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2008 - 2009 - 2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
RADIOCOMMUNICATIONS AMENDMENT BILL 2010
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Broadband, Communications
and the Digital Economy, Senator the Honourable Stephen Conroy)
RADIOCOMMUNICATIONS AMENDMENT BILL 2010
OUTLINE
The Radiocommunications Amendment Bill 2010 (the Bill) amends the
Radiocommunications Act 1992 (the Act) to implement the Government's
policies to:
. provide the Australian Communications and Media Authority (ACMA) with
greater flexibility in the timeframe in which it can commence spectrum
licence re-issue processes;
. allow the ACMA to issue class licences in the same radiofrequency
spectrum as expired or re-issued spectrum licence allocations as well
as spectrum in which a spectrum licence is not currently in force,
conditional upon there being adequate interference safeguards and it
is in the public interest;
. make class of service determinations made by the Minister under
subsection 82(3) of the Act legislative instruments that are not
subject to disallowance; and
. make spectrum access charge directions by the Minister to the ACMA
under subsection 294(2) of the Act not legislative instruments.
Each of these matters is explained in further detail below.
Background
The Government commenced auctioning a number of spectrum licences designed
to support a market-based approach to licensing the radiofrequency spectrum
in the late 1990s. The licences have a tenure of 15 years, flexible
conditions and are fully tradable. The first key spectrum licences are due
to expire in 2013.
When a spectrum licence expires there is a presumption in the Act that the
licence will be re-allocated via a price based method (e.g. auction),
unless it is in the public interest to do otherwise. The independent
regulator, the ACMA has primary carriage of the spectrum licence re-issue
process, including issuing the licences, developing the technical
frameworks authorising the operation of devices under the spectrum licence,
and setting licence conditions.
In April 2009, the Department of Broadband, Communications and the Digital
Economy issued a public discussion paper 'Public Interest Criteria for Re-
issue of Spectrum Licences' seeking comment on possible ways the Government
could deal with the forthcoming expiry of key spectrum licences.
On 3 March 2010, the Minister for Broadband, Communications and the Digital
Economy announced that spectrum licence re-issue will be considered for
those existing 15 year spectrum licensees who are already using their
spectrum licences to provide services to significant numbers of Australian
consumers, or who have in place networks capable of providing services to
significant numbers of consumers. As part of an eventual decision,
consideration will be given to the five public interest criteria which were
supported by industry stemming from the 2009 consultation process.
The criteria are:
. promoting the highest value use for spectrum;
. investment and innovation;
. competition;
. consumer convenience; and
. determining an appropriate rate of return to the community.
Discussions with a number of incumbent spectrum licensees are expected to
commence in mid 2010.
Greater flexibility in preparing for licence (re) issues
The Bill amends the Act to provide the ACMA with greater flexibility in
terms of when it can commence licence re-issue processes by removing the
two year time restriction upon the ACMA in terms of when it can publish a
notice that a licence may be re-issued; and to issue a draft spectrum
licence containing licence conditions. This provision is intended to
maximise the flexibility afforded to the ACMA regarding the commencement of
licence re-issue processes. In addition, this amendment will help reduce
incumbent licensee uncertainty close to licence expiry and encourage
continued investment by incumbents in existing network services currently
provided under these licences.
Coexistence of class licences and spectrum licences
Spectrum licences can only be issued in specific parts of the
radiofrequency spectrum that have been either designated for spectrum
licensing under section 36 of the Act or declared for spectrum licensing
under section 153B of the Act.
New and developing technologies have the potential to greatly increase the
technical and productive efficiency of spectrum use. These new
technologies may be authorised by the ACMA under class licences. Such
technological developments will potentially allow devices to share spectrum
by utilising a variety of technically sophisticated methods to avoid
harmful interference with other services and will be subject to the ACMA
being satisfied that:
. unacceptable levels of interference will not occur to the operation
of radiocommunications devices operated, or likely to be operated,
under spectrum licences; and
. it is in the public interest to issue class licneces, in spectrum
designated or re-allocated for spectrum licences, to authorise
devices with the new sharing technology.
It is expected that, over time, there will be widespread adoption of the
new technologies in an extensive range of devices developed overseas,
including consumer goods, that will become readily available in Australia.
