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1996
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
TELECOMMUNICATIONS
(CARRIER LICENCE CHARGES) BILL 1996
EXPLANATORY
MEMORANDUM
(Circulated
by authority of Senator the Hon. Richard Alston, Minister for Communications and
the Arts)
79583 Cat. No. 96 5541 7 ISBN 0644 480149
TELECOMMUNICATIONS (CARRIER LICENCE
CHARGES) BILL 1996
OUTLINE
The Telecommunications (Carrier Licence Charges) Bill 1996 (‘the
Bill’) provides for the imposition of application charges and annual
charges in relation to carrier licences under the proposed Telecommunications
Act 1996.
A person will be able to apply for a carrier licence so
long as the person is a corporation to which paragraph 51(xx) of the
Constitution applies (basically an Australian corporation with substantial
trading or financial activities or a foreign corporation), a partnership where
each of the partners is a constitutional corporation or a public body. Existing
carriers under the Telecommunications Act 1991 will be deemed to have
been granted a carrier licence under the proposed Telecommunications Act
1996 on 1 July 1997. AUSTEL will be able to receive applications for
carrier licences from 5 June 1997 on behalf of the ACA (which comes into
existence on 1 July 1997). Provisions allowing the granting of licences,
however, will not come into effect until 1 July 1997.
An application for
a carrier licence will be required to be accompanied by the charge imposed on
the application by Part 2 of Bill. Part 2 provides for the amount of this
charge to be ascertained in accordance with a disallowable instrument determined
by the ACA. This amount will not be able to exceed $100,000.
Part 3 of
the Bill provides for the imposition, from 1 July 1998, of an annual charge on a
carrier licence that is in force at the beginning of a financial year. The
amount of the annual charge will be ascertained in accordance with a
disallowable instrument determined by the ACA. The Bill provides for a limit on
the total amount of this charge on carriers having regard to the amounts
attributable to the ACA’s and ACCC’s telecommunications functions
and powers for the immediately preceding financial year and the proportion of
the Commonwealth’s contribution to the budget of the International
Telecommunication Union for the calendar year that is to be recovered from
carriers.
Part 4 of the Bill will empower AUSTEL, before 1 July 1997, to
make a determination under Part 2 setting out how the amount of application
charge for a carrier licence is to be ascertained. Such a determination will
have effect, on and after 1 July 1997, as if it had been made by the
ACA.
The annual charge for 1 July 1997 will be dealt with by transitional
arrangements under the Telecommunications (Carrier Licence Fees) Termination
Bill 1996.
FINANCIAL IMPACT
The Bill provides for the imposition of application charges of up to $100,000 for new carrier licences. Accordingly, there should be some addition to Commonwealth revenue from this measure. The amount of the addition will depend upon the number of applications received each year and the precise amount at which the charge is set within the overall limit. With effect from 1 July 1998, the Bill will also enable ACA and ACCC expenditures incurred in administering telecommunications-specific regulation to be recovered from carriers via annual licence charges. Forward estimates for resource needs for the ACA and the ACCC for 1998-99 and subsequent financial years will be settled in the context of the 1997-98 Budget.
NOTES ON CLAUSES
Part 1––Introduction
Clause 1 – Short title
Clause 1 provides for the
citation of the Telecommunications (Carrier Licence Charges) Act
1996.
Clause 2 – Commencement
Clause 2 provides
for the Bill, when enacted, to commence on the day on which it receives the
Royal Assent. If this day is later than 5 June 1997, the proposed Act will be
taken to have commenced on 5 June 1997. (As a result of Division 4 of Part 3 of
the proposed Telecommunications (Transitional Provisions and Consequential
Amendments) Act 1996, AUSTEL will be able to receive applications for
carrier licences from 5 June 1997 until the end of 30 June 1997 on behalf of the
ACA (which comes into existence on 1 July 1997). Provisions allowing the
granting of licences, however, will not come into effect until 1 July
1997.)
Clause 3 – Act to bind Crown
Clause 3 provides
that the Bill, when enacted, will bind the Crown in all its
rights.
Clause 4 – Extension to eligible
Territories
Clause 4 provides that the Bill, when enacted, will
extend to each eligible Territory. The term ‘eligible Territory’ is
defined in clause 5 to have the same meaning as in the proposed
Telecommunications Act 1996 ie. the Indian Ocean Territories of Christmas
Island and the Cocos (Keeling) Islands and any other external Territory
prescribed in the Telecommunications Regulations for the purposes of proposed s.
