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2000
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF REPRESENTATIVES
TELECOMMUNICATIONS (CONSUMER PROTECTION AND SERVICE STANDARDS) AMENDMENT BILL (NO. 2) 2000
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator the Hon. Richard Alston, Minister for Communications, Information Technology and the Arts)
ISBN: 0064 205475
TELECOMMUNICATIONS (CONSUMER PROTECTION AND
SERVICE STANDARDS) AMENDMENT BILL (NO. 2)
2000
TELECOMMUNICATIONS (UNIVERSAL SERVICE
LEVY) AMENDMENT BILL 2000
OUTLINE
The Telecommunications (Consumer Protection and Service Standards) Amendment
Bill (No. 2) 2000 (‘the Bill’) provides for the repeal and
substitution of the universal service regime in the existing Part 2 of the
Telecommunications (Consumer Protection and Service Standards) Act 1999.
Part 2 of the Telecommunications (Consumer Protection and Service
Standards) Act 1999 currently imposes a universal service obligation (USO)
on telecommunications carriers to ensure that standard telephone services (ie.
voice telephony), payphones and prescribed carriage services 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. As an adjunct to imposing this obligation on the
telecommunications industry, Part 2 also provides for the funding by
telecommunications carriers of losses incurred in fulfilling the universal
service obligation. Currently Telstra is the national universal service
provider and digital data service provider.
Standard telephone services
are price-controlled and in high-cost areas the universal service provider
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 among all
participating carriers (ie. carriers during the financial year the losses were
incurred) in proportion to their eligible revenue. Each carrier’s
contribution is currently calculated at the end of each financial year, and
carriers pay their contributions in one lump sum.
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:
(a) 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, for up to three years in
advance;
(b) undertake a competitive selection process to award the $150
million allocated for the provision of untimed local calls in remote Australia
(the Extended Zones), with the successful tenderer subsequently becoming the
universal service provider for the area;
(c) amend the universal service
regime to improve its general operation, particularly in relation to
contestability, costing and funding;
(d) undertake two pilot schemes in
regional Australia to trial the competitive supply of services under the USO;
and
(e) extend the funding base for the USO and DDSO to include carriage
service providers as well as carriers.
On 10 May 2000 the Government
introduced into Parliament the Telecommunications (Consumer Protection and
Service Standards) Amendment Bill (No. 1) 2000 (the first Bill). The first Bill
includes proposed amendments to the existing USO regime in order to implement
decisions (a) and (b). These were amendments considered essential for passage
before 30 June 2000 and where therefore introduced promptly. The Government
also took the opportunity provided by the first Bill to make simple amendments
to enhance the clarity and administrative flexibility of the existing regime,
pending full revision of the USO regime.
When it introduced the first
Bill, the Government indicated it would introduce a further Bill to
comprehensively revise the USO regime to implement the Government’s other
decisions. This Outline deals with that second Bill, the Telecommunications
(Consumer Protection and Service Standards) Amendment Bill (No. 2) 2000 and the
related Telecommunications (Universal Service Levy) Amendment Bill 2000. This
second Bill generally incorporates the amendments made in the first
Bill.
The following is an outline of the proposed substantive changes
provided for in the Bills to the operation of current Part 2 of the
Telecommunications (Consumer Protection and Service Standards) Act 1999
and the Telecommunications (Universal Service Levy) Act 1997. (It does
not cover changes provided for in the first Bill.)
Universal Service
Obligation
The Minister will be given a clarification power to
determine what is necessary or not necessary to ensure that services provided
under the USO and DDSO are ‘reasonably accessible’. The USO will be
able to be divided into constituent service obligations with a view to different
obligations being provided by different universal service providers in the same
or different areas. The Minister will be empowered to determine areas to be
universal service areas in respect of one or more obligations of the USO. Areas
not determined will constitute a default area in their own
right.
Arrangements for fulfilling the USO
Provision is
made for primary universal service providers (PUSPs) and competing universal
service providers (CUSPs). As the default, the Minister must declare one PUSP
in respect of each service obligation in respect of each universal service area.
Competitive selection of PUSPs will be dealt with administratively. As a
transitional measure, Telstra is deemed to be declared the PUSP for all service
areas until such time as another person is declared PUSP.
A PUSP will
be required to provide the services, equipment and goods required to be supplied
under the USO as specified in the legislation as it applies to the
PUSP.
A PUSP will be required to have a policy statement and a marketing
plan, which sets out how it will fulfil the USO as it applies to it, approved by
the Australian Communications Authority (ACA). The PUSP will be required to
comply with the approved documents. The PUSP will be required to consult
publicly on the policy statement and the marketing plan.
A PUSP will be
able to seek the approval by the ACA of a marketing plan to supply alternative
telecommunications services (ATS) in fulfilment of the USO (in addition to the
services it is required to provide under statute). The marketing plan must, in
the ACA’s view, appropriately deal with relevant matters. The ACA must be
satisfied the ATS will appropriately fulfil the USO. The PUSP may be required
to consult publicly on its marketing plan. The PUSP will be free to cease
offering the ATS but will need to give notice and provide for the transfer of
customer to other services.
The Minister will be able to determine that
supply of a service obligation in an area is contestable and thereby subject to
default contestability arrangements. The default PUSP arrangements will remain
in place in contestable markets.
A carrier or carriage service provider
wishing to be a competing provider in respect of a contestable service
obligation in a specified service area will be able to apply to the ACA for
approval as a competing USP or CUSP. The ACA must consider the person’s
application in terms of whether the person is (i) an appropriate person; (ii)
the person has an approved policy statement; and (iii) the person has an
approved marketing plan.
A CUSP will be able to seek the approval by the
ACA of a marketing plan to supply ‘statutory services’ and/or ATS in
fulfilment of the USO. The marketing plan must, in the ACA’s view
appropriately deal with relevant matters. The ACA must be satisfied the
services proposed will appropriately fulfil the USO. The CUSP may be required
to consult publicly on its marketing plan. The CUSP will be free to cease
offering the services it has undertaken to supply but will need to give notice
and provide for the transfer of customer to other services. Where a CUSP ceases
to provide services in fulfilment of that service obligation in respect of which
it has been approved for an area, it will no longer be a CUSP.
The
Minister will have the power to revoke an approved ATS or CUSP marketing plan
where it is in the public interest to do so. In such a case, the Minister will
be able to determine transitional arrangements.
The Minister will be able
to determine alternative arrangements for the supply of the USO. The
arrangements will be disallowable.
The provisions relating to the DDSO have been left largely unchanged.
Such changes as have been made generally align the provisions with the new USO
arrangements. More important changes include:
• competitive
selection of DDSPs to be dealt with administratively;
• public
consultation on variation of a digital data service plan will be at the
Minister’s discretion; and
• the Minister will be able to
determine a DDSP’s digital data cost without requiring the agreement of
all persons participating in the universal service arrangements.
Price control determinations are to take effect on the day specified in
the determinations rather than at the start of financial years (to enable price
controls to be aligned with new capacity, provided for in the first Bill, for
persons to become USPs at anytime).
The Minister will determine USPs’ subsidy entitlements for up to
three years in advance. Subsidies will be able to be determined in respect of
one or more service obligations under of the USO in respect of one or more
service areas. Because of their fundamental importance to the operation of the
scheme, such determinations will not be disallowable.
The Minister’s determination will be able to set out the circumstances in which the subsidy is payable, that is, in effect, to set eligibility criteria. The Minister will be able to determine additional subsidies are payable to PUSPs in contestable service areas.
The Minister will be able to request the advice of the ACA in setting
subsidies. The Minister’s request will be able to specify principles,
including the methodology, the ACA is to have regard to in preparing its advice.
Use of the current methodology (efficient provider avoidable cost less revenue
forgone) will be an administrative matter.
Eligible revenue is a revenue measure defined by subordinate legislation
and is the basis for calculating persons’ contributions to the total USO
cost. Responsibility for defining eligible revenue passes to the
ACA.
Carriage service providers as well as carriers will be required to
contribute to funding the USO cost. As a number of implementation issues need
to be resolved, provision is made for carriage service providers to be brought
into the funding process by subordinate instrument.
Eligible revenue is
to be calculated for an ‘eligible revenue period’ immediately
preceding the period for which claims for subsidies are made. The default
eligible revenue period will be a financial year. A shorter period will be able
to be set by subordinate instrument.
Carriers and carriage service
providers earning gross telecommunications revenue under a threshold determined
by the Minister, and other classes of specified persons, will not need to lodge
eligible revenue returns and will therefore be exempted from contributing to USO
funding.
Carriers and carriage service providers earning less than an
amount of eligible revenue determined by the Minister will be deemed to have
zero eligible revenue and will therefore be exempted from contributing to USO
funding.
For equity and to minimise the burden on smaller contributors, a
person’s eligible revenue assessment will be net of an amount equivalent
to the eligible revenue threshold.
The ACA will be required to make an
assessment of eligible revenue returns.
Where a carrier or carriage
service provider required to lodge an eligible revenue return does not do so,
the ACA will be able to estimate an eligible revenue figure for that person.
The ACA will need to consult with the person. The person will be able to submit
a late return but it will be at the ACA’s discretion whether it considers
the return if the ACA has already assessed USO contributions on the basis of the
estimate.
Claims for USO subsidies are to be calculated for a ‘claim
period’. The default claim period will be a financial year, but a shorter
period will be able to be specified by subordinate instrument.
The ACA will be required to make an assessment of claims.
To clarify,
if necessary, how claims should be treated and to enable management of any
difficult claim situations that may arise, the Minister will be able to
formulate principles to be followed by the ACA in assessing (including
adjusting) claims. The Minister will be required to consult before determining
such principles. The principles will be disallowable.
The Minister will
be able to modify the default formula for calculating a person’s USO
contribution (levy debit). This will be the means by which the proposed default
margin is provided for as well as the carrying-forward of the balance of any
default margin. It will also allow other adjustments to be made to the total
USO amount to be funded or individual USO contributions, so as to maintain the
efficacy of the funding arrangements. The determination will be
disallowable.
Multiple assessments (ie. of eligible revenue, claims, levy
debits and credits) will be able to be included in the same document.
The
Minister will be able to determine arrangements in relation to contributors to
USO and DDSO costs taking out performance bonds or guarantees in relation to
payment. The determination will be disallowable.
Provisions relating to the Universal Service Account have been revised to
align them with the standard forms for Special Accounts under the Financial
Management and Accountability Act 1997. Credits to and purposes of the
Universal Service Account have been revised to align them with the operation of
the universal service regime as a whole.
The Account is to be
administered by the Department of Communications, Information Technology and the
Arts, or the ACA if the ACA is a prescribed Agency for the purposes of the
Financial Management and Accountability Act 1997.
Levy will be able to be paid out to persons with USO subsidy entitlements
(levy credits) in proportion to each person’s entitlement as contributions
are paid into the Account. (Currently all contributions need to have been paid
in before any monies can be paid out.)
The Minister will be able to
determine alternative rules for the making of payments out of the Account (for
example, to give priority to specified kinds of universal service providers like
PUSPs). The determination will be disallowable.
Any balance in the
Account after all USO subsidy entitlements (levy credits) for a claim period
have been paid will be able to be distributed to persons who have paid monies
into the Account. The Minister will be able to determine rules for this
purpose. The determination will be disallowable.
Current information disclosure provisions are re-enacted but the Minister
will be able, by subordinate instrument, to modify those provisions, for
example, to make the disclosure test less restrictive. Such an instrument will
be disallowable.
Provision is made for the Minister to determine
arrangements for the provision of information to the Minister that the Minister
considers may assist in the Minister in the performance of his or her functions
and exercise of his or her powers, particularly in relation to contestability,
under the Part.
The ACA will be required to maintain a register of key subordinate
instruments made under the Part.
All the Minister’s functions and
powers under the Part will be able to be delegated, on a conditional basis, to
Senior Executive Service employees of the ACA. Delegations will not be
disallowable.
The Telecommunications (Universal Service Levy) Amendment Bill 2000
amends the Telecommunications (Universal Service Levy) Act 1997 to cover
the funding of the USO and DDSO by carriage service providers as well as
carriers (‘participating persons’) and to reflect new arrangements
in relation to eligible revenue periods and claims periods.
FINANCIAL IMPACT
STATEMENT
The Bill is not expected to have any significant financial impact on
Commonwealth expenditure or revenue. The ACA has been allocated an additional
$1.6 million in 2000-01 and an additional $1.0 million for the next 3 years for
additional administration associated with the new USO arrangements. The details
of the set out the 2000-01 Budget papers. Expenditure by the ACA will be
recovered from the industry through carrier licence application charges and
annual charges imposed by the Telecommunications (Carrier Licence Charges)
Act 1997.
The Bill provides for the funding of the USO and the DDSO
by carriage service providers as well as carriers. The Bill will therefore
alter the current financial impact on carriers who are currently required to
fund the operation of the USO and DDSO.
REGULATION IMPACT
STATEMENT
The Telecommunications (Consumer Protection and
Service Standards) Amendment Bill (No.2) 2000 (the Bill) makes amendments to the
universal service regime in Part 2 of the Telecommunications (Consumer
Protection and Service Standard) Act 1999. The Telecommunications
(Universal Service Levy) Amendment Bill 2000 makes minor consequential
amendments to the Telecommunications (Universal Service Levy) Act 1999.
This Regulation Impact Statement (RIS) identifies the key problems the Bills
address, 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. The
complementary digital data service obligation (DDSO) underpins access on request
to a 64 kbps (or comparable) data service. The Telecommunications (Universal
Service Levy) Act 1999 provides for the imposition of levy to fund the USO
and DDSO.
Currently Telstra is the sole and national universal service
provider (USP) and digital data service provider (DDSP). Regulations are
currently required before there can be competing USPs in an area. The Minister
can declare competing DDSPs.
Standard telephone services are
price-controlled and in high-cost areas the USP cannot always recover the full
cost of providing services from the customer. The losses incurred by USPs
resulting from the supply of loss-making services in the course of fulfilling
the USO are shared among all participating carriers (ie. carriers during the
financial year the losses are incurred) in proportion to their eligible revenue.
Each carrier’s contribution is currently calculated at the end of each
financial year and carriers pay their contributions in one lump sum.
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:
(a) enhance
industry certainty about USO costs by enabling the Minister to determine a
USP’s net universal service cost (NUSC) in advance for 2000-01 and
subsequent financial years, for a period of up to three
years;
(b) undertake a competitive selection process to award the $150
million allocated for the provision of untimed local calls in remote Australia
(the Extended Zones), with the successful tenderer subsequently becoming the USP
for the area;
(c) amend the universal service regime to improve its
general operation, particularly in relation to contestability, costing and
funding;
(d) undertake two pilot schemes in regional Australia to trial
the competitive supply of services under the USO; and
(e) extend the
funding base for the USO and DDSO to include carriage service providers (CSPs)
as well as carriers.
On 10 May 2000 the Government introduced into
Parliament the Telecommunications (Consumer Protection and Service Standards)
Amendment Bill (No. 1) 2000 (the first Bill). The first Bill includes proposed
amendments to the existing USO regime in order to implement decisions (a) and
(b). These were amendments considered essential for passage before 30 June 2000
and were therefore introduced promptly. The Government also took the
opportunity provided by the first Bill to make simple amendments to enhance the
clarity and administrative flexibility of the existing regime, pending full
revision of the USO regime.
When it introduced the first Bill, the
Government indicated it would introduce a further Bill to comprehensively revise
the USO regime to implement the Government’s other decisions. That second
Bill is the Bill to which this RIS relates. This second Bill generally
incorporates the amendments made in the first Bill. On that basis the RIS does
not canvass again the issues covered in the RIS for the first Bill.
This
RIS therefore assesses the regulatory impact of decisions relating
to:
1. introducing competition in the supply of services under the
USO;
2. more equitable funding of the USO and DDSO; and
3. further
refinement and streamlining of administration of the USO, particularly in
relation to funding and information
disclosure.
STAKEHOLDERS
The key stakeholders with an
interest in these matters and the possible responses to them
are:
• telecommunications consumers - as ultimate bearers of the
USO funding obligation, and hence ultimate beneficiaries of improved operation
of the USO regime;
• telecommunications consumers in regional and
rural Australia – as direct beneficiaries of the USO
regime;
• Telstra – as the incumbent national USP and the
largest contributor to the USO;
• other telecommunications carriers
– as contributors to the USO and potential USO competitors;
and
• non-carrier CSPs – as potential contributors to the USO
and potential USO competitors.
1. IMPROVING SUPPLY OF USO
SERVICES
Problem identification
The USO funding
arrangements involve in practice some 400,000 services in loss-making areas. In
keeping with Government policy to ensure the equitable provision of affordable,
basic telephony services, USO consumers receive services at less than the cost
of provision.
At present Telstra is the designated (and sole) USP. The
other carriers dispute Telstra’s assessment of the costs of USO delivery
while consumers and consumer representatives, from time to time, point to
Telstra’s lack of responsiveness to rural and remote customers both with
respect to maintaining quality of service for USO services and providing
services in a timely manner. The present arrangements also mean there is a lack
of consumer choice and little or no incentive for other carriers to enter and
supply services which are, by definition, loss-making.
Notwithstanding
these concerns, a key consideration in making any changes to the USO
arrangements is the need to maintain community confidence that services will
continue to be available and to leave to consumers the choice of whether they
change USPs. As the incumbent USP, the ongoing role of Telstra is an important
factor in this regard.
Objective
To implement USO
arrangements that ensure the core services covered by the USO are delivered to
USO customers while minimising industry (carrier) disputes, improving consumer
choice and quality of service and putting downward pressure, over time, on
delivery costs.
Discussion of options and
impacts
1. Status quo—ongoing USO monopoly
In
practice, the USO is currently an uncontested monopoly and the first option
would be to continue this status quo. Given carrier interest in entering USO
markets and consumer interest in choice of supply, such an approach would
prevent an opportunity to address these aspirations by testing alternative
contestability models. The status quo offers little incentive of itself for
improving service delivery or the range of choices. Telstra may possibly
benefit from retaining the monopoly but the extent of any benefit is uncertain.
Telstra’s competitors would continue to be excluded from the opportunity
to provide services in exchange for subsidies, while being obliged to contribute
to the USO cost.
Introducing some level of competition will provide a
basis for testing the scope for delivering USO services at less cost, and, more
importantly, offering consumers greater service choice, while still maintaining
the core services covered by the USO.
2. Competition to be the sole
USP for an area
Option 2 would involve the Government putting
fulfilment of the USO in an area to tender with the successful tenderer becoming
the sole USP for the area concerned. This approach is primarily aimed at
identifying the most technically efficient single provider of service for an
area with a view to minimising costs. Effectively there would be competition in
relation to providing the USO for that area, but once that competitive process
was complete, the USP would be the monopoly provider of services under the USO
in that area and the sole recipient of subsidies. If a person other than the
incumbent won the tender, customers would be required to change service provider
unless the incumbent chose to continue providing services on an unsubsidised
basis.
This approach may benefit the persons funding the USO (industry
and, ultimately, consumers) by reducing costs. Assuming the successful tenderer
would, by definition, earn a return it considered appropriate, it would benefit.
At the same time, however, its competitors would be denied access to a market
which they are helping to subsidise. If a tender was conducted carefully and
the tender requirements enforced rigorously on an ongoing basis USO customers
could be delivered real benefits. These would, however, always be contingent on
the effectiveness of the tender process and ongoing monitoring and enforcement
of its outcome during the contract period. USO customers may face disruption by
being forced to change providers and may miss out on ongoing service innovation
and efficiency gains in the absence of competitive or contractual pressure.
Moreover, customers, particularly in well serviced areas, may fortuitously enjoy
levels of service above what are required under the USO because of the
characteristics of the incumbent’s infrastructure. Unless adequate
safeguards are in place, tendering, because it may lead to a change in provider,
could put these fortuitous service levels at risk.
The efficacy of the
single provider tendering approach is highly dependent on the circumstances
applying in an area. A variation of the model is being applied in the Extended
Zones of remote Australia because there are clear differences between that area
and the other parts of Australia which mean this model is better for remote
Australia. These differences are discussed in ‘Conclusion and recommended
action’ below.
3. Multi-carrier USO
contestability
Option 3 would involve a multi-carrier contestability
model under which providers would compete for subsidies to provide loss-making
services under the USO. It would allow any carrier that pre-qualified with the
ACA to become a USP, to enter a contestable USO market and be eligible to
receive subsidies for USO services its supplies. Competing USPs could also seek
ACA approval of alternative services (for example, mobile, higher data rates)
they could offer in fulfilment of the USO, on a subsidised basis.
Under
contestable arrangements there is the possibility of greater choice in products
and/or suppliers and a greater incentive, in the form of competition, for USPs
to improve service offerings. Such arrangements would also accommodate more
easily coordination with other interventions, such as Social Bonus spending or
State Government contributions towards telecommunications infrastructure
development.