In light of these technological trends, it is important that the Australian
radiocommunications regulatory framework be sufficiently flexible to meet
these upcoming challenges. This Bill amends the Act to permit class
licences to be issued in spectrum designated for spectrum licensing under
section 36 or declared under section 153B.
The Bill also makes additional amendments which clarify the operation of
the provisions relating to the variation of existing class licences to
coexist with spectrum licences in the spectrum designated or declared for
spectrum licensing.
These amendments are required to provide for future circumstances when
spectrum is designated, allocated or reallocated under the Act to authorise
the ACMA to issue or re-issue spectrum licences in a spectrum band in which
the ACMA has previously issued a class licence. Before the ACMA issues new
or varies pre-existing class licences where spectrum licences are proposed
to coexist in the same spectrum allocation, the ACMA will undertake
consultation and satisfy itself appropriately about relevant matters, such
as interference and public interest considerations.
Ministerial determinations and directions
Subsection 82(4) of the Act currently makes ministerial determinations
under subsection 82(3) disallowable instruments for the purposes of the
Acts Interpretation Act 1901. The Bill amends the status of determinations
made by the Minister under this subsection to make them legislative
instruments that are not subject to disallowance. Such determinations,
however, will be published on the Federal Register of Legislative
Instruments. This amendment is proposed in order to facilitate 15 year
spectrum licences discussions. The Attorney-General provided policy
approval for this amendment.
Detailed consideration of the 15 year spectrum licence re-issue process is
currently on-going, with licence re-issue discussions with specific
incumbents due to commence in mid 2010. In order to progress these
discussions, a number of determinations under subsection 82(3) of the Act
may be necessary in order for the ACMA to re-issue licences.
Future investment certainty for incumbent licensees is central to
successful licence re-issue discussions. The timing of determinations
under subsection 82(3) of the Act will be significant in these discussions
if the Government is to provide the necessary certainty sought by incumbent
licensees to renew their licences.
Potential delay stemming from the possible disallowance of a determination
is likely to have a material negative impact on the completion of
discussions and the consequential re-issue of licences.
The Bill also amends the Act concerning written directions by the Minister
to the ACMA about determinations made by the ACMA under subsection 294(1)
of the Act concerning spectrum access charges. The proposed amendment to
subsection 294(5) of the Act will specifically provide that such a
direction is not a legislative instrument.
The rationale for this amendment is that instruments of this kind are not
legislative in nature, and fall within an exemption provided for under the
Legislative Instruments Act 2003 (LIA). The Commonwealth Attorney-General
has advised that this approach is consistent with the LIA.
The intention of this amendment is to protect commercially sensitive
pricing information relating to the re-issue of 15 year spectrum licences.
By giving a written Ministerial direction to the ACMA, under subsection
294(2), that is not a legislative instrument, and thus not subject to
disallowance, it will protect this information during licence re-issue
discussions.
Consistent with established practice, it is expected that prices paid for
licences will be published by the ACMA once discussions and re-issue
processes are completed.
FINANCIAL IMPACT STATEMENT
The amendments have been assessed as having no direct financial impact on
the Australian Government or affected parties.
ABBREVIATIONS
The following abbreviations are used in this explanatory memorandum:
ACMA: Australian Communications and Media Authority
Act: Radiocommunications Act 1992
Bill: Radiocommunications Amendment Bill 2010
LIA: Legislative Instruments Act 2003
Minister: Minister for Broadband, Communications and the Digital Economy
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides for the citation of the Radiocommunications Amendment Act
2010 (the Act).
Clause 2 - Commencement
Clause 2 of the Bill provides for the Act to commence on the day after it
receives Royal Assent.
Clause 3 - Schedule(s)
Clause 3 provides for the Act to be amended as provided for in the
Schedule.
Schedule 1--Amendments
Item 1 - Paragraph 78(a)
Item 1 repeals paragraph 78(a) and inserts a replacement paragraph. The
purpose of the change is to remove the reference to the time-frame of '2
years' which will provide the Australian Communications and Media Authority
(ACMA) with greater flexibility in respect of the time in which the
Authority can commence spectrum licence re-issue activities. Apart from
this change, Item 1 will not make any other substantive change to the
requirement for the ACMA to cause a notice to be published in the Gazette
that states where information may be obtained about spectrum licences that
will expire in a period specified in the notice and the parts of the
spectrum to which they relate.
