New registration scheme and enforcement powers sharpen teeth of Australia’s telco regulator

On 12 February 2025 the Telecommunications Amendment (Enhancing Consumer Safeguards) Bill 2025 (the Bill) was introduced to Parliament. The Bill, if enacted, will significantly bolster the compliance and enforcement powers available to the Australian Communications and Media Authority (ACMA) in respect of conduct by carriage service providers (CSPs).

The Bill proposes three key changes:

1. the introduction of a mandatory CSP registration scheme;
2. direct enforcement of industry codes by removing the requirement for the ACMA to first issue a direction to comply; and
3. significant increases to the maximum penalties for contraventions of industry codes and standards.

CSP registration scheme

While CSPs are already subject to significant regulation under the Telco Act and associated legislation, up to now they have not been required to register with or obtain a licence from the ACMA in order to supply carriage services.

While various other lists of CSPs exist (the Integrated Public Number Database, the Telecommunications Industry Ombudsman’s register of CSP members that supply services to residential or small business customers, and Communications Compliance’s register of CSP’s subject to the Telecommunications Consumer Protection Code to name but a few), none of them are intended to be a comprehensive record of all CSPs operating in the Australian market. According to the ACMA (as well as several industry participants), the absence of a single ‘source of truth’ has limited its capacity to educate CSPs on their regulatory obligations and hampered its ability to proactively target bad actors.

To address this, the Bill will establish a CSP registration scheme within Part 4 of the Telco Act, which would:

1. require the ACMA to maintain a public register of CSPs;
2. require CSPs to register with the ACMA in order to be able to provide listed carriage services; and
3. prevent carriers and wholesale CSPs from providing listed carriage services to CSPs who are not registered with the ACMA.

All CSPs that are ‘registrable’ CSPs will be subject to the registration obligation. ‘Registrable CSP’ means any CSP that is an ‘eligible CSP’ for the purpose of the Telecommunications (Consumer Protection and Service Standards) Act 1999. This means that those CSPs that are required to join the Telecommunications Industry Ombudsman (TIO) scheme will also be required to register with the ACMA.

The register will have the effect of giving the ACMA the ability to exclude CSPs from the market by declining registration (or imposing conditions on registration), including in circumstances where it identifies that a provider has failed to register with or is otherwise contravening (or has contravened) the TIO scheme. Likewise, the Bill proposes that the ACMA may revoke a CSP’s registration where it considers that the CSP in question poses an unacceptable risk to consumers or causes significant consumer harm. However, the Bill’s explanatory memorandum notes that exclusion from the market is intended to act primarily as a deterrent from significant non-compliance and is expected to be used only as a last resort measure, with mechanisms in place for review and re-registration.

CSPs that are subject to the registration obligation will only be permitted to supply listed carriage services if they complete their registration under the scheme. Additionally, carriers and wholesale CSPs will be prohibited from supplying listed carriage services to an unregistered CSP. Carriers and wholesalers will therefore need to carefully consider whether their customers are registrable CSPs be prepared to verify their appearance on the register as a condition of ongoing service supply.

The CSP registration obligation will not come into force immediately after the passage of the Bill (which may take some time, given the upcoming federal election). Rather, CSPs will have 6 months to comply with the registration requirement following proclamation in the Government Gazette, affording the ACMA some time to finalise the practicalities of the registration scheme’s operation.

Direct enforcement of industry codes

Currently, the ACMA cannot take direct enforcement action under the Telco Act for contraventions of registered industry codes. As it stands, regardless of the seriousness of the contravention, the ACMA must first issue a direction to comply with the code. If the provider fails to observe the ACMA’s direction to comply, it may then seek stronger enforcement action for the contravention of the direction to comply, including by way of an enforceable undertaking, an infringement notice or the initiation of proceedings seeking pecuniary penalties in the Federal Court.

The Bill amends Part 6 of the Telco Act to make compliance with industry codes mandatory, thereby removing the two-step enforcement process, and enabling the ACMA to take direct and immediate enforcement action for contraventions of the codes. This is consistent with the existing enforcement mechanisms available to the ACMA in connection with contraventions with industry standards and determinations.

Given the volume of directions to comply issued by the ACMA in response to contraventions of TCP Code, the Reducing Scam Calls and Scam SMs Code, and the IPND Code in recent years, CSPs should take particular care to ensure their ongoing compliance with these codes.

Increased pecuniary penalties

Currently, there is significant inconsistency in the maximum civil penalties applicable throughout the Telco Act, meaning that breaches of similar magnitude or severity can result in different penalties being applied, depending on the particular code, standard or determination that has been contravened. Stakeholders including the ACMA, the TIO and the ACCC have long argued that there is a need for the reform of the maximum penalties, with the current maximum penalties for breaches of industry codes and industry standards not being commensurate to the harm caused, or high enough to deter non-compliance.

The Bill would amend Part 31 of the Telco Act to align maximum penalties for breaches of industry codes, industry standards and service provider determinations from $250,000 to an amount no more than the greater of:

1. 30,300 penalty units (currently ~$10 million AUD);
2. 3 times the benefit obtained; or
3. 30% of the adjusted turnover of the body corporate during the breach turnover period for the contravention.

The new maximum penalty framework is intended to recognise the varying size of entities within the telco market and give the Federal Court scope to determine the appropriate penalty amount for a contravention taking into account the relevant circumstances. In addition to ensuring consistency with the maximum penalties available for contraventions of the service provider rules and carrier licence conditions, the changes also bring the maximum civil penalties available under the Telco Act into line with those available under other regulatory frameworks, including the penalties in the Competition and Consumer Act 2010 (Cth).

Key takeaways

• Assuming that the Bill is passed, the increased penalty framework and direct enforcement of industry codes will apply immediately. Registrable CSPs will have 6 months to comply with the registration requirement following proclamation. It is also contemplated that transitional rules may apply, given that there may be in excess of 1500 registrable CSPs.
• Businesses involved in supplying carriage services should consider whether they are registerable CSPs (i.e., subject to the TIO scheme), and will therefore be required to register with ACMA.
• Wholesale providers of carriage services will also need to consider whether the businesses to which they supply listed carriage services are registrable CSPs and, given the prohibition on supplying to unregistered CSPs, consider any risk that may arise if they are unable to supply services to those customers should they fail to register under the scheme.
• CSP should carefully consider their compliance with obligations under industry codes and standards in light of the increased pecuniary penalties for contraventions, as well as the direct enforcement mechanism for industry codes, and the possibility of deregistration from the CSP register as a last resort in case of serious non-compliance.

For more information, please contact Thomas Jones, Matthew Bovaird, Patrick Cordwell or Jasper O’Donnell.