Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2004-2005
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TELECOMMUNICATIONS (CARRIER LICENCE CHARGES) AMENDMENT
(INDUSTRY PLANS AND CONSUMER CODES) BILL 2005
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for
Communications, Information Technology and the Arts,
Senator the Hon. Helen Coonan)
1
TELECOMMUNICATIONS (CARRIER LICENCE CHARGES)
AMENDMENT (INDUSTRY PLANS AND CONSUMER CODES) BILL 2005
OUTLINE
The Telecommunications (Carrier Licence Charges) Amendment (Industry Plans and
Consumer Codes) Bill 2005 (the Bill) would amend the Telecommunications (Carrier
Licence Charges) Act 1997 (the Carrier Licence Charges Act) and the
Telecommunications (Carrier Licence Charges) Amendment Act 1998.
The amendments contained in the Bill, in connection with the proposed amendments
contained in Schedule 3 to the Telecommunications Legislation Amendment (Future
Proofing and Other Measures) Bill 2005 (the Future Proofing Bill), would allow the
total amount of annual charges that are imposed on carrier licences to include an
additional amount, which would provide for industry bodies and associations that
develop consumer-related industry codes to be reimbursed by the Australian
Communications and Media Authority (ACMA) for their costs in developing those
codes. As a result of the changes made to the Carrier Licence Charges Act by this Bill,
the Commonwealth would be able to recoup, through the charges imposed on carrier
licences the amount that the ACMA would be required to pay to industry bodies and
associations for the development of consumer-related industry codes.
The Bill also contains amendments that are consequential to the proposed amendments
in Schedule 1 to the Telecommunications Legislation Amendment (Competition and
Consumer Issues) Bill 2005, which would remove the requirement for carriers to have
a current industry development plan.
This Bill would also make minor changes to the Carrier Licence Charges Act to reflect
the operation of the Legislative Instruments Act 2003 and would correct an error in an
amendment to the Carrier Licence Charges Act that was contained in the
Telecommunications (Carrier Licence Charges) Amendment Act 1998.
2
FINANCIAL IMPACT STATEMENT
This Bill would amend the Carrier Licence Charges Act to increase the maximum
amount of the charges that may be imposed on carrier licences under that Act. The
Future Proofing Bill would make amendments to the Telecommunications Act 1997
which would provide that industry bodies and associations that develop consumer-
related industry codes can be reimbursed by the ACMA for their costs in developing
those codes.
Although the proposed amendment in item 3 of Schedule 1 to the Bill would result in
an increase in Commonwealth revenue, the amount of additional revenue raised in a
financial year would be directly referrable to the total amount of costs reimbursed to
industry bodies and associations by the ACMA during the previous financial year. For
this reason, the introduction of a scheme to reimburse industry bodies for their costs in
developing consumer-related industry codes (as implemented by this Bill and the
Future Proofing Bill) is not expected to have a financial impact on Commonwealth
revenue or expenditure.
REGULATION IMPACT STATEMENT
PROBLEM IDENTIFICATION
Increasing costs of Consumer Code development
In recent years, increased expectations for the timely and effective development of
consumer-related industry codes of practice under the Government's self-regulatory
framework have translated to increased costs to industry self-regulatory bodies. This
problem is compounded by the fact that the necessary funding to pay for those rising
costs has not increased proportionately.
The Government has acknowledged the importance of consumer participation in the
telecommunications sector, and stressed the importance of effective self-regulation in
this sector. Consumer participation is an important feature of effective self-regulation.
The increasing costs of consumer participation in various self-regulatory bodies, such
as the telecommunications industry's peak self-regulatory body, the Australian
Communications Industry Forum (ACIF), combined with increased expectations for
timely and effective code development, have resulted in difficulties with maintaining
effective and efficient funding of the telecommunications self-regulatory framework.
For example, the recently completed Consumer Contracts code has set a new
benchmark in what is considered to be an appropriate format for code development,
both in the context of code development processes as well as the consideration and
consultation of relevant policy issues. While the Consumer Contracts code has been
recognised by both industry and consumer groups as having been developed with an
appropriate balance of consumers' and providers' interests, and within an appropriate
timeframe, the funding required to achieve such `best practice' was significant.
