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2000
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF REPRESENTATIVES
TELECOMMUNICATIONS (CONSUMER PROTECTION AND SERVICE STANDARDS) AMENDMENT BILL (NO. 1) 2000
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator the Hon. Richard Alston, Minister for Communications, Information Technology and the Arts)
TELECOMMUNICATIONS (CONSUMER PROTECTION AND SERVICE STANDARDS) AMENDMENT BILL (NO. 1) 2000
OUTLINE
The Telecommunications (Consumer Protection and Service Standards)
Amendment Bill (No. 1) 2000 (the Bill) amends the universal service regime in
Part 2 of the Telecommunications (Consumer Protection and Service Standards)
Act 1999:
(a) to enhance industry certainty by enabling the Minister to determine a universal service provider’s net universal service cost (NUSC) in advance for 2000/01 and subsequent financial years;
(b) to support the proposed $150 million tender for untimed local calls in Telstra’s Extended Zones in remote Australia; and
(c) to provide greater flexibility in relation to the declaration of
universal service providers and digital data service providers.
In many
parts of Australia, the cost of supplying basic telephone services exceeds the
revenues earned from doing so. The services are thus loss-making and require
subsidisation. The obligation to supply these services is known as the
universal service obligation (USO). The USO requires universal services
providers to ensure that standard telephone services, payphones and prescribed
carriage services are reasonably accessible to all people in Australia on an
equitable basis, wherever they reside or carry on business.
The USO is
supplemented by a further obligation to ensure the availability of data services
operating at a specified minimum speed (around 64 kbps). This obligation is
known as the Digital Data Service Obligation (DDSO).
As an adjunct to
imposing the USO and DDSO on universal service providers, Part 2 of the
Telecommunications (Consumer Protection and Service Standards) Act 1999
also provides for the funding of the USO and DDSO. The industry levy used to
fund the USO and DDSO is enabled by the Telecommunications (Universal Service
Levy) Act 1997.
The Bill amends Part 2 of the Telecommunications
(Consumer Protection and Service Standards) Act 1999
to:
§ enable there to be more than one USP for a
single area at one time (items 1, 2, 4, 10, 11, 12, 13, 14, 15, 17, 39, 45, 50,
51, 52, 53, 54, 55, 56, 57, 58, 61, 65, 67, 73, 79 and 80 of Schedule
1);
§ clarify that a selection system for a USP
under s. 22 or s. 23 does not need to be used in selecting a USP and a
declaration that does not use such a system is valid (items 3, 5, 16 and 18 of
Schedule 1);
§ make it clear that the Minister is not
restricted in the matters he considers in deciding to declare a person to be a
USP (item 6 of Schedule 1);
§ provide that the person with whom the
Commonwealth enters into a written agreement under section 56 or 57 of the
Telstra Corporation Act 1991 becomes the regional universal service
provider (RUSP) for the region specified in the agreement without the need for a
separate declaration and for the commencement date of its becoming the RUSP to
be as set out in the written agreement with the Commonwealth (or otherwise
specified in a notice made by the Minister), with that date being able to vary
between areas within the extended zones (items 6, 8 and 9 of Schedule
1);
§ enable the Minister to declare a person to
be a USP at any time with commencement of the declaration being specified in the
declaration (item 7 of Schedule 1) and to amend existing sections to provide for
the situation where the person is not a USP on the first day of a financial year
(items 59, 60, 62, 63, 64, 66 and 74 of Schedule
1);
§ require a person who is or has been a USP
for a service area where another person is or is to become a USP, to provide the
new USP with information (eg. service locations and customer contact details)
that will assist the new USP to do something required or permitted under Part 2
or as is determined by the Minister (item 19 of Schedule
1);
§ enable the declaration of multiple USPs
for a service area without the need for regulations so as to facilitate
competition in the supply of USO services (items 20, 21, 22, 23, 24, 25, 26, 27,
28 and 29 of Schedule 1);
§ enable a carriage service provider as well
as a carrier to be declared to be a general or special digital data service
provider (items 30, 32, 36, 37, 38, 40, 41, 43, 44, 46 and 47 of Schedule
1);
§ clarify that a selection system under s.
26C or s. 26D for a digital data service provider (DDSP) does not need to be
used in declaring a DDSP and a selection process that does not use such a system
is not invalid (items 31, 33, 42 and 48 of Schedule
1);
§ make it clear that the Minister is not
restricted in the matters he considers in deciding to declare a person to be a
DDSP (item 34 of Schedule 1);
§ enable the Minister to declare a person to
be a DDSP for at any time with commencement of the declaration being specified
in the declaration (item 35 of Schedule 1);
§ require a person who is or has been a DDSP
for a service area where another person is or is to become a USP to provide the
new USP with information (eg. service locations and customer contact details)
that will assist the new USP to do something required or permitted under Part 2
or as is determined by the Minister (item 49 of Schedule
1);
§ enable the Minister to determine in
advance a person’s universal service cost (NUSC) or a methodology for
determining that cost for a period (items 68, 69, 70 and 71 of Schedule
1);
§ make it clear that a grant under section
56 or 57 of the Telstra Corporation Act 1991 should not be taken into
account for specified purposes under the Act (items 72, 75, 76, 77 and 78 of
Schedule 1); and
§ make provision for the application of
proposed new sections and for transitional arrangements (items 81, 82, 83, 84
and 85 of Schedule 1).
FINANCIAL IMPACT STATEMENT
The Bill is not expected to have any significant financial impact on
Commonwealth expenditure or revenue. Expenditure by the Australian
Communications Authority (ACA) will be offset by carrier licence application
charges and annual charges imposed by the Telecommunications (Carrier Licence
Charges) Act 1997. The details of the ongoing resource requirements for the
ACA will be considered in the 2000-01 and subsequent budget
processes.
The Bill will not alter the current financial impact on
carriers since they will continue to be required to fund the operation of the
universal service obligation.
REGULATION IMPACT STATEMENT
The Telecommunications (Consumer Protection and Service Standards) Bill
(No.1) 2000 (the Bill) makes amendments to the universal service regime in Part
2 of the Telecommunications (Consumer Protection and Service Standard) Act
1999. This Regulation Impact Statement identifies the problems the Bill
addresses, the options for tackling them and explains why the approach adopted
has been taken.
The current universal service arrangements are set out in Part 2 of the
Telecommunications (Consumer Protection and Service Standards) Act 1999.
The Act defines the universal service obligation (USO) as the obligation to
ensure that the standard telephone service (ie. voice telephony), payphone and
other prescribed services are reasonably accessible to all people in Australia
on an equitable basis, wherever they reside or carry on business. No other
services have been prescribed to date. The complementary digital data service
obligation (DDSO) underpins access on request to a 64 kbps (or comparable) data
service. Universal service arrangements thus provide support for high-cost
rural and remote areas of Australia.
One or more carriers can be declared
universal service providers and required to fulfil the USO and/or DDSO.
Currently Telstra is the sole and national universal service provider (USP) and
is required by existing legislation to undertake this role. While other
carriers may also become USPs it is not envisaged that Telstra will cease to be
a USP in the foreseeable future.
Standard telephone services provided are
price-controlled and in high-cost areas the universal service carrier cannot
always recover the full cost of providing services from the customer. The
losses incurred by universal service providers resulting from the supply of
loss-making services in the course of fulfilling the USO are shared amongst all
participating carriers (ie. carriers during the financial year the losses were
incurred) in proportion to their eligible revenue. Each carrier’s
contributions are currently calculated at the end of each financial year, and
carriers pay their contributions in one lump sum.
Telephone subscribers
in Telstra’s Extended Zones (EZs) currently have either no or limited
access to untimed local calls, essentially because the telecommunications
infrastructure in those Zones has capacity limitations. Under ss.56 and 57 of
the Telstra Corporation Act 1991 $150 million was appropriated from
proceeds from the second tranche of the sale of Telstra in order to remedy this
problem. It was envisaged that these proceeds would be used to fund a
significant upgrade to telecommunications infrastructure in the EZs to overcome
the capacity limitations and thereby enable the provision of untimed local
calls.
On 23 March 2000 the Government announced a number of major
initiatives in relation to the provision of universal service in Australia and
of untimed local calls in remote Australia. In broad terms, the key decisions
were to:
• enhance industry certainty by enabling the Minister to
determine a universal service provider’s net universal service cost (NUSC)
in advance for 2000/01 and subsequent financial years;
• undertake
a competitive selection process for the $150 million for the Extended Zones with
the successful tenderer subsequently becoming the universal service provider for
the region;
• undertake two pilot schemes in regional Australia to
trial the competitive supply of services under the Universal Service Obligation
(USO); and
• amend the universal service regime to improve its
general operation, particularly in relation to contestability costing and
funding.
