5 September 2004

The Commonwealth Ombudsman
Level 25, 288 Edward Street
Brisbane Qld 4000

Dear Sir

Complaint concerning decision made by the Australian Communications Authority

We write to complain about a decision made by the Australian Communications Authority ("ACA") and ask the Ombudsman to investigate the decision which we believe is wrong, unjust and unfair.

The Australian Communications Authority is the telecommunications industry regulator and is empowered by law to enforce compliance with the Telecommunications Act 1997 ("the Act") by members of the telecommunications industry. The ACA is empowered, for example, to issue formal warnings, written directions to comply, and obtain injunctions from the Federal Court (Part 4 Div 5 and Part 30 of the Act). The ACA is also empowered by s510 of the Act to investigate complaints about contravention of the Act made by any person under s509.

On 28 July 2003, we sent a detailed written complaint to the ACA under s509 of the Act alleging contravention of Part 13 (titled "Protection of Communications") of the Act by telecommunications service providers (including Telstra, Comindico and Optus). Among other things, we alleged that some telephone service providers had recently commenced (and they still are) disclosing silent numbers and other blocked calling number information to Internet Service Providers ("ISPs") in contravention of s276 of the Act. Contravention of s276 is not a minor offence, it carries a penalty of imprisonment for a maximum period of 2 years. Our complaint also alleged breaches of the related Calling Number Display Industry Code which is also enforceable by the ACA. We requested the ACA to exercise its powers to enforce compliance with both the Act and the Code.

On 20 August 2004, over twelve months after lodging the complaint, we received the ACA's decision in response. (During that twelve months the ACA had advised on several occasions that their investigation was taking longer than anticipated due to lack of co-operation with ACA's investigation by some service providers). Copies of our complaint to the ACA and the ACA's decision are attached.

The decision states that the ACA found that some members of the telecommunications industry are contravening s276 of the Act and the Code as alleged in our complaint. In particular, some telephone call carriage service providers (e.g. Telstra, Comindico and Optus) are illegally disclosing silent and other blocked calling number information to some ISPs.

However, the ACA has decided not to take any action to enforce compliance with s276 of the Act. While the ACA response includes a list of sixteen decisions, those are directed towards enforcing compliance with the Industry Code. None of the sixteen decisions address the principal matter of contravention of s276 of the Act.

The ACA decision states the ACA will not take enforcement action in relation to contravention of s276 because, basically, having to comply with the law allegedly is or may be inconvenient to some telecommunications service providers. The decision in effect says individuals' right to protection of the law is subservient to the convenience of industry.

Furthermore, in making the decision not to take steps to enforce compliance with s276:

1. the ACA took irrelevant considerations into account. These include, but are not limited to:
   
   
   1. that no evidence of malicious intent on the part of carriers and ISPs was found by the ACA's investigation. However, malicious intent is not an element of the s276 offence, nor is absence of malicious intent a defence to contravention of s276.
      
      
   2. that the ACA speculated that the number of breaches may be small. However, the s276 offence applies to a single instance of illegal disclosure. The number of breaches is not an element of the s276 offence, nor is a small number of breaches a defence. Further, the decision contains no factual information to justify the ACA's speculative conclusion concerning number of breaches.
      
      
   3. that "there is concern that" carriers will be unable to identify when they are or are not breaching the law. However, this is only because carriers have relatively recently and intentionally chosen to automatically over-ride calling number blocking instructions on calls made to some ISPs. Much the same as ignorance of the law is not a defence, use of automated technology by carriers that enables them to be ignorant of whether or not they are breaking the law in any particular instance is not a defence to contravention of s276.
      
      
   4. that if carriers comply with the law, that is, cease illegally disclosing silent and other blocked calling number information to ISPs, that "may hamper law enforcement agencies in the collection of information". It is astounding that the ACA considers it appropriate to allow telecommunications service providers to continue breaching the law because that might help them to help law enforcement agencies catch other people who breach other laws.
      
      
2. the ACA failed to take relevant considerations into account. Although the ACA took into consideration the irrelevant matter of possible number of breaches, the ACA failed to take into consideration the type of people likely to suffer detriment as a result of breach of the law by carriers and ISPs and the level of potential harm to them.
   
