The Australian government is considering a licensing scheme for telecommunications retailers.

The government says it wants to tackle the issue of phantom carriage service providers (CSPs) operating in the sector without adequate oversight. 

These CSPs have raised concerns within various government departments, including the Department of Home Affairs and the Attorney General’s Department, as they complicate regulatory efforts.

In a recently released discussion paper, the government acknowledged the challenges these phantom CSPs pose to consumer regulators. 

The paper has initiated a public consultation to determine the most suitable approach, whether it be a relatively light registration system or the implementation of a CSP licence - an approach currently used in only one other country, Singapore.

One significant issue highlighted in the paper is the absence of a comprehensive list of CSPs, as the Telecommunications Industry Ombudsman lacks certainty about whether all organisations reselling telco services are TIO members. 

This lack of transparency has been exacerbated by the government's growing cybersecurity concerns.

The Department of Home Affairs and the Attorney General’s Department are unable to verify compliance with data breach reporting requirements or confirm whether CSPs have supplied information to the Register of Critical Infrastructure Assets when these providers operate under the radar.

The Australian Communications and Media Authority (ACMA) also faces challenges in dealing with rogue CSPs. ACMA lacks a mechanism to identify and remove these bad actors or prevent them from re-emerging under new identities - a practice known as ‘phoenixing’.

The only enforcement route available to ACMA is through the courts, which has proven to be slow and ineffective in achieving the desired outcomes.