• Nick Dowse

Did Telstra just break payphone regulation by making calls from them free?

In a move that can only be described as a damn good thing, Telstra announced this week that local and national calls to standard fixed line numbers and calls to standard Australian mobiles on Telstra’s public payphones are now free. But have they broken the legislative and contractual framework governing payphones by doing so? I think so.

Many are perhaps surprised that payphones even still exist - but that reveals their privilege. While it is true that payphone use has been on a steady decline for a long period, and the Productivity Commission has gone as far as saying "[t]he evidence of the demise of payphones is clear," they remain a valuable resource in emergencies and in disadvantaged communities.

Telstra is the designated "primary universal service provider" for payphones in Australia, which, by law, requires it to ensure that payphones are reasonably accessible to all people in Australia on an equitable basis, wherever they reside or carry on business. Telstra has an agreement with the Federal Government under which Telstra is paid $44 million per annum to supply, install and maintain public payphones, in the discharge of its universal service obligation.

But how does it work if the "pay" in payphone no longer applies?

The term 'payphone' is defined in legislation. Under s 9C of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (Cth) (TCPSSA), a payphone is a fixed telephone which, when in normal working order, cannot be used to make a telephone call (other than a free call or a call made with operator assistance) unless payment is made or arranged, or a “prescribed act” has been done. I can find no information on what a "prescribed act" is.

Notably, a phone remains a 'payphone' if free calls can be made from it when in normal working order. But "a free call", though not defined, is commonly understood to be a call to a number which does not attract a charge, such as a call to a 1800 number or a call to emergency services. Local and national calls to standard fixed line numbers and calls to standard Australian mobiles are not free if made from other phones, such as your mobile (the cost of these calls are included in your plan or pre-paid cost). So it seems unlikely that they could be classified as "free calls".

Indeed, Telstra's own terms and conditions which regulate the public use of payphones refer to a "charge" of $0 for the qualifying call types. Clearly, Telstra still considers these ordinarily-chargeable calls (and therefore not "free calls") but is just imposing a charge of $0 at this time.

The definition of "payphone" in the Act is predicated on there being a payment made or arranged for the call, except in limited circumstances. If the vast majority of calls made from a "payphone" are actually without charge then, in my view, that phone ceases to be a "payphone" as defined in s 9C TCPSSA.

However, it is true that there are still charges payable at payphones in certain circumstances, such as international calls or calls to satellite phones. But I do not think this brings the device back within the definition of "payphone" because it can nevertheless be used to make a telephone call without payment in the majority of circumstances.

Accordingly, I believe this change by Telstra renders these public phones no longer "payphones" within the meaning of s 9C of the TCPSSA. As the definition of "payphone" in the TCPSSA is foundational across multiple pieces of legislation, this also breaks all the legislative instruments regulating how public "payphones" can be installed, removed and rationalised. Perversely, it could also amount to a technical breach by Telstra of its universal service obligation to ensure "payphones" are reasonably accessible Australia-wide.

It is fair enough that the legislative framework is predicated on public phones only being "payphones" if a charge is payable for a call, but given Telstra's announcement, legislative change is required to ensure there are no technical gaps.