The Telecommunications (Consumer Protection and Service
Standards) Amendment Bill (No. 1) 2000 makes amendments to the existing USO
regime in order to implement decisions (1) and (2). Essentially, this Bill
contains amendments to the existing legislative scheme which are considered
essential for passage before 30 June 2000. This Bill also makes some progress
towards implementing decisions (3) and (4) through some simple amendments, which
enhance the administrative flexibility of the existing regime.
The
Government intends to introduce a further Bill which will more comprehensively
revise the USO regime in the near future and deal with other aspects of the
Government’s decision.
PROBLEM IDENTIFICATION
This
Amendment Bill seeks to address four particular problems:
1. lack of
advance certainty within the telecommunications industry about the level of USO
costs, which impacts on business planning and investment;
2. the need for
certainty in relation to key aspects of Extended Zones tender, especially in
relation to: the USO status of the successful tenderer; the status of ongoing
subsidies, access to compensation they may receive; and access to information.
The current lack of certainty has the potential to limit interest unnecessarily
in the Tender, thus reducing possible benefits to the community;
3. lack
of general administrative flexibility, particularly in the context of
undertaking the tender and introducing competition in the supply of USO and DDSO
services; and
4. impediments to the competitive supply of services under
the Digital Data Service Obligation (DDSO).
OBJECTIVES
The
regulatory objectives which the Government wishes to achieve, and which the Bill
supports, are:
§ to provide greater advance certainty for
industry in relation to USO costs;
§ to provide greater certainty for
prospective tenderers in the Extended Zones Tender about the regulatory
environment in which they would be operating should they win the
Tender;
§ to provide the Government with greater
administrative flexibility in the context of the Tender and the operation of the
USO regime generally; and
§ to facilitate greater competition in the
supply of services under the Digital Data Service Obligation, by reducing
regulatory hurdles.
STAKEHOLDERS
The key stakeholders
affected by the problems and the possible responses to them
are:
§ telecommunications customers in the
Extended Zones who stand to benefit from a timely and well constructed tender
process in relation to untimed local calls;
§ other telecommunications consumers,
particularly in regional and rural Australia who will benefit from the
improvements to the operation of the USO
regime;
§ Telstra – as the incumbent national
universal service provider, as the largest contributor to the USO and as a
potential tenderer for the Untimed Local Call
Fund;
§ other telecommunications carriers –
as contributors to the USO, potential USO competitors, and as potential
tenderers for the Untimed Local Call Fund;
§ carriage service providers who may be
interested in providing special digital data services are currently hampered in
their ability to access the rebates available under the DDSO;
and
§ the Commonwealth and taxpayers generally
– on the basis the expenditure of the $150 million for untimed local calls
involves an opportunity cost for the Commonwealth and taxpayers, their interests
lie in obtaining maximum value for money.
1. SETTING NET UNIVERSAL
SERVICE COSTS FOR 2000/01 AND SUBSEQUENT FINANCIAL YEARS
DISCUSSION OF OPTIONS AND IMPACTS
a. Continue existing
funding arrangements (calculate in arrears)
Under the existing
legislation, NUSCs are calculated in arrears, which reduces industry certainty
and makes business planning more difficult. The existing legislation may also
lead USPs to accrue USO compensation entitlements after 1 July 2000 under the
default methodology.
This option perpetuates the existing shortcomings of
NUSC costing, namely: it is ex post; it does not enable carriers to budget in
advance of incurring USO costs; and it creates uncertainties for USO funding. It
impacts negatively on Telstra, and the community by slowing the USO funding
process. Other carriers are harmed by the effect on their planning and lump sum
payment; however they may also gain by the delay in
payment.
b. Empower the Minister to set the NUSC in advance, for
periods of up to three years
This option would overcome many of the
uncertainties presented by the existing arrangements. Carriers could budget
ahead of their commitments and reduces the risk of default. In determining a
USP’s NUSC, the Minister would generally seek the advice of the ACA. The
ACA has a well-developed methodology for estimating NUSCs and its estimates are
accepted as being fair and reasonable. NUSCs to be determined for 1998/99 and
1999/00 under the current Act will be based on ACA estimates. The Minister will
also be able to have regard to other matters, including industry commentary on
ACA estimates. The risk of significant under- or over-estimation of NUSCs is
therefore low.
CONSULTATION
The Government sought input on forward costing as
part of its review of USO funding arrangements. The ACA released a report into
‘USO Costing and Assessment Arrangements’, and the issue was
discussed at the DCITA hosted Regional Communications Forum (involving the range
of stakeholders) in November 1999. Stakeholders generally supported the move to
set the NUSC in advance, with participating carriers strongly supporting this
approach.
CONCLUSIONS AND RECOMMENDED ACTION
Under the
Government’s proposed amendments, the Minister would be empowered to
determine the USO cost of a USP in advance, for periods of up to three years.
This would reduce industry uncertainty as to the size of their USO liabilities,
improving industry planning and encouraging investment. This increased certainty
is expected in turn to benefit consumers through greater security of
supply.
DISCUSSION OF OPTIONS AND IMPACTS
Given the
Government’s policy decision to tender out to a single carrier the monies
allocated to provide untimed local calls in the Extended Zones, there is a need
to provide certainty for prospective tenderers.
a. Continue with existing legislation
Under this option the
tender would be able to go ahead but there would be risks of it not progressing
successfully. Tenderers could not be certain of the regulatory environment they
would be operating in. They would be uncertain about:
- whether they would
become the USP for the area; and thus
- their ongoing entitlement of USO
subsidies, and the level of those subsidies (this ties in with the issue
surrounding the setting of universal service costs for 2000/01 and beyond);
and
- having access to necessary information.
This lack of certainty could reduce competition in the Tender which would
minimise the benefits for remote telecommunications users as well as the value
for money for the Commonwealth and taxpayers.
b. Make amendments to
the legislation to provider greater certainty to prospective
tenderers
This would involve amendments to specifically address the
areas of concern while retaining the bulk of the overall USO
framework.
To provide greater certainty for prospective Extended Zones
Tenderers, the legislation would be amended
to:
§ provide for the successful tenderer to
automatically become the USP for the area
concerned;
§ clarify the relationship between the $150
million grant and the level of on-going
subsidies;
§ enable the person to have access to the
default costing and compensation process as a safety in the unlikely event that
a USO cost determination is not made;
§ provide access to information held by a
former USP which would assist the new USP in complying with the USO regime;
and
§ enable the declaration of the tenderer as
a DDSO provider should the tender process indicate that is
appropriate.
Amendments to this effect would provide prospective
tenderers with greater certainty and thus improve the likelihood of success of
the tender process.
In addition the option to amend the legislation to
empower the Minister to set the NUSC in advance, for periods up to three years,
and the general improvements to administrative flexibility discussed below will
further improve the likelihood of a successful tender
process.
CONSULTATION
DCITA has consulted closely with key
carriers (Telstra, C&W Optus, AAPT, Vodafone) on this issue and has
considered representations from community groups. DCITA's consultants have also
consulted carriers and remote users. The Regional Communications Forum hosted
by DCITA in November 1999, involving the range of stakeholders, addressed this
issue.
There is strong support amongst consumer and rural interests for
Extended Zone untimed local calls, and support amongst the carriers and
community groups for this initiative for some form of tendering out the
USO.
CONCLUSIONS AND RECOMMENDED ACTION
Given the
Government’s decision to tender out to a single person the monies for the
provision of untimed local calls in remote Australia, it is important that this
tender work as well as possible. Option (b) is the preferred option and is
believed to best fulfil the objective of providing certainty to prospective
tenderers in the Extended Zones Tender.
Such amendments would provide
prospective tenderers with greater certainty about key aspects of the future USO
regime under which they would be operating. As such prospective tenderers would
be appropriately informed in making their decisions whether or not to tender.
With a greater level of certainty, tenderers are more likely to optimise their
bids, thus maximising the benefits for remote telecommunications users and value
for money for the Commonwealth and taxpayers.
3. IMPROVING GENERAL
ADMINISTRATIVE FLEXIBILITY, in the context of undertaking the tender,
introducing competition in the supply of USO and DDSO services and addressing
impediments to the competitive supply of services under the DDSO
The Government’s proposed amendments seek to enhance the
administrative flexibility of the existing regime in anticipation of a more
comprehensive revision in the near future. These amendments
include:
§ removing restrictions on the commencement
of USO and DDSO provider declarations;
§ making it clear that matters other than a
person’s ability to fulfil the USO or DDSO could be taken into account in
making a declaration; and
§ removing the need for regulations before
there can be multiple USPs in an area.
While these amendments may lead to
a loss in market share for Telstra, other carriers and carriage service
providers would benefit from greater access to USO customers, and consumers
could benefit from greater competition, a wider range of potential services and
suppliers, greater innovation and reduced prices.
