What was the significance of the Telecommunications Act of 1996?

The Australian Information Commissioner (Information Commissioner) has a range of powers and obligations in regards to the administration of the Telecommunications Act 1997 and the Telecommunications (Interception and Access) Act 1979.

The Information Commissioner:

• is consulted about the development, variation or revocation of codes and standards under the Telecommunications Act 1997 (Telecommunications Act) that deal with privacy matters
• has the power to monitor compliance with the record-keeping requirements contained in Part 13 of the Telecommunications Act, which requires telecommunications carriers and carriage service providers to keep records of certain disclosures of personal information
• is consulted about requirements relating to the form of authorisations made to allow certain law enforcement agencies to access telecommunications data (sometimes called metadata) under the Telecommunications (Interception and Access) Act 1979 (TIA Act)
• has oversight of telecommunications carriers and carriage service providers’ handling of telecommunications data collected under the data retention scheme, which is deemed to be personal information within the meaning of the Privacy Act

Telecommunications Act

The Telecommunications Act contains a number of provisions that deal with personal information held by carriers, carriage service providers and others.

The Telecommunications Act defines a ‘carrier’ as the holder of a carrier licence granted under s 56 of that Act. Licensed carriers provide the infrastructure on which carriage and content services are provided to the public. The Australian Media and Communication Authority (ACMA) publishes a list of licenced and nominated carriers.

A ’carriage service provider’ uses a carriage service to supply phone and/or internet services to the public. The carriage service provider (not the carrier) has direct contact with consumers.

Telecommunications industry codes and standards

Part 6 of the Telecommunications Act provides for the development of industry codes and standards on any matter that relates to a telecommunications activity, which is defined in section 109 of the Act. Codes can be submitted to the ACMA by industry bodies for registration and, where the ACMA is satisfied that the code meets stipulated criteria, it is obliged to include the code on a codes register. Under ss 117 and 134 of the Telecommunications Act, the Information Commissioner must be consulted on codes and standards which deal directly or indirectly with a matter dealt with by the Privacy Act. The codes are voluntary, but the ACMA has the power to direct entities within its jurisdiction to comply with a code.

Information about Telecommunications Act codes and standards, and a register of codes and standards that are currently in force, is available at the ACMA’s Register of Telco Industry Codes & Standards.

Part 13 of the Telecommunications Act sets out strict rules for carriers, carriage service providers and others in their use and disclosure of personal information. The Privacy Act 1988 (Privacy Act) defines ‘personal information’ in s 6(1) as any ’information or an opinion about an identified individual, or an individual who is reasonably identifiable:

• whether the information or opinion is true or not; and
• whether the information or opinion is recorded in a material form or not’

What constitutes personal information will vary, depending on what can be identified or is reasonably identifiable in a particular circumstance.

The Information Commissioner has the power to monitor compliance with Part 13, Division 5 of the Telecommunications Act, which requires carriers and carriage service providers to make records of certain disclosures of personal information, including disclosures of telecommunications data collected and retained under the data retention scheme (see below) to law enforcement agencies.

The OAIC has produced a business resource to assist telecommunication service providers to understand their obligations to maintain records of disclosures under ss 306 and 306A of the Telecommunications Act 1997. The resource includes a checklist to help providers ensure the relevant requirements are met when creating records of disclosures.

If you think that a carrier has not complied with the Telecommunication Act you can make a complaint.

Telecommunications (Interception and Access) Act

Under the TIA Act the Australian Security and Intelligence Organisation (ASIO) and certain domestic law enforcement agencies can authorise the disclosure of telecommunications data by a carrier or carriage service provider, including telecommunications data collected and retained under the new data retention scheme. Under s 183(3) of the TIA Act, the Information Commissioner must be consulted about requirements relating to the form of those authorisations.

Data retention scheme

In March 2015, the Australian parliament passed legislation to introduce a data retention scheme into Part 5-1A of the TIA Act.

From 13 October 2015, providers of telecommunications services in Australia (service providers) are required to collect and retain specified types of telecommunications data (sometimes called ‘metadata’) for a minimum period of two years. Importantly, Part 5-1A requires all service providers that collect and retain telecommunications data under the data retention scheme to comply with the Privacy Act in relation to that data (for more information see the telecommunications service providers’ obligations arising under the Privacy Act as a result of Part 5-1A of the TIA Act).

Evaluating legislative success is more art than science. Today our nation commemorates the 20th anniversary of the Telecommunications Act of 1996 becoming law, and there is now a sufficient period to evaluate whether the act has achieved what it was intended to accomplish.

The law was designed in part to support technology and service innovation by allowing the Regional Bell Operating Companies (aka “Baby Bells”) to enter new markets, including long-distance telephone and information services. These had been prohibited by court oversight of the 1981 consent decree of AT&T and the Department of Justice. The resulting divestiture of AT&T created seven Baby Bells that were severely constrained from operating in a manner that best capitalized on their business strategies and assets.

Competing in the marketplace was also an essential part of tearing down the so-called Berlin Wall of telecommunications. Local telephone companies were prohibited by the Federal Communications Commission from offering cable television service. The same prohibition applied to local cable television systems being able to offer telephone service. Until the Telecommunications Act of 1996, regulation ensured that these industries could not go head-to-head against each other for customers.

Lacking that incentive, both players did not place a high priority on upgrading their network infrastructures in any comprehensive way. As Chairman of the House Commerce Committee Thomas J. Bliley Jr. (R-VA) noted when the telecommunications reform legislation was being introduced, “it is imperative that the statutory guidelines be put in place so that companies can make business plans as we enter the information age…the federal government should not be in the business of refereeing among competitors through regulation.”

Perhaps Clay T. Whitehead, founding director of the White House Office of Telecommunications Policy, best summarized what the 1996 Telecommunications Act tried to achieve: “set a framework based on those enduring principles of competition and open entry, allow a little time for the industry to get used to the ideas, and get out of the way.”

One of the clear legislative targets was to have competition serve as a force for broadband network development nationwide. The act’s legislative history reflects the goal of Congress “to  accelerate the deployment of an advanced capability that will enable subscribers in all parts of the United States to send and receive information in all its forms—voice, data, graphics, and video— over a high-speed switched, interactive, broadband, transmission capability.”

It’s fair to say that the law did not achieve immediate success. Five years after its enactment, only New York and Texas had determined that there was sufficient competition in the local telephone market to enable the Baby Bells operating there to also offer long-distance telephone service. By 2001, concentration within the industry actually increased, with only four companies in the United States handling 95 percent of local telecommunications service: Verizon, SBC, BellSouth and Qwest.

Fast forward to today’s telecommunications environment, where permitting both local telephone and cable companies to offer broadband service (including video) has been a powerful driver for new investment to facilities upgrades or new construction. According to the United States Telecom Association, broadband providers have made $1.4 trillion in capital investments from 1996 through 2014.

And the National Broadband Map shows that all parts of the country (50 states along with all U.S. territories) now have broadband service, as the law intended. Competition from new entrants, notably Google, has provided competitive incentives for upgrading the speed of fixed broadband even further. Today, fixed broadband at 100 mbps download or greater is available to 65 percent of Americans, up from only 11 percent in 2010.

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Competition remains vigorous in mobile broadband, which has virtually universal availability with 97 percent of Americans able to choose among three or more mobile providers. These metrics do not demonstrate that the Telecommunications Act of 1996 was an unqualified success, but they are evidence of the law’s real economic and consumer benefits. We can only hope that the additional passage of time will continue to support what Congress admirably set in motion two decades ago.