3
Another important consideration is the different funding arrangements that exist for the
development of various consumer protection instruments, particularly those that are
legislated as opposed to those provided via the self-regulatory framework. For
example, the costs of developing regulations made by the Australian Communications
and Media Authority (ACMA) are recoverable from carrier licence charges, however
the same arrangements do not currently apply to instruments developed through the
self-regulatory process. In effect, although the ultimate outcome for consumers is the
same, the funding framework to achieve those outcomes differs.
Under existing arrangements, the financial costs of supporting code development are
borne by the relevant self-regulatory body. The sole income stream of many of those
bodies is membership fees. Given that membership of self-regulatory bodies is
voluntary, the resulting inequitable financing of code development - due to the fact
that while members are contributing to those costs, non-members nevertheless also
reap the benefits of industry self-regulation - is making it increasingly difficult to
support those costs. This could potentially translate into a disincentive to self-
regulation, particularly in the context of initiating code development.
Further, taking into account the changing nature and far wider scope of the industry
since industry self-regulation was first provided for and promoted in the
Telecommunications Act 1997, Government inaction could jeopardise the ability of
industry self-regulatory bodies to continue to develop timely and effective codes and
therefore the credibility and relevance of those bodies.
Market failure of voluntary funding arrangements
Self-regulatory bodies have been established in response to the Government's policy to
promote self-regulation in the telecommunications sector. The funding arrangements
put in place for those bodies were mainly membership funding, and for many self-
regulatory bodies this remains their sole income stream.
Membership fees for the major self-regulatory bodies, particularly in the
telecommunications sector, are generally based on a sliding scale according to the
bodies' telecommunications revenue per annum. For example, in ACIF, carriers pay
according to a sliding scale dividing their eligible revenue into brackets (> $10 billion,
>$3 billion, >$1 billion, >$400 million, >$200 million, and <$200 million); carriage and
content service providers (CSPs) are charged at a lesser rate, but according to the
same revenue classification; and associations (usually not-for-profit bodies) pay flat
fees, with a maximum of $15,000 for industry groups and $2,000 for consumer
groups.
Because membership of self-regulatory bodies is generally voluntary, a large
proportion of industry does not contribute to the bodies either financially or by way of
labour, but nevertheless reap the benefits of industry self-regulation. Of the
approximately 150 carrier licences issued in Australia, only 15 carriers are members of
ACIF. Approximately ten carriers meet most of ACIF's costs and contribute the bulk
of resources required for ACIF's work. The remainder of resources is provided by
some eight CSPs, seven industry associations, four consumer associations and eight
other bodies.
4
Relying on the market in conjunction with the general application of existing laws will
not solve the funding problem, because there are no commercial incentives under the
existing framework for currently non-contributing industry stakeholders to financially
support and share in the costs of industry self-regulation.
Further, relying on the `goodwill' of stakeholders to voluntarily contribute provides
insufficient certainty in terms of ensuring that funding for necessary activities is
commensurate with increasing stakeholder expectations for timely and effective codes.
OBJECTIVE
One objective is to establish a funding arrangement for consumer-related codes of
practice that promotes industry self-regulation to the maximum practicable extent, in
accordance with section 4 of the Telecommunications Act 1997.
A second objective is to achieve adequate funding for the development of consumer-
related codes, in recognition of the desirability of a sustained increase in the level of
consumer participation in code development.
Third, the funding arrangements for consumer-related codes should be equitable, that
is, contributions should be distributed among industry participants in accordance with
the benefits and costs.
REGULATORY OPTIONS
The following options were considered for promoting the above objectives:
1. Reduction of carrier licence charges for members of self-regulatory bodies.
2. Government subsidy of membership fees to self-regulatory bodies, and legislated
membership obligation .
3. Cost recovery for the development of consumer-related codes via carrier licence
charges.
1. Reduction of carrier licence charges for members of industry self-
regulatory bodies
Carrier licence charges imposed on carriers could be reduced by the amount paid by
the carriers to specified industry self-regulatory bodies in membership fees. To the
extent that carriers contribute to the costs of self-regulatory bodies through
membership fees, this would reduce their total contribution and provide a commercial
incentive for carriers to participate in those bodies.
2. Government subsidy of membership fees to self-regulatory bodies and
legislated membership obligation
Membership subsidies would provide a commercial incentive for industry stakeholders
to take up membership of relevant self-regulatory bodies. The Government could
subsidise membership fees for carriers and carriage service providers (CSPs) to
5
industry self-regulatory bodies on a pro-rata basis according to the existing fee
structures of those bodies.
