The metadata to be collected by the companies was said to help fight criminal activity.
The Australian government has temporarily abandoned plans that would have forced Internet and telephone data to be stored for up to two years, following an enquiry by the parliament which did not wish to go ahead with it.
When the parliament committee raised concerns about it, the Attorney General Mark Dreyfus said more work was needed.
Dreyfus in a statement: "The government will not pursue a mandatory data retention regime at this time and will await further advice from the departments and relevant agencies and comprehensive consultation."
The metadata to be collected by the companies was said to help fight criminal activity. The committee, meanwhile, recommended that unfettered access should not be allowed.
It asked the attorney general to review "the threshold for access to telecommunications data," adding that this review "should focus on reducing the number of agencies able to access telecommunications data by using gravity of conduct which may be investigated utilising telecommunications data as the threshold on which access is allowed."
The committee wrote: "This lack of information from the attorney general and her department had two major consequences.
"First, it meant that submitters to the inquiry could not be sure as to what they were being asked to comment on. Second, as the committee was not sure of the exact nature of what the attorney general and her department was proposing it was seriously hampered in the conduct of the inquiry and the process of obtaining evidence from witnesses."