This type of USO contestability could be implemented in two
main ways: on a full national basis or by way of pilots. The main potential
disadvantages of moving directly to USO contestability nationally are the risks
and uncertainties involved. These include the need to develop effective
administrative arrangements, including subsidy levels, the risk of increasing
USO costs by reducing economies of scale and stranding assets and consumer
confusion. Because of likely complexities and the time needed to implement
contestability nationally, it is preferable to enable different models of
contestability to be tested in a controlled way so that any problems can be
identified and remedied during the life of the pilots.
Such pilots
would test the viability of the administrative subsidy model, and also the
possibilities of regional and community cooperative carriers. Trials involving
administrative subsidies are comparatively simple and quick to implement and
they allow Government to keep costs in check. They provide a transition path to
arrangements under which subsidies are determined competitively and the wider
introduction of USO contestability.
4. Repeal the USO legislation and
rely on market forces
This is not considered to be a realistic
option. There is general acceptance that the provision of universal service in
telecommunications needs to be underpinned by a regulatory framework that
provides for the provision and subsidisation of loss-making services. Repeal of
the USO regime would be likely to lead to significant cost increases for
customers whose services are supplied under the USO and the possible
disconnection of services if those costs were prohibitive. While repeal of the
regime would arguably level the playing field for carriers and CSPs, this may be
of little benefit if remote customers proved unable or unwilling to pay full
commercial prices.
Consultation
There has been extensive
consultation with stakeholders on the basis of a discussion paper on USO
tendering (contestability) released in March 1999. A Regional Communications
Forum hosted by the Department of Communications, Information Technology and the
Arts (DCITA) in November 1999 involved a range of stakeholders. The broad
consensus of these processes favoured contestability. Telstra’s
preference has been for single carrier tendering models while the other major
carriers (Cable & Wireless Optus and Vodafone) have favoured multiple
carrier models. The National Farmers’ Federation and the Australian
Telecommunications Users’ Group have indicated strong support for USO
competition. Other consumer consultation has indicated some in principle
consumer support for contestability, qualified by concerns that consumers should
not be made worse off in practice. (Such concerns will be addressed in the
design of contestability schemes.)
Conclusion and recommended
action
In general, Option 3 is the preferred option. It provides an
avenue for addressing issues of consumer choice, quality of service and
innovation, which Option 1 does not. It also maintains pressure on
providers’ underlying efficiency and costs with long term benefits for the
community. It avoids issues for consumers raised by simple tendering, which
restrict the circumstances in which that option is preferable. Option 4 is
unlikely to guarantee reasonable access to telecommunications service at the
level expected by the community and required by the Government.
In
certain circumstances Option 2 is a preferable approach, although it does need
to be implemented with care. These circumstances exist in remote Australia and
this approach is being implemented there. In remote Australia, existing service
infrastructure and service levels are poor, which means that, to offer untimed
local calls and Internet access, the successful tenderer will need new or
significantly upgraded telecommunications infrastructure. Even with the benefit
of the proposed $150 million grant to provide untimed local calls, low
teledensities, with around 40,000 services spread over 80 per cent of the land
area of Australia, mean that multiple USO providers in the area are unlikely to
be sustainable in the short term. Accordingly, to maximise carrier interest in
the tender, it is proposed that the successful tenderer would gain exclusive
access to USO subsidies in the extended zones of remote Australia for a period
of three years. The competitive nature of the tender should encourage the
maximising of benefits to customers and the tender process will also involve
safeguards such as ensuring the continued availability of existing services and
the smooth transition of existing customers to any new service
provider.
In short, while multiple USP competition is preferable and
practical for the more settled areas of Australia, single provider tendering is
the most practical and preferable approach in remote Australia in the short
term.
Implementation
The Bill provides for the
implementation of USO contestability pilots by enabling the Minister to
determine that the supply of specified parts of the USO is contestable in
specified service areas. In such areas, carriers and CSPs wishing to supply
services in fulfilment of the USO on a contestable basis will be able to seek
pre-qualification from the ACA. Each contestable area will have a primary USP
or ‘carrier of last resort’, Telstra in the first instance. All
USPs will have access to subsidies for supplying USO services. The Government
expects to select pilot areas by the second quarter of 2000-01. Under the
Government’s proposed reforms, option 2 is to be implemented in remote
Australia by the successful tenderer becoming the primary USP for the Extended
Zones. Like the first Bill, this Bill includes a number of provisions to
support the conduct of the Untimed Call Tender.
2. MORE EQUITABLE
FUNDING OF THE USO AND DDSO
Problem identification
At
present carriers are levied to fund the USO and DDSO in proportion to their
eligible revenue. Carriers’ eligible revenue includes both their
wholesale and retail (CSP) revenues. Where a carrier provides retail services,
the full value (wholesale and retail) of those services is subject to the USO
and DDSO levy. Where a CSP who is not a carrier provides retail services, only
the wholesale value of those services is subject, at the carrier level, to the
USO and DDSO levy.
The burden of funding the USO and DDSO levy is not,
therefore, spread across all users of telecommunications services according to
the ‘value’ of the services they consume. Rather, it falls more
heavily on carriers’ retail customers. This disadvantages carriers
relative to CSPs with whom they compete for retail customers. And over time, as
the number of carrier service providers and the value of their retail revenues
grows, these problems will be exacerbated.
Objective
To
fund the USO in a way which is competitively neutral, fair and equitable to
industry participants and their customers, sustainable, promotes economic
efficiency and maintains downward pressure on per service costs.
Discussion of options and impacts
1. Fund the USO cost
from Budget
There are strong arguments for Budget funding as the USO
is of benefit to the Australian community as a whole. Budget funding is
generally considered more economically efficient and transparent. It would
allow Government to set an aggregate value on the USO provided and then to
determine the best way to get value for money for this. Moreover,
industry-based funding is a form of industry-specific taxation that can
potentially distort investment patterns. However, Budget funding carries the
attendant risk that USO costs could increase substantially over time in the
absence of strong industry pressure to contain them. (Even though Governments
have an equally strong incentive to contain costs, they ultimately have little
control over those costs.) With the introduction of USO contestability there is
potential for this situation to lead to even higher Budgetary USO outlays where
multiple carriers enter the USO market and face reduced economies of scale.
With Budget funding these costs would ultimately be borne by taxpayers
generally, rather than telecommunications users.
2. Retain the
existing form of carrier funding
This option would continue to base
funding on carriers’ eligible wholesale and retail revenue. This has
advantages in terms of administrative simplicity but would fail to address any
of the problems identified above. It also means that possible defaults will
have a more serious impact on revenue than would be the case with a more widely
distributed levy base. As with all industry funding approaches, it means
service prices are more than they would otherwise be in order to cross-subsidise
access in loss-making USO areas.
3. Retain carrier funding but base
eligible revenue on wholesale revenue only
Funding based on wholesale
revenue was the premise of the original 1997 legislation because it was seen as
comparatively simple and would enable USO costs to be shared between carriers
and downstream users (through the passing on of costs). It proved to be
unworkable at the practical level and difficulties have been identified at the
level of principle. Carriers do not necessarily keep separate accounting records
for their wholesale and retail revenue, particularly in self-supplying, so there
is no reliable way of estimating (or verifying) wholesale revenue. The
wholesale revenue option would also narrow the tax base across which the levy is
spread and fail to secure a contribution to the USO cost from the value added at
the retail level.
4. Continue industry funding of the USO but extend
the funding base to include CSPs’ value added
The present
funding arrangements, where the full costs of the USO largely fall on
carriers’ customers, are inequitable. Carriers’ customers
contribute to the funding of the USO on the basis of the wholesale and retail
value (or ‘total value added’) of those services they consume. In
contrast CSPs’ customers, to the extent carrier USO costs are passed on to
CSPs, contribute only on the basis of wholesale value. Telstra is restricted in
passing on USO costs in interconnection charges to carriers and CSPs on the
basis that each carrier should fund the USO directly and transparently.
However, it is not practical to have different interconnection charges for
carriers and CSPs, on the basis one funds the USO directly and the other
indirectly. CSPs effectively get a windfall in that, at least as far as
Telstra’s originating and terminating access charges go, there is no USO
component. The Australian Competition and Consumer Commission (ACCC) can impose
this rule on all carriers. Carrier USO costs are being largely passed on to
their retail customers. This gives rise to inequities. Including value added
by CSPs in the levy base would address this fundamental inequality. It would
also enhance funding certainty by expanding the levy base. However it will also
increase CSPs’ compliance costs. Undue costs can be addressed by setting
minimum contribution thresholds to small CSPs and applying the levy only to
revenue above the threshold.
If CSPs were brought within the scope of the
USO levy, under the current regulations they would be able to deduct their
payments to other carriers from their eligible revenue. This prevents double
taxation of their revenue: in other words, the levy paid would be based on their
net revenue. Direct CSP contributions would be consistent with the limitations
on carriers passing on USO costs via interconnection charges. The ACCC has
existing powers to investigate any inappropriate passing on of costs in
interconnection charges should the need
arise.
Consultation
Carriers favour Budget funding on the basis
that the benefits of the USO and DDSO flow broadly to the community and the
economic costs should be borne by the Australian community as a whole. Failing
this, carriers would like to see wider industry funding. Consumer groups favour
industry funding arrangements and are concerned that a shift to Budget funding
would expose USO funding to the possibility of Budget cut-backs. A DCITA
discussion paper that addressed funding issues was made publicly available on
the DCITA website. The specific issue of extending the funding base to include
CSPs was an option covered in a paper prepared for the November 1999 Regional
Communications Forum. That paper was also made available on the DCITA website.
While a number of carriers have made comment on these funding issues, CSPs, in
general, have not. Legally, Internet service providers are CSPs. The Internet
Industry Association and some Internet service providers have expressed concern
about the possibility of double taxation (see above), a possible additional cost
burden and the appropriateness of them having to contribute directly to the USO.
Further consultation has been initiated with affected parties in the development
of legislation and would be undertaken in relation to proposed subordinate
legislation.
Conclusion and recommended action
Unlike
option 1, industry funding provides contributing parties with an ongoing
incentive to keep downward pressure on USO costs. Options 2 and 3 perpetuate
current inequities. Option 3 also has implementation problems. Broadening the
base as envisaged under option 4 spreads the USO cost burden and reduces the
risk of default. Option 4 is more equitable in terms of industry coverage
relative to the existing narrow funding base in Option 2. Option 4 is
preferred.
Implementation
The Bill provides for CSPs to be
determined by the Minister as persons who may, subject to determined thresholds,
be required to contribute to USO funding. This approach has been adopted
because of the need to a number of outstanding implementation issues relating to
general administration, timing, record keeping and the level of proposed
exclusionary threshold. Particular attention will be given to the concerns of
ISPs, particularly to ensure any requirements have clear regard to impact on
operations and capacity to pay.
3. ENHANCED ADMINISTRATIVE
ARRANGEMENTS, PARTICULARLY IN RELATION TO FUNDING AND INFORMATION
DISCLOSURE
Problem identification
Experience with the
current USO arrangements has demonstrated a number of practical problems with
their day-to-day operation. Notable among these have been a lack of access to,
and scrutiny of, information used in determining USO costs and contributions;
uncertainties about the payment and distribution of levy, and inflexibility in
relation to the entry of new USPs. These are already problems where there is a
single USP and may inhibit the introduction of competition in the supply of the
USO, for example, by creating uncertainty. The problems may also be exacerbated
as greater demands are put on the universal service regime by increased
competition.
Objective
To implement more robust regulatory
arrangements, particularly in relation to the administration of funding and
information disclosure, which will better support fulfilment of the USO,
particularly on a competitive basis.
Discussion of Options and
Impacts
1. Retain the status quo
Under the current
arrangements, persons contributing to the USO are required to have levy
guarantees. This has proved difficult to enforce because of the reluctance of
financial institutions to provide open-ended guarantees. If USO payments are
not made, the debts must be pursued by the Commonwealth. There is no provision
for outstanding debts to be carried-forward for subsequent assessments. No levy
can be distributed until all contributions have been paid. This means
significant USO payments can be delayed by the default of a small provider. The
ACA can disclose information provided to it for USO purposes subject to a test
that the disclosure does not cause substantial harm to the person providing the
information. Little information has been disclosed, hindering industry and
public scrutiny.
These arrangements could be continued on the basis that,
while imperfect, they have not prevented fulfilment of the USO. They have,
however, a number of shortcomings. For USPs there are risks that USO
contributors may delay payment or default completely, adding to their cost
burden. In the long term this situation could jeopardise the sustainability of
USO delivery, with consequent impacts on consumers. While non-USP contributors
to the USO may benefit from the ability to delay levy payment, such conduct is
not appropriate. Contributors and the wider community are also potentially
disadvantaged by the inability to scrutinise information, particularly claims,
on which contributions are based.
2. Make appropriate amendments to
the regulatory framework
This option would involve making appropriate
amendments to the regulatory framework, either individually or as part of a
larger package, to rectify identified shortcomings. While the amendments could
be approached in a number of ways, the amendments would, in general do the
following:
• provide for greater industry and public scrutiny of
information used in determining USO contributions, principally by establishing a
default that such information should be in the public domain or by establishing
a less restrictive public interest test;
• provide stronger
incentives for industry to lodge eligible revenue returns, for example in the
form of stronger penalties and by enabling the ACA to estimate a figure where no
return is provided;
• clarify the ACA’s ability to specify audit requirements and
scrutinise and adjust claims and eligible revenue
returns;
• establish arrangements to minimise the likelihood of
default by contributors, for example, by enabling more frequent collection of
levy, requiring performance bonds, and requiring the payment of default
margins;
• provide for payment to USPs, on a proportional basis, of
levy contributions as they are received; and
• provide greater
flexibility overall and thus ability to respond to new issues, for example, by
allowing standard arrangements to be varied by disallowable subordinate
legislation.
Changes such as these, by addressing deficiencies, would generally benefit
all stakeholders. USPs would have greater certainty about the payment of their
entitlements. Greater flexibility would provide scope to resolve unforeseen
issues that may emerge. The interests of participants would be protected by
instruments being disallowable. Contributors would have less scope to benefit
from avoiding or defaulting on payment, but this is inappropriate conduct in any
regard. By providing more robust arrangements along these lines, other carriers
and CSPs may have fewer concerns about becoming USPs. Information providers,
particularly USPs, but also contributors, would generally prefer to restrict
access to information with a view to protecting their commercial interests.
Wider availability of information, however, should help promote greater scrutiny
of arrangements for the provision of universal service and long term
enhancements to the benefit of the industry and consumers. Consumers will
benefit generally from USO arrangements which are more effective, sustainable
and encourage the entry of new providers.
Consultation
Consultation with industry, the ACA and other
interested parties is the main means by which the Government has become aware of
problems with the current legislative regime. Such deficiencies have been
brought to its attention through day-to-day contact with stakeholders as well as
formal consultation, for example, in relation to DCITA’s discussion paper
on costing and funding, released in August 1999. Other matters were discussed
at the Regional Communications Forum in November 1999. Greater information
disclosure has also been proposed in the past by the Senate Environment,
Communications, Information Technology and the Arts Legislation Committee.
There is general support for the development of a more robust and reliable USO
regime. Support for information disclosure, however, generally depends on
whether a person is an information provider or a potential scrutineer. Telstra
has generally been cautious about less restrictive information disclosure
arrangements.
Conclusion and recommended action
Option 2 is
the only realistic option, given the shortcomings of the current arrangements
(Option 1). The action recommended is amendment of Part 2 to addressed the
various administrative matters
identified.
Implementation
The Bill makes a range of
changes to the legislative arrangements for administering funding of the USO.
Provision is made for a number of subordinate instruments (for example,
information disclosure) to enable the regime to be supplemented as required.
The Government policy is to consult on the drafting of subordinate
legislation.
REVIEW
The provision of services under the USO
and DDSO is subject to considerable community, industry and Government interest
and is subject to constant scrutiny from these quarters. The ACA and Government
closely monitor the fulfilment of both obligations.
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 the Bill amends, is reviewed in 2004.
Instruments under the proposed legislation will be subject to a similar review
timeframe. The proposed contestability pilots themselves will be the subject of
comprehensive monitoring and evaluation arrangements.
ABBREVIATIONS
The following abbreviations are used in this explanatory
memorandum:
ACA: Australian Communications
Authority
Act: Telecommunications (Consumer Protection and Service
Standards) Act 1999
ATS: alternative telecommunications
service
Bill: Telecommunications (Consumer Protection and Service
Standards) Amendment Bill (No. 1) 2000
CSP: carriage service
provider
CUSP: competing universal service
provider
DDSO: Digital Data Service Obligation
DDSP: Digital
Data Service Provider
FMA Act: Financial Management and
Accountability Act 1997
NUSC: net universal service
cost
NUSP: national universal service provider
PUSP: primary
universal service provider
RUSP: regional universal service
provider
STS: standard telephone service
Telecommunications
Act: Telecommunications Act 1997
Telstra: Telstra Corporation
Limited
USO: universal service obligation
USP: universal
service provider
NOTES ON CLAUSES
Clause 1 provides that the Bill, when enacted, may be cited as the
Telecommunications (Consumer Protection and Service Standards) Amendment Act
(No. 2) 2000.
Subclause 2(1) provides that subject to clause 2 the Bill, when enacted, will
commence on the day on which it receives 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 proposed new universal service regime
in new Part 2 of the Act will apply in relation to the 2000-2001 financial years
and subsequent financial years.
Clause 3 provides that subject to clause 2, provisions in an 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.
Item 1 repeals Part 2 of the Telecommunications (Consumer Protection and
Service Standards) Act 1999 that contains the current universal service
regime arrangements and substitutes a new Part 2 dealing with new universal
service regime arrangements.
Proposed section 8 sets out a simplified outline of new Part 2 to assist
readers.
The objects of new Part 2 are modelled on the objects of the existing Part 2
with modifications to reflect new emphases and priorities in relation to the
supply of services under the proposed new universal service regime.
The
objects of new Part 2 are to give effect to the following policy
principles:
• all people in Australia, wherever they reside or
carry on business, should have reasonable access, on an equitable basis, to
standard telephone services, payphones, prescribed carriage services and digital
data services – this focuses on the services that should be available to
people in Australia and the basis of access to those
services;
• the USO in proposed section 9 and the DDSO in proposed
section 10 should be fulfilled effectively, efficiently and economically –
this focuses on the importance of the USO and DDSO being fulfilled so that they
provide real benefits to consumers (ie. ‘effectively’) while
controlling the overall cost to the community (ie. ‘efficiently’ and
‘economically’);
• the USO and DDSO should be fulfilled
in ways consistent with Australia’s open and competitive
telecommunications regime – this refers in particular to the principle
that the supply of telecommunications services in Australia is first and
foremost a commercial, competitive activity, and that, in this context, the
universal service regime is an additional consumer safeguard – this is
reflected throughout the operation of the proposed
provisions;
• the USO and DDSO should be fulfilled in ways that
are, as far as practicable, responsive to the needs of consumers – this
refers in particular to the obligations working in ways that deliver consumers
the services they want – this is reflected in the provisions supporting
the competitive supply of services, including ATS - ‘as far as
practicable’ recognises there may be limits to this object, such as
technical feasibility or cost constraints;
• fulfilment of the USO
and DDSO should generally be open to competition among carriers and carriage
service providers - this primarily refers to there being equality of opportunity
for competing service providers in the supply of USO and DDSO services - this is
reflected in the proposed provisions supporting the competitive supply of USO
and DDSO services, including ATS;
• there should be specific and
predictable funding arrangements to advance the provision of universal service,
particularly in high cost areas – this refers in particular to there being
funding arrangements USPs can have confidence in and which give all of the
industry a clear indication, in advance, of USO costs – it responds in
part to uncertainties about costs inherent in post facto costing approaches
– ‘particularly in high cost areas’ recognises that while the
USO and DDSO apply nationally, there are specific areas of high cost which are
particularly depend on industry subsidisation – this object is reflected
in the proposed provisions enabling determination in advance of subsidies as
well as revised funding arrangements;
• providers of
telecommunications services should contribute, in a way which is equitable and
reasonable, to the funding of the USO and DDSO – this refers to funding of
the USO and DDSO being shared fairly and reasonably by all service providers
– relative capacity to contribute and the potential impact on the
sustainability of businesses are intended to be considered – the object is
reflected, in particular, in the extension of funding to carriage service
providers and mechanisms to focus funding
obligations;
• information on which decisions under the universal
service regime are based should generally be open to industry and public
scrutiny – this is to facilitate industry and community understanding of,
and debate about, the processes and costs involved with a view to identifying
more effective, efficient and economical approaches to the delivery of the USO
and DDSO – the object is reflected in the Minister’s ability to
determine alternative information disclosure rules; and
• the
universal service regime should be flexible and able to deal with rapid changes
in both the telecommunications industry and the needs of consumers – this
acknowledges the rapidity and magnitude of change in the industry on both the
supply and demands and recognises the difficulties the current Part 2 has had in
dealing with emerging USO issues – the object is reflected throughout the
proposed provisions, including the ability to specify service areas, to share
the constituent obligations of the USO between providers and modify default
arrangements by subordinate legislation.