However, on the basis that such an arrangement would result in greater subsidies in
dollar terms for larger carriers and CSPs, a sub-option could alternatively be for
financial support to be provided only to carriers with revenue below a specified
amount or to those that take up membership of a specified self-regulatory body within
a specified period.
Given that it would be difficult to justify a Government subsidy without at the same
time requiring all carriers and CSPs to be members of the relevant self-regulatory
bodies, implementation of this option would entail legislating requirements for
compulsory membership of those bodies as for the Telecommunications Industry
Ombudsman (TIO) scheme in the Telecommunications (Consumer Protection and
Service Standards) Act 1999.
3. Cost recovery for the development of Consumer Codes and Guidelines via
carrier licence charges
The costs of developing consumer-related codes (but not codes dealing with
operational or technical issues) could be recovered from carriers in the following
financial year via carrier licence charges. In order to enable payments to be made
within a reasonable timeframe, ACMA could be given a standing appropriation for the
purposes of reimbursing industry bodies for the costs of developing consumer-related
codes, with the relevant amount being drawn from consolidated revenue and then
recovered from carriers in the following financial year via carrier licence charges. This
option would involve amendments to the Telecommunications (Carrier Licence
Charges) Act 1997 and the Telecommunications Act 1997.
These amendments would:
allow, but not require, an industry body or association intending to develop a
consumer-related code to seek reimbursement of attributable costs through carrier
licence charges;
require the industry body to provide an independently audited statement of costs;
require ACMA, should it find the statement to be adequate, to pay to the relevant
body or association within 30 days the costs of developing the consumer-related
code; and
fund only consumer-related codes that are submitted to ACMA for registration.
Reimbursement would not be available where the code is not deemed by ACMA to be
a consumer-related code, where costs claimed are determined to be non-refundable by
ACMA or are excessive, or the consumer-related code is not submitted for registration
upon completion.
Contributions based on carrier eligible revenue are a clearly well established means of
recovering costs, as evidenced by the Universal Service Obligation (USO). The
recovery of the telecommunications regulatory costs of ACMA and the Australian
Competition and Consumer Commission (ACCC) via eligible revenue-based carrier
licence charges also provides a practical precedent for this manner of cost recovery.
6
IMPACT ANALYSIS
1. Reduction of carrier licence charges for members of industry self-
regulatory bodies
The advantages of this option are that it would encourage carrier membership of self-
regulatory bodies (but not CSP or other membership) and more equitably spread the
costs of those bodies among industry participants.
The disadvantages are that:
non-carrier membership of self-regulatory bodies would be discouraged;
it would effectively anoint those self-regulatory bodies as the only official industry
bodies responsible for industry self-regulation, technical standards and other
activities;
participation by non-carriers in self-regulatory activities may be reduced; and
the cost of the `discount' in carrier licence charges would need to be subsidised,
either by the Government or redistributed among non-member carriers.
Likely impacts on relevant groups are as follows:
Government. If loss in revenue due to the carrier licence charge `discount' is to be
absorbed by the Government, this would result in a financial cost to the Government.
Telecommunications carriers. To the extent that carriers contribute to self-regulatory
bodies' costs through membership fees, this option would reduce their total
contribution and provide a commercial incentive for carriers to participate in such
bodies. However, this option could potentially be viewed as imposing a financial
penalty on non-member carriers, particularly if the costs of the carrier licence charge
`discount' were to be redistributed among non-member carriers.
CSPs. The amendments would apply only to holders of carrier licences. There should
be no financial impact on a CSP unless it is also a carrier licence holder.
Self-regulatory bodies. Potential net financial gain due to increased carrier
membership. However, membership fees may require significant restructuring.
2. Government subsidy of membership fees to self-regulatory bodies and
legislated membership obligation
Adoption of the membership requirements of the TIO (which is a complaints handling
body) is not justifiable in the context of most self-regulatory bodies. While compulsory
membership of the TIO is appropriate, as it is the means by which coverage of all
services provided to residential and small business consumers is achieved, this is not
the case with self-regulatory bodies.
While this option may help to achieve broader membership of self-regulatory bodies
and increase the available funding, there are a number of disadvantages, namely that:
7
it would effectively anoint the respective self-regulatory bodies as the only official
industry bodies responsible for industry self-regulation, technical standards and
other activities; and
there do not appear to be precedents for requiring membership of such an industry
body, in Australia or overseas.