However, most of these
impacts will flow from the Government’s proposed general reforms to the
USO system to be introduced via the Telecommunications (Consumer Protection and
Service Standards) Amendment Bill (No. 2) 2000, and to a large extent, they are
comprehensively canvassed in the Regulation Impact Statement accompanying that
Bill.
As the Telecommunications (Consumer Protection and Service Standards)
Bill (No.1) 2000 largely contains interim measures to resolve immediate
problems, these measures will not be subject to a specific review. However,
under the normal five yearly process for review of statutes, the amendments,
once enacted, will be reviewed when the Telecommunications (Consumer
Protection and Service Standards) Act 1999, which this Bill amends, is
reviewed in 2004.
ABBREVIATIONS
The following abbreviations are used in this explanatory
memorandum:
ACA: Australian Communications
Authority
Act: Telecommunications (Consumer Protection and Service
Standards) Act 1999
Bill: Telecommunications (Consumer Protection
and Service Standards) Amendment Bill (No. 1) 2000
DDSO: Digital
Data Service Obligation
DDSP: Digital Data Service
Provider
NUSC: net universal service cost
NUSP: national
universal service provider
RUSP: regional universal service
provider
Telecommunications Act: Telecommunications Act
1997
Telstra: Telstra Corporation Limited
USO: universal
service obligation
USP: universal service
provider
NOTES ON CLAUSES
Clause 1 – Short title
Clause 1 provides that the
Bill, when enacted, may be cited as the Telecommunications (Consumer
Protection and Service Standards) Amendment Act (No. 1)
2000.
Clause 2 – Commencement
Subclause 2(1)
provides that subject to clause 2 the Bill, when enacted, will commence on the
day on which it receives the Royal Assent.
Subclause 2(2) provides that
Schedule 1 to the Bill commences, or is taken to have commenced, on 1 July 2000.
This will ensure that the amendments made by the Bill to the universal service
regime in Part 2 of the Act will apply in relation to the 2000-2001 financial
year and subsequent financial years.
Clause 3 –
Schedule(s)
Clause 3 provides that provisions in the Act are amended
or repealed in accordance with the applicable items in a Schedule to the Bill,
and that other items in a Schedule have effect according to their terms.
Schedule 1––Amendments relating to the universal service regime
Part 1 of the Bill contains amendments to the universal service regime in
Part 2 of the Act. The amendments have three main objectives:
§ to enhance industry certainty by enabling the Minister to determine a universal service provider’s net universal service cost (NUSC) in advance for 2000/01 and subsequent financial years;
§ to support the proposed $150 million tender for untimed local calls in Telstra’s Extended Zones in remote Australia; and
§ to provide
greater flexibility in relation to the declaration of universal service
providers and digital data service providers.
Item 1 –
Amendment to subsection 5(2) (paragraph (a) of the definition of universal
service provider)
Section 5 of the Act contains definitions of
key terms used in the Act.
Subsection 5(2) defines ‘universal
service provider’ to mean:
(a) the national universal service
provider (currently Telstra); or
(b) a regional universal service
provider.
Item 1 amends the definition of ‘universal service
provider’ to change the reference to ‘the national universal service
provider’ to ‘a national universal service provider’. This is
consequential to the repeal of subsection 20(4) by item 7 which will enable
there to be more than one USP for a single area at one time, thereby
facilitating competition in the supply of USO services. Currently regulations
must be made before there can be more than one USP in an area (subsections 25(1)
and 26(1)).
Item 2 – Amendment of subsection 20(1)
Subsection 20(1)
of the Act enables the Minister to make a written declaration stating that a
specified carrier is the national universal service provider.
By virtue
of subsection 20(11), a ‘carrier’ must be a ‘participating
carrier’. The effect of being declared the national universal service
provider, in terms of geographical responsibilities, is stated in subsection
21(1).
Item 2 amends subsection 20(1) to change the reference to
‘the national universal service provider’ to ‘a national
universal service provider’. This is consequential to the repeal of
subsection 20(4) by item 7 which will enable there to be more than one USP for a
single area at one time, thereby facilitating competition in the supply of USO
services. Currently regulations must be made before there can be more than one
USP in an area (subsections 25(1) and 26(1)).
Item 3 – Repeal of
subsection 20(1) (note)
Section 22 of the Act enables the Minister to
determine a selection system for the purpose of selecting a carrier to be the
NUSP. The note under subsection 20(1) provides that if a selection system has
been determined under section 22, a declaration of the NUSP under subsection
20(1) must be consistent with the system.
As a consequence of item 16,
which will give the Minister flexibility as to whether or not to use a section
22 selection system in selecting a NUSP, item 3 repeals the note under
subsection 20(1).
Item 4 – Amendment of subsection
20(2)
Subsection 20(2) enables the Minister to declare that a
specified carrier is the RUSP for a specified service area. By virtue of
subsection 20(11), a ‘carrier’ must be a ‘participating
carrier’. The effect of being declared a RUSP, in terms of geographical
responsibilities, is stated in subsection 21(2). ‘Service area’ is
defined in section 15.
Item 4 amends subsection 20(2) to change the
reference to ‘the regional universal service provider’ to ‘a
regional universal service provider’. This is consequential to the repeal
of subsection 20(4) by item 7 which will enable there to be more than one USP
for a single area at one time, thereby facilitating competition in the supply of
USO services. Currently regulations must be made before there can be more than
one USP in an area (subsections 25(1) and 26(1)).
Item 5 –
Repeal of subsection 20(2) (note)
Section 23 of the Act enables the
Minister to determine a selection system for the purpose of selecting carriers
to be RUSPs. The note under subsection 20(2) provides that if a selection
system has been determined under section 23, a declaration of a RUSP under
subsection 20(2) must be consistent with the system.
As a consequence of
item 18, which will give the Minister flexibility as to whether or not to use a
section 23 selection system in selecting a RUSP, item 5 repeals the note under
subsection 20(2).
Item 6 – Insertion of new subsections after
subsection 20(2)
Item 6 inserts proposed subsections 20(2A), (2B),
(2C) and (2D) after subsection 20(2) of the Act.
Proposed subsection
20(2A) provides that in deciding whether to make a declaration of a NUSP or
RUSP, the Minister is not limited to considering only the person’s
suitability to provide the services that must be provided to fulfil the USO.
This will make it clear that it is open to the Minister to consider a range of
relevant matters other than the ability of the person to fulfil the USO before
declaring a NUSP or RUSP. This may include, for example, the person’s
ability to provide other services, its operational practices or its technical
capabilities or financial standing.
The purpose of proposed subsections
20(2B), 20(2C) and 20(2D) is to provide that the person with whom the
Commonwealth enters into a written agreement under section 56 or 57 of the
Telstra Corporation Act 1991 will, if the agreement so provides, become
the RUSP for the service area to which the agreement is expressed to apply
without the need for a separate declaration. The commencement date of the
person becoming the RUSP for an area will be a date set out in the written
agreement with the Commonwealth. The date will be able to vary between areas
within the area to which the agreement is expressed to apply. The Minister may
make a written determination specifying other commencement dates. A copy of
the determination must be published in the Gazette.
Sections 56
and 57 of the Telstra Corporation Act 1991 enable grants of financial
assistance from the Untimed Local Call Access Account to a State, the Australian
Capital Territory, the Northern Territory or another person. The terms and
conditions on which that financial assistance is granted are to be set out in a
written agreement between the Commonwealth and the relevant State, Territory or
person.
It is implicit in proposed subsections 20(A) to 20(2D) that an
agreement under sections 56 or 57 of the Telstra Corporation Act 1991 may
include conditions about the person who enters into the agreement with the
Commonwealth becoming the RUSP for the area concerned and from what date or
dates.
The objective of these provisions is to provide prospective
tenderers with greater certainty that they will become the RUSP if their tender
is successful.
Regulations are proposed for the purposes of paragraph 54(1)(b) of the
Telstra Corporation Act to allow monies from the Untimed Local Calls Access
Account to be spent to provide subscribers within inner extended zones with
extended access to untimed local calls.
Item 7 – Repeal of
subsections 20(4), (5), (6), (7) and (8) and substitution of new subsections
20(4) and (5)
Subsection 20(4) of the Act requires the Minister to exercise his or her
powers in such a way that at any particular time there is only one USP for a
service area. Regulations for the purposes of subsections 25(1) and 26(1) can,
however, override this rule. The proposed repeal of subsection 20(4) will
enable there to be more than one USP in a single area at one time. The purpose
of this is to enable the declaration of multiple USPs for a service area without
the need for regulations under sections 25 or 26 so as to improve administration
and facilitate competition in the supply of USO services.
Subsections 20
(5) and (6) of the Act impose restrictions on the commencement of the
declaration of a person as a NUSP or a RUSP. Currently a person must be
declared as a NUSP or a RUSP in advance of the financial year for which the
declaration has effect, with the declaration having effect from 1 July of that
financial year. The exception to this is if an existing NUSP or RUSP is
replaced in which case a declaration can be made to replace that person at any
time (subsections 20(7) and (8)).
