Address to ACCAN National Conference

Melbourne
Monday, 28 June 2010

Good morning everyone.

It’s a pleasure to be here at ACCAN’s first annual national conference an event that I am sure will become a prominent one for stakeholders across the telecommunications sector.

I’d like to acknowledge:

• Senator Kate Lundy, Senator for the ACT;
• Professor Cosmo Graham, Director, Centre for Consumers and Essential Services, School of Law, University of Leicester, UK;
• Allan Asher, ACCAN CEO;
• Chris Cheah, ACMA Deputy Chair
• Peter Kell, ACCC Deputy Chair
• Keith Besgrove, DBCDE First Assistant Secretary
• Mark Needham, Regional Telecommunications Independent Review Committee;
• Senator Ludlam, Senator for WA.

It is fair to say that we are in the midst of a period of immense change in the telecommunications sector.

Changes in technology.

Changes in consumer behaviour and expectations.

And, of course, changes that the government is pursuing to reform the sector in the interest of all Australians.

It is important, I think, to emphasise the underlying driver for why this reform program is so important.

Communications services are increasingly critical in modern day life.

People rely on these services in their working life and in their personal life.

For too long, Australians have not received the level of choice and standard of service in telecommunications services they deserve.

For too long, Australians have been paying too much for these services … and for too long, governments and industry have not done enough to rectify this.

We have a collective responsibility – government and industry – for ensuring that Australians get a better deal, and that is what the Government is focusing on.

Delivering Reforms in the Telecommunications Sector:

Everyone here is well aware that the telecommunications sector is undergoing a period of enormous change.

New technologies are coming online at an incredible rate and there is no doubt they will transform our society for generations to come.

Around the world, governments and industry are working to take advantage of the opportunities the new Digital Age will bring.

The Government has been bold in ensuring the reforms and policies are in place, so Australia is at the forefront of this communications revolution.

And at the centre of these reforms and policies - must be consumers.

ACCAN:

Last year, the Government established the Australian Communications Consumer Action Network and it has already made itself known in the industry.

This was a very significant reform.

Before ACCAN was formed – and notwithstanding the hard work and dedication of many individuals – consumers didn’t have a truly effective voice in the telecommunications sector.

It’s a testament to ACCAN that in just one year, consumers have a voice that is not just being heard, but being understood and importantly, it is being listened to.

In Government, we have seen ACCAN present on consumer issues at the highest levels.

I understand that ACCAN is now represented on 17 government and industry committees.

I congratulate and thank ACCAN on its work so far.

I know I can rely on Allan Asher and his team to continue to help us understand the needs of consumers, and how they can best be accommodated in Government policy.

For example, through its grants program, we are seeing a number of worthwhile grassroots initiatives.

In Western Australia, scammers were targeting the deaf community.

The WA Deaf Society — with ACCAN funding — responded quickly with research to raise awareness in the deaf community.

This is a great illustration of grassroots education that empowers consumers.

I look forward to ACCAN’s continuing research, representation and education activities.

Government and Industry Working Together:

Reforming the structure of the telecommunications sector is also an important component of our plans to unleash the potential of industry and ensure consumers get a better deal.

At this time, there is the real potential for government and industry to work together towards this goal.

The rollout of the wholesale-only National Broadband Network will transform competition in the telecommunications sector.

Already the rollout is well underway:

• First services will go live in Tasmania in the next few weeks.

• Already, with the introductory pricing offers from Primus, Internode and iiNet in Tasmania – with retail prices as low as $29.95 for 25Mbps download speeds and 15 gigabytes of data – we are seeing the power of a genuinely competitive platform to drive better deals for consumers.

• Work is progressing on 6000km of fibre optic backbone links to around 100 regional locations, that will benefit approximately 400,000 people.

• Already over 800km of fibre has been laid.

• NBN Co continues to progress work in its five first release sites on mainland Australia.

And last week, there was another significant milestone in the rollout of the NBN – and the potential for cooperation between government and industry.

The historic Heads of Agreement between Telstra and NBN Co provides us now with a clear pathway to deliver historic structural reform of the telecommunications sector to introduce genuine competition for the first time.