10 of the Telecommunications Act 1996 (which enables that Act to be
extended to additional external Territories).
Clause 5 –
Interpretation
Clause 5 sets out the definitions of key terms used in
the Bill.
Part 2––Application charge
Clause 6 – Definition of charge
Clause 6
defines ‘charge’, for the purposes of Part 2, to mean the
application charge imposed by this Part.
Clause 7 – Imposition
of charge
Clause 7 provides for charge to be imposed on an
application for a carrier licence.
Clause 8 – By whom charge
payable
Clause 8 provides that charge imposed on an application for a
carrier licence is payable by the applicant.
A person will be able to
apply for a carrier licence so long as the person is a corporation to which
paragraph 51(xx) of the Constitution applies (basically an Australian
corporation with substantial trading or financial activities or a foreign
corporation), a partnership where each of the partners is a constitutional
corporation or a public body (see proposed s. 52 of the Telecommunications
Act 1996). Existing carriers under the Telecommunications Act 1991
will be deemed to have been granted a carrier licence under the proposed
Telecommunications Act 1996 on 1 July 1997. AUSTEL will be able to
receive applications for carrier licences from 5 June 1997 on behalf of the ACA
(which comes into existence on 1 July 1997). Provisions allowing the granting
of licences, however, will not come into effect until 1 July 1997 (see Division
4 of Part 3 of the proposed Telecommunications (Transitional Provisions and
Consequential Amendments) Act 1996).
Proposed s. 54 of the
Telecommunications Act 1996 provides that an application for a carrier
licence must be accompanied by the charge imposed on the application by Part 2
of the proposed Telecommunications (Carrier Licence Charges) Act 1996.
Part 2 provides for the amount of this charge to be ascertained in accordance
with a disallowable instrument determined by the ACA (see clause 9 of the Bill).
This amount will not be able to exceed $100,000 (see clause 10 of the
Bill).
Proposed s. 72 of the Telecommunications Act 1996 provides
for the collection of the application charge imposed by Part 2 of the proposed
Telecommunications (Carrier Licence Charges) Act 1996, the imposition of
late payment penalties and the remission of penalties in relation to such
application charges.
Clause 9 – Amount of
charge
Clause 9 provides for the amount of charge imposed on an
application for a carrier licence to be the amount ascertained in accordance
with a written disallowable determination made by the ACA. Under Division 3 of
Part 3 of the proposed Telecommunications Act 1996, the ACA will have the
function of granting carrier licences. Under paragraph 6(f) of the proposed
Australian Communications Authority Act 1996, the ACA will have the
function of monitoring all significant matters relating to the licensing of
carriers. Given the ACA’s responsibility for, and administration of, the
carrier licensing function, it will be best placed to determine the appropriate
charge to be imposed on an application for a carrier licence.
As a result
of proposed ss. 6 and 12 of the Australian Communications Authority Act
1996, the Minister will be able to give the ACA written directions in
relation to the setting of this charge.
Part 4 of the Bill will empower
AUSTEL, before 1 July 1997, to make a determination under Part 2 setting out how
the amount of application charge for a carrier licence is to be ascertained.
Such a determination will have effect, on and after 1 July 1997, as if it had
been made by the ACA.
Clause 10 – Maximum charge
The
maximum amount of charge imposed on an application for a carrier licence will
not be able to exceed $100,000. Significant rights and obligations attach to a
carrier licence, so the maximum charge can be set at a level which discourages
frivolous applications.
Part 3––Annual charge
Clause 11 – Definition of charge
Clause 11
defines ‘charge’, for the purposes of Part 3, to mean the annual
carrier licence charge imposed by this Part.
Clause 12 –
Imposition of charge
With respect to the 1998/99 financial year, and
subsequent financial years, clause 12 of the Bill will impose the annual carrier
licence charge on a carrier licence that is in force at the beginning of a
financial year beginning on or after 1 July 1998. (As a result of the proposed
Telecommunications (Carrier Licence Fees) Termination Act 1996, existing
carriers will be required to pay an annual licence fee on 1 July 1997 of an
amount determined in accordance with the Telecommunications (Carrier Licence
Fees) Regulations as in force at that date.)