Greater flexibility is required in
relation to the commencement of a person as a NUSP or a RUSP to enable the
regime to respond to changes in the telecommunications environment generally and
to facilitate competition in the supply of USO services. Item 7 will repeal
subsections 20(4) to (8) and substitute proposed new subsections 20(4) and (5)
to enable:
(a) a declaration of a NUSP or a RUSP to take effect on the
day specified for the purpose in the declaration (being a day on or after the
day the declaration is made); and
(b) a revocation of a declaration of a
NUSP or a RUSP to take effect on the day specified for the purpose in the
instrument of revocation (being a day on or after the day the instrument is
made).
Items 8 and 9 – Amendment of subsection 20(10) and
insertion of new subsection 20(10A)
Subsection 20(10) of the Act
makes a declaration of a USP a disallowable instrument which accordingly must be
notified in the Gazette, tabled in the Parliament and is subject to
Parliamentary disallowance.
The effect of items 8 and 9 is to provide
that the Minister’s deemed declaration under proposed subsection 20(2B)
(see item 6 above) will not be a disallowable instrument. Instead, a notice
will need to be published in the Commonwealth Gazette advising that the person
concerned is a RUSP for the area concerned and of the relevant commencement date
or dates. Any variation or revocation of such a declaration will, however, be
disallowable.
The objective of these provisions is to provide prospective
tenderers with greater certainty that they will become the RUSP if their tender
is successful.
Items 10 to 13 – Amendments of section
21
Section 21 of the Act sets out the effect, in terms of
geographical responsibilities and legal obligations, of being declared a USP.
Subsection 21(1) makes the NUSP the USP for all of Australia except for each
service area in relation to which a RUSP has been declared and for so much of a
service area as is not within such an area.
Item 10 amends subsection
21(1) of the Act to change the reference to ‘the national universal
service provider’ to ‘a national universal service provider’.
This is consequential to the repeal of subsection 20(4) by item 7 which will
enable there to be more than one USP for a single area at one time, thereby
facilitating competition in the supply of USO services. Currently regulations
must be made before there can be more than one USP in an area (subsections 25(1)
and 26(1)).
Subsection 21(2) of the Act makes a RUSP in relation to a
particular service area the USP for that area and for each service area within
that area. Item 11 amends subsection 21(2) to make it clear that there can be
more than one RUSP in relation to a particular service area.
The note
under subsection 21(2) provides that where there ceases to be a RUSP for a
particular service area, the NUSP automatically becomes responsible for
fulfilling the USO in that RUSP’s service area. Item 12 replaces this
note with another note as a consequence of amendments allowing there to be more
than one NUSP or RUSP for a single area at one time. The replacement note
indicates that if a carrier that is the sole RUSP for a particular service area
ceases to be a RUSP for that area and is not replaced as a RUSP for that area by
another carrier, the carrier, or each carrier, that is a NUSP automatically
becomes a USP for that area.
Subsection 21(5) of the Act provides that
the universal service provider for an area must take all reasonable steps to
fulfil the universal service obligation, so far as the obligation relates to
that area. As a consequence of amendments allowing there to be more than one
NUSP and RUSP, item 13 replaces the reference in subsection 21(5) to ‘The
universal service provider’ with ‘A universal service
provider’.
Items 14, 15 and 16 – Amendments of section 22
Section 22 of the Act provides a head of power to enable the
Minister to determine a selection system for selecting the NUSP for Australia in
relation to specified financial years.
Items 14 and 15 amend section 22
to make it clear that there can be more than one NUSP and that the
Minister’s determination may select a carrier to be the NUSP in relation
to specified financial years or any part of a specified financial
year.
Subsection 22(4) of the Act provides that if the Minister has
determined a selection system for the NUSP, the Minister’s declaration of
the NUSP under subsection 20(1) must be consistent with the system. Item 16
replaces subsection 22(4) with a new provision that will enable the Minister to
use any selection system that has been determined under section 22 for the
purposes of deciding what carrier should be declared as a NUSP under subsection
20(1) in a particular situation, or to make that decision on some other
basis.
Items 17 and 18 – Amendments of section
23
Section 23 of the Act provides a head of power to enable the
Minister to determine a selection system for selecting the RUSPs for particular
areas in relation to specified financial years.
Item 17 amends subsection
23(1) to enable the Minister’s determination to select a carrier to be a
RUSP in relation to specified financial years or any part of a specified
financial year.
Subsection 23(4) of the Act prevents the Minister from exercising his or her
power to declare a RUSP under subsection 20(2) in any way that is inconsistent
with the determined selection system. Item 18 replaces subsection 23(4) with a
new provision that will enable the Minister to use any selection system that has
been determined under section 22 for the purposes of deciding what carrier
should be declared a RUSP under subsection 20(2) in a particular situation, or
to make that decision on some other basis.
Item 19 – Insertion
of new section 24A – Former universal service provider may be required to
provide information to current universal service provider
Item 19
inserts a new section 24A in the Act to require a person who has been a USP for
a service area where another person is or is to become a USP to provide the new
USP with such information (eg. service locations and customer contact details)
as will assist the new USP to do something required or permitted under Part 2 of
the Act or as requested by the new USP or as is determined by the
Minister.
Proposed subsection 24A(1) provides that new section 24A will
apply if:
(a) a person (the former provider) ceases to be a USP for a
particular area (the relevant area) and another person (the current provider) is
declared, by a declaration that takes effect at the time of that cessation or
within the next 6 months, to be a USP for some or all of that area;
or
(b) a person (the former provider) ceases to be a USP for a particular
area (the relevant area) and another person (the current provider) who, before
that cessation, was also a USP for some or all of that area continues after that
cessation to be a USP for some or all of that area.
Proposed subsection
24A(2) enables the current provider to give the former provider a notice
requiring the former provider to give the current provider specified
information. If paragraph 24A(1)(a) applies, the notice must be given within 6
months of the current provider becoming a USP for some or all of the relevant
area. If paragraph 24A(1)(b) applies, the notice must be given within 6 months
of the former provider ceasing to be a USP for the relevant
area.
Proposed subsection 24A(3) provides that the information that may
be required to be given must be information that will assist the current
provider in doing something that the current provider is required or permitted
to do by or under a provision of Part 2 of the Act (dealing with the universal
service regime). The notice must identify the doing of that thing as the
purpose for which the information is required.
Proposed subsection 24A(4)
provides that the former provider will be required to comply with a requirement
made by a notice under subsection 24A(2) if it is reasonable as soon as
practicable after receiving the notice. If the requirement is unreasonable, the
former provider will not have to comply with it.
Proposed subsection
24A(5) allows the Minister to make a written determination the effect of which
will be to require the provision as such information as the Minister considers
is necessary to the new USP’s performance of its role as USP. Any such
determination will have effect accordingly.
Proposed subsection 24A(6)
provides that a Ministerial determination under proposed subsection 24A(5) is a
disallowable instrument which accordingly must be notified in the Commonwealth
Gazette, tabled in the Parliament and is subject to Parliamentary
disallowance.
Paragraph 280(1)(b) of the Telecommunications Act
1997 will allow information to be disclosed as required by proposed section
24A but the person to whom the information is given will still be bound by Part
13 of that Act dealing with the protection of communications.
The purpose
of these provisions is to facilitate the smooth operation of the USO regime,
particularly where there is a change in USP, by ensuring new USPs have access to
appropriate information (compare with Part 4, Schedule 1 to the
Telecommunications Act 1997).
In the first instance, the ACA, as
industry regulator, would adjudicate on the reasonableness of any request. The
ACA has powers of direction in relation to compliance with the Act.
It is
envisaged that a former provider would advise its USO customers of any
disclosure of information if necessary pursuant to these provisions (eg as part
of its billing activities). Consideration would be given to drafting subordinate
legislation to this effect if necessary.
Items 20 to 24 –
Amendments of section 25
Items 20 to 24 amend s. 25 of the Act so
that regulations are no longer required to have multiple NUSPs and are no longer
necessary to split the USP between multiple providers. The aim of this
provision is to simplify administration and facilitate competition in the supply
of USO services. Item 7 (see above) repeals subsection 20(4) which currently
precludes there being more than one USP per service area.
Subsection
25(1) of the Act provides that regulations may authorise the Minister to declare
that two or more carriers are to be NUSPs. Item 20 repeals this provision and
substitutes a new subsection 25(1) to provide that for the purposes of the
remodelled section 25, there is a multiple provider situation if there are 2 or
more NUSPs.
Subsection 25(2) of the Act provides that the regulations may
also authorise the Minister to declare that the Act has effect, in relation to
any multiple NUSP that is declared, as if the USO applicable to the provider
were limited as set out in the declaration. Subsection 25(2) also requires,
however, that declarations may only be made in accordance with section 25 for
the purpose of dividing the universal service obligation between two or more
declared providers.