Item 2 - Subsection 79(1)
Item 2 makes a consequential amendment to subsection 79(1) as a result of
the amendment under Item 1. Subsection 79(1) deals with preparation of
draft spectrum licences for re-issue. The effect of the amendment in Item
2 is that all '2 year' time period references in section 79 are removed.
This will mean that the ACMA will be permitted to prepare at any time prior
to a spectrum licence expiring:
. a draft of a new spectrum licence that would wholly or partly replace
that licence; or
. drafts of 2 or more new spectrum licences that, taken together, would
wholly or partly replace that licence.
This amendment will provide the ACMA with greater flexibility in terms of
when it can commence preparing draft spectrum licences.
Item 3 - Subsection 82(3)
This item represents a minor amendment to correct the misspelling of the
term, "licences" (as a noun). It had erroneously been spelled as
"licenses".
Item 4 - Subsection 82(4)
Under the Act there is a power for the Minister to issue a determination
under subsection 82(3) to specify a class of services for which it would be
in the public interest to re-issue the spectrum licences to the same
licensee. Subject to discussions, a number of determinations may be
necessary for the ACMA to re-issue individual licences. As noted in the
Background commentary, a number of key spectrum licences are due to expire
from 2013 and re-issue discussions for these licences are expected to
commence in mid 2010.
Item 4 repeals subsection 82(4) of the Act and inserts a new provision
which provides that ministerial determinations made under subsection 82(3)
will be legislative instruments but they will be expressly excluded from
the Parliamentary disallowance process (under section 42 of the Legislative
Instruments Act 2003). This instrument is being exempted from the
disallowance regime because any delay stemming from a potential
disallowance of such a ministerial determination would severely impact upon
the successful conclusion of licence re-issue discussions between the
Government and the relevant incumbent licensees. There would also be
adverse follow-on impacts on commercial and investment certainty for
incumbent licensees if re-issue discussions are delayed.
The Commonwealth Attorney-General has provided policy approval for this
amendment.
Item 5 - Subsection 136(1A)
Item 5 inserts a new provision after subsection 136(1). This new
subsection imposes additional matters which the ACMA must satisfy itself
of, before the variation to the class licence can be made.
In addition to the amendment at Item 7 below which will enable the ACMA to
have the ability to issue a class licence in spectrum-licensed space
(subject to the various conditions), the ACMA will be permitted to vary
class licences to enable coexistence in spectrum-licensed space. Such a
variation is desirable for a range of reasons, for example to specify
additional radiocommunications devices that might be subject to the class
licence, or to specify additional bands to which the class licence applies.
The circumstances which would trigger the operation of new subsection
136(1A) are any instance where the proposed variation of the class licence
would affect spectrum allocated, to be allocated, to be re-allocated, or to
be re-issued, by issuing spectrum licences. In simple terms, the
formulation "issuing spectrum licences" refers to spectrum that is
designated for spectrum licensing under section 36 or re-allocated as a
result of a declaration under section 153B.
New subsection 136(1A) will only have application in cases where a
variation to a class licence would have the affect of operating in a
spectrum space where a spectrum licence is to be allocated, re-allocated,
or re-issued.
Before varying the class licence in the specified instances, the ACMA must
be satisfied that the variation of the class licence:
. would not result in unacceptable levels of interference to the
operation of radiocommunications devices operated, or likely to be
operated, under spectrum licences (subparagraph 136(1A)(a)(i); and
. would be in the public interest (subparagraph 136(1A)(a)(ii)).
The ACMA must also consult with all licensees of spectrum licences who may
be affected by the proposed variation of the class licence. In practice,
the numbers of licensees that will be consulted and the scope of the
consultation undertaken by the ACMA will vary, depending upon the proposed
spectrum to be designated or allocated for spectrum licensing and the
number of incumbent and future possible licensees in that spectrum licensed
space.
Item 6 -Subsection 136(5)
Item 6 makes a minor amendment to subsection 136(5) by inserting after the
words "subsection (1)" a reference to subclause 136(1A). This amendment
makes it clear that the new requirements of subsection 136(1A) are also
considered by the ACMA in addition to the requirements of subsection 136(1)
and (2). This represents a minor consequential amendment.
Item 7 - Section 138
Currently, section 138 of the Act prohibits the ACMA from issuing class
licences in spectrum designated for spectrum licensing under section 36.
Item 7 repeals section 138 of the Act and replaces it with an amended
section 138. This amendment is made to give full effect to the
Government's decision to allow for coexistence of class and spectrum
licences in the same spectrum space.