Proposed section 8B mirrors section 10 of the Telecommunications (Consumer
Protection and Service Standards) Act 1999. It defines Australia for the
purposes of new Part 2 of that Act and provides that a reference to
‘Australia’ includes a reference to the Territories of Christmas
Island and Cocos (Keeling) Islands and an external territory specified in the
regulations. This requires the Government to make a conscious decision to
extend the universal service regime to other external territories, such as
Norfolk Island. The definition of ‘Australia’ in section 7 of the
Telecommunications Act 1997 will not apply to new Part 2 of the
Telecommunications (Consumer Protection and Service Standards) Act 1999.
This definition of Australia applies the USO to the territories of Christmas and
Cocos (Keeling) Islands and is consistent with previous Government decisions to
extend the body of Commonwealth laws to these territories.
Proposed section 8C mirrors section 15 of the Telecommunications (Consumer
Protection and Service Standards) Act 1999. It is a definitional provision
that provides that, for the purposes of new Part 2 of that Act, a ‘service
area’ is: a geographical area within Australia; any area of land; or any
premises or part of premises; regardless of size. To avoid doubt, it is
intended that the universal service obligation applies to premises that are
within another building, for example, a flat or shop in a multi-unit complex.
‘Service area’ is used, for example in proposed section 9G
dealing with universal service areas.
Proposed section 9G, provides for
the determination of ‘universal service areas’, that is, service
areas in respect of the USO. Each universal service area will be required to
have a primary universal service provider. As a matter of course competing
service providers will be able to provide services in any areas but they will
only be subject to the universal service obligation (USO) and eligible for USO
subsidies where they are approved as competing universal service providers in
relation to declared contestable service obligations in respect of a specified
universal service area.
A ‘claim period’ for the purposes of
Part 2 is defined in proposed subsection 8D(1) as:
• the 2000-2001
financial year and each later financial year; or
• if the Minister
determines in writing another period – the other period.
The
Minister’s power to determine a different claim period in proposed
subsection 8D(1) includes a power to determine different periods in respect
of one or more universal service subsidies, or the digital data cost of one or
more digital data service providers (proposed subsection 8D(2)). The Minister
must not determine a period that is a part of more than one financial year
(proposed subsection 8D(3)). The determination must be published in the
Gazette (proposed subsection 8D(5)).
Proposed subsection 8D(4)
provides that the Minister’s determination may modify the way new Part 2
of the Act applies to carriers and carriage service providers.
The
ability to determine a new claim period is intended to enable claim periods to
be set for periods of less than a financial year, thereby enabling USPs to make
claims, and importantly, receive payment for shorter periods. This will help
alleviate the cost burden on USPs of having to provide services for a whole
financial year without payment in relation to those service until some time
after the end of that year. The sums involved can be significant. The
Minister’s power to modify the new Part 2 where a new claim period is
introduced would be used to ensure the new claim period interacts properly with
the overall scheme of Part 2 (which operates on a financial year default),
particularly where different claim periods are established in relation to
different subsidies.
Proposed section 8E provides that for the purposes of new Part 2 of the
Telecommunications (Consumer Protection and Service Standards) Act 1999
alternative telecommunications services, or ATS, are services the supply of
which by a universal service provider the ACA authorises for the purposes of
proposed section 8E. ATS will increase opportunities for USPs to compete
in the supply of services in fulfilment of the USO and enable them to better
response to the diverse needs of consumers.
Proposed section 8F mirrors section 18 of the Telecommunications (Consumer
Protection and Service Standards) Act 1999. It is a definitional provision
that provides that a reference in new Part 2 of that Act to an ‘approved
auditor’ is a reference to a person included in a class of persons
specified in a written determination, published in the Commonwealth
Gazette, made by the ACA for the purposes of this
provision.
Eligible revenue returns and claims for levy credit must be
accompanied by a report of an approved auditor (proposed sections 20D and 20K).
As the ACA is ultimately responsible for accepting such returns and claims, it
is appropriate that the ACA determine the class of persons who it will accept as
approved auditors.
Proposed section 8G provides that ‘disability’ has the same
meaning as in the Disability Discrimination Act 1992. Examples of the
used of the term ‘disability’ are proposed in proposed sections 9E
and 13J.
Proposed section 9 is based on subsections 19(1), (2), (3), (4), (8), (9) and
(10) of the Telecommunications (Consumer Protection and Service Standards)
Act 1999 which are re-enacted without change. Current subsections 19(5),
(6) and (7) have been substantively re-enacted and expanded upon in proposed
section 9A. Proposed section 9 is a definitional provision which, because it
defines the universal service obligation (USO), is a key provision of new Part 2
of that Act.
Proposed subsection 9(1) provides that for the purposes of
the Act, the universal service obligation is the obligation 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.
Proposed subsection 9(1) provides a broad
conceptual definition of the universal service obligation: people in Australia
are to have reasonable access to certain specified carriage services. In
relation to the concepts of ‘reasonable access’ and ‘equitable
basis’, it should be noted that these concepts are intended to relate
primarily to access in geographical terms and equity in terms of equality of
opportunity, rather than concepts of affordability. While affordability is
clearly important to access in general terms, it is a matter which the
Government considers should not be embedded in the USO itself, but should be
tackled through other (transparent) mechanisms such as competition, price
control and targeted assistance.
This broad conceptual obligation is
backed up by a further part of the obligation, namely to supply the services and
payphones necessary to achieve the objective of ensuring the specified services
and payphones are reasonably accessible to people in Australia on an equitable
basis.
Proposed subsection 9(2) therefore provides that to the extent
necessary to achieve the obligation mentioned in proposed subsection 9(1), it is
service obligation:
• to supply standard telephone services to people in Australia on request; and
• to supply, install and maintain payphones in Australia; and
• to supply prescribed carriage services to people in Australia on
request.
This two tier approach to defining the universal service
obligation provides a clear ‘headland’ statement of the core of the
universal service obligation, and indicates that the supply of services under
the obligation supports the broad obligation.
Importantly, proposed
subsection 9(2) provides for the supply of the specified carriage services
‘on request’, that is, on the request of the person seeking supply
of the relevant service. The ‘on request’ concept clarifies the
nature of the universal service obligation, particularly in a situation where
more than one carriage service or ancillary item (other than payphones) is
required to be supplied under the universal service obligation. For example,
some customers may only want to receive a standard telephone service and no
other prescribed carriage services. It is not considered appropriate,
therefore, for the universal service provider to be required to supply that
customer with all the services under the USO, including services the customer
does not want (see proposed subsections 9(4) and (5)).
Proposed
subsection 9(3) enables the Minister to determine in writing that it is service
obligation to supply, install and maintain payphones at specified locations in
Australia. This enables specific community concerns, should they arise, about
the availability of payphones to be addressed. Such a determination would be an
integral component of the USO. Any such determination will have effect
accordingly and a copy of the determination will be required to be published in
the Commonwealth Gazette. This ensures the full extent of a universal
service provider’s obligation is publicly known.
Proposed
subsection 9(6) makes it clear that an obligation to supply standard telephone
services that extends to customer equipment requires the customer to be given
the option of hiring the equipment.
Proposed section 9A builds on current subsections 19(5), (6) and (7). The
proposed subsection enables the Minister to determine what is, or is not,
necessary to ensure standard telephone services, payphones and prescribed
carriage services are reasonably accessible. Such Ministerial
determinations would be an integral component of the USO. They will be required
to be published in the Commonwealth Gazette to ensure that the full
extent of a universal service provider’s obligation is publicly known.
The expanded powers of the Minister are designed to enable the Minister to make
it clear what is or is not required to be done in order for the services
required under the USO to be reasonably accessible. It is intended that the
mechanism would be used to provide guidance on issues of a practical nature as
to what, in relation to a situation of a kind, does in fact need to be done. An
example of the type of situation where the power might be used is to specify
what needs to be done to ensure standard telephone services, including
disability equipment, are being made reasonably accessible to people in
multi-occupant premises such as nursing homes and hostels.
Proposed subsection 9B(1) provides that in the absence of a Ministerial
determination under subsection (2), each of the following is a service
obligation:
(a) the obligation to ensure that standard telephone services
are reasonably accessible to all people in Australia on an equitable basis,
wherever they reside or carry on business (proposed paragraph
9(1)(a));
(b) the obligation to ensure that payphones are reasonably
accessible to all people in Australia on an equitable basis, wherever they
reside or carry on business (proposed paragraph 9(1)(b));
(c) the
obligation to ensure that prescribed carriage services are reasonably accessible
to all people in Australia on an equitable basis, wherever they reside or carry
on business (proposed paragraph 9(1)(c)).
Proposed subsection 9B(2)
enables the Minister to determine in writing the service obligations by dividing
the universal service obligation in another way. This provision would enable
the Minister to identify other existing sub-components of the USO to be specific
obligations. For example, the obligation to supply the STS might be further
divided into two service obligations of (1) supplying the standard telephone
carriage service; and (2) supplying customer equipment, including customer
equipment for people with a disability.
Proposed subsection 9B(3)
requires the Minister’s determination to specify, in respect of each
service obligation, what must be supplied or done in order to fulfil the service
obligation.
Proposed subsection 9B(4) requires a copy of the
Minister’s determination to be published in the Commonwealth
Gazette.
The proposed provision has its antecedent in subsection
25(2) of the Act which provides for regulations to divide the USO between two or
more USPs. The purpose of this provision is to enable the constituent service
obligation of the USO to be shared among two or more USPs. This might be done
so as to take advantage of, or foster, specialisation by USPs. It also enables
one service obligation under the USO, for example, the supply of the STS, to be
made contestable at one time, while enabling another service obligation, such as
the supply of payphones, to be made contestable at a later time. The power does
not allow the Minister to add to or subtract from the overall USO.
Under proposed subsection 12A(3), the Minister must ensure that at all
times there is one PUSP in respect of each service obligation for each universal
service area.
Proposed section 9C mirrors section 11 of the Telecommunications (Consumer
Protection and Service Standards) Act 1999. It defines a payphone for the
purposes of new Part 2 of the Act.
For the purposes of new Part 2, a
payphone is a fixed telephone that is a means by which a standard telephone
service is supplied and when in normal working order, generally cannot be used
to make a call unless payment or similar activation takes place. A ‘fixed
telephone’ refers to a payphone fixed at a single geographical location
and does not include a telephone that is fixed in a vehicle (for example, a
taxi, train or aircraft). In relation to the USO, ‘payphone’
includes all payphones, not just payphones in public places, thus ensuring that
payphones in hotel lobbies, shopping malls and other private places which are
nonetheless reasonably accessible to the public can be taken into account when
fulfilling the USO. It is intended that a universal service provider’s
obligation to provide payphones to meet the needs of people with a disability
should be determined under the Disability Discrimination Act
1992.
Proposed section 9D mirrors section 12 of the Telecommunications (Consumer
Protection and Service Standards) Act 1999.
It provides that for
the purposes of new Part 2 of the Act, a ‘prescribed carriage
service’ is a carriage service specified in the regulations.
‘Carriage service’ is defined in section 7 of the
Telecommunications Act 1997 to be a ‘service for carrying
communications by means of guided and/or unguided electromagnetic energy’.
This provision does not, therefore, enable the prescription of services other
than carriage services to be made service obligation. (This outcome could be
achieved under proposed paragraphs 9E(1)(d) and 9F(c).)
The USO will be
able to be upgraded to ensure, through compartmentalising the components of the
USO, that people will always have reasonable access to a minimum service that is
of general appeal and that can change over time, while providing a mechanism to
ensure more advanced services, which may not be of general appeal, can be
required to be made accessible under the USO, without affecting overall access
to the basic service.
Proposed section 9E mirrors section 13 of the Telecommunications (Consumer
Protection and Service Standards) Act 1999.
It is a definitional
provision that sets out what is included in a reference to the supply of a
standard telephone service (for example, under paragraph 9(2)(a)) and thereby
provides a means of adding further requirements to the USO.
Proposed
section 9E provides that a reference in new Part 2 of the Act to the supply of a
standard telephone service includes a reference to the supply
of:
• if the regulations prescribe customer equipment – that
customer equipment or customer equipment supplied instead of that
first-mentioned customer equipment in order to comply with the Disability
Discrimination Act 1992; and
• if the regulations do not
prescribe customer equipment – a telephone handset that does not have
switching functions or other customer equipment supplied instead of such a
handset in order to comply with the Disability Discrimination Act 1992;
and
• other prescribed goods; and
• prescribed
services;
where the equipment, goods or services, as the case may be, are
for use in connection with the standard telephone service.
Proposed
subsection 9E(2) provides that a reference in new Part 2 of the Act to the
supply of a standard telephone service includes a reference to the supply, to a
person with a disability, of prescribed customer equipment and other prescribed
goods and services where the equipment, goods or services, as the case may be,
are for use in connection with the standard telephone service.
Proposed
section 9E ensures that customer equipment will be supplied under the USO along
with the standard telephone service. Unless regulations provide otherwise, that
customer equipment will be, at a minimum, a telephone that does not have
switching functions; that is, a basic telephone that allows calls to be made and
received but does not necessarily have other functionality (including, for
example, the ability to redirect calls, ie. a switching function).
In
the case of people with a disability, the customer equipment would be the
equipment supplied instead of such a telephone, in order to comply with the
Disability Discrimination Act 1992.
A power is included to
enable regulations to prescribe other customer equipment to be supplied for use
in connection with the standard telephone service. This enables upgrade of the
type of customer equipment for use in connection with the standard telephone
service under the USO. For example, a regulation might prescribe a telephone
with switching functions or with a liquid crystal display (LCD) for use with
calling line identification (CLI) services. In the case of people with a
disability, the customer equipment would be the equipment supplied instead of
such equipment, in order to comply with the Disability Discrimination Act.
Reliance on the Disability Discrimination Act 1992 is consistent with the
Government’s overall approach of relying on the general provisions of that
Act to address the needs of people with a disability.
In addition to
customer equipment, paragraphs 9E(1)(c) and (d) and 9F(b) and (c) also enable
regulations to provide that a reference to the supply of the standard telephone
service also includes a reference to the supply of prescribed goods (other than
customer equipment) and prescribed services (other than carriage services).
These provisions give the Government considerable flexibility in constructing
the package of products that may be supplied under the USO for use in connection
with the standard telephone service. Other prescribed goods could include, for
example, particular telephone add-ons or manuals on how to use a service.
Prescribed services could include non-carriage services, for example, customer
helplines or relay services for speech/hearing impaired users.
It is
important to note that equipment, other goods and services included in a
reference to the supply of a standard telephone service must be for use in
connection with the standard telephone service. Equipment, other goods and
services not for use in connection with the standard telephone service cannot be
required to be supplied under this provision. Furthermore, equipment, other
goods and services for use in connection with the standard telephone service are
not required to be supplied on a stand-alone basis, but only for use in
conjunction with the standard telephone service. For example, persons cannot
request that they be supplied with just a telephone; they can only request a
telephone be supplied for use in connection with a standard telephone
service.
Proposed section 9F is a companion provision to proposed section 9E that sets
out what is included in a reference to the supply of a prescribed carriage
service (for example, under paragraph 9(2)(c)). Like proposed section 9E,
proposed section 9F provides a further means of adding items, for use in
connection with a prescribed carriage service, to the USO.
Proposed
section 9F provides that a reference in new Part 2 of the Act to the supply of a
prescribed carriage service includes a reference to the supply
of:
• prescribed customer equipment;
• other
prescribed goods; and
• prescribed services;
where the
equipment, goods or services, as the case may be, are for use in connection with
the prescribed carriage service.
Service areas will be the basic spatial building blocks of the new USO
arrangements and will work with service obligations to identify a USP’s
particular obligations. PUSPs will be determined for service obligations in
respect of universal service areas. Subsidies will be determined in respect of
service obligations and universal service areas. Service obligations will be
determined to be contestable in respect of universal service areas. CUSP will
seek approval on the basis of specified service areas.
The universal
service area concept is intended to provide a high degree of flexibility in
defining areas spatially (see proposed section 8C) and in terms of applicable
service obligations. In particular, it is intended that service areas can be
determined:
• for the USO as a whole, with the effect that there
would be a single set of universal service areas for the USO for the whole of
Australia; or
• for each service obligation comprising the USO
(combination of the service obligations), with the effect that there could be
two or more sets of services areas covering the whole of
Australia.
Multiple layers of service areas may arise if it is considered
each service obligation has characteristics that warrant a particular layout of
areas being adopted.
Proposed subsection 9G(5) provides that the
Minister’s determination is a disallowable instrument. Accordingly, it
will be required to be notified in the Commonwealth Gazette, tabled in
both Houses of Parliament and will be subject to Parliamentary disallowance. A
determination that the Minister is taken to have made because of section 12E
(discussed below) will not, however, be a disallowable
instrument.
Proposed subsection 9G(2) provides that in determining
universal service areas, the Minister must ensure that no universal service area
in respect of a service obligation overlaps to any extent with any other
universal service area in respect of that service obligation.
Proposed
subsection 9G(3) provides that if at any particular time any areas of Australia
are not within a universal service area covered by a determination under
proposed subsection 9G(1), in respect of a service obligation:
(a) those
areas together constitute at that time a single universal service area in
respect of that service obligation; and
(b) the Minister is taken to have
made a determination to that effect under proposed subsection 9G(1).
That
is, those areas outside the determined universal service areas together
constitute a default service area and the Minister is deemed to have determined
the default area.
Proposed subsection 9G(4) provides that if at any
particular time one or more of the universal service areas in respect of which
the Minister is taken to have made a determination because of subsection 9G(3)
cover the same areas of Australia, then despite proposed subsection
9G(3):
(a) those areas together constitute at that time a single
universal service area in respect of all of the service obligations referred to
in proposed subsection 9G(3); and
(b) the Minister is taken to have made
a determination under proposed subsection 9G(1).
This rule is intended to
prevent an unnecessary proliferation of default universal service areas in the
event that the Minister determines different service areas in respect of
different service obligations, for example, with a view to making one particular
service obligation contestable. To the extent that the default service areas
for different service obligations coincide, the default service areas in
relation to those obligations is the same area. In the event that the default
service areas for two service obligations coincide but that for a third does
not, then the first two will have the same default service area while the latter
will have its own default service area.
In addition, under proposed
section 12E, the Minister will be taken to have properly made a determination
under proposed section 9G that each of the areas specified in an agreement under
section 56 or 57 of the Telstra Corporation Act 1991 (dealing with
grants of assistance from the Untimed Local Call Access Account) as a universal
service area is a universal service area for the purposes of the Act.
Proposed subsection 9H(1) provides that a determination under proposed
section 9G will take effect on the day specified in the determination. That day
must not be before the day on which notice of the determination is published in
the Commonwealth Gazette. The determination will therefore have a
prospective and not a retrospective operation.
Proposed subsection 9H(2)
provides that if the determination is expressed to cease to have effect at a
specified time, the determination ceases to have effect at that
time.
Proposed subsection 9H(3) provides that a variation or revocation
of a determination under proposed section 9G will take effect on the day
specified for the purpose in the instrument of variation or revocation. That
day must not be before the instrument is made. The variation or revocation will
therefore have a prospective and not a retrospective operation.
Proposed subsection 9J(1) provides that if the Minister revokes a
determination under proposed section 9G, the Minister will be able to determine
arrangements in writing to deal with any issues of a transitional nature that
arise as a result of the revocation.
Proposed subsection 9J(2) provides
that a copy of the Minister’s determination under proposed subsection
9J(1) must be published in the Commonwealth Gazette.
The provision
is intended to provide flexibility to deal with any unforeseen issues which may
arise from variations to service area determinations. Because measures may need
to be implemented quickly and they are to deal with transitional issues, the
proposed instrument will not be disallowable.
Proposed section 10 is a definitional provision which, because it defines the
digital data service obligation, is a key provision of new Part 2 of the Act. It
mirrors subsection 19A(1) of the current Act.
Proposed section 10
provides that for the purposes of the Act, the digital data service obligation
(DDSO) is the obligation:
• to ensure that
either:
– general digital data services; or
– special
digital data services;
are reasonably accessible to all people in
Australia on an equitable basis, wherever they reside or carry on
business;
• to ensure that general digital data services are
reasonably accessible to at least 96% of the Australian population on an
equitable basis; and
• to ensure that special digital data services
are reasonably accessible to the remainder of the Australian population on an
equitable basis.