Items 21 and 22 amend subsection 25(2) to enable the
regulations to authorise the Minister to declare that the Act has effect, in
relation to a provider in a multiple provider situation, as if the USO
applicable to the provider were limited as set out in the declaration. However,
declarations may only be made in accordance with amended subsection 25(2) for
the purpose of dividing the USO between 2 or more of the providers. This
amendment is consequential to Item 20.
Item 23 amends subsection 25(3) to
provide that a declaration made in accordance with regulations referred to in
subsection 25(2) has effect accordingly.
Item 24 amends subsection 25(4)
to enable the regulations to provide that Part 2 of the Act dealing with the
universal service regime applies in relation to any of the providers in a
multiple provider situation.
Items 25 to 29 – Amendments of
section 26
Items 25 to 29 amend s. 26 of the Act so that regulations
are no longer required to have multiple RUSPs and are no longer necessary to
split the USP between multiple providers. The aim of this provision is to
simplify administration and facilitate competition in the supply of USO
services. Item 7 (see above) repeals subsection 20(4) which currently precludes
there being more than one USP per service area.
Subsection 26(1) of the
Act provides that regulations may authorise the Minister to declare that two or
more carriers are to be RUSPs for the same service area. Item 25 repeals this
provision and substitutes a new subsection 26(1) to provide that for the
purposes of the remodelled section 26, there is a multiple provider situation if
there are 2 or more RUSPs for all or part of the same area.
Subsection
26(2) of the Act provides that the regulations may also authorise the Minister
to declare that the Act has effect, in relation to any multiple RUSP that is
declared, as if the USO applicable to the provider were limited as set out in
the declaration. Subsection 26(2) also requires, however, that declarations may
only be made in accordance with section 26 for the purpose of dividing the USO
between two or more declared providers.
Items 26 and 27 amend subsection
26(2) to enable the regulations to authorise the Minister to declare that the
Act has effect, in relation to a provider in a multiple provider situation, as
if the USO applicable to the provider were limited as set out in the
declaration. However, declarations may only be made in accordance with amended
subsection 26(2) for the purpose of dividing the USO between any of the
providers in a multiple provider situation. This amendment is consequential to
item 25.
Item 28 amends subsection 26(3) to provide that a
declaration made in accordance with regulations referred to in subsection 26(2)
has effect accordingly.
Item 29 amends subsection 25(4) to enable the
regulations to provide that Part 2 of the Act dealing with the universal service
regime applies in relation to any of the providers in a multiple provider
situation.
Items 30, 31, 32, 33, 34, 35 and 36 – Amendments of
section 26A
Subsection 26A(1) of the Act enables the Minister to
declare that a specified carrier is a general digital data service provider for
a specified general digital data service area. A ‘general digital data
service area’ is determined by the Minister under section 19B. By virtue
of subsection 26A(10), a ‘carrier’ must be a ‘participating
carrier’. The effect of being declared a digital data service provider,
in terms of geographical responsibilities, is stated in section 26B.
Item
30 amends subsection 26A(1) to enable the Minister to declare a specified
carriage service provider as well as a specified carrier as the general digital
data service provider for a specified general digital data service area. This
is technically feasible because a carriage service providers can acquire
services from carriers to enable them to provide DDSO services. Enabling
carriage service providers to be DDSPs will promote competitive neutrality
between carriers and carriage service providers consistent with the
Government’s wider USO and telecommunications policies.
The note
under subsection 26A(1) provides that if a selection system has been determined
under section 26C, a declaration of the general digital data service provider
under subsection 26A(1) must be consistent with the system.
As a
consequence of item 42, which will give the Minister flexibility as to whether
or not to use a section 26C selection system in declaring a general digital data
service provider, item 31 repeals the note under subsection
26A(1).
Subsection 26A(2) enables the Minister to declare that a
specified carrier is a special digital data service provider for a specified
special digital data service area. A ‘special digital data service
area’ is determined by the Minister under section 19C. By virtue of
subsection 26A(10), a ‘carrier’ must be a ‘participating
carrier’. The effect of being declared a special digital data service
provider, in terms of geographical responsibilities, is stated in section 26B.
‘Service area’ is defined in section 15.
Consistent with item
30, item 32 amends subsection 26A(2) to enable the Minister to declare a
specified carriage service provider as well as a specified carrier as the
special digital data service provider for a specified special digital data
service area.
The note under subsection 26A(2) provides that if a
selection system has been determined under section 26D, a declaration of the
special digital data service provider under subsection 26A(2) must be
consistent with the system.
As a consequence of item 48, which will give
the Minister flexibility as to whether or not to use a section 26D selection
system in determining a special digital data service provider, item 33 repeals
the note under subsection 26A(2).
Item 34 inserts a new subsection 26(2A)
which provides that in deciding whether to make a declaration of a DDSP, the
Minister is not limited to considering only the person’s suitability to
provide the services that must be provided to fulfil the DDSO. This will make
it clear that it is open to the Minister to consider a range of relevant matters
other than the ability of the person to fulfil the DDSO before declaring a DDSP.
This may include, for example, the person’s ability to provide other
services, its operational practices or its technical capabilities or financial
standing.
Subsection 26A(4) of the Act makes a declaration of a DDSP take
effect on the date specified in the declaration if it is the first declaration
made under subsection 26A(1) or (2). In any other case the declaration takes
effect at the start of the financial year after the financial year in which it
is made, and ceases at the end of the financial year the declaration specifies
unless it is sooner revoked. If the declaration does not include a cessation
date, it continues in force until it is revoked. This provision is subject to
subsections 26A(6), (7) and (8) which deal with replacement of declarations and
the cessation of a carrier licence.
Greater flexibility is required in
relation to the commencement of a declaration of a DDSP to enable the regime to
respond to changes in the telecommunications environment generally, to simplify
administration and to facilitate competition in the supply of digital data
services. Item 35 will repeal subsections 26A(4) to (7) and substitute proposed
new subsections 20(4) and (5) to enable:
(a) a declaration of a DDSP to
take effect on the day specified for the purpose in the declaration (being a day
on or after the day the declaration is made); and
(b) a revocation of a
declaration of a DDSP to take effect on the day specified for the purpose in the
instrument of revocation (being a day on or after the day the instrument is
made).
As a consequence of item 30, item 36 inserts a new subsection
26A(8) to provide that if a DDSP is a carriage service provider but not a
carrier and the DDSP ceases to be a carriage service provider, then the
declaration in relation to that carriage service provider ceases to be in force
from that time. That is, on ceasing to be a carriage service provider, the
person will no longer be a general digital data service provider or a special
digital data service provider.
Items 37, 38, 39, 40, 41 and 42 –
Amendments of section 26C
Subsection 26C(1) of the Act enables the
Minister, by written instrument, to determine a selection system for the purpose
of selecting a carrier to be a general digital data service provider for
specified general digital data service areas in relation to specified financial
years.
As a consequence of item 30 enabling the Minister to declare a
carriage service provider as well as a carrier to be a general digital data
service provider, item 38 replaces the reference to ‘carriers’ in
subsection 26C(1) with a reference to ‘eligible persons’. Item 37
inserts a new subsection 26C(1A) to provide that a reference in section 26C to
an ‘eligible person’ is reference to a carrier or a carriage
service provider.
Item 39 will enable any selection system for general
digital data service providers to apply in relation to them in relation to
specified financial years or any part of a specified financial
year.
Subsection 26C(2) of the Act requires that a selection system for a
general digital data service provider determined by the Minister must require
the selected carrier to have elected that:
(a) an amount specified in the
election will be the carrier’s digital data cost for the financial year
concerned; or
(b) a method of ascertaining an amount, being a method
specified in the election, will apply for the purposes of determining the
carrier’s digital data cost for the financial year concerned.
As a
consequence of item 30, items 40 and 41 replace the references in subsection
26C(2) to ‘carrier’ and ‘carrier’s’ with a
reference to ‘eligible person’ and ‘person’s’.
Subsection 26C(4) of the Act prevents the Minister from exercising his or her
power to declare a general digital data service provider under subsection 26A(1)
of the Act in any way that is inconsistent with the determined selection
system. That is, where a system is in place for determining the general digital
data service provider, that system must be used. Item 42 replaces subsection
26C(4) with a new provision that will enable the Minister to use any selection
system that has been determined under section 26C for the purposes of deciding
what carrier or carriage service provider should be declared a general digital
data service provider under subsection 26A(1) in a particular situation, or to
make that decision on some other basis.
Items 43, 44, 45, 46, 47 and
48 – Amendments of section 26D
Subsection 26D(1) of the Act
enables the Minister, by written instrument, to determine a selection system for
the purpose of selecting a carrier to be a special digital data service provider
for specified special digital data service areas in relation to specified
financial years.