Further, given the absence of licensing requirements (other than carrier licences), there
are inherent difficulties in identifying which industry participants should be required to
join relevant self-regulatory bodies.
The sub-option identified in the previous section of providing financial support only to
carriers and CSPs with revenue below a specified amount or to those that take up
membership within a specified period, may also be criticised for unfairly assisting non-
members or smaller carriers and CSPs.
Likely impacts on relevant groups are as follows:
Government. The financial impact on Government would be dependent upon the level
of subsidy to be provided. There could be possible savings in regulatory costs if
membership of certain self-regulatory bodies were mandated.
Telecommunications carriers and CSPs. While membership fee subsidies would
provide a commercial incentive for industry stakeholders to participate in the relevant
self-regulatory bodies, there would be an increase in costs to industry, as all carriers
and CSPs would be required to contribute financially to the costs of relevant self-
regulatory bodies. Impacts are likely to be felt more acutely by current non-
contributing or non-member industry stakeholders.
Self-regulatory bodies. Potential positive net financial gain due to increased
membership. However, self-regulatory bodies may consider their autonomy and
independence to be reduced by Government support.
3. Cost recovery for the development of consumer-related codes via carrier
licence charges
A key advantage of this option is that it may be seen as resulting in a more equitable
distribution of costs of self-regulation.
In addition, this option also has the advantages that:
consumer protections are financed the same way, regardless of whether they arise
from the actions of a self-regulatory body or ACMA;
consumer-related codes would be financed in the same way regardless of the
responsible self-regulatory body;
compared with option 2, it is likely to provide greater certainty of funding for self-
regulatory bodies; and
as carriers who contribute financially to self-regulatory bodies via carrier licence
charges may be encouraged to join, it could encourage greater membership of, and
participation in, self-regulatory processes than the other options.
8
It is not possible to make a reliable estimate of the annual cost of developing
consumer-related codes. The number of consumer-related codes developed is likely to
vary from year to year. Further, the resources devoted to these codes will vary
according to the importance of the code, and the complexity and scope of the issues
addressed.
Under this option, most of the cost of consumer-related codes would be recovered
from carriers through carrier licence charges. The costs of consumer-related codes not
submitted to ACMA for registration would not be recoverable, however the policy of
self-regulatory bodies at present is to submit all consumer-related codes to ACMA for
registration.
Likely impacts on relevant groups are as follows:
Government. Some administrative costs would be incurred by ACMA as it would be
responsible for administering the scheme. ACMA would have a role in assessing
which codes are consumer-related codes, certifying that the costs claimed by self-
regulatory bodies were reasonable, and setting and collecting charges from carriers in
the following financial year.
Telecommunications carriers. On the basis of calculations derived from ACIF's
2004/05 revenue and expenditure figures and the assumption that approximately one
third of current membership fees fund consumer-related code development, the main
effect is likely to be a rebalancing of contributions among existing member carriers,
such that contributions would be more closely related to eligible revenue. While
carrier licence charges would increase due to the proposal, total membership fees for
self-regulatory bodies would be expected to decline. A small number of existing
carrier members of self-regulatory bodies would be expected to pay more under the
proposal, while others would pay less. The largest carriers, particularly Telstra and
Optus, are likely to incur additional costs under the proposal, while the remaining
member carriers are likely to experience a decrease in costs. Existing non-member
carriers will experience a minor increase in costs.
CSPs. The amendments would apply only to holders of carrier licences. There should
be no impact on a CSP unless it is also a carrier licence holder.
Self-regulatory bodies. It is likely that these bodies will experience a positive net
financial gain due to increased funding. Benefits would also include greater certainty
about funding prior to commencing code development.
CONSULTATION
Government Agencies
Comment was sought from ACMA concerning the recommended option as set out in
the Bill. ACMA's comments were as follows.
9
Making refund conditional on the development of codes that are registered by the
ACMA would increase the incentive for industry bodies to develop codes that meet
the objectives of the legislation.
ACMA does not have a clear understanding of Government expectations about a
range of matters, including the setting of auditing requirements and the
determination of costs that will not be refundable, making it difficult to assess the
practicality of the proposals. Making such assessments is potentially onerous and
resource intensive.
