Telcos, ISPs cautious about CDR

Telecommunications and Internet Service Providers say the government should demonstrate that the Consumer Data Right has delivered benefits for banking and energy consumers, before extending the regime to other industries.

Yesterday, the federal government published the review of the CDR that was launched in February, along with the public submissions to the review. 

Telco and ISP interests are represented by industry associations, the Communications Alliance and the Internet Association of Australia, with Telstra the only telco or ISP to make an independent submission.

The Communications Alliance was critical of the process, saying that as part of a broad industry coalition it had tried to engage with the former minister about the “risks, costs and opportunities” of designating telecommunications under the CDR.

“Attempts to engage directly with the minister were unsuccessful”, the alliance said.

The broad industry alliance included the Comms Alliance, the Australian Information Industry Association, the Australian Mobile Telecommunications Association, Internet Australia and the Internet Association of Australia.

The Comms Alliance, the IAA and Telstra agree the government has failed to adequately quantify the CDR’s consumer benefits in the banking and energy sectors, making its application to telecommunications premature.

The Internet Association of Australia [pdf] said: “the government should undertake an in-depth study” into whether the promised innovation benefits have been delivered for the banking and energy sectors, a proposal supported by the Communications Alliance [pdf] calls for “further examination and stringent modelling” of consumer benefit.

The Comms Alliance also pointed out that the case for a CDR is lower in telecommunications than in banking or energy, given that customer churn between providers is already a feature of the industry.

Since there’s low friction for consumers switching telcos, “the CDR objectives may indeed be achievable without designation”.

While supporting the CDR in principle, Telstra added its voice to calls for more research: “It is difficult to appropriately assess whether the objects are fit-for-purpose as there does not appear to be a clear measure of success for CDR.

“Treasury is yet to undertake a review of the implementation in the banking sector to determine whether the scope of eligible customers, data etc are appropriate”.

Telstra wants MVP approach

In its submission [pdf], Telstra called for a “minimum viable product” (MVP) approach to guide regulators in rule-making, to minimise costs to the industry.

The carrier also called for “targeted sectoral reviews”, perhaps a year after the CDR is applied to an industry, to assess whether the intended outcomes are delivered, or whether adjustments are needed.

Telstra also calls for a second cost-benefit analysis after an industry is designated, but before a sector’s rules are finalised, to “help ensure the scope is appropriate and proportionate to deliver customer benefits.”

Telstra believes the MVP approach is the only way the government could ever apply the CDR economy-wide: “each sector has their own rules, requirements, and approach to assisting and servicing consumers.”

It argues for a “shallow application of the CDR … rather than seeking wide application to all available consumer and consumer adjacent data for each sector.”