As a consequence of item 32 enabling the Minister to
declare a carriage service provider as well as a carrier to be a special digital
data service provider, item 44 replaces the reference to ‘carriers’
in subsection 26D(1) with a reference to ‘eligible persons’. Item
43 inserts a new subsection 26D(1A) to provide that a reference in section 26D
to an ‘eligible person’ is reference to a carrier or a carriage
service provider.
Item 45 will enable any selection system for special
digital data service providers to apply in relation to them in relation to
specified financial years or any part of a specified financial
year.
Subsection 26D(2) of the Act requires that a selection system for a
special digital data service provider determined by the Minister must require
the selected carrier to have elected that:
(a) an amount specified in the
election will be the carrier’s digital data cost for the financial year
concerned; or
(b) a method of ascertaining an amount, being a method
specified in the election, will apply for the purposes of determining the
carrier’s digital data cost for the financial year concerned.
As a
consequence of item 32, items 46 and 47 replace the references in subsection
26D(2) to ‘carrier’ and ‘carrier’s’ with a
reference to ‘eligible person’ and ‘person’s’.
Subsection 26D(4) of the Act prevents the Minister from exercising his or her
power to declare a general digital data service provider under subsection 26A(2)
of the Act in any way that is inconsistent with the determined selection
system. That is, where a system is in place for determining the general digital
data service provider, that system must be used. Item 48 replaces subsection
26D(4) with a new provision that will enable the Minister to use any selection
system that has been determined under section 26D for the purposes of deciding
what carrier or carriage service provider should be declared a special digital
data service provider in a particular situation, or to make that decision on
some other basis.
Item 49 – Insertion of new section 26F –
Former digital data service provider may be required to provide information to
current digital data service provider
Item 49 inserts a new section 26F in the Act to require a person who has
previously been a DDSP for a service area where another person is or is to
become a DDSP to provide the new DDSP with such information (eg. service
locations and customer contact details) as will assist the new DDSP to fulfil
its DDSO and is requested by the new DDSP to do something required or permitted
under Part 2 of the Act or as is determined by the Minister.
Proposed
subsection 26F(1) provides that new section 26F will apply if:
(a) a
person (the former provider) ceases to be a DDSP for a particular area (the
relevant area) and another person (the current provider) is declared, by a
declaration that takes effect at the time of that cessation or within the next 6
months, to be a DDSP for some or all of that area; or
(b) a person (the
former provider) ceases to be a DDSP for a particular area (the relevant area)
and another person (the current provider) who, before that cessation, was also a
DDSP for some or all of that area continues after that cessation to be a DDSP
for some or all of that area.
Proposed subsection 26F(2) enables the
current provider to give the former provider a notice requiring the former
provider to give the current provider specified information. If paragraph
26F(1)(a) applies, the notice must be given within 6 months of the current
provider becoming a DDSP for some or all of the relevant area. If paragraph
26F(1)(b) applies, the notice must be given within 6 months of the former
provider ceasing to be a DDSP for the relevant area.
Proposed subsection
26F(3) provides that the information that may be required to be given must be
information that will assist the current provider in doing something that the
current provider is required or permitted to do by or under a provision of Part
2 of the Act (dealing with the universal service regime). The notice must
identify the doing of that thing as the purpose for which the information is
required.
Proposed subsection 26F(4) provides that the former provider
will be required to comply with a requirement made by a notice under subsection
24F(2) if it is reasonable as soon as practicable after receiving the notice.
If the requirement is unreasonable, the former provider will not have to comply
with it.
Proposed subsection 26F(5) allows the Minister to make a written
determination the effect of which will be to require the provision as such
information as the Minister considers is necessary to the new DDSP’s
performance of its role as DDSP. Any such determination will have effect
accordingly.
Proposed subsection 26F(6) provides that a Ministerial
determination under proposed subsection 26F(5) is a disallowable instrument
which accordingly must be notified in the Commonwealth Gazette, tabled in the
Parliament and is subject to Parliamentary disallowance.
Paragraph
280(1)(b) of the Telecommunications Act 1997 will allow information to be
disclosed as required by proposed section 26F but the person to whom the
information is given will still be bound by Part 13 of that Act dealing with the
protection of communications.
The purpose of these provisions is to
facilitate the smooth operation of the USO regime, particularly where there is a
change in DDSP, by ensuring new DDSPs have access to appropriate information
(compare with Part 4, Schedule 1 to the Telecommunications Act
1997).
In the first instance, the ACA, as industry regulator would
adjudicate on the reasonableness of any request. The ACA has powers of direction
in relation to compliance with the Act.
It is envisaged that a former
provider would advise its USO customers of any disclosure of information if
necessary pursuant to these provisions (eg as part of its billing activities).
Consideration would be given to drafting subordinate legislation to this effect
if necessary.
Item 50 – Amendment of subsection
27(2)
Subsection 27(2) of the Act requires a universal service
provider for a particular area to give the Minister a draft universal service
plan for that area within 90 days of becoming the universal service provider for
that area.
As a consequence of item 1, which enables there to be more
than one USP for a single area at one time, item 50 replaces the reference in
subsection 27(2) of the Act to ‘the universal service provider’ with
a reference to ‘a universal service provider’.
Item 51
– Amendment of section 28
Section 28 of the Act provides that a
draft or approved universal service plan for an area is a plan that sets out how
the universal service provider for that area will progressively fulfil the USO
(in so far as it relates to that area).
As a consequence of item 1,
which enables there to be more than one USP for a single area at one time, item
51 replaces the reference in section 28 of the Act to ‘the universal
service provider’ with a reference to ‘a universal service
provider’.
Items 52 and 53 – Amendments of section
34
Subsection 34(1) of the Act requires the Minister to notify the
ACA and the universal service provider submitting a draft universal service plan
for an area whether he or she has approved or refused to approve the draft plan
(subsection 34(1)).
Subsection 34(3) provides that the Minister must give
the universal service provider submitting the plan a written notice setting out
the reasons for refusing to approve the draft plan if the Minister has rejected
the plan.
As a consequence of item 1, which enables there to be more than
one USP for a single area at one time, items 52 and 53 replace references in
paragraph 34(1)(a) and subsection 34(3) of the Act to the universal service
provider ‘for the area’ with a reference to the universal service
provider ‘concerned’.
Item 54 – Amendment of section
35
Section 35 of the Act sets out the process for varying an approved
universal service plan, as may be necessary, for example, because of changes to
the USO, changes in the demographics of a service area, or changes to the
service provider’s delivery strategy.
Subsection 35(1) makes this
section apply if an approved plan is in force and the universal service provider
for the area gives the Minister a draft variation of the plan.
As a
consequence of item 1, which enables there to be more than one USP for a single
area at one time, item 54 replaces reference in paragraph 35(1)(b) to the
universal service provider ‘for the area’ with a reference to the
universal service provider ‘concerned’.
Item 55 –
Amendment of section 38
Section 38 of the Act applies if an approved
universal service plan for an area is in force. It enables the Minister to give
the universal service provider ‘for the area’ a notice requiring the
provider to give the Minister a draft variation of its current plan or a fresh
draft plan for the area that is expressed to replace the current
plan.
This section enables the Minister to require changes to, or
replacement of, an approved universal service plan should the Minister form the
view that the approved plan is no longer adequate. A plan may need to be
changed, for example, because experience reveals deficiencies with the approved
plan, circumstances within the service area change, or the USO itself is changed
(and the universal service provider has failed to automatically vary its plan
accordingly).
As a consequence of item 1, which enables there to be more
than one USP for a single area at one time, item 55 replaces reference in
subsection 38(2) of the Act to the universal service provider ‘for the
area’ with a reference to the universal service provider
‘concerned’.
Item 56 – Amendment of section
39
Section 39 of the Act provides that if an approved universal
service plan for an area is in force, the universal service provider ‘for
the area’ must take all reasonable steps to ensure that it complies the
plan.
As a consequence of item 1, which enables there to be more than
one USP for a single area at one time, item 56 replaces reference in section 39
to the universal service provider ‘for the area’ with a reference to
the universal service provider ‘concerned’.
Item 57
– Amendment of subsection 41(1)
Subsection 41(1) of the Act
provides that section 41 applies if a person is ‘the universal service
provider’ for a particular area. Subsection 41(2) provides that for the
purposes of Division 5 of Part 2 of the Act, dealing with the regulation of
universal service charges, a ‘universal service charge’ is a charge
imposed or proposed to be imposed, by the person for:
• the supply
of standard telephone services to persons in the area;
• calls made
from payphones in the area; or
• the supply of prescribed carriage
services to persons in the area.
As a consequence of item 1, which
enables there to be more than one USP for a single area at one time, item 57
replaces the reference in subsection 41(1) of the Act to ‘the universal
service provider’ with a reference to ‘a universal service
provider’.