ACMA may not be particularly well-qualified to determine arm's-length costs.
It may provide greater clarity and certainty if ACMA were to specify categories of
refundable, rather than non-refundable, costs.
ACMA should be able to consider other factors, as well as those set out in new
section 136B, in determining whether to refuse an application for eligibility for
refund of costs.
Non-Government
On the basis of prior correspondence and meetings with key stakeholders on related
issues, views on this proposal are likely to be as follows:
Self-Regulatory bodies
ACIF has indicated that it would welcome greater certainty about likely costs of
code development and availability of funding prior to commencing code
development. This is also likely to be the case for other self-regulatory bodies.
ACIF has also recognised the need to identify and provide incentives for industry
to increase its participation in ACIF and be part of the self-regulatory process.
Telecommunications carriers and CSPs
While commercial incentives for membership of self-regulatory bodies would be
welcome, industry (particularly smaller carriers and CSPs) would not support any
moves that would require it to incur significant increases in expenditure.
Carriers that are not members of self-regulatory bodies would be critical of any
arrangements that favoured members over non-members.
Legislating for compulsory membership of a self-regulatory body is unlikely to be
supported.
Consumers
In their report `Consumer Driven Communications: Strategies for Better
Representation', consumer groups were highly critical of the current consumer
participation arrangements in ACIF.
While advocating greater consumer participation in self-regulatory activities,
consumer groups recognise that funding is required to assist in the realisation of
this objective.
Consumer groups are likely to welcome greater certainty about funding of
consumer-related codes prior to commencing code development.
CONCLUSION AND RECOMMENDED ACTION
10
As outlined in option 3, the Government proposes to implement a scheme enabling the
recovery of the costs of developing consumer-related codes from carriers in the
following financial year via carrier licence charges.
For the following reasons, Option 3 appears the best of the options identified:
It promotes self-regulation's objectives in a cost-effective and efficient manner,
consistent with the statement of regulatory policy articulated in the
Telecommunications Act 1997 that self-regulation in telecommunications be used
to the maximum practicable extent, and that public interest considerations be
addressed in a way that does not impose undue financial and administrative burdens
on industry participants.
It provides an equitable method of recovery of the costs occasioned by industry
players, despite difficulties in identifying which industry participants' contributions
should be collected (due to the absence of licensing requirements, other than
carrier licences).
It is a well established means of equitable cost recovery, as evidenced by the
eligible revenue based systems for the recovery of the telecommunications
regulatory costs of ACMA and the ACCC, and for financing the USO.
It is more equitable than the options that do not involve eligible revenue based
systems (for example, subsidisation of membership fees) in that it does not favour
either members or non-members of relevant self-regulatory bodies.
The other options, while meeting some of the objectives, may present potential
unintended side-effects that are inconsistent with Government policy or outweigh any
benefits.
IMPLEMENTATION AND REVIEW
It is proposed that the recommended option be implemented via legislative
amendments to the Telecommunications (Carrier Licence Charges) Act 1997 and the
Telecommunications Act 1997.
These amendments would:
allow, but not require, any body or association intending to develop a consumer-
related code to seek reimbursement of costs;
allow ACMA to reimburse costs from the consolidated revenue fund through a
standing appropriation, with subsequent recovery from industry through carrier
licence charges;
fund only consumer-related codes that are submitted to ACMA for registration,
and therefore likely to be enforceable; and
not make funding dependent on registration, as registration is not within the
control of the body or association.
The Department of Communications, Information Technology and the Arts will
continue to monitor the development and implementation of consumer-related codes
under the telecommunications self-regulatory framework, with a view to reviewing the
funding arrangements should the circumstances which led to their introduction change.
11
12
ABBREVIATIONS
The following abbreviations are used in this explanatory memorandum:
ACMA: Australian Communications and Media Authority
ACCC: Australian Competition and Consumer Commission
AIA: Acts Interpretation Act 1901
Bill: Telecommunications (Carrier Licence Charges)
Amendment (Industry Plans and Consumer Codes) Bill
2005
Carrier Licence Charges Act: Telecommunications (Carrier Licence Charges) Act
1997
Future Proofing Bill Telecommunications Legislation Amendment (Future
Proofing and Other Measures) Bill 2005
LIA Legislative Instruments Act 2003
Minister: Minister for Communications, Information Technology
and the Arts
Telecommunications Act: Telecommunications Act 1997
13
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides that the Bill, when enacted, may be cited as the Telecommunications
(Carrier Licence Charges) Amendment (Industry Plans and Consumer Codes) Act
2005.