The general digital data service obligation is defined in proposed subsection
10A(1) as the obligation to ensure general digital data services are reasonably
accessible to all people in general digital data service areas on an equitable
basis.
Proposed section 10A therefore provides a broad conceptual
definition of the digital data service obligation: people in Australia are to
have reasonable access to certain specified digital data services. In relation
to the concepts of ‘reasonably accessible’ and ‘equitable
basis’ referred to in proposed subsections 10A(1) and 10B(1), it should be
noted that these concepts are intended to relate primarily to access in
geographical terms and equity in terms of equality of opportunity, rather than
concepts of affordability.
This broad conceptual obligation is backed up
by a further part of the obligation under proposed section 10F, namely to supply
customer equipment or other goods or services necessary to achieve the objective
of ensuring the specified services and customer equipment are reasonably
accessible to people in Australia on an equitable basis.
Importantly,
proposed subsection 10A(2) provides for the supply of the specified digital data
services ‘on request’, that is, on the request of the person seeking
supply of the relevant service.
The special digital data service obligation is defined in proposed subsection
10B(1) as the obligation to ensure that special digital data services are
reasonably accessible to all people in special digital data service areas on an
equitable basis.
In relation to the concepts of ‘reasonably
accessible’ and ‘equitable basis’ referred to in proposed
subsection 10B(1), it should be noted that these concepts are intended to relate
primarily to access in geographical terms and equity in terms of equality of
opportunity, rather than concepts of affordability. This broad conceptual
obligation is backed up by a further part of the obligation under proposed
section 10F, namely to supply customer equipment or other goods or services
necessary to achieve the objective of ensuring the specified services and
customer equipment are reasonably accessible to people in Australia on an
equitable basis.
Importantly, proposed subsection 10B(2) provides for the
supply of the specified digital data services ‘on request’, that is,
on the request of the person seeking supply of the relevant service.
Proposed section 10C provides that a digital data service providers will not
be required to supply that customer with services customer requests not to be
supplied.
Proposed section 10D provides for regulations that enable obligations that
arise in relation to supplying customer equipment, to be met through the
involvement of a third party. The obligation is taken to have been met if the
third party supplies the necessary customer equipment (through acquisition or
hire), and any customer entitlement to a rebate on that equipment is met by the
digital data service provider. This provision establishes a basis on which the
Government’s commitment to provide a subsidy for customer equipment
necessary to receive the special digital data service may be given effect. The
specific mechanism, however, is expected to be determined in consultation with
relevant special digital data service providers.
Under proposed
subsection 10D(2) the customer’s right to a rebate from a digital data
service provider can be transferred to a third party supplying the equipment.
These provisions provide the flexibility for customer equipment to be
supplied by persons other than a digital data service provider, and the customer
to receive the rebate on that equipment from the equipment supplier (who can
seek compensation from the digital data service provider).
Proposed
subsection 10D(3) ensures that proposed subsection 10D(1) is not read down by
proposed subsection 10D(2).
Proposed section 10E defines digital data services. It mirrors section 12A of
the current Act.
For the purposes of the Act, a digital data service will
continue to be either a general digital data service or a special digital data
service (proposed subsection 10E(1)).
For the purposes of the Act,
proposed subsection 10E(2) defines a general digital data service to be a
carriage service that provides a digital data capability broadly comparable to
that provided by a data channel with a data transmission rate of 64 kilobits per
second supplied to end-users as part of the designated rate ISDN service. This
definition is a replication of the carriage service definition under subsection
66(1) of the Telecommunications Act 1997. The general digital data
service can be likened to the ISDN service currently available to 96% of the
Australian population, as required by licence condition issued under paragraph
66(1)(b) of the Telecommunications Act.
For the purposes of the Act,
proposed subsection 10E(3) defines a special digital data service as a carriage
service that provides for a capability for the delivery of digital data to an
end-user broadly comparable to the corresponding capability provided by a data
channel with a data transmission speed of 64 kilobits per second supplied to
end-users as part of the designated basic rate ISDN service. The special
digital data service can be likened to an asymmetric service that provides a
data capability in one direction (that is, to the end-user) broadly comparable
to 64 kilobits per second with a lesser data rate return service. The
Australian Communications Authority, in its report Digital Data Inquiry:
Public inquiry under section 486(1) of the Telecommunications Act 1997, in
August 1998, noted that satellite based data delivery systems are expected to be
available in the near future that will provide a data rate capacity comparable
to an ISDN line or a 56 kilobit per second modem. It is intended that these
types of asymmetric data services will meet the requirements of proposed
subsection 10E(3). Nothing in proposed subsection (3), however, is intended to
prevent a symmetric service (that is, one capable of providing the same data
transmission capability in both directions) from meeting the requirements of
that subsection.
Proposed subsection 10E(4) defines the term
‘designated basic rate ISDN service’. To provide definitional
certainty, the intention of this provision is to refer to a basic rate ISDN
service that Telstra actually supplied immediately before 1 July 1997, that
service being Telstra’s ISDN service that is compliant with ETSI
standards. ETSI has produced an extensive suite of standards in relation to
ISDN and it is not intended that the carriage service supplied by a digital data
service provider to provide the required digital data capability need comply
with those standards.
Proposed subsection 10E(5) explains how the
comparability of digital data capability is to be determined. Proposed
subsection 10E(5) provides that for the purposes of proposed subsection 10E(2),
the determination of the comparability of the digital data capability of a
carriage service is to be based solely on a comparison of the data transmission
speed available to an end-user of the service.
Proposed section 10F deals with the supply of general digital data services.
The proposed section mirrors current subsections 14A(1) to (4) of the
Act.
Proposed section 10F is a definition provision that sets out what is
included in a reference to the supply of a general digital data service and
thereby provides a means of adding further requirements to the digital data
service obligation (DDSO).
A reference in new Part 2 of the Act to the
supply of a general digital data service will include a reference to the supply
of:
• customer equipment specified in the regulations;
and
• other goods of a kind specified in the regulations;
and
• services of a kind specified in the regulations;
where
the equipment, goods or services, as the case may be, are for use in connection
with the general digital data service and the supply complies with such
requirements, restrictions or conditions as may be specified in the regulations
(proposed subsection 10F(1)).
The regulations will be able to require
that the supply of a specified kind of customer equipment be by way of hire. If
those regulations impose such a requirement, new Part 2 of the Act will have
effect, in relation to the customer equipment concerned, as if a reference to
‘supply’ were a reference to supply by way of hire (proposed
subsection 10F(2)).
The regulations will also be able to require that
specified customer equipment is to be supplied on the basis that the customer
concerned enters into a legally enforceable agreement containing such terms and
conditions relating to the ownership, possession, location, disposal or use of
the equipment, as are specified in, or ascertained in accordance with, the
regulations (proposed subsection 10F(3)).
Proposed subsections 10F(2) and
(3), will not, by implication, limit paragraph 10F(1)(e) (proposed subsection
10F(4)).
Proposed section 10G deals with the supply of special digital data services.
The proposed section mirrors current subsections 14A(5) to (8) of the
Act.
Proposed section 10G is a definition provision that sets out what is
included in a reference to the supply of a general digital data service (for
example, proposed subsection 10A(2)) and thereby provides a means of adding
further requirements to the digital data service obligation (DDSO).
A
reference in new Part 2 of the Act to the supply of a special digital data
service will include a reference to the supply of:
• customer
equipment of a kind specified in the regulations; and
• other goods
of a kind specified in the regulations; and
• services of a kind
specified in the regulations;
where the equipment, goods or services, as
the case may be, are for use in connection with the special digital data service
and the supply complies with such requirements, restrictions or conditions as
may be specified in the regulations (proposed subsection 10G(1)).
The
regulations will be able to require that the supply of a specified kind of
customer equipment is to be by way of hire. If those regulations impose such a
requirement, new Part 2 of the Act will have effect, in relation to the customer
equipment concerned, as if a reference to ‘supply’ were a reference
to supply by way of hire (proposed subsection 10G(2)).
The regulations
will also be able to require that specified customer equipment is to be supplied
on the basis that the customer concerned enters into a legally enforceable
agreement containing such terms and conditions relating to the ownership,
possession, location, disposal or use of the equipment, as are specified in, or
ascertained in accordance with, the regulations (proposed subsection
10G(3)).
It is intended that regulations will require the supply of
customer equipment associated with the special digital data service (such as a
satellite dish, associated wiring and a card inserted into the customer’s
personal computer) and that a subsidy exist for a proportion of the costs of
that equipment. To ensure the integrity of that subsidy scheme, certain
restrictions may be imposed on the supply of the customer equipment, including
on the ownership, possession, location, disposal or use by the customer of
equipment that has been subsidised.
Proposed subsections 10G(2) and (3),
will not, by implication, limit paragraph 10G(1)(e) (proposed subsection
10G(4)).
The digital data service regime differs from the universal service regime in
that it specifies two different levels of digital data service provision –
a general digital data service, and a special digital data
service.
Proposed section 10H, which mirrors section 19B of the current
Act, provides for the Minister to determine service areas containing those parts
of the Australian population to be covered by the general digital data service
obligation. The proposed section provides the flexibility for the service areas
to be ascertained according to geographical or other criteria. This recognises
that the capability to supply the general digital data service (such as by means
of an ISDN service) may be influenced by factors which are not capable of
description solely by reference to geographical criteria (for example, the
ability to supply ISDN services is influenced by the length of cable between a
customer and their local exchange and the quality of that
cable).
Proposed subsection 10H(2) requires a copy of the
Minister’s determination under this proposed section to be published in
the Commonwealth Gazette.
Proposed subsection 10H(3) requires the
Minister to exercise the powers conferred by proposed section 10H in a manner
that is consistent with the fulfilment of the digital data service obligation
(including the obligation to ensure that the general digital data service be
reasonably accessible to at least 96% of the population).
Similarly to proposed section 10H, proposed section 10J enables the Minister
to determine service areas containing those parts of the Australian population
to be covered by the special digital data service obligation. The proposed
section provides the flexibility for the service areas to be ascertained
according to geographical or other criteria. It mirrors section 19C of the
current Act.
Proposed subsection 10J(2) requires a copy of the
Minister’s determination under proposed section 10J to be published in the
Commonwealth Gazette.
Proposed subsection 10J(3) requires the
Minister to exercise the powers conferred by proposed section 10J in a manner
that is consistent with the fulfilment of the digital data service obligation
(including the obligation to ensure that the special digital data service be
available to that part of the population not covered by a general digital data
service obligation).
Proposed section 11 sets out the arrangements for the fulfilment of the
universal service obligation by universal service providers (proposed subsection
11(1)).
Proposed subsection 11(2) provides that the default arrangements
set out in new Division 5 will apply to each universal service
area.
Proposed subsection 11(3) provides that if the Minister determines
under proposed section 11C that a service obligation for a universal service
area is a contestable service obligation for that area, then:
(a) the
default arrangements set out in Division 5 apply to the area; and
(b) the
standard contestability arrangements set out in Division 6 apply to the
contestable service obligation for that area.
Proposed subsection 11(4)
provides that if the Minister determines under Division 7 that alternative
arrangements apply to a universal service area, then:
(a) those
alternative arrangements apply to the area; and
(b) the default
arrangements set out in Division 5 apply to the area except to the extent that
the determination modifies the way those arrangements apply, or excludes them
from applying, to the area.
Proposed subsection 11A(1) provides that for the purposes of new Part 2 to
the Telecommunications (Consumer Protection and Service Standards) Act
1999 the term universal service provider means a primary
universal service provider (PUSP) (see proposed section 12A) or a competing
universal service provider (CUSP) (see proposed section 13A).
Both
carriers and carriage service providers will be eligible to become USPs,
reflecting the ability of carriage service providers to utilise carrier
facilities, particularly satellite. It is proposed that Telstra will be
designated the national PUSP by Ministerial determination (see proposed sections
12A and 12D). Other carriers proposing to become universal service providers
will be pre-qualified by the ACA, having regard for example to their financial
and technical capability.
Proposed subsection 11A(2) provides that for
the purposes of new Part 2 to the Act a person who is a PUSP under a declaration
that is in force under proposed section 12A or who is approves as a CUSP under
proposed section 13B, at any time during a claim period will be:
(a) a
USP for the claim period; and
(b) a PUSP for the claim
period.
Proposed subsection 11A(3) provides that for the purposes of new
Part 2 to the Act a person who is approved as a USP under proposed subsection
13B, at any time during a claim period is:
(a) a USP for the claim
period; and
(b) a CUSP for the claim period.
Proposed section
11B – Former universal service provider may be required to provide
information to current universal service provider
Proposed section
11B will 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
(for example, service locations and customer contact details) as will assist the
new USP to do something required or permitted under new Part 2 of the Act or as
requested by the new USP or as is determined by the Minister.
Proposed
subsections 11B(1) and (2) provide that new section 11B will apply
if:
(a) a person (the former provider) ceases to be a USP for a universal
service area in respect of a service obligation (the relevant area) and within 6
months after that happens, another person (the current provider) becomes a USP
for that area in respect of that service obligation; or
(b) a person (the
former provider) ceases to be a USP for a universal service area in respect of a
service obligation (the relevant area) and another person (the current provider)
who, before that cessation, was also a USP for that area in respect of that
service obligation continues after that cessation to be a USP for that area in
respect of that service obligation.
Proposed subsection 11B(3) enables
the current provider to give the former provider a notice requiring the former
provider to give the current provider specified information. If proposed
subsection 11B(1) applies, the notice must be given within 6 months of the
current provider becoming a USP for the relevant area or the day on which the
determination under proposed section 12A was made, or the approval under
proposed section 13B was given in respect of the current provider. If proposed
subsection 11B(2) applies, the notice must be given on the day of the former
provider ceasing to be a USP for the relevant area.
Proposed subsection
11B(4) 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 new
Part 2 of the Act. The notice must identify the doing of that thing as the
purpose for which the information is required.
Proposed subsection 11B(5)
provides that the former provider will be required to comply with a requirement
made by a notice under proposed subsection 11B(3) 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
11B(6) 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 11B(7)
provides that a Ministerial determination under proposed subsection 11B(6) 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
11B 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 (for
example, as part of its billing activities). Consideration would be given to
drafting subordinate legislation to this effect if necessary.
Proposed
section 11C – Determination that a service obligation is
contestable
Proposed subsection 11C(1) enables the Minister to
determine in writing in relation to a universal service area in respect of a
service obligation that the obligation is a contestable service obligation.
This means that the standard contestability arrangements apply to the area to
the service obligation that is contestable (see proposed subsection 11(2)). The
standard contestability arrangements are set out in new Division
6.
Proposed subsection 11C(2) requires the Minister to give the ACA a
copy of each determination made under proposed section 11C.
Proposed
subsection 11C(3) provides that a determination under proposed section 11C is a
disallowable instrument. Accordingly, it must be notified in the Gazette,
tabled in both Houses of Parliament and is subject to Parliamentary
disallowance.
Proposed subsection 11D(1) provides that a determination under proposed
section 11C takes effect on the day specified in the determination. That day
must not be before the notice of the determination is published in the
Commonwealth Gazette. The determination will therefore have a
prospective and not a retrospective operation.
Proposed subsection 11D(2)
provides that if a determination under proposed section 11C is expressed to
cease to have effect at a specified time, the determination ceases to have
effect at that time.
Proposed subsection 11D(3) provides that a variation
or revocation of a determination under proposed section 11C takes effect on the
day specified for the purpose in the instrument of variation or revocation.
That day must not be before the instrument is made. The instrument of variation
or revocation will therefore have a prospective and not a retrospective
operation.
Proposed subsection 11E(1) provides that if the Minister revokes a
determination under proposed section 11C, the Minister may determine in writing
arrangements to deal with any issues of a transitional nature that arise as a
result of the revocation.
Proposed subsection 11E(2) provides that a copy
of the Minister’s determination under proposed subsection 11E(1) must be
published in the Commonwealth Gazette.
Proposed section 12 provides that the default arrangements for primary
universal service providers consist of the arrangements set out in new Division
5. These arrangements will apply to each universal service area except to the
extent that a determination of alternative arrangements modifies the way they
apply, or excludes them from applying, to the area (see proposed subsection
11(4)).
Proposed subsection 12A(1) enables the Minister to determine in writing that
a specified carrier or carriage service provider is the primary universal
service provider (PUSP) for a universal service area in respect of a service
obligation.
Proposed subsection 12A(2) enables the Minister to
determine:
(a) different PUSPs in respect of difference service
obligations; and
(b) the same person as the PUSP for one or more
universal service areas in respect of one or more service
obligations.
Proposed subsection 12A(3) provides that in exercising his
powers under proposed section 12A the Minister must ensure that at all times
there is one PUSP for each universal service area in respect of each service
obligation. This ensures that at any one time there will be at least one USP
for all aspects of the USO for all of Australia.
Proposed subsection
12A(3) and other provisions in new Part 2, will be able to be modified or
excluded if alternative arrangements are determined for a universal service area
under proposed section 14.
Proposed subsection 12A(4) provides that in
deciding whether to make a determination that a person is a PUSP, the Minister
will be required to consider any matters prescribed by the regulations and will
be able to consider any other matters that he or she considers relevant in
making that decision. The Minister will not be limited to considering only the
person’s ability to provide the services that must be provided to fulfil
the relevant service obligation, so far as it relates the universal service area
concerned.
Proposed subsection 12A(5) requires the Minister to give the
person concerned and the ACA a copy of his determination under proposed section
12A.
Proposed subsection 12A(6) provides that a determination under
proposed section 12A is disallowable. The determination must accordingly be
notified in the Commonwealth Gazette, tabled in both Houses of Parliament
and will be subject to Parliamentary disallowance.
Proposed subsection 12B(1) provides that a determination under proposed
section 12A takes effect on the day specified in the determination. That day
must not be before the day on which notice of the determination is published in
the Commonwealth Gazette.
Proposed subsection 12B(2) provides that
if a determination under proposed section 12A is expressed to cease to have
effect at a specified time, the determination ceases to have effect at that
time.
Proposed subsection 12B(3) provides that a variation or revocation
of a determination under proposed section 12A takes effect on the day specified
for the purpose in the instrument of variation or revocation. That day may be
before, on or after the day on which the instrument is made.
Proposed
subsection 12B(4) provides that if the Minister revokes a determination under
proposed section 12A, he may determine in writing arrangements to deal with any
transitional issues that may arise as a result of the revocation.
Proposed subsection 12C(1) provides that a PUSP for a universal service area
in respect of a service obligation must take all reasonable steps
to:
(a) fulfil that service obligation so far as it relates to that area;
and
(b) comply with the provider’s approved policy statement;
and
(c) comply with the approved standard marketing plan and the approved
ATS marketing plan (if any) of the provider that covers that area in respect of
that service obligation.
Proposed subsection 12C(2) enables the ACA to
determine requirements that a PUSP must comply with if the provider intends to
cease supplying alternative telecommunications services in accordance with an
approved ATS marketing plan. A copy of the ACA’s determination will be
required to be given to the provider.
Proposed subsection 12C(3) requires
the provider to comply with the ACA’s requirements under proposed
subsection 12C(2) as well as any requirements in the approved ATS marketing
plan.
This provision performs the function of requiring a PUSP to fulfil
the USO.
The obligations in proposed subsection 12C(1) are expressed in
terms of taking ‘all reasonable steps’. The reasonableness
requirement recognises that a PUSP for a universal service area may only be able
to fulfil the relevant service obligation progressively in its area. This is
particularly the case where the USO is upgraded, as the rollout of additional
network infrastructure may be required.
Section 581 of the
Telecommunications Act enables the ACA to give written directions to a carrier
in connection with performing any of the ACA’s telecommunications
functions or exercising any of the ACA’s telecommunications powers. Those
functions include regulating telecommunications in accordance with the
Telecommunications Act 1997 or the Telecommunications (Consumer
Protection and Service Standards) Act 1999. As proposed subsection 12C(1)
requires a PUSP for a universal service area to take all reasonable steps to
fulfil the relevant service obligation, clause 1 of Schedules 1 and 2 to the
Telecommunications Act makes this obligation a standard carrier licence
condition (in the case of a carrier) and a service provider rule (in the case of
a carriage service provider). The ACA has the powers to enforce this carrier
licence condition and service provider rule (see sections 68, 69, 101 and 102
and Parts 30 and 31 of the Telecommunications Act) and the ACA will have the
power under section 581 of the Telecommunications Act to direct a PUSP in
relation to its compliance with this obligation.
In addition, proposed
subsection 16(5) requires a subsidy determination to specify that a subsidy is
only payable to a PUSP who complies with proposed section 12C.
Proposed subsection 12D(1) provides that until a PUSP is, or is taken to
be, determined for the first time in respect of a service obligation for a
universal service area, the Minister will be taken to have made a determination
under proposed section 12A that Telstra is the PUSP for that area in respect of
that part.