Item 58 – Amendment of paragraph
43(2)(b)
Section 43 of the Act enables the Minister to determine the
actual price control arrangements to which declared universal service charges
are to be subject.
Paragraph 43(2)(b) enables the Minister to make a
written determination setting out principles or rules in accordance with which
‘the universal service provider’ may impose or alter a particular
declared universal service charge.
As a consequence of item 1, which
enables there to be more than one USP for a single area at one time, item 58
replaces the reference in paragraph 43(2)(b) of the Act to ‘the universal
service provider’ with a reference to ‘a universal service
provider’.
Items 59, 60, 61 and 62 – Amendments of section
49
As a result of the difficulties with the default methodology set
out in subsection 57(2) for calculating a USP’s NUSC, a key objective of
this Bill is to empower the Minister to determine a USP’s NUSC (see item
70). This will be the preferred method for setting a USP’s NUSC in the
future. However, as a precaution, necessary amendments to the default costing
process are proposed to ensure it remains consistent with other changes to Part
2 of the Act.
Section 49 of the Act currently requires a person who is a
universal service provider in relation to a financial year to give the ACA,
within 60 days of commencement of the financial year, a notice specifying
service areas for which the person is the universal service provider and which
the person considers the ACA should declare as net cost areas for the financial
year (subsection 49(2)).
As a consequence of amendments which remove the
restriction that the declaration of a USP must commence on 1 July of a financial
year, items 59, 60 and 62 amend section 49 to deal with the situation where a
person is declared a USP after the commencement of the financial
year.
Item 59 substitutes the current subsection 49(1) with a new
subsection which provides that section 49 will apply where a person is a
universal service provider on the first day or any later day (the relevant day)
in a financial year.
Item 62 inserts proposed new subsection 49(2A) which
provides that where a person becomes a universal service provider a later day in
a financial year, then the notice under subsection 49(2) must not be given more
than 45 days after end of the financial year concerned. Item 60 amends
subsection 49(2) to provide that the requirement that a notice should be given
within 60 days of the commencement of the financial year will be subject to
proposed subsection (2A).
As a consequence of amendments allowing there
to be more than one NUSP and RUSP, item 61 replaces the reference in paragraph
49(2)(a) to ‘the universal service provider’ with ‘a universal
service provider’.
Items 63, 64 and 65 – Amendments of
section 50
Section 50 of the Act enables the ACA to declare areas as
net cost areas after receiving a notice under section 49. Currently, subsection
50(1) requires the ACA to decide whether a proposed area is a net cost area
within 60 days of receiving a notice under section 49. Item 63 makes subsection
(1) subject to proposed subsection 50(1A). As a consequence of amendments which
remove the restriction that the declaration of a USP must commence on 1 July of
a financial year, item 64 inserts a new subsection 50(1A) which deals with the
situation where a person becomes a universal service provider on a later day in
a financial year.
Proposed new subsection 50(1A) provides that the ACA
must , in dealing with the notice, comply with section 50 within 75 days after
the end of the financial year concerned where:
§ a person becomes a universal service
provider after the first day in the financial year;
and
§ the 60
day period referred to in subsection 50(1) would end more than 75 days after the
end of the financial year.
As a consequence of amendments allowing there
to be more than one NUSP and RUSP, item 65 replaces the reference in
subparagraph 50(2)(b)(i) to ‘the universal service provider’ with
‘a universal service provider’.
Items 66 and 67 –
Amendments of section 51
Section 51 of the Act enables a USP to seek
to have new areas declared as net cost areas after the ordinary declaration
process where circumstances beyond the USP’s control justify such late
declaration.
Subsection 51(1) of the Act provides that section 51 applies
if a person is a universal service provider on the first day of a financial
year. As a consequence of amendments which remove the restriction that the
declaration of a USP must commence on 1 July of a financial year, item 66
amends subsection 51(1) to provide that section 51 will apply where a person is
a universal service provider on the first day as well as any later day in a
financial year.
As a consequence of amendments allowing there to be more
than one NUSP and RUSP, item 67 replaces the reference in paragraph 51(2)(a) to
‘the universal service provider’ with ‘a universal service
provider’.
Items 68, 69, 70, 71, 72, 73, 74, 75 and 76 –
Amendments of section 57
Section 57 of the Act is central to the
calculation of a universal service provider’s costs in fulfilling its USO.
It provides the basis for determining participating carriers’ respective
credits and debits and levy entitlements and liabilities.
The purpose of
the amendments to section 57 and of proposed subsections 57(1A), 57(1B), 57(1C),
57(1D) and 57(1E) is to enable the Minister to determine the amount of the NUSC
or the method of working out the NUSC which will apply in respect of a specified
person, or for each person in a specified class, for a specified financial year.
The determination power under proposed subsection 57(1A) will allow the Minister
to establish long-term forward-looking costing to provide a necessary level of
certainty for the industry. Ministerial determination of a USP’s NUSC is
to be the preferred method for determining a USP’s NUSC following
amendments made by the Bill. Other costing approaches have been retained for
flexibility.
It is intended that the new proposed subsections will
supplement the existing provisions of section 57. Where the ACA has assessed the
liabilities and entitlement of a person in a financial year under section 64,
the Minister’s determination under subsection 57(1A) will not apply to
that person during that year.
Item 68 inserts a new subparagraph
57(1)(aa) which provides that if a determination under proposed subsection
57(1A) applies in respect of a person in that financial year, the person’s
net universal service cost for that year will be as set out in the determination
or in accordance with a method specified in the determination.
Item 69
replaces references in paragraphs 57(1)(a), (b), (c) and (d) to ‘if’
with ‘if paragraph (aa) does not apply and:’. It is intended that
the current provisions of section 57 will continue to apply where no declaration
under proposed subsection 57(1A) has been made.
Item 70 inserts
subsections 57(1A) to (1E) which set out the Minister’s proposed power to
determine NUSCs.
Proposed subsection 57(1A) provides that the Minister
will have the power to make a written determination to specify the amount of the
NUSC or the method of working out the NUSC in relation to a person, for each
person in a specified class, or for a specified financial year to which
subsection 57(1) applies. Item 70 also inserts a note to explain the application
of proposed section 61AA which prevents the ACA from taking into account a grant
made to a person under section 56 or 57 of the Telstra Corporation Act 1991
when providing advice on a determination proposed to made under subsection
57(1A) (see note on item 78).
Proposed subsection 57(1B) provides that a
subsection 57(1A) determination may be expressed to cover a single financial
year or up to 3 successive financial years. It also provides that, in relation
the year, or each of the years, it purports to cover, the determination has
effect for the year whether it was made before or during the year, or after the
end of the year – except where the year and a particular person have been
the subject of an ACA assessment made under section 64.
Proposed
subsection 57(1C) provides that under subsection 57(1A) the Minister may make a
determination that the amount in, or the amount worked out under, the
determination may be zero dollars.
Proposed subsection 57(1D) provides
that a determination under proposed subsection 57(1A) is required to be notified
in the Commonwealth Gazette. The Minister’s determination of a NUSC will
not be disallowable. A USP’s NUSC will generally be a significant amount
and it is important to the operation of the USP and the industry as a whole that
there be certainty as to its level. If a determination were able to be
disallowed, the USP may need to make use of the default subsection 57(2) costing
process which is administratively demanding and has given rise to significant
difficulties in the past. These difficulties led the Parliament in 1999 to cap
the USO for 1997/98 to 1999/00, subject to a Ministerial power of
determination.
Proposed subsection 57(1E) addresses the situation where a
determination under proposed subsection 57(1A) is varied or revoked. Where there
is a variation or revocation, the variation or revocation will have effect for
the year or each of the years it purports to cover, whether it was made before
or during the year, or after the end of the year – except where the year
and a particular person have been the subject of an ACA assessment made under
section 64.
As a consequence of proposed subsection 57(1A) under which
the Minister may alternatively make a determination of the amount of or the
method for working out a net universal service cost, item 71 replaces the
reference in subsection 57(2) to ‘The formula is’ with ‘For
the purposes of paragraph (1)(d), the formula is’.
Item 71 also
inserts a note to subsection 57(2) to explain the application of proposed
section 61AA which prevents the ACA from taking into account a grant made to a
person under section 56 or 57 of the Telstra Corporation Act 1991 for the
purposes of applying the formula in this subsection (see note on item
78).
As a consequence of amendments allowing there to be more than one
NUSP and RUSP, item 73 replaces the reference in paragraph 57(3)(a) to
‘the universal service provider’ with ‘a universal service
provider’.
Subsection 57(4) contemplates the situation where a USP
is a carrier for only part of a year. As a consequence of amendments which
remove the restriction that the declaration of a USP must commence on 1 July of
a financial year, and for consistency with the language in the rest of the
section 57, item 74 replaces the reference in subsection 57(4) to
‘carrier’ with ‘universal service provider’.