Clause 2 - Commencement
Clause 2 of the Bill provides for the commencement of the Act.
Clauses 1 to 3 of the Bill would commence on Royal Assent and Schedule 1 to the Bill
would commence on the day after the day on which the Bill receives the Royal Assent.
Schedule 2 would commence immediately after the time specified in the
Telecommunications (Carrier Licence Charges) Amendment Act 1998 for the
commencement of item 2 of Schedule 1 to that Act. Item 2 of Schedule 1 to the
Telecommunications (Carrier Licence Charges) Amendment Act 1998 is specified to
commence on the day on which that Act received the Royal Assent (section 2 of the
Telecommunications (Carrier Licence Charges) Amendment Act 1998). That Act was
assented to on 30 June 1998. Schedule 2 would commence retrospectively because
the purpose of the amendment in Schedule 2 is to correct a minor drafting error in the
Telecommunications (Carrier Licence Charges) Amendment Act 1998 (see Schedule 2
to the Bill) and to remove any possible arguments about the effectiveness of the
amendment that was made by item 2 of Schedule 1 to the Telecommunications
(Carrier Licence Charges) Amendment Act 1998.
Clause 3 - Schedule(s)
Clause 3 provides that each Act that is specified in a Schedule to the Bill is amended or
repealed as set out in that Schedule and any other item in a Schedule has effect
according to its terms. There are two Schedules to the Bill. Schedule 1 would make
amendments to the Carrier Licence Charges Act and Schedule 2 would make an
amendment to the Telecommunications (Carrier Licence Charges) Amendment Act
1998.
Schedule 1 - Amendment of the Telecommunications
(Carrier Licence Charges Act) 1997
Item 1 - Subsection 9(2)
Part 2 of the Carrier Licence Charges Act deals with application charges.
Subsection 9(1) provides that the ACMA may make a determination as to the amount
of the charge imposed on an application for a carrier licence. Subsection 9(2) provides
that a determination made by the ACMA under subsection 9(1) is a disallowable
instrument for the purposes of section 46A of the AIA. Since 1 January 2005, the
effect of subparagraph 6(d)(i) of the Legislative Instruments Act 2003 is that
14
determinations made by the ACMA under subsection 9(1) are declared to be legislative
instruments for the purposes of that Act and have been subject to the requirements of
the LIA, including in relation to registration and disallowance. In order to reflect the
commencement of the LIA, Item 1 would repeal and replace subsection 9(2).
Proposed subsection 9(2) would provide that a determination made by the ACMA
under subsection 9(1) is a legislative instrument for the purposes of the LIA.
Item 2 - Subsection 14(2)
Part 3 of the Carrier Licence Charges Act deals with the annual charge imposed on
carrier licences. Subsection 14(1) provides that the amount of the annual charge
imposed on a carrier licence is the amount ascertained in a written determination by the
ACMA. Subsection 14(2) provides that a determination made by the ACMA under
subsection 14(1) is a disallowable instrument for the purposes of section 46A of the
AIA. Similarly to the proposed amendment in item 1, item 2 would repeal and replace
subsection 14(2) in order to reflect the commencement of the LIA. Proposed
subsection 14(2) would provide that a determination made by the ACMA under
subsection 14(1) is a legislative instrument for the purposes of the LIA.
Item 3 - After paragraph 15(1)(c)
Item 3 would insert new paragraph (ca) into subsection 15(1) in Part 3 of the Carrier
Licence Charges Act.
Subsection 15(1) provides that the total amount of annual charges that are imposed on
carrier licences in force at the beginning of a financial year must not exceed the sum of
the amounts that are specified in paragraphs (a) through (e). (However, item 5 would
repeal paragraph (e) as a result of proposed amendments contained in Schedule 1 to
the Telecommunications Legislation Amendment (Competition and Consumer Issues)
Bill 2005.)
The effect of new proposed paragraph 15(1)(ca) would be that the total amount of
annual charges imposed on carrier licences that are in force at the beginning of a
financial year could include the amount determined by the ACMA in a written
instrument to be the sum of the amounts paid by the ACMA under proposed
section 136C of the Telecommunications Act during the previous financial year.