   
3. the decision involves an error of law in that the ACA's analysis of the legislation failed to take into account the fourth element (1)(d) of the s291 exemption to the s276 offence. Failure to take the fourth element into account results in a conclusion that some disclosures are lawful in circumstances in which they are not lawful. In addition, we consider the ACA's construction of the law in relation to the "former" customer component of s291 is arguably incorrect.

More detailed information in relation to the above matters is provided in Attachment 1.

In addition, it appears the ACA failed to fully investigate the complaint. The complaint stated that the respondents to the complaint were the telephone call carriers Telstra, Comindico, Optus, and "any other carriers or carriage service providers engaging in the complained of practices (including resellers of carriers' services to ISPs)" and ISP customers of those service providers' relevant services. The ACA's response refers to investigation of only the named carriers and some of their ISP customers. It specifically refers to "anecdotal evidence" regarding the practices of wholesalers (resellers) (para 22) indicating this section of the industry was not investigated, notwithstanding that the report states "anecdotal evidence indicates that few ISP wholesalers have an understanding of their responsibilities and obligations and indeed considered themselves quite divorced from the implications of the Act and the code". The number of breaches of the Act therefore seems likely to be significantly larger than suggested by the ACA's report.

We also submit that the making of the decision was an improper exercise of the power conferred on the ACA. The ACA's telecommunications functions are, among other things, "to regulate telecommunications in accordance with the Telecommunications Act 1997" and "to do anything incidental to or conducive to the performance of" that function (Section 6(a) and (k) of the Australian Communications Authority Act 1997). It is improper for the ACA to not only condone past contraventions of that Act but in effect encourage ongoing breaches by failing to take any action whatsoever towards ensuring compliance from now on. The decision in effect tells telecommunications service providers they can continue breaching the Act, safe in the knowledge that the telecommunications regulator will not take any action to enforce compliance with the law.

In lodging this complaint, we are hopeful that the Ombudsman will investigate the ACA's decision and recommend that the ACA change its decision not to take any action to enforce compliance with s276 of the Act. In our opinion, the ACA must take firm action in relation to the breaches of s.276. Specifically, we believe that the ACA must:

1. prosecute the organisations that committed the breaches;
2. if not, then obtain a Federal Court injunction requiring all relevant organisations to comply with s.276 (as the ACA is empowered to do by Part 30 of the Act);
3. if not, then:
   1. issue directions to all relevant organisations, requiring them to comply with s.276 (as the ACA is empowered to do by Part 4 Div 5 of the Act); and
   2. put in place firm arrangements to conduct a follow-up investigation 6 months after the directions are issued; and
   3. prosecute organisations that continue to be in breach of s.276.

We will be pleased to provide any further information that may assist your office in investigation of this matter.

As mentioned during our brief call to your office's complaints line on 23 August, this decision by the ACA is not subject to internal reconsideration by the ACA nor review by the Administrative Appeals Tribunal (see Part 29 and Sch. 4 of the Act) and although we are investigating the possibility of seeking a review under the Administrative Decisions (Judicial Review) Act 1977, it is doubtful that option would be available to us due to the financial costs involved. However, if the Ombudsman is not able to investigate, and if we find we would be able to seek Court review, we understand we would need to lodge a review application within the Court's normal deadline of 28 days from receipt of a decision, which in this instance is 17 September, or seek an extension of time. The representative of your office (Leanne) advised that in such circumstances, your office is normally able to advise fairly quickly whether or not the Ombudsman's office is able to and will investigate.

We would therefore be grateful to receive advice, at the earliest possible date, regarding whether or not the subject of this complaint is a matter that the Ombudsman is able to investigate and if so whether the Ombudsman intends to do so.

We advise that, for ease of communication, we nominate Ms Irene Graham as the primary point of liaison between ourselves and your office. Ms Graham can be contacted during business hours at Tel: 07 3424 0201, Fax: 07 3424 0241 or Email: [...].

We look forward to your response.

Yours faithfully

Irene Graham     Roger Clarke     David Fitch

Attachments:

1. Explanatory notes and commentary on the ACA's decision
2. Copy of letter of complaint to the ACA, dated 28 July 2003
3. Copy of ACA's decision in response to complaint, dated 19 August 2004