Aussie Telcos dazed and confused by data retention

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By Leith van Onselen

Today is the day in which the Government’s controversial data retention (‘metadata’) laws come into effect, and Australia’s telcos are dazed and confused by the legislation, with 84% of carriers not ready to start retaining and storing the metadata of phone and internet users for two years. From The Canberra Times:

…telecommunications companies say they remain confused about how the scheme will work and how much of the cost will be passed on to consumers…

Just 16 per cent of telcos are ready to retain and encrypt the data required of them, according to an industry survey conducted over the past two weeks by peak body the Communications Alliance…

The survey, based on responses from 63 telecommunications providers, found more than two thirds of providers were not confident at all or only somewhat confident they understood what is required of them under the laws.

The laws allow companies to work towards full compliance within 18 months, as long as they submit an “implementation plan” to the government…

Internet Australia, the not-for-profit peak organisation representing all Australian internet users, has already warned that small internet service providers (ISPs) face a “very real prospect of ISPs going out of business” if they are not adequately reimbursed for the costs of implementing and complying with the Coalition’s data retention scheme.

As part of this year’s Federal Budget, $131 million was set aside to help fund the costs of creating and maintaining systems to store all Australians’ telecommunications data. However, that amount is expected to cover only between one-third and one-half of the actual estimated cost.

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Accordingly, consumers will be forced to pay one way or another for data retention, either through higher internet costs or via their taxes.

As I keep pointing out, data retention is likely to be a disaster of a policy that will largely be ineffective, in addition to being overly costly to set-up and administer.

Prime Minister, Malcolm Turnbull, has already highlighted data retention’s flaws. When he was shadow communications minister in 2012, he noted “grave misgivings” on data retention, which he felt “seems to be heading in precisely the wrong direction” and would be easy to evade by criminals.

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Moreover, in an interview conducted in March, Turnbull noted how easy the scheme will be to evade:

“If you have a device, and if I call you just through the mobile phone network, then there will be a record at my carrier that I’ve called your number”…

“If on the other hand I’ve called you by Skype, or a voice call on Viber, I send you a message on WhatsApp or Wickr or Threema or Signal, you know, Telegram, there’s a gazillion of them…

“Or indeed, if we have a Facetime call, the telco can see that I have made a connection to a Skype server or a Whatsapp server, it doesn’t see that I’ve had any connection with you.”

Of course, another obvious way to evade the metadata net is to set up a “virtual private network”, which takes about 20 minutes.

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The sad reality is that this legislation will be counter-productive to the Government’s goal of national security and law enforcement precisely because it will make encryption and anonymity very much mainstream. In turn, the net result will be to totally hide any trace, whatsoever, of criminal activity in the digital age.

Basically, all data retention will do is force-up everyone’s internet costs or taxes and reduce civil liberties, while the intended perpetrators easily evade the metadata net and continue on their merry way.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.