Clause 13 – By whom
charge payable
The annual charge imposed on a carrier licence under
Part 3 of the Bill will be payable by the holder of the licence (clause
13).
Proposed s. 72 of the Telecommunications Act 1996 provides
for the collection of the annual carrier licence charge imposed by Part 3 of the
proposed Telecommunications (Carrier Licence Charges) Act 1996, the
imposition of late payment penalties and the remission of penalties in relation
to such annual charges.
Clause 14 – Amount of
charge
The amount of annual charge imposed on a carrier licence will
be the amount ascertained in accordance with a written disallowable
determination made by the ACA (clause 14). Under Division 3 of Part 3 of the
proposed Telecommunications Act 1996, the ACA will have the function of
granting carrier licences. Under paragraph 6(f) of the proposed Australian
Communications Authority Act 1996, the ACA will have the function of
monitoring all significant matters relating to the licensing of carriers. Given
the ACA’s responsibility for, and administration of, the carrier licensing
function, it will be best placed to determine the appropriate annual charge to
be imposed on a carrier licence.
As a result of proposed ss. 6 and 12 of
the Australian Communications Authority Act 1996, the Minister will be
able to give the ACA written directions in relation to the setting of this
charge.
Clause 15 – Limit on total of charges
Clause
15 provides for a limit on the total amount of the annual charges that are
imposed on carrier licences in force at the beginning of a financial
year.
The total will not be able to exceed the sum of:
• the
amount determined by the ACA, by disallowable instrument, to be the proportion
of its costs for the immediately preceding financial year that is attributable
to the ACA’s telecommunications functions and powers;
• the
amount determined by the ACCC, by disallowable instrument, to be the proportion
of its costs for the immediately preceding financial year that is attributable
to the ACCC’s telecommunications functions and powers;
and
• the amount determined by the ACA, by disallowable instrument,
to be the proportion of the Commonwealth’s contribution to the budget of
the International Telecommunication Union for the calendar year in which the
beginning of the financial year occurs that is to be recovered from carriers
(clauses 15(1) and (3)).
The references in clause 15 to the ACA’s
costs and the ACCC’s costs will be the amount that, in accordance with
accrual-based accounting principles, is treated as a cost of the ACA or as a
cost of the ACCC (clause 15(4)). An accrual basis of accounting recognises the
effects of transactions and other events in the period to which they properly
relate regardless of the timing of associated cash receipts or payments. The
accrual approach will avoid imposing inappropriate and unreasonably large swings
in cash appropriations on carriers within a short period. In addition, under an
accrual approach the ACA and ACCC will be able to recover the costs of accruing
employee entitlements when they are earned rather than leaving them until some
future date when the leave is actually taken. The use of accrual costs is the
basis on which the publicly available and detailed published financial
statements on Commonwealth Budget funded agencies are prepared.
The
references in clause 15 to the ACA’s telecommunications functions and to
the ACA’s telecommunications powers will include functions and powers
conferred on the ACA by or under the proposed Telecommunications Act
1996, the proposed Telecommunications (Carrier Licence Charges) Act
1996, the proposed Telecommunications (Numbering Charges) Act 1996
and Part XIC of the Trade Practices Act 1974 (dealing with the access
regime).
The reference in clause 15 to the ACCC’s
telecommunications functions and powers will cover functions and powers
conferred on the ACCC by or under the proposed Telecommunications Act
1996, the Telstra Corporation Act 1991 (as proposed to be amended),
Part XIB and Part XIC of the Trade Practices Act 1974 (dealing with
anti-competitive conduct and the access regime) and any other provision of the
Trade Practices Act in so far as that provision applies to a matter connected
with telecommunications.
The instruments made by the ACA and the ACCC
under clause 15(1) will be required to be notified in the Commonwealth Gazette
before the day on which the annual carrier licence charges become due for
payment (clause 15(2)).
Part
4––Transitional
Clause 16 – Exercise of powers by AUSTEL before 1 July
1997––application charge
Among other things, Part 2 of
the Bill provides that the amount of charge imposed on an application for a
carrier licence is the amount ascertained in accordance with a written
determination made by the ACA.
Clause 16 will allow AUSTEL to make the
determination under Part 2 before 1 July 1997. Anything that AUSTEL does under
Part 2 before 1 July 1997 will be taken to have effect, on and after 1 July
1997, as if it had been done by the ACA.