Proposed section 136C would be in a part of new Division 6A that would be inserted
into Part 6 of the Telecommunications Act by the Future Proofing Bill (see Item 1 of
Schedule 3 to that Bill). Proposed section 136C would provide that the ACMA must
reimburse an industry body or association for its costs in developing a consumer-
related industry code, provided that certain conditions are met. The proposed section
would also create a standing appropriation to the Consolidated Revenue Fund to allow
the ACMA to pay the relevant industry bodies or associations the amounts that they
are entitled to be reimbursed under new Division 6A.
The inclusion of proposed paragraph 15(1)(ca) would mean that the total of the
amounts that would be paid to industry bodies or associations under new Division 6A
by the ACMA can be recouped by the Commonwealth through carrier licence charges.
15
Item 4 - Paragraph 15(1)(d)
Item 4 would make a minor consequential amendment to paragraph 15(1)(d) to reflect
the repeal of paragraph 15(1)(e) (see item 5).
Item 5 - Paragraph 15(1)(e)
Section 15 of the Carrier Licence Charges Act specifies the limit on the total charges
that may be imposed on carrier licences in force at the beginning of the financial year.
Paragraph 15(1)(e) relates to the proportion of the Commonwealth's costs for the
immediately preceding financial year that is attributable to the administration of Part 2
of Schedule 1 to the Telecommunications Act. These costs are determined by the
Industry Minister (defined to mean the Minister for Communications, Information
Technology and the Arts or the Minister for the Arts and Sport, see item 9) by written
instrument and form a component of the sum that the amount of charges imposed on
carrier licences must not exceed.
Item 5 repeals paragraph 15(1)(e). The proposed amendment is consequential to the
proposed repeal of Part 2 of Schedule 1 to the Telecommunications Act 1997 by
Item 1 of Schedule 1 to the Telecommunications Legislation Amendment (Competition
and Consumer Issues) Bill 2005.
Item 6 - Subsections 15(2) and (3)
Item 6 would repeal subsections 15(2) and (3) of the Carrier Licence Charges Act.
Subsection 15(3) provides that an instrument made by the ACMA is a disallowable
instrument for the purposes of section 46A of the AIA. Similarly to the proposed
amendments in Items 1 and 2, item 6 would repeal subsection 15(3) and replace it with
new subsection 15(2). In order to reflect the commencement of the LIA, proposed
subsection 15(2) would provide that instruments made under subsection 15(1) are
legislative instruments for the purposes of the LIA.
Subsection 15(2) provides that an instrument that the ACMA makes under subsection
15(1) must be notified in the Gazette before the day on which the charges referred to in
that subsection became due for payment.
Section 56 of the LIA deals with the relationship of gazettal requirements in relation to
legislative instruments in their enabling legislation and to the registration requirements
under the LIA. Subsection 56(1) provides that where legislation that was in force
before the commencement of the LIA provides for a legislative instrument to be made
and requires the text of the instrument to be published in the Gazette, the requirement
for publication in the Gazette is taken to be satisfied by registration of the instrument
on the Federal Register of Legislative Instruments. Subsection 56(2) provides that,
where legislation as enacted or amended after the commencement of the LIA provides
for a legislative instrument to be made and requires that instrument to be published in
the Gazette, the requirement for publication in the Gazette applies in addition to the
requirement for registration of the instrument on the Federal Register of Legislative
Instruments.
16
As the Bill would amend section 15 to provide that an instrument made by the ACMA
under subsection 15(1) is a legislative instrument for the purposes of the LIA, if
subsection 15(2) were to remain in the Carrier Licence Charges, the effect of
subsection 56(2) of the LIA would be that the ACMA would have to publish
determinations it makes under subsection 15(1) in the Gazette in addition to registering
them on the Federal Register of Legislative Instruments. This would be an
unnecessary administrative burden on the ACMA. Item 6 would therefore repeal
subsection 15(2), to ensure that the ACMA is not obliged to publish an instrument it
makes under subsection 15(1) in the Gazette in addition to registering the instrument.
Item 7 - Subsection 15(4) (paragraph (b) of the definition of cost)
Item 7 makes a minor consequential amendment to paragraph (b) of the definition of
cost to reflect the repeal of paragraph (c) of that definition (see item 8).