Notice to the effect that Telstra is the PUSP for the area in
respect of the relevant part will be required to be published in the
Commonwealth Gazette (proposed subsection 12D(2)).
Proposed subsection 12E(1) provides that proposed section 12E applies to
agreements under section 56 or 57 of the Telstra Corporation Act 1991
made between the Commonwealth and a person (including a State or Territory) that
are expressed also to have effect for the purposes of:
(a) proposed
subsection 12E(1); or
(b) subsection 20(2B) (to be inserted by the
proposed Telecommunications (Consumer Protection and Service Standards)
Amendment Act (No. 1) 2000) as in force immediately before the commencement
of Schedule 1 of the proposed Telecommunications (Consumer Protection and
Service Standards) Amendment Act (No. 2) 2000.
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. (Regulations have been made 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 - see
Telstra Corporation Regulations (SR 103 of 2000)).
Subsection 20(2B) of the Act, as proposed to be in force on 30 June 2000,
provides that if an agreement under section 56 or 57 of the Telstra
Corporation Act 1991 made between the Commonwealth and a person (including a
State or Territory) is expressed also to have effect for that subsection, the
Minister is taken to have made a declaration that the person is a RUSP for the
area or areas concerned from the date or dates specified.
Proposed
subsection 12E(2) provides that the Minister will be taken to have properly
made:
(a) a determination under proposed section 9G (dealing with
universal service areas) that each of the areas specified in the agreement as a
universal service area in respect of a service obligation is a universal service
area in respect of that service obligation for the purposes of the Act;
and
(b) a determination under proposed section 12A (dealing with the
determination of PUSPs) that the person is a PUSP for each of the areas, in
respect of the service obligation or obligations specified in the
agreement.
This will enable the person with whom the Commonwealth enters
into a written agreement under section 56 or 57 of the Telstra Corporation
Act 1991, if the agreement so provides, to become the PUSP in respect of the
relevant service obligations of the USO for the service areas to which the
agreement is expressed to apply without the need for separate determinations. It
is implicit in proposed section 12E 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 a PUSP in respect
of a service obligation for the area concerned and from what date or dates
.
The commencement date of the person becoming the PUSP for an area will
be a date set out in the written agreement with the Commonwealth. The date will
be able to vary between the service areas to which the agreement is expressed to
apply (proposed subsections 12E(3) and (4)).
The Minister will be able
to make a written determination specifying other commencement dates. A copy of
the determination must be published in the Gazette (proposed subsection
12E(5)).
In relation to the deemed determinations under proposed
subsection 12E(2), a notice will be required to be published in the Commonwealth
Gazette to the effect that the person is a PUSP for the service area or
areas concerned and that includes the relevant commencement date or dates
(proposed subsection 12E(6)).
A variation or revocation of a deemed
declaration will be a disallowable instrument (proposed subsection 12E(7)).
Notice of the making of the instrument of variation or revocation will
accordingly be required to be published in the Commonwealth Gazette, the
instrument will be required to be tabled in both Houses of Parliament and it
will be subject to Parliamentary disallowance.
Proposed section 12E will
apply to an agreement under section 56 or 57 of the Telstra Corporation Act
1991 whenever it is made (proposed subsection 12E(8)).
Proposed Subdivision C of Division 5 requires a PUSP to have a policy
statement and a marketing plan, which sets out how it will fulfil the USO as it
applies to it, approved by the ACA. . The proposed Subdivision builds upon
concepts in the current Division 4. The PUSP will be required to comply with the
approved documents. The PUSP will be required to consult publicly on the policy
statement and the marketing plan. This reflects the importance of the documents
given the PUSP’s role of ‘carrier of last resort’ and the
person, who, in many ways sets the service benchmark in an area.
Proposed section 12F defines key expressions used in Subdivision C of
Division 5, which deals with policy statements and standard marketing plans of
PUSPs. These expressions are discussed in relation to proposed section 12H
below.
Proposed section 12G enables the Minister to determine in writing
requirements to be complied with by draft policy statements and draft standard
marketing plans for PUSPs (proposed subsection 12G(1)).
Examples of such
requirements are set out in proposed subsection 12G(2). These include
timeframes for supply, performance standards relating to the fulfilment of the
USO and processes for advising the public about the availability, offer and
supply of relevant equipment, goods or services in the fulfilment of the
USO.
Any determination made by the Minister under proposed section 12G
will be a disallowable instrument (proposed subsection 12G(3)). Notice of the
making of the determination must therefore be published in the Commonwealth
Gazette, the determination must be tabled in both Houses of Parliament
and the determination will be subject to Parliamentary disallowance.
Proposed section 12H provides that within 90 days after a person becomes
a PUSP for a universal service area in respect of a service obligation, the PUSP
must give the ACA:
(a) a draft policy statement, or draft variation of an
approved policy statement; and
(b) a draft standard marketing plan, or
draft variation of an approved standard marketing plan;
covering that
area in respect of that service obligation.
This requirement is subject
to the consultation requirements of proposed section 12J.
Under proposed
subsection 12K(3), a PUSP’s policy statement must set out appropriate
arrangements the PUSP will put in place to deal with the eventuality of a CUSP
ceasing to contest a contestable service obligation. (In this eventuality the
PUSP will, together with any remaining CUSPs, have obligations to service that
CUSP’s customers.) If a service obligation is determined to be
contestable, the PUSP would be expected to amendment its policy statement of its
own volition. Alternatively the Minister could formulate requirements under
proposed section12G requiring this or direct the PUSP under proposed section
12Y.
A draft policy statement for a PUSP is a general statement of the
policy the PUSP will apply in supplying equipment, goods or services as a PUSP
(see proposed subsection 12F(1)). An approved policy statement is a draft
policy statement that has been approved by the ACA (proposed subsection
12F(2)).
A draft standard marketing plan for a PUSP for a universal
service area in respect of a service obligation is a plan that sets
out:
(a) the equipment, goods or services that PUSP will supply in
fulfilment of that service obligation so far as it relates to that area;
and
(b) the arrangements for supplying and marketing the equipment, goods
or services;
but does not deal with alternative telecommunications
services (proposed subsection 12F(3)).
An approved standard marketing
plan for a PUSP is a draft standard marketing plan that has been approved by the
ACA and that is in force (proposed subsection 12F(4)).
A draft or
approved standard marketing plan will be able to cover one or more universal
service areas in respect of one or more parts of the USO (proposed subsection
12F(5)).
Proposed section 12J generally requires a PUSP to publish a preliminary
version of the draft policy statement or draft standard marketing plan before
giving it to the ACA. The PUSP must invite public submissions on the draft and
consider any submissions received within the consultation period, which must be
at least 30 days (proposed subsection 12J(1)). When giving the draft to the
ACA, the PUSP must include advice on the public submissions considered and any
changes made to the draft as a result (proposed subsection
12J(2)).
Unless the ACA determines otherwise, these consultation
requirements will not apply to the situation where the ACA has refused to
approve a draft and has directed the PUSP to provide a fresh draft (proposed
subsection 12J(3)).
The ACA must either approve, or refuse to approve, a draft policy statement
given to it by a PUSP for a universal service area in respect of a service
obligation (proposed subsection 12K(1)).
The ACA will not be able to
approve the draft unless it is satisfied that the draft adequately deals with
the supply of appropriate equipment, goods or services to people with a
disability and people with special needs (proposed subsection 12K(2)).
If
the service obligation concerned is a contestable service obligation, the ACA
will also need to be satisfied that the draft sets out appropriate arrangements
that the PUSP will apply in the event that a CUSP for that area in respect of
that service obligation ceases to supply equipment, goods or services in that
area in respect of that part (proposed subsection 12K(3)). The arrangements
may, for example, deal with the transfer of customers from the CUSP to the
PUSP.
In deciding whether to approve the draft, the ACA must also have
regard to:
(a) whether the draft complies with the requirements (if any)
under proposed section 12G (which enables the Minister to determine requirements
for drafts);
(b) any other matters determined in writing by the Minister
(a copy of the Minister’s determination must be published in the
Commonwealth Gazette – see proposed subsection (5));
and
(c) any other matters the ACA considers relevant (proposed subsection
12K(4)).
The ACA must either approve, or refuse to approve, a draft standard marketing
plan given to it by a PUSP (proposed subsection 12L(1)).
Proposed
subsection 12L(2) provides that the ACA will not be able to approve the draft
unless it is satisfied that:
(a) the draft specifies appropriate goods or
service that the PUSP will supply in fulfilment of the service obligation
concerned, so far as it relates to the universal service area concerned;
and
(b) the draft adequately deals with how the PUSP will fulfil the that
service obligation, so far as it relates to that area; and
(c) the draft
sets out appropriate terms and conditions on which the equipment, goods or
services are to be supplied; and
(d) the draft sets out appropriate
arrangements for the marketing of the supply of the equipment, goods or services
to persons in the universal service area concerned.
Proposed subsection
12L(3) provides that in deciding whether to approve the draft, the ACA must also
have regard to:
(a) whether the draft complies with the requirements (if
any) under proposed section 12G (which enables the Minister to determine
requirements for drafts);
(b) any other matters determined in writing by
the Minister (a copy of the Minister’s determination must be published in
the Commonwealth Gazette – see proposed subsection (6);
and
(c) any other matters the ACA considers relevant.
The ACA must give the PUSP written notice of the ACA’s decision whether
or not to approve a draft policy statement or draft standard marketing plan
(proposed subsection 12M(1)). If the decision is to approve the draft, notice
of this must be published in the Commonwealth Gazette (see proposed
subsection 12M(4)).
If the ACA refuses to approve the draft, it must
provide its reasons for doing so to the PUSP and may direct the PUSP to give the
ACA a fresh draft within a specified period and in specified terms (proposed
section 12M(2)). The PUSP must comply with such a direction (proposed
subsection 12M(3) and see also ss. 61, 68, 69, 98, 101, 102, Parts 30 and 31 and
cl. 1 of Schedules 1 and 2 of the Telecommunications Act 1997 in relation
to enforcement).
Proposed section 12N gives transitional operation to Telstra’s approved
universal service plan in force immediately before the commencement of Schedule
1 to the Bill (proposed subsection 12N(1)).
To the extent that the plan
contains statements of the policy Telstra will apply in supplying equipment,
goods or services, the plan will be taken, immediately after the commencement of
Schedule 1 to the Bill, to be an approved policy statement for the purposes of
the Act (proposed section 12N(2)).
The remainder of the plan will,
immediately after the commencement of Schedule 1 to the Bill, be taken to be an
approved standard marketing plan for the purposes of the Act (proposed
subsection 12N(3)).
Proposed Subdivision D of Division 5 enables a PUSP to seek the ACA’s
approval of a marketing plan to supply alternative telecommunications services
(ATS) in fulfilment of the USO (in addition to the services it is required to
provide under statute). The marketing plan must, in the ACA’s view,
appropriately deal with relevant matters. The ACA must be satisfied the ATS
will appropriately fulfil the USO. The PUSP may be required to consult publicly
on its marketing plan. The PUSP will be free to cease offering the ATS but will
need to give notice and provide for the transfer of customer to other services.
The ability of the PUSP to seek approval of ATSs is to enhance its ability to
better service the needs of consumers in its service areas and to compete on an
equal footing with CUSPs who may offer ATSs. In general ATS marketing plans
must be prepared on a service obligation by service obligation and area by area
basis to maximise their transparency and the effectiveness of compliance
monitoring. Marketing plans will be a key regulatory tool under Part 2.
Because a PUSP makes a commercial decision to offer an ATS, draft ATS
marketing plans are required in advance of approval and may contain commercially
sensitive information (for example, features and start date of a new service),
public consultation on a draft ATS plan will be at the discretion of the ACA.
(A PUSP proposing to offer such a service could undertake consultation of its
own volition if it wished. The ACA would be expected to take this into account
in deciding whether to require consultation.) An approved ATS marketing plan is
a public document held in a register maintained by the ACA (proposed section
23).
Proposed section 12P defines key expressions used in Subdivision D of
Division 5.
Proposed subsection 12P(1) provides that a draft ATS
marketing plan for a PUSP for a universal service area in respect of a service
obligation is a plan that sets out:
(a) the alternative
telecommunications services that the PUSP will supply in fulfilment of that
service obligation so far as it relates to that area; and
(b) the
arrangements for supplying and marketing those services.
An approved ATS
marketing plan for a PUSP is a draft ATS marketing plan that has been approved
by the ACA and that is in force (proposed subsection 12P(2)).
Unless the
ACA determines otherwise, each draft or approved ATS marketing plan will be able
to cover only one universal service area and only one service obligation
(proposed subsection 12P(3)).
Any ACA determination under subsection (3)
must be published in the Gazette (proposed subsection 12P(4)).
Proposed section 12Q enables the Minister to determine in writing
requirements to be complied with by draft ATS marketing plans for PUSPs
(proposed subsection 12Q(1)).
Examples of such requirements are set out
in proposed subsection 12Q(2). These include timeframes for supply, performance
standards relating to the fulfilment of the USO and processes for advising the
public about the availability, offer and supply of relevant equipment, goods or
services in the fulfilment of the USO.
Any determination made by the
Minister under proposed section 12Q will be a disallowable instrument (proposed
subsection 12Q(3)). Notice of the making of the determination must therefore be
published in the Commonwealth Gazette, the determination must be tabled
in both Houses of Parliament and the determination will be subject to
Parliamentary disallowance.
A PUSP in respect of a service obligation who wishes to supply alternative
telecommunications services in fulfilment of that service obligation so far as
it relates to that area will be able to give the ACA a draft ATS marketing plan
covering the supply of those services (proposed subsection 12R(1)).
Even
if the PUSP does this, the PUSP will still be required to fulfil that service
obligation so far as it relates to that area in accordance with proposed section
9 (proposed subsection 12R(2)).
To assist the ACA in deciding whether to approve a draft ATS marketing plan,
the ACA may require the PUSP concerned to publish a preliminary version of the
draft, invite public submissions on it, consider any submissions received within
the consultation period of at least 30 days and advise the ACA on the public
submissions considered and any changes made to the draft as a result (proposed
section 12S).
The ACA must either approve, or refuse to approve, a draft ATS marketing plan
given to it by a PUSP for a universal service area in respect of a service
obligation (proposed subsection 12T(1)).
Proposed subsection 12T(2)
provides that the ACA will not be able to approve the draft unless it is
satisfied that:
(a) the draft specifies appropriate equipment, goods or
service that the provider will supply in supplying the alternative
telecommunications services; and
(b) the draft adequately deals with how
the PUSP will supply alternative telecommunications services in fulfilment of
that service obligation, so far as it relates to the concerned area;
and
(c) the PUSP will supply appropriate equipment, goods or services in
supplying the alternative telecommunications services; and
(d) the draft
sets out appropriate terms and conditions on which the equipment, goods or
services are to be supplied; and
(e) the draft sets out appropriate
arrangements for the marketing of the supply of the equipment, goods or services
to persons in that area; and
(f) the draft sets out appropriate
arrangements that the PUSP will comply with, if the PUSP ceases to supply
alternative telecommunications services in fulfilment of that service
obligation, so far as it relates to that area.
The procedure referred to
in paragraph 12T(2)(f) must include the giving of at least 45 days’ notice
to the ACA or such other notice as the ACA determines is adequate (proposed
subsection 12T(3)).
Proposed subsection 12T(4) provides that in deciding
whether to approve the draft, the ACA must also have regard
to:
(a) whether the draft complies with the requirements (if any) under
proposed section 12Q (which enables the Minister to determine requirements for
drafts); and
(b) any other matters determined in writing by the Minister
(a copy of the Minister’s determination must be published in the
Commonwealth Gazette – see proposed subsection (5);
and
(c) any other matters the ACA considers relevant.
The ACA must give the PUSP written notice of the ACA’s decision whether
or not to approve the draft (proposed subsection12U(1)). If the decision is to
approve the draft, notice of this must be published in the Commonwealth
Gazette (see proposed subsection 12U(3)).
If the ACA refuses to
approve the draft, it must provide its reasons for doing so to the PUSP
(proposed subsection 12U(2)).
Proposed section 12V makes it clear that if a draft policy statement, a draft
standard marketing plan or an approved ATS marketing plan for a PUSP becomes an
approved policy statement, an approved standard marketing plan or an approved
ATS marketing plan and is expressed to replace an earlier approved policy
statement, approved standard marketing plan, or approved ATS marketing plan the
earlier statement or plan ceases to be in force when that happens.
Proposed section 12W deals with the situation where a PUSP gives the ACA a
draft variation of an approved policy statement, an approved standard marketing
plan or approved ATS marketing plan for the PUSP that is in force (proposed
subsection 12W(1)).
The ACA must either approve, or refuse to approve,
the variation (proposed subsection 12W(2)).
Before deciding whether to
approve the variation, the ACA may, if it considers it appropriate, require the
PUSP to publish a preliminary version of the draft variation, invite public
submissions on it within a specified period, consider any submissions received
within that period and to advise the ACA on those submissions and any changes
made to the draft variation as a result (proposed subsection 12W(3)).
The
ACA will not be able to approve the variation unless it is satisfied that if the
PUSP were to give the ACA a draft policy statement, a draft standard marketing
plan or a draft ATS marketing plan in the same terms as the current statement or
plan as varied, the ACA would approve the draft (proposed subsection
12W(4)).
After deciding whether to approve the variation, the ACA will be required to
notify the PUSP of its decision (proposed subsection 12X(1)).
If the ACA
refuses to approve the variation, the ACA will be required to provide reasons
for the refusal to the PUSP (proposed subsection 12X(2)).
If the ACA
approves the variation, the current statement or plan is varied accordingly and
a copy of the notice given to the PUSP must be published in the Commonwealth
Gazette, unless the variation is only of a minor technical nature
(proposed subsection 12X(3)).
Proposed section 12Y enables the Minister to give a PUSP a written notice
requiring the PUSP to give the ACA a draft variation of an approved policy
statement or an approved marketing plan for the PUSP, or a fresh statement or
plan within a specified period and in specified terms (proposed subsections
12Y(1) and (2)).
A PUSP will be required to comply with a notice given
under proposed section 12Y (proposed subsection 12Y(3) and see also ss. 61, 68,
69, 98, 101, 102, Parts 30 and 31 and cl. 1 of Schedules 1 and 2 of the
Telecommunications Act 1997 in relation to enforcement).
Proposed section 12Z enables the Minister, by giving written notice to a
PUSP, to revoke the PUSP’s approved ATS marketing plan if the Minister
considers that it is in the public interest to do so. A copy of this notice
must be given to the ACA (proposed subsection 12Z(1)).
An approved ATS
marketing plan that is revoked ceases to be in force when the revocation takes
effect (proposed subsection 12Z(2)).
The revocation will take effect on
the day specified in the notice. This day must be on or after the day on which
the notice is given to the PUSP (proposed subsection 12(3)).
The Minister
will be able to determine in writing arrangements to deal with issues of a
transitional nature that may arise as a result of the revocation. A copy of the
Minister’s determination must be given to the PUSP and the ACA (proposed
subsection 12Z(4)).
The PUSP will be required to comply with the
requirements (if any) in the Minister’s determination (proposed subsection
12Z(5) and see also ss. 61, 68, 69, 98, 101, 102, Parts 30 and 31 and cl. 1 of
Schedules 1 and 2 of the Telecommunications Act 1997 in relation to
enforcement).
New Division 6 sets out the default arrangements for the competitive supply
of services under the USO. It enables a carrier or carriage service provider
wishing to be a competitive provider in respect of a contestable service
obligation in a specified service area to apply to the ACA for approval as a
CUSP. The ACA must consider the person’s application in terms of whether
the person is (i) an appropriate person; and (ii) the person has an approved
policy statement; and (iii) the person has an approved marketing plan.
Proposed section 13 provides that the standard contestability arrangements
consist of the arrangements set out in Division 6. These apply to contestable
parts of the USO for a universal service area in respect of that part (see
proposed subsection 11(3)).
Proposed section 13A provides that a carrier or carriage service provider
will be able to apply to the ACA for approval as a CUSP for a universal service
area in respect of a contestable service obligation (proposed subsection
13A(1)).
The application must be in the form approved in writing by the
ACA and be accompanied by a draft policy statement, or draft variation of an
approved policy statement, a draft standard marketing plan and/or a draft ATS
marketing plan and such information or documents as are required by the approved
form (proposed subsection 13A(2)).
The ACA must, within a reasonable time, approve the applicant as a CUSP for
the universal service area in respect of the contestable service obligation or
refuse the application and give the applicant written notice of its reasons for
the refusal (proposed subsection 13B(1)).
