regarding barring of premium SMS and MMS services and do not bill orders $33,000
Contraventions by mobile CSPs and content service providers regarding entering into contracts with content service providers nor included in the industry register $22,000

The stated purpose of these higher penalty amounts is to provide the ACMA with a means to ensure compliance with these provisions without the need to resort to court proceedings for civil penalties. In effect, they are designed to deal with ―mid-range‖ contraventions, where there is a perceived need for penalties greater than the usual penalty unit amounts, but not so great as to require court intervention and remedies.

Issues for Mobile CSPs

For mobile CSPs, the relevant contraventions involve the obligations on mobile CSPs to provide customers with options to bar premium SMS and MMS services, and to provide information to customers and potential customers about those barring options. There are also obligations regarding ―do not bill‖ orders from the ACMA.

The following table sets out the obligations, proposed penalties and reasons for the proposed penalties4:

Provision Brief Description of the Provision Proposed Penalty Brief Explanation for the Proposed Penalty
Obligations in Telecommunications Service Provider (Mobile Premium Services) Determination 2010 (No 1) ('MPS Determination No 1')5
s 6 A mobile CSP must implement a service which enables the barring of all premium SMS and MMS services. $33,000 Failure to implement barring capability on a mobile network exposes large numbers of mobile customers to the risk of financial loss from the unauthorised or unintended use of premium SMS and MMS services.
s 13(3) If the ACMA determines that a mobile CSP has failed to comply with the requirements in MPS Determination No 1 and gives the mobile CSP a notice requiring it to take specified action in relation to the way it supplies services and information to customers, the mobile CSP must comply with the notice. $33,000 Failure to take the remedial action required by such a notice will potentially adversely affect all customers of the mobile CSP. It is also serious because it will constitute the second occasion that the mobile CSP will have breached its obligations–the first occasion being its breach of one of the requirements in MPS Determination No 1.
Obligations is Telecommunications Service Provider (Mobile Premium Services) Determination 2010 (No 2)6
s 2.1(1) A content service provider must not enter into a contract with another content service provider for the supply of premium SMS and MMS services to a customer unless the other content service provider is listed in the register maintained by the Communications Alliance under the Mobile Premium Services Industry Code ('MPS Code'). $22,000 The MPS Code requires content service providers that supply premium SMS and MMS services to be on the register maintained by the Communications Alliance. The purpose of the registration requirement is to facilitate regulatory supervision by the ACMA. If content service providers contract with unregistered content service providers for the supply of premium SMS and MMS services to customers of mobile CSPs, effective regulatory supervision will be undermined, exposing potentially large numbers of mobile customers to the risk of financial loss from inappropriate practices relating to the supply of premium SMS and MMS services.
s 2.1(2) A mobile CSP must not enter into a contract with a content service provider for the supply of premium SMS and MMS services to a customer unless the content service provider is listed in the register maintained by the Communications Alliance under the MPS Code. $22,000 The explanation is similar to the explanation relating to subsection 2.1(1).
s 3.8 A mobile CSP must comply with a do not bill order (which prohibits a mobile CSP from billing its customers for premium SMS and MMS services). $33,000 A do not bill order can only be made by the ACMA in respect of a mobile CSP if the ACMA is satisfied that the mobile CSP has breached the MPS Code and has acted, in relation to the supply of SMS and MMS services, in a way that is significantly detrimental to customers' interests. Failure to comply with a do not bill order is serious not only because of its adverse impact on customers but also because it constitutes the second occasion that the mobile CSP will have breached its obligations—the first occasion being its breach of the MPS Code.
s 3.13 A mobile CSP must comply with an interim do not bill order (which prohibits a mobile CSP from billing its customers for premium SMS and MMS services). $33,000 An interim do not bill order can only be made by the ACMA in respect of a mobile CSP if the ACMA is satisfied that the mobile CSP may have breached the MPS Code and that, if the order is not made, either disadvantaged or vulnerable customers will or may suffer significant detriment or a substantial number of customers will or may suffer immediate detriment. Failure to comply with an interim do not bill order is serious for similar reasons to those given above in relation to failure to comply with a (final) do not bill order.

Consultation Period

The ACMA and DBCDE are seeking comments on the respective proposals. The ACMA consultation on the list of contraventions to be the subject of Infringement Notices closes on 14 September 2011. The DBCDE consultation on penalty amounts to be determined by the Minister closes on 19 September 2011.

1 http://www.acma.gov.au/WEB/STANDARD/pc=PC_410066

2 http://www.acma.gov.au/webwr/_assets/main/lib311996/ifc29-2011_telecommunications_infringement_notice.pdf

3 http://www.dbcde.gov.au/broadband/national_broadband_network/telecommunications_regulatory_reform

4 Table taken from DBCDE Consultation Paper. See http://www.dbcde.gov.au/broadband/national_broadband_network/telecommunications_regulatory_reform

5 The determination sets out service provider rules made by ACMA under section 99.

6 The determination sets out service provider rules made by ACMA under section 99.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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