According to the announcement made yesterday by the federal government, the Consumer Data Right to the telecommunications industry is formally expanded.

The designation of telecommunications under the CDR was announced yesterday by Communications minister Paul Fletcher, Treasurer Josh Frydenberg, and financial services minister Senator Jane Hume. This marks the third industry to become part of the regime and banking and energy. The government said that open finance is expected to be the fourth sector.

According to a joint statement made by the three ministers: “Expanding the Consumer Data Right to the telecommunications sector will allow consumers to access more accurate information about their own internet consumption, phone usage, and product plans so they can more easily compare and switch between providers, encouraging more competition, lower prices, and more innovative products.”

The CDR “allows consumers to control the use of their data by trusted third parties so they can more easily compare products and find a better deal,” the ministers further added.

However, according to the statement of Communications Alliance to the government, the telco industry believes that the net benefits that the designation of the sector will deliver remain unclear. The Treasury commissioned a GrantThornton report on the impact of expanding the CDR to telecommunications. According to the estimated costs detailed in the report, the CDR implementation and two years of operation for a small telco will cost around $500k and $5.58m for a large telco. 

Nevertheless, the report added: “These estimated costs are highly caveated given they are based on consultations with stakeholders before the development of detailed rules and standards that will support any future implementation of the CDR in telco.”

“At this point in the Sectoral Assessment process, telco data holders were unable to provide specific data related to the potential cost implications of designation. More specific cost estimates, however, were provided by the potential outsource service providers to the sector based on their experience gained in other sectors.”

John Stanton, Communications Alliance CEO, warned that those costs might then be passed on to consumers. He said that several benefits to consumers touted by the government had already been delivered through other policies. He also called for a regulation impact statement on the designation of the sector.

Stanton further added that “Undertaking this type of assessment would assist the creation of the CDR rules that will underpin the framework.”

“It is also vital that industry and other stakeholders be given adequate time and opportunity to engage in the upcoming rule-making process.”

According to the government, the consultation on the rules governing the application of the CDR to the telecom sector will commence “shortly.”