The ACA will not be able to
approve the applicant as a CUSP unless the ACA is satisfied the applicant is an
appropriate person (having regard, among other things, to the applicant’s
technical and commercial competence and financial standing). The applicant will
also be required to have an approved policy statement and/or an approved
standard marketing plan or an approved ATS marketing plan (proposed subsection
13B(2)). If, however, the applicant is already a CUSP for a universal service
area in respect of another contestable service obligation, the ACA will be
entitled to (but not required to) assume that the applicant is an appropriate
person (proposed subsection 13B(3)).
If the Minister determines in
writing certain matters to which the ACA must have regard in determining whether
an applicant is an appropriate person (see subparagraph 13B(2)(a)(iii)), a copy
of the Minister’s determination must be published in the Commonwealth
Gazette (proposed subsection 13B(4)).
While the ACA must take due
care in deciding whether or not to approve a person as a competing USP, as with
carrier licensing, ACA approval of a person as a CUSP cannot be expected to, and
is not intended to, provide an all time guarantee about a person’s ongoing
presence or effectiveness in a market. The performance of all USPs will be
monitored closely on an ongoing basis. The legislative regime for
telecommunications includes a number of mechanisms that can be employed in
addressing non-compliance with the universal service regime by a USP, including
ACA direction and ineligibility for subsidies. Ultimately, under proposed
section 13C, a person’s approval as a CUSP can be revoked.
An approval of a person as a CUSP under proposed section 13B will take effect
on the day specified in the approval. That day will be required to be on or
after the day on which the approval is given (proposed subsection
13C(1)).
If an approval is expressed to cease to have effect at a
specified time, it will cease to have effect at that time (proposed subsection
13C(2)).
A variation or revocation of an approval will take effect on the
day specified for the purpose of the instrument of variation or revocation.
That day must be on or after the day on which the instrument is made (proposed
subsection 13C(3)).
If the ACA revokes an approval of a person as a CUSP under proposed section
13B, it will be able to determine in writing arrangements to deal with any
issues of a transitional nature that may arise as a result of the revocation
(proposed subsection 13C(4)).
A copy of the ACA’s determination
will be required to be published in the Commonwealth Gazette (proposed
subsection 13C(5)).
Proposed subsection 13D(1) provides that a CUSP for a universal service area
in respect of a contestable service obligation must take all reasonable steps
to:
(a) fulfil that service obligation so far as it relates to that area;
and
(b) comply with the CUSP’s approved policy statement;
and
(c) comply with the approved standard marketing plan (if any) and the
approved ATS marketing plan (if any) of the CUSP that covers that area in
respect of that service obligation.
Proposed subsection 13D(2) deems a
CUSP for a universal service area in respect of a contestable service obligation
who supplies alternative telecommunications services in accordance with an ATS
marketing plan to have fulfilled that service obligation so far as it relates to
that area and any other obligations that arise under this Act because of that
service obligation. Most importantly, under Part 4 of the Act a STS supplied in
fulfilment of the USO is subject to the untimed local call obligation. In
choosing whether to take an ATS in fulfilment of the USO as opposed to standard
USO services, consumers will need to be mindful that ATS may not be subject to
the same requirements as standard USO services. An ATS supplier will be
expected to identify any divergence from standard requirements in its marketing
plan and to inform consumers of them. The standard USO service that must be
supplied by PUSPs will always provide a choice for consumers and set a benchmark
for CUSPs.
Proposed subsection 13D(3) enables the ACA to determine
requirements that a CUSP must comply with if the CUSP intends to cease
fulfilling the contestable service obligation concerned, so far as it relates to
the universal service area concerned, in accordance with an approved standard
marketing plan or an approved ATS marketing plan. A copy of the ACA’s
determination will be required to be given to the CUSP (proposed subsection
13D(4).
The obligations in proposed subsection 13D(1) are expressed in
terms of taking ‘all reasonable steps’. The reasonableness
requirement recognises that a CUSP for a universal service area in respect of a
contestable service obligation may only be able to fulfil the relevant service
obligation progressively in its area. This is particularly the case where the
USO is upgraded, as the rollout of additional network infrastructure may be
required.
Section 581 of the Telecommunications Act enables the ACA to
give written directions to a carrier in connection with performing any of the
ACA’s telecommunications functions or exercising any of the ACA’s
telecommunications powers. Those functions include regulating
telecommunications in accordance with the Telecommunications Act 1997 or
the Telecommunications (Consumer Protection and Service Standards) Act
1999. As proposed subsection 13D(1) requires a CUSP for a universal service
area in respect of a contestable service obligation to take all reasonable steps
to fulfil the relevant service obligation, clause 1 of Schedules 1 and 2 to the
Telecommunications Act makes this obligation a standard carrier licence
condition (in the case of a carrier) and a service provider rule (in the case of
a carriage service provider). The ACA has the powers to enforce this carrier
licence condition and service provider rule (see sections 68, 69, 101 and 102
and Parts 30 and 31 of the Telecommunications Act) and the ACA will have the
power under section 581 of the Telecommunications Act to direct a PUSP in
relation to its compliance with this obligation.
In addition, proposed
subsection 16(5) requires a subsidy determination to specify that a subsidy is
only payable to a CUSP who complies with proposed section 13D.
Proposed subsection 13E(1) enables a CUSP for a universal service area in
respect of a contestable service obligation to notify the ACA at any time that
the provider intends to cease fulfilling that obligation as so far it relates to
that area.
In giving notice to the ACA, the CUSP must comply
with:
(a) the procedures referred to in paragraph 13K(2)(e), set out in
the CUSP’s approved standard marketing plan; or
(b) the procedures
referred to in paragraph 13Q(2)(f) set out in the CUSP’s approved ATS
marketing plan.
whichever are applicable (proposed subsection
13E(2)).
After receiving the CUSP’s notice, the ACA may determine
in writing the date on which the CUSP’s approval as a CUSP for that area
in respect of that contestable service obligation ceases to have effect
(proposed subsection 13E(3).
The CUSP must be notified of the ACA’s
determination and the determination must be published in the Gazette
(proposed subsection 13E(4).
A CUSP may seek approval on the basis of supplying in fulfilment of a
contestable service obligation the equipment, goods and services required to be
supplied as defined under Part 2 or alternative telecommunications services (ie.
ATSs). The ability of the CUSP to seek approval of ATSs is to enhance its
ability to better service the needs of consumers in its chosen service areas
while enabling it to take advantage of its particular commercial strengths in
competing with PUSPs and other CUSPs. In general marketing plans must be
prepared on a service obligation by service obligation and area by area basis to
maximise their transparency and the effectiveness of compliance monitoring.
Marketing plans will be a key regulatory tool under Part 2.
Because a
CUSP makes a commercial decision to contest a contestable service obligation in
an area, its draft marketing plans (standard and ATS) are required in advance of
approval and may contain commercially sensitive information (for example,
features and start date of a new service), public consultation on a draft plan
will be at the discretion of the ACA. (A CUSP proposing to offer services could
undertake consultation of its own volition if it wished. The ACA would be
expected to take this into account in deciding whether to require consultation.)
A CUSP’s approved marketing plan is a public document held in a register
maintained by the ACA (proposed section 23).
Proposed section 13F
– Meaning of expressions
Proposed section 13F defines key
expressions used in Subdivision C of Division 6, which deals with policy
statements and standard marketing plans of CUSPs.
A draft policy
statement for an applicant for approval as a CUSP is a general statement of the
policy the applicant will apply in supplying equipment, goods or services as a
CUSP (see proposed subsection 13F(1)). An approved policy statement for the
applicant or CUSP is a draft policy statement that has been approved by the ACA
(proposed subsection 13F(2)).
A draft standard marketing plan for an
applicant for approval as a CUSP for a universal service area in respect of a
contestable service obligation is a plan that sets out:
(a) the
equipment, goods or services that the applicant will supply in fulfilment of
that service obligation so far as it relates to that area; and
(b) the
arrangements for supplying and marketing the equipment, goods or
services;
but does not deal with alternative telecommunications services
(proposed subsection 13F(3)).
An approved standard marketing plan for
the applicant or CUSP is a draft standard marketing plan that has been approved
by the ACA and that is in force (proposed subsection 13F(4)).
A draft or
approved standard marketing plan will be able to cover one or more universal
service areas in respect of one or more parts of the USO (proposed subsection
13F(5)).
Proposed section 13G enables the Minister to determine in writing
requirements to be complied with by draft policy statements and draft standard
marketing plans for applicants for approval as CUSPs (proposed subsection
13G(1)).
Examples of such requirements are set out in proposed subsection
13G(2). These include timeframes for supply, performance standards relating to
the fulfilment of the USO and processes for advising the public about the
availability, offer and supply of relevant equipment, goods or services in the
fulfilment of the USO.
Any determination made by the Minister under
proposed section 13G will be a disallowable instrument (proposed subsection
13G(3)). Notice of the making of the determination must therefore be published
in the Commonwealth Gazette, the determination must be tabled in both
Houses of Parliament and the determination will be subject to Parliamentary
disallowance.
Proposed section 13H requires an applicant for approval as a CUSP to
publish a preliminary version of the draft policy statement before giving it to
the ACA. The CUSP must invite public submissions on the draft and consider any
submissions received within the consultation period, which must be at least 30
days (proposed subsection 13H(1)).
When giving the draft to the ACA,
the applicant must include advice on the public submissions considered and any
changes made to the draft as a result (proposed subsection 13H(2)).
The
ACA may require similar consultation before deciding whether to approve a
standard marketing plan (proposed subsection 13H(3).
The ACA must either approve, or refuse to approve, a draft policy statement
given to it by an applicant for approval as a CUSP for a universal service area
in respect of a contestable service obligation (proposed subsection
13J(1)).
The ACA will not be able to approve the draft unless it is
satisfied that the draft adequately deals with the supply of appropriate
equipment, goods or services to people with a disability and people with special
needs (proposed subsection 13J(2)). It is intended that the reference to people
with special needs will include persons in regional, rural and remote areas as
well as Aboriginal and Torres Strait Islanders.
The ACA will also need to
be satisfied that the draft sets out appropriate arrangements that the applicant
will apply in the event that another CUSP for the area in respect of that
contestable part ceases to supply equipment, goods or services in that area in
respect of that contestable part (proposed subsection 13J(3)). The arrangements
may, for example, deal with the transfer of customers from the CUSP to another
CUSP.
In deciding whether to approve the draft, the ACA must also have
regard to:
(a) whether the draft complies with the requirements (if any)
under proposed section 13G (which enables the Minister to determine requirements
for drafts);
(b) any other matters determined in writing by the Minister
(a copy of the Minister’s determination must be published in the
Commonwealth Gazette – see proposed subsection (5));
and
(c) any other matters the ACA considers relevant (proposed subsection
13J(4)).
The ACA must either approve, or refuse to approve, a draft standard marketing
plan given to it by an applicant for approval as a CUSP for a universal service
area in respect of a contestable service obligation (proposed subsection
13K(1)).
Proposed subsection 13K(2) provides that the ACA will not be
able to approve the draft unless it is satisfied that:
(a) the draft
specifies appropriate equipment, goods of services that the applicant will
supply in fulfilment of the contestable service obligation concerned, so far as
it relates to the universal service area concerned; and
(b) the draft
adequately deals with how the applicant will fulfil the service obligation
concerned, so far as it relates to that area; and
(c) the draft sets out
appropriate terms and conditions on which the equipment, goods or services are
to be supplied; and
(d) the draft sets out appropriate arrangements for
the marketing of the supply of the equipment, goods or services to persons that
area; and
(e) the draft sets out appropriate arrangements that the
applicant will comply with if the applicant ceases to supply any such equipment,
goods or services or to fulfil the relevant service obligation, so far as it
relates to the area concerned.
The procedures referred to in paragraph
13K(2)(e) must include the giving of at least 45 days’ notice to the ACA
or such other notice as the ACA determines is adequate. Under proposed
subsection 13E(2) the CUSP must comply with the exit arrangements set out in its
approved standard marketing plan in surrendering its approval as a competing
USP.
Proposed subsection 13K(3) provides that in deciding whether to
approve the draft, the ACA must also have regard to:
(a) whether the
draft complies with the requirements (if any) under proposed section 13G (which
enables the Minister to determine requirements for drafts);
(b) any other
matters determined in writing by the Minister (a copy of the Minister’s
determination must be published in the Commonwealth Gazette – see
proposed subsection (4); and
(c) any other matters the ACA considers
relevant.
The ACA must give the applicant written notice of the ACA’s decision
whether or not to approve the draft policy statement or draft standard marketing
plan (proposed subsection 13L(1)). If the decision is to approve the draft,
notice of this must be published in the Commonwealth Gazette (see
proposed subsection 13L(3)).
If the ACA refuses to approve the draft, it
must provide its reasons for doing so to the applicant (proposed subsection
13L(2).
Proposed section 13M defines key expressions used in Subdivision D of
Division 6.
Proposed subsection 13M(1) provides that a draft ATS
marketing plan for an applicant for approval as a CUSP for a universal service
area in respect of a contestable service obligation is a plan that sets
out:
(a) the alternative telecommunications services that the applicant
will supply in fulfilment of that service obligation so far as it relates to
that area; and
(b) the arrangements for supplying and marketing those
services.
An approved ATS marketing plan for a CUSP is a draft ATS
marketing plan that has been approved by the ACA and that is in force (proposed
subsection 13M(2)).
Each draft or approved ATS marketing plan will be
able to cover only one universal service area in respect of one service
obligation, unless the ACA determines otherwise (proposed subsection 13M(3)). A
copy of the ACA’s determination under subsection (3) must be published in
the Gazette (proposed subsection 13M(4)).
Proposed section 13N enables the Minister to determine in writing
requirements to be complied with by draft ATS marketing plans for applicants for
approval as CUSPs (proposed subsection 13N(1)).
Examples of such
requirements are set out in proposed subsection 13N(2). These include
timeframes for supply, performance standards relating to the fulfilment of the
USO and processes for advising the public about the availability, offer and
supply of relevant equipment, goods or services in the fulfilment of the
USO.
Any determination made by the Minister under proposed section 13N
will be a disallowable instrument (proposed subsection 13N(3)). Notice of the
making of the determination must therefore be published in the Commonwealth
Gazette, the determination must be tabled in both Houses of Parliament
and the determination will be subject to Parliamentary disallowance.
To assist the ACA in deciding whether to approve a draft ATS marketing plan,
the ACA may require an applicant for approval as a CUSP to publish a preliminary
version of the draft, invite public submissions on it, consider any submissions
received within the consultation period of at least 30 days and advise the ACA
on the public submissions considered and any changes made to the draft as a
result (proposed section 13P).
The ACA must either approve, or refuse to approve, a draft ATS marketing plan
given to it by an applicant for approval as a CUSP for a universal service area
in respect of a contestable service obligation (proposed subsection
13Q(1)).
Proposed subsection 13Q(2) provides that the ACA will not be
able to approve the draft unless it is satisfied that:
the draft
specifies appropriate equipment, goods or services that the provider will supply
in supplying the alternative telecommunications service; and
(a) the
draft adequately deals with how the applicant will supply alternative
telecommunications services in fulfilment of that service obligation, so far as
it relates to that area; and
(b) the alternative telecommunications
services are of general appeal and are appropriate for fulfilling that service
obligation, so far as it relates to that area; and
(c) the draft sets out
appropriate terms and conditions on which the equipment, goods or services are
to be supplied; and
(d) the draft sets out appropriate arrangements for
the marketing of the supply of the equipment, goods or services to persons
within that area; and
(e) the draft sets out appropriate arrangements
that the applicant will comply with, if the applicant ceases to supply any such
equipment, goods or services or to fulfil that service obligation, so far as it
relates to that area.
The procedures referred to in paragraph 13Q(2)(f)
must include the giving of at least 45 days’ notice to the ACA or such
other notice as the ACA determines is adequate. Under proposed subsection
13E(2) the CUSP must comply with the exit arrangements set out in its approved
ATS marketing plan in surrendering its approval as a competing USP.
Proposed subsection 13Q(3) provides that in deciding whether to approve
the draft, the ACA must also have regard to:
(a) whether the draft
complies with the requirements (if any) under proposed section 13N (which
enables the Minister to determine requirements for drafts); and
(b) any
other matters determined in writing by the Minister (a copy of the
Minister’s determination must be published in the Commonwealth
Gazette – see proposed subsection (4); and
(c) any other
matters the ACA considers relevant.
The ACA must give the applicant written notice of the ACA’s decision
whether or not to approve the draft (proposed subsection 13R(1)). If the
decision is to approve the draft, notice of this must be published in the
Commonwealth Gazette (see proposed subsection 13R(3)).
If the ACA
refuses to approve the draft, it must provide its reasons for doing so to the
applicant (proposed subsection 13R(2)).
Proposed section 13S makes it clear that if a draft policy statement, a draft
standard marketing plan or a draft ATS marketing plan for a CUSP becomes an
approved policy statement, an approved standard marketing plan or an approved
ATS marketing plan and is expressed to replace an earlier approved policy
statement, an approved standard marketing plan or an approved ATS marketing
plan, the earlier statement or plan ceases to be in force when that
happens.
Proposed section 13T deals with the situation where a CUSP gives the ACA a
draft variation of an approved policy statement, an approved standard marketing
plan or an approved ATS marketing plan for the CUSP that is in force (proposed
subsection 13T(1)).
The ACA must either approve, or refuse to approve,
the variation (proposed subsection 13T(2)).
Before deciding whether to
approve the variation, the ACA may, if it considers it appropriate, require the
CUSP to publish a preliminary version of the draft variation, invite public
submissions on it within a specified period, consider any submissions received
within that period and to advise the ACA on those submissions and any changes
made to the draft variation as a result (proposed subsection 13T(3)).
The
ACA will not be able to approve the variation unless it is satisfied that if the
CUSP were to give the ACA a draft policy statement, a draft standard marketing
plan or a draft ATS marketing plan in the same terms as the current statement or
plan as varied, the ACA would approve the draft (proposed subsection
13T(4)).
After deciding whether to approve the variation, the ACA will be required to
notify the CUSP of its decision (proposed subsection 13U(1)).
If the ACA
refuses to approve the variation, the ACA will be required to provide reasons
for the refusal to the CUSP (proposed subsection 13U(2)).
If the ACA
approves the variation, the current statement or plan is varied accordingly and
a copy of the notice given to the CUSP must be published in the Commonwealth
Gazette, unless the variation is only of a minor nature (proposed
subsection 13U(3)).
Proposed section 13V enables the Minister, by giving written notice to a
CUSP, to revoke the CUSP’s approved ATS marketing plan if the Minister
considers that it is in the public interest to do so. A copy of this notice
must be given to the ACA (proposed subsection 13V(1)).
An approved ATS
marketing plan that is revoked ceases to be in force when the revocation takes
effect (proposed subsection 13V(2)).
The revocation will take effect on
the day specified in the notice. This day must be on or after the day on which
the notice is given to the CUSP (proposed subsection 13V(3)).
The
Minister will be able to determine in writing arrangements to deal with issues
of a transitional nature that may arise as a result of the revocation. A copy
of the Minister’s determination must be given to the CUSP and published in
the Gazette (proposed subsection 13V(4)).
The CUSP will be
required to comply with the requirements (if any) in the Minister’s
determination (proposed subsection 13V(5) and see also ss. 61, 68, 69, 98, 101,
102, Parts 30 and 31 and cl. 1 of Schedules 1 and 2 of the Telecommunications
Act 1997 in relation to enforcement).
Proposed section 14 provides that the Minister may determine in writing that
specified alternative arrangements apply to a universal service area in respect
of a service obligation.
The determination may expressly modify the
application of the default arrangements set out in Division 5 in respect of that
area, or the way in which the provisions of Part 2 apply to the area (proposed
subsection 14(2)). The Minister’s power to ‘modify’
arrangements will include excluding the application of a provision entirely, as
well as omitting, adding and substituting provisions (proposed subsection
14(5)).
The Minister must give the ACA a copy of each determination under
proposed section 14. A determination under this section will be a disallowable
instrument (proposed subsection 14(4)). Notice of the making of the
determination must therefore be published in the Commonwealth Gazette,
the determination must be tabled in both Houses of Parliament and the
determination will be subject to Parliamentary disallowance.
The purpose
of these provisions is to enable the Minister, in the light of experience with
the new regime or changes in industry circumstances, to determine alternative
USO delivery arrangements that are more effective and appropriate. The proposed
provisions reflect the extent to which legislative change to USO arrangements
has been required over the past three years to deal with newly emerging issues.
There is a partial antecedent to the provisions in current subsection 25(2),
which provides for regulations to modify Part 2 to support multiple
USPs.
Proposed subsection 14A(1) provides that a determination under proposed
section 14 takes effect on the day specified in the determination, but that the
day must not be fore the day on which notice is published in the Gazette.
