Internet service provider iiNet has argued that the cost of complying with proposed anti-piracy legislation should be borne by copyright holders who want websites blocked, not telcos.
iiNet and Amcom have made a joint submission (PDF) to the inquiry into the government's Copyright Amendment (Online Infringement) Bill 2015.
In it, the telcos argue that the copyright holders that use the legislation to apply for court orders to force ISPs to block subscriber access to websites linked to piracy should bear the cost of the new system.
The government has estimated the bill will cost ISPs $130,825 per year.
Communications Minister Malcolm Turnbull last month introduced the site-blocking legislation.
It applies only to "online locations" outside of Australia.
The telcos' submission points to Section 313(3) of the Telecommunications Act, which has in the past been used by law enforcement agencies to request ISPs block subscriber access to websites (the use of that section of the Telco Act to block websites is itself the subject of a separate inquiry).
"[I]t has been expressly provided for by statute that CSPs [carriage service providers] should not bear the costs of complying with requests for assistance from enforcement agencies," states the submission prepared by Thomson Geer Lawyers for the telcos.
"In our clients' view, if a CSP is not, as a matter of principle, expected to bear the cost of assisting enforcement agencies who are acting in the public interest, that principle applies even more strongly in the case of assisting copyright owners to enforce private rights."
ISPs should not have to comply with an injunction until their costs have been paid, the telcos argue.
The submission states that the two telcos believe site blocking "is unlikely to be an effective way of dealing with online copyright infringement" but generally backs the approach of the bill, which requires a court order before an ISP begins to block sites.
"Subject to one concern, our clients believe that the Bill appropriately balances the interests of copyright owners against the interests of owners/operators of overseas online locations and individuals who may wish to view overseas online locations using the services of a CSP," the submission states.
"Our clients' concern relates to the fact that the Bill does not include any express safeguard to prevent what is commonly referred to as 'over blocking'."
As an example of over blocking, the submission points to the infamous cases where the Australian Securities and Investments Commission (ASIC) used Section 313 of the Telco Act to request some ISPs implement an IP-based website block.
The move led to the unintentional blocking of thousands of websites and was a trigger for the current Section 313(3) inquiry.
"Our clients believe that the Bill should expressly deal with the issue of over blocking by imposing a specific obligation on the copyright owner to demonstrate that its application includes reasonable steps for the CSP to take that will not result in any over blocking," the submission states.
The iiNet/Amcom submission argues that the bill should be amended so that it mandates ISPs take "reasonable and proportionate steps" to comply with an order to block a site and that a note is included in the proposed legislation explaining that "reasonable steps may include a CSP employing technical measures to block its subscribers from accessing a specified website".
The bill should include "a power to make regulations, subject to consultation with CSPs, that are able to specify what steps will be reasonable and proportionate in commonly occurring scenarios (for example in respect of particular technology)".
Rights holders should be obliged to consult with telcos about what "reasonable steps" telcos should take if the court grants the application.
The inquiry is due to report on 13 May.