Press Release · For Immediate Release
Diverse Networks Group Submits Response to TIO's Targeted Review of Non-Financial Loss Compensation Limits
Diverse Networks Group has lodged a formal submission with the Telecommunications Industry Ombudsman (TIO) in response to its Targeted Review of Non-Financial Loss (NFL) Compensation Limits. The independent, Australian-owned carrier strongly objects to any proposal that would increase, expand, or broaden non-financial loss compensation limits beyond current thresholds, warning that escalating liabilities reward vexatious behaviour and discourage capital investment in Australian telecommunications infrastructure.
Diverse Networks Group welcomes the opportunity to submit its response to the Telecommunications Industry Ombudsman's (TIO) Targeted Review of Non-Financial Loss (NFL) Compensation Limits.
As an independent, Australian-owned telecommunications service provider operating in a highly competitive, low-margin environment, the group strongly objects to any proposal that seeks to increase, expand, or broaden non-financial loss compensation limits beyond current thresholds. While consumer protection is a vital component of a healthy telecommunications market, regulatory intervention in recent years has drifted heavily in one direction, increasingly penalising carriers and service providers while disregarding the commercial and operational realities of building and running physical network infrastructure.
“Continually expanding non-financial loss liabilities threatens market competition, rewards vexatious behaviours, and directly discourages capital investment in Australian telecommunications infrastructure.”
David Trad, MD & Group CEO of Diverse Networks Group
Infrastructure Outages and Unbalanced Liability
Telecommunications infrastructure relies on complex, physical, multi-layered supply chains spread across vast geographic distances. Fibres get cut by third-party civil works, equipment components suffer unpreventable hardware faults, and extreme weather events sever connectivity. These are physical realities of network management.
- When an outage occurs, the carrier or Retail Service Provider (RSP) is already suffering immediate financial loss in the form of emergency repair costs, direct revenue loss, resource allocation, and reputational impact.
- To layer arbitrary, subjective stress, distress, and inconvenience claims on top of network outages is fundamentally unfair.
- Larger Tier-1 telcos possess massive legal departments and cash reserves to absorb routine $1,500 to $5,000 non-financial compensation awards as operational overhead. Smaller, growing RSPs operating on tight margins cannot.
If network outages become a pathway for consumers to extract non-financial loss payouts, smaller RSPs will face unsustainable financial strain from uncontrollable physical network events.
Forcing De Facto SLAs on Best-Efforts Retail Services
A fundamental distinction has always existed across telecommunications services worldwide. Business, enterprise, and government services are delivered with defined Service Level Agreements (SLAs), guaranteed uptime, prioritised fault restoration, and explicit contractual rebate mechanisms, and those customers pay premium monthly rates to cover the risk and operational cost of those guarantees. Retail and residential consumer services are historically and commercially priced on a best-efforts shared network model to keep connectivity affordable and accessible for all Australians.
Expanding non-financial loss compensation effectively forces an uncontracted, back-door Service Level Agreement onto best-efforts retail products. This enables consumers to demand high-dollar financial compensation for time spent off-line without ever having paid for a guaranteed service level, creating a systemic moral hazard that allows consumer claims to bypass long-standing commercial service structures and penalise RSPs for risks that were never priced into the product.
Absence of Checks, Balances and Litigant Protection
The consultation process lacks explicit checks, balances, or safeguards to protect providers against frivolous, malicious, or vexatious complainants. Because non-financial loss is inherently subjective, relying on claims of frustration, stress, or inconvenience presents a low-barrier target for serial litigants and abusive consumers.
The review also fails to account for the readily available consumer backups that mitigate inconvenience, such as mobile data failovers during fixed-line outages or Wi-Fi Calling during mobile coverage interruptions. Without strict evidentiary standards, objective medical or third-party proof, and transparent tracking of habitual litigants, expanding compensation limits invites widespread misuse against providers who lack the administrative bandwidth to endlessly dispute bad-faith claims.
Regulatory Creep and the Stifling of Infrastructure Investment
Regulatory creep over recent years has systematically villainised carriers and service providers, treating them as default at-fault entities regardless of wholesale dependencies or force majeure events. Capital investment requires predictability: when every operational fault or perceived customer grievance carries the risk of inflated non-financial compensation penalties, the incentive to invest in new services, regional expansion, or innovative product offerings is severely diminished.
Over-regulation and uncapped liabilities directly drive small and medium-sized providers out of the market or force them to consolidate into Tier-1 entities, ultimately reducing consumer choice and increasing retail prices.
Conclusion and Recommendations
Diverse Networks Group firmly maintains that non-financial loss compensation must remain strictly capped, narrowly applied, and exceptionally rare. The group recommends that the TIO:
- Maintain the current cap: retain the existing $1,500 cap for non-financial loss and reject any alignment with higher financial-sector schemes such as AFCA.
- Explicitly exclude physical outages: carve out physical network outages, force majeure events, and wholesale third-party delays from non-financial loss eligibility.
- Protect the best-efforts principle: reaffirm that residential best-efforts services do not carry implicit SLA compensation rights.
- Implement litigant safeguards: develop transparent rules to filter out frivolous or serial complainants, requiring formal, independent evidentiary standards for any claims of non-financial distress.
The group urges the TIO to consider the operational and financial impact on smaller service providers and to maintain a scheme that is balanced, objective, and fair to both consumers and industry participants.
Media Contact:
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David Trad
MD & Group CEO, Diverse Networks Group
[email protected]