The determination will cease to have effect at the time specified by the
determination, if such a time is specified (proposed subsection
14A(2)).
A variation or revocation of a determination made under proposed
section 14 takes effect on the day specified in the instrument of variation or
revocation. That day must not be after the day the instrument is made (proposed
subsection 14A(3).
Where the Minister revokes a section 14
determination, the Minister may determine transitional arrangements (proposed
subsection 14A(4)). A copy of such a determination must be published in the
Gazette (proposed subsection 14A(5).
New Division 8 reflects the provisions of Division 3A of the current Act. A
major difference is the omission of sections 26C, 26D and 26E of the current Act
relating to the determination of DDSP selection systems. Under this new
proposed Division, the selection of DDSPs will be dealt with administratively.
Proposed section 15 enables the Minister to determine in writing that a
specified carrier or carriage service provider is a general digital data
service provider, or a specified carrier or carriage service provider is a
special digital data service provider. The Minister is able to determine a
specified carriage service provider as well as a specified carrier as the
general digital data service provider for a 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.
Nothing in
this proposed section is intended to limit the ability of the Minister to make a
determination of a carrier or carriage service provider a general digital data
service provider and/or a special digital data service provider.
It is
not necessary to specifically authorise the Minister to determine multiple
general digital data service providers, or multiple special digital data service
providers, as proposed subsection 15(1) does not limit the Minister’s
ability to determine multiple general digital data service providers, and
proposed subsection 15(2) does not limit the Minister’s ability to
determine multiple special digital data service providers.
Under proposed
section 15A, a digital data service provider must take all reasonable steps to
fulfil the digital data service obligation so far as it relates to the area for
which it is the digital data service provider. Under proposed section 15P, a
digital data service provider must take all reasonable steps to ensure that its
digital data service plan, which sets out how it is to progressively fulfil its
DDSO, is complied with. A digital data service provider must fulfil the DDSO in
its respective area, and can claim for proceeds of the levy to compensate it for
certain costs associated with fulfilling the DDSO.
There is nothing in
the legislation to prevent a carrier who wishes to be determined a digital data
service provider approaching the Minister to be so determined.
Proposed
subsection 15(1) enables the Minister to determine that a specified carrier or a
carriage service provider, 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 proposed section
10H.
Proposed subsection 15(2) enables the Minister to determine 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 proposed section 10J. The effect
of being determined as a special digital data service provider, in terms of
geographical responsibilities, is stated in proposed section 15A.
‘Service area’ is defined in proposed section 8C.
Proposed
subsection 15(3) provides that in deciding whether to make a determination 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
determination of 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.
Proposed subsections 15(4) provides
that a determination under proposed subsections 15(1) or (2) has effect
accordingly. The effect of such determination is stated in proposed subsections
15A(1), (2), (4) and (5).
Greater flexibility is required in relation to
the commencement of a determination 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. Proposed subsections 15(5) and (6) enable:
• a
determination of a DDSP to take effect on the day specified for the purpose in
the determination (being a day on or after the day the day the notice of the
instrument is published in the Gazette); and
• a revocation
of a determination 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 day the
notice of the instrument is published in the Gazette).
Proposed
subsection 15(7) provides that if a carrier is a general digital data service
provider, or a special digital data service provider, and the carrier ceases to
hold a carrier licence, then the determination in relation to that carrier
ceases to be in force from that time. That is, on ceasing to be a carrier, the
person is no longer a general digital data service provider or a special digital
data service provider.
Proposed subsection
15(8) provides if a DDSP is a carriage service provider but not a carrier and
the DDSP ceases to be a carriage service provider, then the determination 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.
Proposed subsection 15(9) makes a determination of a general
digital data service provider, or a special digital data service provider, a
disallowable instrument which accordingly must be notified in the Commonwealth
Gazette, tabled in the Parliament and will be subject to Parliamentary
disallowance.
Proposed section 15A sets out the effect, in terms of geographical
responsibilities and legal obligations, of being determined as a digital data
service provider. The explicit linkage between the DDSO and being a general
digital data service provider, or special digital data service provider, is
established in proposed subsections 15A(4) and (5), and is supported through the
digital data service plans (new Division 3 of Part 2).
Proposed
subsection 15A(1) makes a digital data service provider in relation to a
particular service area the digital data service provider for all of that area,
and for each service area that is within that area.
It is worth noting
that a digital data service provider may also be responsible for
‘enclave’ service areas within the service area of another digital
data service provider if that service area is so designed.
Proposed
subsection 15A(2) provides that a person in relation to whom there is a
determination in force under proposed subsection 15(1) or (2) at any time during
a claim period is a digital data service provider in relation to that claim
period. This means that person is eligible to make a claim for levy
credit under proposed section 20J, even though the person may no longer be a
digital data service provider.
Proposed subsection 15A(3) provides that
the areas for which a person is a digital data service provider are taken to be
a single area. This means that although a digital data service provider may be
responsible for fulfilling the DDSO in a number of non-contiguous areas (for
example, Victoria and Western Australia) for the purposes of the Part, those
areas are treated as a single area. This assists with administration of the
DDSO costing arrangements.
Proposed subsection 15A(4) provides that a
general digital data service provider for an area must take all reasonable steps
to fulfil the general DDSO, so far as the obligation relates to that area.
Proposed subsection 15A(5) provides that a special digital data service provider
for an area must take all reasonable steps to fulfil the special DDSO, so far as
the obligation relates to that area.
These provisions (proposed
subsections 15A(4) and (5)) perform the function of requiring a digital data
service provider to fulfil the DDSO. New Division 4A of Part 2 places further
obligations on a digital data service provider for a particular area in relation
to digital data service plans, and proposed section 15P requires such a digital
data service provider to take all reasonable steps to ensure that the plan is
complied with. Under proposed section 15D, a digital data service plan sets out
how a digital data service provider will progressively fulfil the DDSO in the
provider’s area. In considering whether a provider has taken all
reasonable steps to fulfil the DDSO, regard should be had to whether the
provider has complied with its digital data service plan.
The obligation
in proposed subsections 15A(4) and (5) is expressed in terms of taking
‘all reasonable steps’. The reasonableness requirement recognises
that a digital data service provider may only be able to fulfil the DDSO
progressively in its area as the rollout of additional network infrastructure
may be required.
Section 581 of the Telecommunications Act enables the
ACA to give written directions to a carrier in connection with performing any of
the ACA’s telecommunications functions or exercising any of the
ACA’s telecommunications powers. Those functions include regulating
telecommunications in accordance with the Telecommunications Act 1997 or
the Telecommunications (Consumer Protection and Service Standards) Act
1999. As proposed subsections 15A(4) and (5) require a digital data service
provider to take all reasonable steps to fulfil the DDSO, clause 1 of Schedules
1 and 2 to the Telecommunications Act make this obligation a standard carrier
licence condition and a service provider rule and the ACA has the powers to
enforce this carrier licence condition and service provider rule (see sections
68, 69, 101 and 102 and Parts 30 and 31 of the Telecommunications Act) and the
ACA will have the power under section 581 of the Telecommunications Act to
direct a digital data service provider in relation to its compliance with this
obligation.
Proposed section 15B inserts a new section 15B 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 (for example,
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 15B(1) provides that new section 15B 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)
determined, by a determination 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 15B(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 15B(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 15B(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 15B(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 new Part 2 of the Act. The notice must
identify the doing of that thing as the purpose for which the information is
required.
Proposed subsection 15B(4) provides that the former provider
will be required to comply with a requirement made by a notice under proposed
subsection 25B(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 15B(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 15B(6) provides that a Ministerial
determination under proposed subsection 15B(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 15B 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 (for example, as part of its billing
activities). Consideration would be given to drafting subordinate legislation to
this effect if necessary.
While the approval of digital data service plans rests with the Minister
under the proposed provisions, it is envisaged the function will be delegated to
the ACA in due course, consistent with the ACA’s proposed statutory
responsibility for the approval of draft policy statements and standard and ATS
marketing plans of USPs.
Proposed section 15C requires a digital data service provider for a
particular area to give the Minister a draft digital data service plan for that
area (proposed subsection 15C(1)) within 90 days of becoming the digital data
service provider for that area (proposed subsection 15C(2)).
Where a
digital data service provider takes over responsibility for a service area from
a digital data service provider that ceases to have responsibility for that
service area, this requirement will apply to the new digital data service
provider. Nothing would prevent that service provider adopting the plan of the
former digital data service provider.
Proposed section 15D states that a draft or approved digital data service
plan for an area is a plan that sets out how the digital data service provider
for that area will progressively fulfil the DDSO (in so far as it relates to
that area).
The requirements imposed on the digital data service
provider by the DDSO provide the basis for a digital data service plan. The
plan is intended to set out the means by which the digital data service provider
will fulfil those requirements. Given that it may take time for a digital data
service provider to fulfil its obligations in an area, the plan may provide for
the progressive fulfilment of the obligation.
Among other things, it is
envisaged that digital data service plans could specify:
• the
levels of service quality, in terms of both technical performance and customer
service, at which a digital data service provider intends to supply the services
required under the DDSO;
• the timeframes within which a service
would be made accessible within an area (for example, where significant network
upgrading would be required);
the timeframes within which services would
be supplied (ie. connected) to a customer (which may vary from area to area, if
such differences are reasonable).
Proposed section 15E provides that a draft digital data service plan for an
area may replace a pre-existing approved plan for an area if such a plan is in
force. When the draft plan becomes an approved plan, the pre-existing plan
ceases to be in force. This provides a means by which digital data service
providers can change their digital data service plans as they consider it
appropriate. Changes might be required, for example, if the DDSO is revised, an
area’s demographics change, a provider decides to deploy different
technologies or experience reveals deficiencies in service provision, including
quality.
Proposed section 15F provides for the approval or rejection of a draft
digital data service plan by the Minister. The Minister’s ability to
refuse to approve a draft plan and to direct a digital data service provider to
submit a new plan enables the Minister to contribute to the planning of
fulfilment of the DDSO, and provides an active level of Governmental involvement
appropriate to this important obligation.
Proposed subsection 15F(1)
requires the Minister to approve or refuse to approve a draft digital data
service plan. In assessing a plan, the Minister must have regard to the
criteria set out in proposed section 15H.
Proposed subsection 15F(2)
makes a draft plan approved by the Minister an approved digital data service
plan. Under proposed section 15P, a digital data service provider must take all
reasonable steps to ensure that an approved digital data service plan is
complied with.
Proposed subsection 15F(3) enables the Minister to direct
a digital data service provider to give the Minister, within the period
specified and in the terms specified in the direction, a fresh draft digital
data service plan if the Minister refuses to approve a draft plan (for example,
if the Minister considers the plan does not adequately provide for the
fulfilment of the DDSO in an area). The content of such a direction can state
where the Minister considers a draft plan was deficient and how those
deficiencies should be rectified in a new draft plan. The provider must comply
with a direction to submit a new draft plan.
Proposed section 15G requires a digital data service provider to undertake
public consultation on a draft digital data service plan before submitting it to
the Minister for approval.
This provision is intended to ensure that the
public has an opportunity to comment on draft digital data service plans as they
are being developed.
Proposed subsection 15G(1) requires that, before
giving the Minister a draft digital data service plan under proposed section
15F, a digital data service provider must:
• publish a preliminary
version of the draft plan and invite members of the public to make submissions
to the provider about the preliminary version within a specified period;
and
• give consideration to any submissions that were received from
members of the public within that period.
This provision provides a
mechanism for the public to comment on draft digital data service plans and for
the public’s comments to be considered. A digital data service plan sets
out how a digital data service provider will progressively fulfil its DDSO
(proposed section 15D).
Proposed subsection 15G(2) requires that the
period specified in the invitation to comment must run for at least 30 days.
This provides the public with a guaranteed minimum period within which to make
comments.
Proposed subsection 15G(3) provides that proposed section 15G
does not apply to a draft plan given to the Minister in accordance with a
direction under proposed subsection 15F(3). Proposed subsection 15F(3) enables
the Minister to direct a digital data service provider to provide a fresh draft
digital data service plan where the Minister refuses to approve an original
plan. Given that the Minister’s direction will take into account the
public comments which occurred in relation to the original plan and there are
timing pressures if a revised plan is required, it is not appropriate to require
public consultation in these circumstances.
Proposed subsection 15G(4)
provides that proposed section 15G does not apply to a draft plan given to the
Minister in accordance with a notice under proposed section 15N. Proposed
section 15N enables the Minister to require a digital data service provider to
give the Minister a draft variation of a current plan or draft replacement plan.
Given that public consultation will have occurred in relation to the original
plan and there are timing pressures if a revised plan is required, it is not
appropriate to require public consultation in these circumstances.
Proposed section 15H sets out criteria the Minister must have regard to in
considering whether or not to approve a draft digital data service plan. The
criteria are designed to ensure the DDSO is fulfilled in a manner consistent
with relevant objects of the Act (including Part 2) and
of the Telecommunications Act.
Proposed subsection 15H(1) requires the
Minister, in deciding whether to approve a draft digital data service plan for a
general digital data service area, to have regard to whether:
• the
plan provides for the DDSO (in so far as it relates to that area) to be
fulfilled:
– as efficiently and economically as practicable;
and
– at performance standards that reasonably meet the social,
industrial and commercial needs of the Australian community;
and
– progressively throughout that area within such period as the
Minister considers reasonable; and
• the draft plan complies with
any requirements (formulated by the Minister) in force under proposed section
15J.
The three detailed criteria derive from the objects of the Act
(including Part 2) and the Telecommunications Act (see sections 3 and 9 of the
Telecommunications (Consumer Protection and Service Standards) Act
1999).
Proposed subsection 15H(1) does not, by implication, limit the
matters to which regard may be had (proposed subsection 15H(2)).
As a
matter of course, the Minister would have regard to any advice or report
provided by the ACA to the Minister at the Minister’s request, including
any report on a public inquiry on a draft digital data service plan the Minister
has asked the ACA to conduct. This provision is important in providing a means
by which the Minister can contribute to planning the fulfilment of the
DDSO.
Proposed section 15J enables the Minister to formulate requirements to be
complied with by a draft digital data service plan (proposed subsection 15J(1))
and gives examples of possible types of requirements,
including:
• timetables for the supply of services (for example, a
service must be accessible to a particular percentage of the population or in
particular areas by a particular time or within a particular
period);
• performance standards relating to the fulfilment of the
DDSO (relating to both the technical performance of a service and customer
service in the supply of a service); and
• the form of a draft
digital data service plan (for example, what must be included in a plan in terms
of information).
The Minister’s requirements must be consistent
with the DDSO as it is defined in proposed subsection 10. Under subsection
33(3A) of the Acts Interpretation Act 1901, different provision can be
made for different types of providers. Proposed subsection 15J(3) makes an
instrument setting out such requirements a disallowable instrument. The
instrument must therefore be notified in the Commonwealth Gazette, tabled
in the Parliament and will be subject to Parliamentary disallowance.
Proposed section 15K requires the Minister to notify the digital data service
provider that has submitted the draft plan and the ACA as to whether he or she
has approved or refused to approve the draft plan (proposed subsection 15K(1)).
A copy of the Minister’s notice must be published in the Commonwealth
Gazette (proposed subsection 15K(2)).
The Minister must give the
digital data 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 (proposed subsection 15K(3)). Note that under proposed subsection
15F(3) the Minister may direct the digital data service provider to give the
Minister another draft plan, within the period and within the terms specified in
the direction.
Proposed section 15L sets out the process for varying an approved digital
data service plan, as may be necessary, for example, because of changes to the
DDSO, changes in the demographics of a service area, or changes to the service
provider’s delivery strategy.
Proposed subsection 15L(1) makes
proposed section 15L apply if an approved plan (‘the current plan’)
is in force and the digital data service provider concerned gives the Minister a
draft variation of the plan.
Proposed subsection 15L(2) requires the
Minister to approve or refuse to approve the variation.
Proposed
subsection 15L(3) provides that, before deciding whether to approve a variation,
the Minister may, if he or she considers appropriate require the
DDSP:
• to publish a preliminary version of the draft plan and
invite members of the public to make submissions to the provider about the
preliminary version within a specified period;
• to give
consideration to any submissions that were received from members of the public
within that period; and
• to advise the Minister on those
submissions and any changes made to the draft variation as a result.
This
provision provides Minister with a discretion to require a DDSP to seek public
comment on variations of approved draft digital data service plans and to ensure
that the public’s comments are considered. Given that the Minister’s
direction will take into account the public comments which occurred in relation
to the original plan and there are timing pressures if a revised plan is
required, it is may not be appropriate to require public consultation in these
circumstances.
Proposed subsection 15L(4) prevents the Minister from
approving the variation unless the Minister is satisfied that he or she would
approve a draft digital data service plan in the same terms as the current plan
but varied as proposed in the draft variation.
Proposed section 15M requires the Minister to notify the digital data service
provider that has submitted the draft plan and the ACA as to whether he or she
has approved or refused to approve the variation (proposed subsection 15M(1). A
copy of the notice must be published in the Commonwealth Gazette
(proposed subsection 15M(2)).
Proposed subsection 15M(3) requires the
Minister to give the digital data service provider submitting the draft
variation a written notice setting out the reasons for refusing to approve the
variation if the Minister has rejected
it.
Proposed subsection 15M(4) provides that
a current plan is varied accordingly if the Minister approves a
variation.
Proposed subsection 15M(5) requires the Minister to give the
ACA a copy of each variation approved under proposed section 15L.
Proposed section 15N applies if an approved digital data service plan for an
area is in force (proposed subsection 15N(1)). The proposed section enables the
Minister to give the digital data service provider concerned 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
(proposed subsection 15N(2)). The provider must comply with the notice
(proposed subsection 15N(3)).
This provision enables the Minister to
require changes to, or replacement of, an approved digital data 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 or circumstances within the service area
change (and the digital data service provider has failed to automatically vary
its plan accordingly).
Proposed subsection 15P(1) requires a general or special digital data service
provider to take all reasonable steps to ensure that it complies with a relevant
approved digital data service plan.
Proposed section 15P provides a
test of ‘reasonableness’ in relation to compliance with a digital
data service plan in recognition that the supply of telecommunications services
is a complex undertaking involving many factors, not all of which may be within
the control of the digital data service provider. For example, compliance with
a plan may be rendered difficult or impossible because of natural disasters or
failure of suppliers (for example, satellite launch failure).
Proposed
section 15P requires compliance with an approved digital data service plan.
Clause 1 of Schedules 1 and 2 to the Telecommunications Act make it a statutory
condition of licence and a service provider rule that a carrier and carriage
service provider comply with that Act and the Telecommunications (Consumer
Protection and Service Standards) Act 1999. Contravention of these Acts
gives rise to possible civil liability under Part 31 of the Telecommunications
Act involving pecuniary penalties of up to $10 million.
Proposed
subsections 15A(4) and (5) provide that the digital data service provider for an
area must take all reasonable steps to fulfil the digital data service
obligation, so far as the obligation relates to that area. Proposed section 15P
requires a digital data service provider for a particular area to take all
reasonable steps to ensure that the plan for the area is complied with. Under
proposed section 15D, a digital data service plan sets out how the digital data
service provider will progressively fulfil the DDSO in the provider’s
area. In considering whether a provider has taken all reasonable steps to
fulfil the DDSO for the purpose of proposed subsections 15A(4) or (5), it is
intended that regard should be had to whether the provider has complied with its
digital data service plan.
New Division 9 contains new provisions relating to the determination of
subsidies payable in relation to the fulfilment of the USO. The provisions have
some antecedents in Subdivision C of Division 6 of the current Part 2,
particularly section 57 (relating to the calculation of the NUSC of a USP for a
financial year). The proposed determination provisions are the main vehicle for
giving effect to the Government’s decision to set USO payments in advance
for periods of up to three years. The degree of flexibility allowed in the
determination of subsidies will be important to the introduction of competition
in the supply of USO services. Adoption of the term ‘subsidy’ is
intended to reflect the re-orientation of the universal regime away from the old
monopoly USO delivery model to one increasingly open to competitive USO
delivery.
Proposed section 16 provides for the determination of universal service
subsidies in the form of an amount, or a method for working out the amount, to
which a USP will be eligible.
Proposed subsection 16(1) provides that,
before the end of a claim period, the Minister must determine in writing one or
more universal service subsidies for the period. This obligation on the
Minister ensures that a universal service subsidy is identified for each service
area and it is known to USPs before the end of a claim period, thereby giving
foreknowledge and greater certainty to USPs as to their entitlements and
contributors as to their contributions.
Under proposed subsection 16(1)
a copy of the determination must be published in the Gazette. This will
facilitate public awareness of subsidies that are determined. It is proposed
that determinations not be disallowable because of their fundamental importance
to the operation of the USO arrangements and the need for certainty that
subsidies will be set and in place. The nature of USO subsidy determinations is
such that they will inevitably be subject to intense industry, public and
Parliamentary scrutiny regardless of whether or not they are disallowable. As a
matter of course the Minister will need to exercise exceptional diligence in the
preparation of such determinations.