Through the operation of subsection 132(1) and new subsection 138(1), the
ACMA will be able to issue new class licences in frequencies which are part
of the radiofrequency band specified in issued spectrum licences. The
coexistence of class and spectrum licences within the same radiofrequency
bands would allow devices and services not owned or managed by the primary
spectrum licensee to operate in a spectrum licensed band under specified
licensing arrangements and technical parameters.
Under Item 7, the ACMA may issue a class licence within a part of the
spectrum designated or re-allocated for spectrum licensing, if the ACMA is
satisfied that:
. the proposed class licence would not result in unacceptable levels of
interference to the operation of radiocommunication devices operated
by, or likely to be operated, under spectrum licensees (subparagraph
138(2)(a)(i)); and
. it would be in the public interest to issue the proposed class
licence (subparagraph 138(2)(a)(ii)).
New subclause 138(2)(b) provides that before issuing a class licence, the
ACMA must consult with all licensees of spectrum licences who may be
affected by the proposed class licence. This mirrors the consultation
requirements under new paragraph 136(1A)(b)- see the discussion at Item 5
above.
Item 8 - Paragraph 294(1)(a)
This item represents a minor amendment to correct the mis-spelling of the
term, "licences" (as a noun). The term had been erroneously spelled as
"licenses".
Item 9 - Subsection 294(5)
Subsection 294(1) of the Act provides that the ACMA may, by written
instrument, make determinations fixing spectrum access charges and the
times such charges are payable. The Minister may issue a written direction
to the ACMA under subsection 294(2) of the Act, relating to spectrum access
charges for the re-issue of spectrum licences.
Item 9 repeals subsection 294(5) of the Act and substitutes a new
subsection 294(5). The effect of this amendment is that a ministerial
direction made to the ACMA under subsection 294(2) will not be a
legislative instrument, and therefore will not be disallowable. It is
appropriate that sensitive pricing information contained in such directions
remain confidential until the discussions with licence holders and licence
re-issue processes are completed.
If the amendment was not made, it would mean that the direction would,
among other things, be published on the Federal Register of Legislative
Instruments (making it public, amongst other things) and be subject to
disallowance, which would have an adverse material impact upon the
Commonwealth's position in discussions for the issue and re-issue of
spectrum licences.
Notwithstanding that the ministerial direction will no longer be published
as a result of the amendment at Item 9, it is the expectation of the
Government, consistent with current practice, that prices paid for licences
would be published by the ACMA after discussions and the ACMA completes its
licence re-issue processes. Availability of price information is an
important element in facilitation and encouraging a spectrum secondary
market.
Furthermore, instruments of this kind (that is ministerial directions to
persons, Commonwealth Authorities) need not have been disallowable in the
first place, on the basis that they would be a class of instruments that
ordinarily would be exempt under LIA.
Item 10 - Application
Item 10 provides for the application of the amendments made by this Bill to
the Act. All the items of the Bill, unless stated otherwise, commence on
the day on which the Act receives the Royal Assent.
Item 10(1) provides that an amendment made by Item 1 (re paragraph 78(a)),
will apply to a notice published in the Gazette on or after the day the
item commences.
An amendment made by Item 4 (subsection 82(4)), will apply to a
determination made by the Minister on or after the day the item commences:
refer Item 10(2)).
Item 10(3)(a) provides that the amendments made by Item 7 (coexistence of
class licences and spectrum licences) will apply in relation to spectrum in
which a spectrum licence is not in force on the day the item commences.
Item 10(3)(b) provides that the amendments made by Item 7 apply in respect
of spectrum for which a spectrum licence is in force on the day the item
commences-to the issue of a class licence after the day the spectrum
licence expires; or on or after the day the spectrum licence is re-issued.
The main intent of Item 10(3)(b) is to make clear that new coexistence
arrangements under new section 138 apply prospectively, that is to new or
re-issued spectrum licences and new and revised class licences. In effect,
for spectrum licences in force on the day the Bill is enacted and until the
expiry/re-issuance of the licence, the new section 138 would have no
operation. This will mean that the provision preventing class licences
under section 138 (prior to its amendment) would continue to apply to it.
Item 10(2) provides that the amendment made by Item 9 applies to a
ministerial direction made when the item commences, being the day after the
Act receives Royal Assent.