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Who will pay for mandatory data retention?

This article originally appeared in DisruptiveViews

Network operators – including communications and internet service providers are under increasing pressure to provide information on customers to a wide range of law enforcement and government departments.

Despite the fact that many are already helping themselves to this information by whatever means – legally or otherwise – as exposed by Edward Snowden, the demands are relentless and in many cases, having an impact on the operators ability to run their businesses efficiently.

Sure, most are charging agencies for the retrieval of this information, many have dedicated departments with security clearance specifically handling them and some are even making money from them, but the fact remains that it is not core business and is compromising the privacy of customers who may still believe their data is private.

What is emerging as a more frightening trend is governments, like that in Australia, trying to pass legislation forcing CSPs and ISPs to retain customer metadata for up to two years and make it readily available on demand to law enforcement and other government agencies.

Great for governments, but not so great for operators and their customers who will not only have their privacy compromised (and are now hiding their online information) but their wallets as well. Someone is going to have to cover the increased costs of collection, retention and retrieval on such a grand scale.

Even if the Australian government does cover the cost, it will come from the budget funded by the taxpayers, the very people they are hoping to target. The Sydney Morning Herald reported that, “A coalition of high-powered chiefs from major Australian internet and phone companies demanded in a letter that the Abbott government outline how much money it is going to give telcos to pay for the creation of its controversial metadata retention regime.

Industry is deeply concerned that the government appears to want to push the data retention legislation into law before it clarifies what it its promised contribution will be to the costs of the scheme.”

By refusing to ‘come clean’ on how much it is willing to contribute to operators the Government has prompted the telecommunications industry to warn that consumers’ internet costs could potentially go up if they are not compensated.

That is a clever ploy to get the public on side against a government that has had to retract a number of equally unpopular budget exercises to extract money from voters that were promised no such surprises during the election campaign.

“Our request to you is, we believe, relatively simple and reasonable,” the telco chief’s letter states. “It is that the government provides to industry, the parliament and the wider community a degree of certainty as to the size of the government’s planned contribution (and the planned methodology for apportioning those funds between [telcos] of different types and market shares) in advance of the bill being debated and potentially passed into law.”

A secret Liberal Party (now in power) briefing paper obtained and made public by Fairfax Media (publishers of The Sydney Morning Herald and The Age) last October warned that industry would complain about the costs and say that if not compensated it would result in an “internet tax” being passed on to consumers.

The Herald also reported that “PricewaterhouseCoopers, which was commissioned late last year to come up with a cost estimate, said the scheme would cost anywhere between $188.8 million and $319.1 million just to set up.” No surprise then that the telecom industry had previously estimated that upfront capital costs could be much higher.

The last annual report showed government agencies authorised access to private telecommunications and internet data 330,640 times during criminal and financial investigations in 2012–13 — an 11% increase in a year and a jump of 31% over two years.

Of much greater concern was an example of potential abuse of this metadata when the opposition leader highlighted that the Australian Federal Police and other agencies could access any journalists’ metadata, including their phone calls and emails, to uncover without a warrant who they have been speaking to. Smart move? Hardly. That alone should guarantee the press will come out against the legislation.

It might also come as a shock to government that telecom operators already retain much of this data for billing purposes for a statutory period. But who can blame them for not wanting to act as the government’s henchmen? The line has to be drawn somewhere.

It might also serve as a lesson to other governments hoping to pull off the same caper. They might also think it easier to simply fall back on their old methods of data collection through espionage as this transparent approach might end up costing them more!

PS The two main government proponents of this scheme are reported to have used Wickr, an encrypted messaging service, to communicate to each other on the matter so no one could eavesdrop. Hmmmm, what message does that send?