Telco chiefs want clarity on data retention costs

Chief executives of major telecommunications companies in Australia have called on the federal government to provide some clarity around the financial contribution it will make towards implementing the data retention regime.

The Communications Alliance wants clarity around the government’s intended contribution to upfront capital expenses that the telecommunications sector may incur following the potential passage of the Telecommunications (Interception and Access) Amendment (Data Retention) Bill 2014.

In a letter to Federal Attorney General, George Brandis and Communications Minister, Malcolm Turnbull on Tuesday, the alliance asked that the government provide to parliament, industry and the community a degree of certainty as to its planned contribution.

The letter was signed by Telstra CEO, David Thodey; Optus chairman, Paul O’Sullivan; Vodafone Hutchison CEO, Inaki Berroeta; and iiNEt CEO, David Buckingham, among several others.

It noted that the government has variously indicated it would make a ‘reasonable’ or ‘substantial’ contribution to these costs, which might exceed $300 million, according to estimates provided by consultants commissioned by the government.

“We note also that a substantial contribution was the bipartisan recommendation by the Parliamentary Joint Committee on Intelligence and Security (PJCIS) – a recommendation that has been accepted by the government,” the letter said.

The alliance wants to know the government’s planned methodology for allocating the funds between carriers and carriage service providers (CSPs) of differing types and market shares in advance of the bill being debated and potentially passed into law.

“The methodology proposed to apportion the government contribution will influence the extent to which smaller CSPs might or might not be disproportionately impacted by the government’s actions – an issue highlighted in the PJCIS’ recommendations.

“A disproportionate effect on smaller CSPs is likely to have a negative effect on their ability to compete in the market,” the comms alliance wrote in its letter.

“In light of these factors, we believe it would be a reasonable action on the part of the government to – at the very least – provide a firm indication of the government contribution, expressed as a percentage of the final determined cost. We will continue to discuss with the government the issues associated with capital maintenance costs and operational costs.”

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