While there still is a significant amount of work to be done, at the time of the announcement I described it as:

… the moment the Australian Government, and industry, joined together to revolutionise the telecommunications sector in this country.

For telecommunications sector, it is a game changer.

For consumers, it will deliver a level playing field on which retail competition will be unleashed to drive innovation, price competition and choice.

The Government has always said that it was possible to achieve a win … a win for Telstra shareholders … and a win for the Australian public and consumers as a whole.

This Agreement provides us with a clear pathway to take Australia from the copper age … to the fibre future.

In support of the agreement, the Government will progress public policy reforms to support the transition to NBN.

In the transition to a wholesale-only NBN, it is important that we ensure that fundamental consumer safeguards and protections remain in place.

This includes the ongoing delivery of reliable and affordable voice services.

That is why the Government has announced that it will establish a new entity, USO Co, that from 1 July 2012 will assume responsibility for most of Telstra’s universal service obligations for the delivery of standard telephone services, payphones and emergency call handling.

Under these arrangements, Australians will have the security of knowing that they will continue to have dependable access to a standard phone service….

Australians will be relieved to know that control over the removal of payphones — and management of emergency call services and the National Relay Service — will be the responsibility of an entity formed entirely to deliver on these public services

For the first time, the Commonwealth will provide funding to support the delivery of the USO. This funding will build to $100 m per year by 2014.

The Government has also announced that from 1 January 2011, NBN Co will become the provider of last resort in new greenfield estates.

The Government has always believed that it is not good enough for people to move into a new home, only to find out later they cannot get decent broadband.

Our policy changes will solve this problem and ensure that everyone gets the benefit of affordable, high speed broadband.

The NBN is central to Australia’s economic future.

It will deliver universal high-speed broadband to households and businesses no matter where they are located.

It will provide an enabling platform which will facilitate innovation in service delivery, access and communication.

It will provide people with disabilities — and their carers —with more opportunities to participate online, in employment, education, health, government services, commerce and social networking.

It is important that as Australians become more connected online, tools such YouTube, Skype, and other mainstream applications with built in accessibility features like the iPhone’s built in screen reader, continue to be developed.

It is also important that applications are developed in a way which will help people with disabilities to not only have access, but to protect their information, privacy and safety online in the same way as other Australians.

ACCC work on misleading advertising:

While our reforms to the sector are important to drive better consumer outcomes, we must also remain vigilant to ensure that consumers are able to make well informed choices.

In part, this comes down to the quality of information available to consumers and effective enforcement tools.

The ACCC is also doing a lot of work to improve advertising standards among telecommunications providers.

It’s fair to say that many people have not been happy with the advertising practices of telecommunications providers.

I know Allan Asher likes to talk about the way products are promoted as being a ‘confus-opoly’.

The ACCC has identified the 12 most prevalent types of potentially misleading conduct made in the sector.
These include

• the inappropriate use of expressions like 'free', 'unlimited', 'no exceptions', 'no exclusions' or 'no catches'
• headline prices that don’t represent the total price
• prominent claims about price, data allowances, speeds or coverage that are inaccurate or not correct for all customers

In September last year, the ACCC received court-enforceable undertakings from Telstra, Optus and Vodafone Hutchison.

These three industry leaders undertook to stop making claims that might be misleading to consumers.

The ACCC is prepared to take action where it believes there have been breaches of these undertakings.

The second element in promoting the interests of consumers is in providing assistance for consumers in choosing a service.

The ACMA will shortly commence its public inquiry into customer service and complaint handling in the communications industry.

Amongst other things ACMA will investigate the way that industry provides assistance to consumers and the way it responds when things go wrong.

ACMA’s chair, Chris Chapman, wants to use its Reconnecting the Customer campaign to get the co-operation of the large providers on enforceable strategies for reducing complaints to the TIO about complaint handling.

I am reminding industry that they should make use of that window of opportunity.

Australian Consumer Law:

There are some other important things happening that I would like to take this opportunity to mention.

The Government’s new Australian Consumer Law will take effect this week - from 1 July.