Item 8 - Subsection 15(4) (paragraph (c) of the definition of cost)
Subsection 15(4) contains definitions of terms used in section 15. Paragraph (c) of the
definition of `cost' in subsection 15(4) provides the meaning of cost in relation to the
Commonwealth for the purposes of section 15. This is because paragraph 15(1)(e)
requires the amount determined by the Industry Minister(defined to mean the Minister
for Communications, Information Technology and the Arts or the Minister for the Arts
and Sport, see item 9) to be the Commonwealth's costs of administering Part 2 of
Schedule 1 to the Telecommunications Act (dealing with IDP requirements) for a
financial year to be included in the amount which operates as a cap on the amount of
charges that may be imposed on carrier licences for the following year.
Paragraph (c) of the definition of `cost' was inserted by the Telecommunications
(Carrier Licence Charges) Amendment Act 1998, although the amendment made by
that Act was misdescribed. This error is retrospectively corrected by Item 1 of
Schedule 2 to this Bill.
As a consequence of the amendment in item 5 to repeal paragraph 15(1)(e), item 8
would repeal paragraph (c) of the definition of `cost'.
Item 9 - Subsection 15(4) (definition of Industry Minister)
Subsection 15(4) contains definitions of terms used in section 15. For the purposes of
section 15, `Industry Minister' is defined in subsection 15(4) to mean the Minister for
Industry, Science and Tourism. However, as a result of the Acts Interpretation
(Substituted References) Order 1998 and the Acts Interpretation (Substituted
References - Section 19B) Amendment Order 2001, `Industry Minister' in subsection
15(4) means the Minister for Communications, Information Technology and the Arts
or the Minister for the Arts and Sport.
Item 9 repeals the definition of `Industry Minister'. The proposed amendment is
consequential to the proposed repeal of paragraph 15(1)(e) (Item 5). No other
reference to `Industry Minister' is made in the Carrier Licence Charges Act.
17
Item 10 - Application of amendments
Item 10 deals with the application of the proposed amendments in Schedule 1. The
amendments will apply in relation to charges imposed on carrier licences in force at the
beginning of the first financial year that ends after the commencement of Item 10 if the
immediately preceding year is a `zero-cost year'. The amendments will also apply to
subsequent financial years. Subclause 10(1) defines a `zero-cost financial year' as a
financial year in which the Commonwealth did not incur any costs that were
attributable to the administration of Part 2 of Schedule 1 to the Telecommunications
Act 1997.
The effect of Item 10 would be that paragraph 15(1)(e) will continue to apply
(allowing the cost of the administration of Part 2 of Schedule 1 to the
Telecommunications Act to be included in the ACMA's assessment of the charges on
carrier licences) until the end of a zero-cost financial year (ie. until a financial year has
passed in which the Commonwealth did not incur any costs attributable to the
administration of the Part 2 of Schedule 1 to the Telecommunications Act).
Schedule 2--Amendment of the Telecommunications
(Carrier Licence Charges) Amendment Act 1998
Item 1 - Item 2 of Schedule 1 (heading)
Item 1 would amend the heading of item 2 of Schedule 1 to the Telecommunications
(Carrier Licence Charges) Amendment Act 1998 which referred to the definition of
`costs' in section 15 of the Carrier Licence Charges Act in order to insert a
paragraph (c) into that definition that provided for a definition of that term in relation
to the Commonwealth. However, section 15 of the Carrier Licence Charges Act
contains a definition of `cost', not `costs'. This proposed amendment in the
Telecommunications (Carrier Licence Charges) Amendment Act 1998 was therefore
misdescribed.
The amendment in this item would correct this error, with retrospective application, so
that the amendment would be taken to have commenced immediately after the
Telecommunications (Carrier Licence Charges) Amendment Act 1998 commenced on
30 June 1998. The proposed amendment is to remove any possible arguments about
the effectiveness of the amendment that was made by item 2 of Schedule 1 to the
Telecommunications (Carrier Licence Charges) Amendment Act 1998.
(Paragraph (c) of the definition of `cost' in the Carrier Licence Charges Act is repealed
by item 8 of Schedule 1 to this Bill, as a consequence of the amendments contained in
Schedule 1 to the Telecommunications Legislation Amendment (Competition and
Consumer Issues) Bill 2005 which would remove the requirement for carriers to have a
current industry development plan. This amendment takes effect from the day after
Royal Assent.)