Item
75 inserts a note to subsection 57(9) to explain the application of proposed
section 61AA which prevents the ACA from taking into account a grant made to a
person under section 56 or 57 of the Telstra Corporation Act 1991 for the
purposes making a determination specifying the method of ascertaining
‘avoidable costs’ under this subsection (see note on item
78).
Subsection 57(22) provides that the Minister may direct the ACA to
give the Minister such reports and/or advice as the Minister requires to assist
in making a decision under subsections 51(14) or (15). Item 76 amends subsection
57(22) to provide that the Minister may also make this direction in relation to
a decision to be made under proposed subsection 57(1A).
Item 77
– Insertion of new note to subsection 60(1)
Item 77 inserts a
note to explain the application of proposed section 61AA which prevents the ACA
from taking into account a grant made to a person under section 56 or 57 of the
Telstra Corporation Act 1991 for the purposes making a determination
specifying a method, or in working out an amount, under subsection 60(1) (see
note on item 78).
Item 78 – Insertion of new section 61AA
– Grant under section 56 or 57 of Telstra Corporation Act 1991 not
to be taken into account for certain purposes
Item 78 inserts new
section 61AA which clarifies that any grant that has been or may be made to a
person under section 56 or 57 of the Telstra Corporation Act 1991, which
might otherwise be dealt with as revenue in the ‘Avoidable cost –
Revenue forgone’ method for calculating a NUSC, should not be taken into
account:
• by the ACA in providing advice to the Minister about the
specification of an amount or a method of working out a NUSC in a determination
proposed under subsection 57(1A);
• in the application of the
formula in subsection 57(2);
• in a method for ascertaining
‘avoidable costs’ specified in a determination by the ACA under
subsection 57(9); or
• in a method, or in working out an amount,
specified by the ACA in a determination under subsection 60(1).
The
objective of this provisions is to provide prospective tenders with certainty as
the relationship of a grant under sections 56 or 57 of the Telstra
Corporation Act 1991 and the NUSC.
Item 79 and 80 –
Amendments to section 109
As a consequence of amendments allowing
there to be more than one NUSP and RUSP, item 79 replaces the references in
subsection 109(1) to ‘the universal service provider’ with ‘a
universal service provider’. Similarly, item 80 replaces the references
in subsection 109(3) to ‘the universal service provider’ with
‘a universal service provider’.
Item 81 – Definitions
Item 81 contains key
definitions for the application and transitional provisions contained in Part 2
of Schedule 1 to the Bill.
Item 82 – Application of new
subsection 20(2B)
Proposed subsection 20(2B) provides that that the
person with whom the Commonwealth enters into a written agreement under section
56 or 57 of the Telstra Corporation Act 1991 will, if the agreement so
provides, become the RUSP for the service area to which the agreement is
expressed to apply, without the need for a separate declaration. The proposed
subsection requires such an agreement to be expressed to have effect for the
purpose of the subsection. Item 82 clarifies that proposed subsection 20(2B)
will apply to such a written agreement irrespective of whether it was made
before, on or after the commencement of the Schedule.
Item 83 –
Application of new subsections 20(4) and (5)
Proposed new subsection
20(4) enables the Minister to make a declaration of a NUSP or a RUSP to take
effect on the day specified for the purpose in the declaration (being a day on
or after the day the declaration is made). Subitem 83(1) clarifies that the
proposed subsection will apply to declarations made on or after the commencement
of Schedule 1 to the Bill on 1 July 2000.
Proposed new subsection 20(5)
enables the Minister to make a revocation of a declaration of a NUSP or a RUSP
to take effect on the day specified for the purpose in the instrument of
revocation (being a day on or after the day the instrument is made). Subitem
83(2) clarifies that the proposed subsection will apply to declarations made on
or after or before the commencement of Schedule 1 to the Bill. This will enable
the revocation of declarations made before the commencement of the
Schedule.
Subsection 20(5) of the Act provides that a declaration of a
USP under section 20 takes effect at the start of the financial year after the
financial year in which it is made and ceases at the end of the financial year
the declaration specifies unless it is sooner revoked. Subsection 20(5) is
proposed to be repealed by item 7. Subitem 83(3) preserves the operation of
existing subsection 20(5) in relation to a declaration made before 1 July 2000
as if the subsection had not been repealed.
Subsection 20(6) of the Act
provides that a revocation takes effect at the end of the financial year it
specifies or the financial year in which it is made if it does not specify
another financial year. Subsection 20(6) is proposed to be repealed by item 7.
Subitem 83(4) preserves the operation of existing subsection 20(6) in relation
to a revocation made before 1 July 2000 as if the subsection had not been
repealed.
Subsection 20(7) of the Act is designed to enable a carrier
that is the existing NUSP to be replaced by another carrier. It provides that if
a fresh declaration declaring another carrier to be the NUSP is made to replace
an existing declaration (the ‘original declaration’) the fresh
declaration takes effect, and the original declaration ceases to have effect,
for the time specified in the fresh declaration. Subsection 20(8) of the Act
mirrors subsection 20(7) but is designed to enable a carrier that is a RUSP to
be replaced by another carrier.
Subsections 20(7) and (8) are proposed to
be repealed by item 7. Subitem 83(5) provides that if existing subsection 20(7)
or 20(8) applied to 2 declarations (an original and a fresh declaration) made
before 1 July 2000, but the fresh declaration had not taken effect, and the
original had not ceased to have effect, under the relevant subsection by 1 July
2000, that subsection continues to apply to those declarations as if it have not
been repealed.
Item 84 – Application of new subsections 26A(4)
and (5)
Proposed new subsection 26A(4) enables the Minister to make a
declaration of a DDSP to take effect on the day specified for the purpose in the
declaration (being a day on or after the day the declaration is made). Subitem
84(1) clarifies that the proposed subsection will apply to declarations made on
or after the commencement of Schedule 1 to the Bill on 1 July
2000.
Proposed new subsection 26A(5) enables the Minister to make a
revocation of a declaration of a DDSP to take effect on the day specified for
the purpose in the instrument of revocation (being a day on or after the day the
instrument is made). Subitem 84(2) clarifies that the proposed subsection will
apply to declarations made on or after or before the commencement of Schedule 1
to the Bill. This will enable the revocation of declarations made before the
commencement of the Schedule.
Existing subsection 26A(4) of the Act
provides that a declaration of a DDSP under section 26A takes effect on the date
specified in the declaration if it is the first declaration made under
subsection 26A(1) or (2). In any other case the declaration takes effect at the
start of the financial year in which it is made, and ceases at the end of the
financial year the declaration specifies unless it is sooner revoked. Existing
subsection 26A(4) is proposed to be repealed by item 35. Subitem 84(3) preserves
the operation of existing subsection 26A(4) in relation to a declaration made
before 1 July 2000 as if existing subsection 26A(4) had not been
repealed.
Existing subsection 26A(5) of the Act provides that a
revocation of a declaration under section 26A takes effect at the end of the
financial year it specifies, or the financial year in which it is made if it
does not specify another financial year. Existing subsection 26A(5) is proposed
to be repealed by item 35. Subitem 84(4) preserves the operation of subsection
26A(5) in relation to a revocation made before 1 July 2000 as if existing
subsection 26A(5) had not been repealed.
Existing subsection 26A(6) of
the Act is designed to enable a carrier that is the existing general digital
data service provider to be replaced by another carrier. It provides that if a
fresh declaration declaring another carrier to be the general digital data
service provider is made to replace an existing declaration (the ‘original
declaration’) the fresh declaration takes effect, and the original
declaration ceases to have effect, from the time specified in the fresh
declaration. Existing subsection 26A(7) mirrors existing subsection 26A(6) but
is designed to enable a carrier that is a special digital data service provider
to be replaced by another carrier.
Existing subsection 26A(6) and (7) are
proposed to be repealed by item 35. Subitem 84(5) provides that if existing
subsection 26A(6) or (7) applied to 2 declarations (an original declaration and
a fresh declaration) made before 1 July 2000, but the fresh declation had not
taken effect, and the original declaration had not ceased to have effect, under
that subsection by 1 July 2000, that subsection continues to apply to those
declarations as if it had not been repealed.
Item 85 –
Application of new section 61AA
Proposed section 61AA provides that
any grant that has been or may be made to a person under section 56 or 57 of the
Telstra Corporation Act 1991, which might otherwise be dealt with as
revenue in the ‘Avoidable cost – Revenue forgone’ method for
calculating a NUSC, should not be taken into account in the
circumstances specified. Under proposed paragraph 61AA(b), this will include the
application of the formula in subsection 57(2). Item 85 provides that proposed
paragraph 61AA(b) applies in relation to the financial year in which the
commencement of Schedule 1 to the Bill occurs (ie. the 2000/01 financial year)
and later financial years.