This law will provide national protection against unfair contracts to all Australians consumers, including consumers of telecommunications products.

This new law will prohibit any contract that causes a significant imbalance in a consumer’s rights or obligations or causes consumer detriment.

I believe this will make a big difference to the current contracts that exist in parts of the telecommunications sector, particularly in relation to some mobile phone contracts.

Bill shock:

Fair and transparent pricing is also an important element in framing the consumer interest not least so that consumers don’t get ‘bill shock’ or as ACCAN has taken to describing it, ‘i-shock’.

It can be a real shock to parents whose teenagers rack up high bills on things like ring tones, smart phone applications and excess data.

Often this happens because charges are excessive – or difficult to work out – but as much as anything it can be difficult for people to know what their usage is to enable them to cut back as they reach whatever limits their contract allows.

Some of these things would seem to be reasonably easy to fix with some determined effort.

We will be closely watching Communications Alliance’s upcoming review of the Telecommunications Consumer Protection Code and the Mobile Premium Service Industry Code, to see how bill shock is addressed.

Complaint handling:

Possibly one of the most important elements in thinking about the consumer interest is redress.

When things go wrong, consumers need to have their problems resolved in a satisfactory and timely manner. And companies need to have the necessary incentives to act in the best interests of consumers.

Since coming to Government I have been on the record numerous times saying that I have not been happy with the standard of customer service or complaint handling in the telecommunications industry.

I know I am not alone in that regard.

And while there is much more work to be done in this area, in recent times, we have started to put forward some changes designed to improve this situation.

In April, I announced that I intended to amend the Telecommunications Act to create a Ministerial power to direct the ACMA to develop an industry standard.

Just last week I released a set of amendments to the Telecommunications Competition and Consumer Protection Bill which included such a provision.

This new provision will allow for the development of a consumer protection standard which, unlike a consumer code, would be developed by the regulator who will need to balance the interests of consumers with those of the industry.

Should the current code review fail to adequately address the interest of consumers, I would have to consider exercising this new power.

In addition to this planned amendment, can I take this opportunity to indicate that the Government remains committed to passing the Competition and Consumer Safeguards Bill at the next opportunity when parliament resumes.

Aside from the new provision I just mentioned, this bill also contains a number of critical provisions to reform the structure of the sector; provide the ACCC with necessary powers to perform its role effectively and strengthen existing consumer safeguards.

As many of you are aware, the bill includes reforms to the Universal Service Obligation and the Customer Service Guarantee to include new minimum performance benchmarks.

Consumers will retain their right to be paid financial damages when a telephone company fails to meet the CSG standards but a failure to meet these new performance benchmarks may result in the provider paying civil penalties as well.

ACCAN was influential in shaping these important reforms that will improve assistance and redress for consumers during the transition to the NBN environment and which are vital to maintaining consumer engagement in the marketplace.

I would like to thank ACCAN for its valuable input into shaping these standards, and assure you all that we are committed to passing these reforms.

Do Not Call Register:

If I could now briefly turn to another issue that ACCAN has provided valuable input on – the Do Not Call Register.

More than 4.4 million telephone numbers are now registered on the Do Not Call Register.

Many consumers simply don’t want their details to be available to telemarketers and clearly value this consumer protection.

As you would know, we recently amended the Do Not Call Register legislation to enable the registration of emergency service numbers, government telephone numbers, and all fax numbers.

In addition, as urged by ACCAN, we enabled the registration period to be extended from 3 to 5 years.

As the Government develops another way to keep the Register up to date further extension of the registration period may be possible.

Conclusion

We have come a long way in the past year and should be proud of the achievements we have brought about for consumers.

I’m particularly pleased to see how energised the consumer movement is — more than at any other time I can remember!

By working together, government and industry can deliver better, more affordable services for consumers.

We are in the middle of a period of great change in the telecommunications sector and we must all adapt to the digital age.

While we are taking advantage of the great opportunities the digital economy presents, we must ensure that the reforms and policies we have in place have consumers at the centre.

I look forward to hearing your views on how we tackle those challenges, and what changes still need to be implemented to ensure consumers are properly protected and served.

Thank you.