Proposed subsection 16(2) provides
that the Minister must ensure that there is a subsidy for each universal service
area in respect of each service obligation. This ensures that a subsidy is set
in relation to all service obligations, for the same reasons that subsides must
be set for all areas.
To ensure the multitude of service delivery
combinations that are possible under the new arrangements can be covered off, it
is intended that the Minister have considerable flexibility as to how he/she
determines subsidies. Therefore, a subsidy may cover one or more service
obligations for one or more universal service areas. It is intended that the
Minister should be able, for example, to determine subsidies specifically in
relation to one or more service obligations within a particular universal
service area or group of service areas or more broadly for specified classes of
universal service areas.
Proposed subsection 16(3) sets out the details
that must be included in the determinations:
• the amount, or
method for working out the amount, of the subsidies (under proposed subsection
16(6), the amount may be zero dollars); and
• the circumstances in
which each subsidy is payable to a universal service provider in relation to the
claim period.
It is intended that the Minister have considerable
flexibility in determining methodologies for working out subsidy amounts. It is
intended, for example, that subsidy amounts could be defined in terms of the
amount payable in relation to the supply of a service, piece of equipment or
good multiplied by the number of services supplied. The subsidy amount could
also be a set sum to be divided between USPs according to a specified measure of
market share. It is intended that subsidies should be able to be determined by
having regard to subsidies payable in relation to other service obligations
and/or service areas (for example, to maintain parity or relativity).
Where a determination provides that a subsidy is to be determined
according to a specified methodology, it is intended that a person’s claim
for levy under proposed section 20J provide such information as is necessary to
establish the total subsidy payable according to the methodology specified. For
example, if the total subsidy payable is the product of a specified amount per
service and the number of services supplied, details of the number of services
supplied would need to be provided. The ACA would also be expected to examine
adherence to eligibility criteria.
It is intended that determinations
should be able to provide for automatic variation when subsequent
determinations, which are anticipated in an original determination, come into
effect. For example, it is intended that the subsidy determination for the
default service area should be able to provide for its automatic variation when
contestable pilot areas are excised from the default service area.
The
requirement that the determination set out the circumstances in which each
subsidy is payable will enable access to subsidies to be focussed and
appropriately controlled. In effect it will provide a means of setting
eligibility criteria which, among other things, the ACA would consider in
assessing levy claims under proposed section 20N.
Proposed subsection
16(4) provides that the circumstances that may be specified (ie under paragraph
16(3)(b)) include, but are not limited to:
• whether the subsidy is
payable to a PUSP or a CUSP; or
• the types and amount of
equipment, goods or services that are supplied to persons in a universal service
area.
It is envisaged, for example, that a PUSP in relation to a
contestable service obligation in a service area will be eligible for an
additional subsidy to reflect to additional responsibilities and risks relative
to CUSPs with whom it competes. Circumstances relating to the amount of
equipment, goods or services supplied might be used to limit the number of
subsidies that would be payable in relation to the number of services supplied
to a particular person or place of residence or business.
Proposed
subsection 16(5) provides that the subsidy is only payable to a universal
provider who fulfils the provider’s obligations under proposed section 12C
or 13D (whichever is applicable). This links payment of subsidies back to
compliance with the general obligations of PUSPs (proposed section12C) and CUSPs
(proposed section13D). Through proposed sections 12D and 13C, payment of
subsidies is linked to compliance with policy statements and marketing plans,
including approved service specifications. In short, payment of subsidies will
be contingent on supplying the equipment, services and goods the USP has been
approved to supplied and on the basis on which it was approved to supply
them.
Proposed subsection 16(6) provides that the determination may
specify an amount of a subsidy as zero dollars. In effect, the Minister has the
discretion to declare that there is no subsidy in relation to certain
circumstances. This may be appropriate if, as time proceeds, it becomes
apparent (for example, due to technological change or lower capital costs) that
subsidies are not required to guarantee the supply of USO services in an area.
Historically USO payments have not been made for the supply of USO services in
densely populated areas because the areas are profitable overall and a zero
subsidy would be expected to apply in these areas.
Proposed section 16A allows the Minister to seek the advice of the ACA in
relation to the Minister’s determination of universal service subsidies
under proposed section 16.
Proposed subsection 16A(1) provides that the
Minister may give written notice to the ACA requiring it to give the Minister
written advice, within a specified period, in relation to the Minister’s
power to determine universal service subsidies.
Proposed subsection
16A(2) provides that the notice may include directions about the giving of
advice. The Minister be able to give the ACA directions as to the principles
that it should apply in giving its advice.
The methodology on which the
ACA would base its advice to the Minister would be an administrative matter. In
the first instance, however, it is envisaged that the ACA’s advice would
be based on the methodology it has used to calculate NUSCs for Telstra for
1997/98, 1998/99 and 1999/00. This is an ‘avoidable cost less revenue
foregone’ methodology which looks at the avoidable cost of an efficient
service provider. The proposed approach in relation to subsidy costing and
determination is intended, however, to provide the flexibility to enable the
costing methodology to evolve over time to take account of increasing experience
with costing techniques, industry change and new issues. It is intended that
the ACA consult with the Minister, industry and the wider community in relation
to the development of, and changes to, its USO costing methodology.
Proposed
subsection 16A(3) provides that the ACA must comply with the notice, and with
the directions (if any), within the specified period.
Proposed subsection
16A(4) provides that, in providing the advice, the ACA must not take into
account an grant that has been made or may be made to a person under section 56
or 57 of the Telstra Corporation Act 1991. Such a grant might otherwise
be dealt with as part of the revenue of a carrier or carriage service
provider.
Proposed subsection 16A(5) provides that, for the purpose of
providing the advice, the ACA may give a written request to a carrier or
carriage service provider for the provision of specified information within a
specified period. The person must comply with the request within the specified
period. Clause 1 of Schedules 1 and 2 to the Telecommunications Act makes it a
statutory condition of licence that a carrier and a service provider rule
that a carriage service provider must comply with that Act and the
Telecommunications (Consumer Protection and Service Standards) Act 1999.
Contravention of these Acts gives rise to possible civil liability (see Part 31
of that Act) involving pecuniary penalties of up to $10 million.
Proposed
subsection 16(6) provides that the Minister is not required to follow any advice
received from the ACA and, in determining the subsidies, may have regard to any
matters that the Minister considers appropriate.
Proposed section 16B sets out the effect of a subsidy determination made
under proposed section 16. Proposed subsection 16B(1) provides that a
determination takes effect on the day specified in the determination. The day
specified could include a day before, on or after the day on which the
determination is made, but under proposed subsection 16(1) the determination for
a claim period must be made before the end of that claim period.
In
general it is intended that subsidies will be determined before the start of the
claim periods to which they are to apply to promote industry certainty about USO
payments. Instances may arise, however, where it is necessary to determine
subsidies during claim periods, for example, when new service areas are
determined and/or service obligations are determined to be contestable. In some
instances it may take time for appropriate subsidies to be calculated and it may
therefore be necessary for them to be able to be applied retrospective. In
relation to 2000-01, for example, it is envisaged the ACA will provide advice to
the Minister on appropriate subsidy levels around August 2000. It is envisaged
these would then be applied retrospectively from 1 July 2000.
Proposed
subsection 16B(2) provides that a subsidy determination applies for the period
specified in the determination, which must be no longer than three
years.
Proposed subsection 16B(3) provides that a variation or revocation
of a subsidy determination takes effect on the day specified in the instrument
of variation or revocation. The day specified could include a day before, on or
after the day on which the instrument is made.
New Division 10 is based on current sections 61A and 61B but a number of
modifications have been made.
Proposed section 17 deals with the digital data cost of a digital data
service provider for a claim period. The proposed section is based in part on
section 61A of the current Act.
Proposed section 17 is central to the
calculation of a digital data service provider’s costs in fulfilling its
DDSO. It is taken into account in determining participating persons’
respective credits and debits and levy entitlements and liabilities. The normal
manner by which digital data service costs would be calculated would be using
the customer equipment costs less customer charges plus supplementary amount
methodology set out in the provision. The other method would be for the
Minister to determine the amount.
If the amount worked out using the
customer equipment costs less customer charges plus supplementary amount
methodology is greater than zero dollars, the person’s digital data cost
for the relevant claim period is equal to that amount. This is because the
person has incurred a loss in fulfilling the DDSO. If, however, the amount
worked out using the customer equipment costs less customer charges plus
supplementary amount methodology is not greater than zero dollars, the
person’s digital data cost for the relevant claim period is zero dollars.
This is because the person has not incurred a loss in fulfilling the DDSO and it
is unnecessary for the person to be compensated for fulfilling the
DDSO.
The methodology envisages at least 2 ways in which the Government
may implement its commitment to subsidise the cost of customer equipment for
special digital data services – the imposition of price controls on
customer equipment supplied (either by way of sale or hire) by a special digital
data service provider or by a requirement that the special digital data service
provider give a rebate to customers who have sought the equipment from a third
party. The net cost of either approach will be able to be claimed through the
levy arrangement under the methodology proposed in proposed subsection
17(2).
Proposed subsection 17(2) gives the formula for determining a
person’s digital data cost for a claim period when there is no Ministerial
determination in force in relation to that claim period. The formula
is:
Customer equipment costs – Customer charges + Supplementary
amount
The formula provides for digital data costs to be calculated by
subtracting the charges payable by persons for the supply of customer equipment
covered by the DDSO from the supplier’s customer equipment costs and
adding a supplementary amount.
Supplementary amount means the amount (if
any) determined through the use of regulations made for the purposes of this
definition. It is not intended that digital data providers be able to claim
losses in fulfilling their obligations in the same way as such losses are
determined for universal service providers. This reflects the fact that all
digital data services are either currently being supplied without subsidy or are
expected to be offered commercially in the near future. In such circumstances
any losses incurred in such commercial activities should not be shared with the
remainder of the telecommunications industry. The inclusion of a
‘supplementary amount’ in the methodology provides a mechanism,
however, for losses incurred as a result of possible regulated losses (in
addition to that envisaged by the customer equipment scheme described above)
being incurred by a digital data provider. Such losses may include, for
example, losses which may be incurred as a direct result of the imposition of
additional price control arrangements.
Proposed subsection 17(3) outlines
customer equipment costs for a financial year for the purposes of proposed
section 17 and the methodology specified under proposed subsection 17(3).
Customer equipment costs comprise the total costs incurred by a person in
acquiring customer equipment that is covered by a declaration under proposed
section 19A (and is of a kind specified in regulations made for the purposes of
paragraph 10F(1)(a) or 10G(1)(a)), and was supplied by the person during the
financial year to persons in the area concerned, and the total rebates that
became payable during the financial year by the person (in accordance with
regulations under proposed subsection 10D(1)).
Proposed subsection 17(4)
enables the Minister to make written determinations specifying a method of
ascertaining an amount for the purposes of paragraph 17(1)(a), that is, for
determining a person’s digital data cost. Proposed subsection 17(4) is
designed to simplify calculation of digital data costs. Unlike under current
subsection 61(4), under proposed subsection 17(4) the Minister is not required
to obtain the consent of participating persons before making such a
determination. The competing interests of DDSPs and participating persons are
such as to make unanimous consent unlikely.
Proposed subsection 17(5)
states that the amount worked out under a determination under proposed
subsection 17(4) may be zero dollars.
Proposed subsection 17(6) requires
that a determination under proposed subsection 17(4) must be published in the
Commonwealth Gazette. This ensures the process for calculating digital
data costs is publicly known and thus open to scrutiny.
Proposed section 17A is intended to provide a further means for the
Government to control excessive digital data costs of a digital data service
provider as calculated using the customer equipment costs less customer charges
plus supplementary amount methodology. The provision is largely intended as a
reserve power to be used should it be apparent that a digital data service
provider's costs are in excess of those which may be reasonably expected (for
example, incurring costs associated with acquiring customer equipment which do
not reflect commercially available prices or prices which might be available if
adequate competition existed in the supply of such equipment).
Proposed
subsection 17A(1) enables the Minister, by written instrument, to formulate
principles or rules that are to be applied in determining the extent (if any) to
which costs of a kind mentioned in proposed subsection 17(3) are to be treated
as excessive for the purposes of proposed subsection 17(3)(a).
For the
purposes of calculating the customer equipment costs less customer charges plus
supplementary amount methodology in proposed subsection 17(2) in relation to a
particular claim period, if the person who is a digital data service provider
has incurred costs of a kind mentioned in the definition of ‘customer
equipment costs’ in paragraph 17(3)(a) and the costs are treated as
excessive to any extent under the principles determined by the Minister, the
amount of the costs is to be reduced by the amount of the excess. That is, a
digital data service provider’s customer equipment costs may be considered
against the excessive cost principles or rules formulated by the Minister and if
they are found to be excessive when considered against those principles, they
are to be reduced by the amount of that excess.
A Ministerial
determination setting excessive cost principles under proposed section 17A(1) is
a disallowable instrument for the purposes of s. 46A of the Acts
Interpretation Act 1901 (proposed subsection 17A(3)). It must therefore be
published in the Commonwealth Gazette, tabled in the Parliament and will
be subject to Parliamentary disallowance.
Generally, it is envisaged such
principles would be determined prior to the claim period in which they were to
apply, thus providing the digital data service provider with an opportunity to
achieve the cost levels provided for in the principles, or to enable the
provider to calculate its costs in accordance with the principles. Note,
however, that nothing in the legislation requires the principles to be
determined in advance of the period to which they will apply. The Minister may
choose to make a written instrument under proposed section 17A(1) during a claim
period if it became apparent that a digital data service provider’s costs
for that claim period were unacceptably high. In all instances, however, it is
intended that the principles be applied by the digital data service provider in
calculating its digital data cost and preparing its levy credit claim. Where
principles have been formulated and applied to a year, the ACA will be required
to examine the correctness of the claim having regard to such principles as have
been formulated.
New Division 11 effectively re-enacts current Division 5 of Part 2. The main
change to the Division is to enable price control determinations to have effect
from the day specified in the determination (proposed subsection 18B(3)) rather
than at the commencement of a financial year. This aligns the Division with the
new arrangements that enable carriers and carriage service providers to become
USPs at anytime. As important consumer safeguards, it is intended that the
price control provisions apply to both PUSPs and CUSPs and both standard USO
services and ATSs. However, it is envisaged that the provisions would generally
be used in relation to standard USO services supplied by PUSPs, rather than
services offered on a commercial basis at the discretion of USPs.
Proposed subsection 18(1) makes proposed section 18 apply if a person is a
universal service provider for a particular universal service area. The
substantive provision of the proposed section, proposed subsection 18(2),
provides that for the purposes of this Division, 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 (this reference to ‘supply’ includes customer equipment, other
goods and prescribed services of a kind mentioned in proposed section 9E and
charges for such items are universal service charges); or
• calls
made from payphones in the area; or
• the supply of prescribed
carriage services to persons in the area (this reference to ‘supply’
includes prescribed customer equipment, other prescribed goods and prescribed
services of the kind mentioned in proposed section 9F
and charges for such items are universal service charges).
It is
intended that the full range of charges relating to these services should be
universal service charges and be eligible for price control, including, but not
limited to, charges for network extension, charges for service connection,
annual or periodic rental charges (including for customer equipment) and charges
for local, national and international calls.
Universal service charges
can only apply to services provided under the USO and in areas where a person is
the universal service provider. Thus if a person is a universal service
provider in one region and also supplies services in another region where it is
not a universal service provider, its charges in the second region are not
subject to price controls under this Division.
Proposed section 18A enables the Minister, by a notice published in the
Commonwealth Gazette, to determine that specified universal service
charges are subject to price control arrangements under this Division (proposed
subsection 18A(1)). Proposed subsection 18A(2) makes such a determination a is
a disallowable instrument for the purposes of s. 46A of the Acts
Interpretation Act 1901. It must therefore be published in the Commonwealth
Gazette, tabled in the Parliament and will be subject to Parliamentary
disallowance.
Proposed section 18B enables the Minister to determine the actual price
control arrangements to which declared universal service charges are to be
subject.
Proposed subsection 18B(1) makes this proposed section apply if
a declaration is in force under proposed section 18A in relation to a particular
universal service charge.
Proposed subsection 18B(2) enables the
Minister to make a written determination setting out:
• price-cap
arrangements and other price control arrangements that are to apply in relation
to the charge; or
• principles or rules in accordance with which
the universal service provider may impose or alter the charge;
or both.
Price control determinations may set out any manner of price controls,
including maximum monetary charges, parity with charges in other areas, rates at
which existing charges may change and notification and disallowance provisions.
A price control determination will be able, for example, to stipulate the exact
level of a particular charge. This is seen as particularly important where a
new universal service provider may be commencing service in an area and it does
not yet have charges in the market place that may be otherwise
regulated. Some further examples of the kinds of
controls that may be included in a determination are given in proposed
subsection 18C(1). Proposed subsection 18C(1) does not limit proposed
subsection 18B (proposed subsection 18C(2)).
Proposed subsection 18B(3)
makes a determination have effect in accordance with its content, and provides
that a determination will have effect on the day specified in the determination
which must be on or after notice of the determination is published in the
Gazette. Under the current Act determinations must take effect at the
commencement of the next financial year.
Proposed subsection 18B(4) provides
that a price control determination under proposed subsection 18B(2) may make
different provision with respect to different customers. Proposed section 18B,
however, does not, by implication limit subsection 33(3A) of the Acts
Interpretation Act 1901.
It is intended that a price control
determination may provide that different (two or more) price control
arrangements apply in relation to one kind of universal service charge, with
each of the different price control arrangements relating to customers in a
particular class. For example, a price control determination may apply
different price control arrangements in relation to residential and business
customers being supplied with the standard telephone service. (Such
differentiation exists under the Telstra Carrier Charges––Price
Control Arrangements, Notification and Disallowance Determination 1997.) It is
also intended that a price control determination be able to apply particular
price controls in relation to more specific classes of customer, for example,
educational institutions, medical facilities or public libraries. This would
mean, for example, that where a prescribed carriage service is prescribed for
the purposes of the USO, the Minister in a price determination could require
that it be provided to schools, libraries and hospitals at a particular price,
while it may be available to other customers at another regulated price, or even
an unregulated price.
It is also intended that separate determinations
may apply to different universal service providers and different service areas.
That is, it is not intended that if there are two or more universal service
providers they must all be subject to a single price control determination.
Subjecting all universal service providers to a single price control
determination would be too inflexible, enabling no account to be taken of the
individual circumstances of each universal service provider.
Proposed
subsection 18B(5) makes the determination a disallowable instrument for the
purposes of s. 46A of the Acts Interpretation Act 1901. It must
therefore be published in the Commonwealth Gazette, tabled in the
Parliament and will be subject to Parliamentary disallowance.
Proposed section 18C lists some of the price control arrangements,
particularly involving notification and disallowance, that a determination under
proposed section 18B may apply to a universal service
charge.
Proposed section 18C(1) enables a price control determination
to:
• prohibit a charge from being imposed or altered without the
consent of the Minister or the ACCC (paragraphs 18C(1)(a) and (b));
or
• prohibit a charge from being imposed or altered without prior
notice being given to the Minister or the ACCC (paragraphs 18C(1)(c) and (d));
or
• empower the Minister to direct the ACCC to give the Minister
such reports and advice as he or she requires for the purposes of assisting the
Minister in deciding whether to give consent in accordance with the
determination (paragraph 18C(1)(e)).
Under these provisions both initial
charges (where services have previously not existed or been charged for) and
changes to existing charges for a service may be subject to consent or prior
notification requirements.
Proposed subsection 18C(2) states that
proposed subsection 18C(1) does not, by implication, limit proposed section 18B.
This makes it clear that a price control determination may provide for price
control arrangements other than those of the type described in proposed section
18C.
Proposed section 18D renders a price control
determination under proposed section 18B ineffective to the extent that it
relates to a charge that is the subject of a price control determination under
subsection 154(1) or 157(1) of the Act.
Subsection 18D(1) makes this
clause apply if a determination under subsection 154(1) or 157(1) of the Act is
in force in relation to a charge imposed by Telstra. If such a determination is
in force, a determination under this Division is of no effect in so far as it
relates to that charge (proposed subsection 18D(2)).
Where Telstra is the
universal service provider, primary reliance will be placed on price control
imposed on it under Part 9 of the Act because price control under that Part will
apply to all Telstra services, not just those being supplied under the USO, thus
giving that price control wider scope. This is appropriate because the
price controls that will continue to be applied to Telstra have a wider function
than those applying to universal service providers under Part 2 of the Act. For
example, price controls on Telstra play multiple roles of simulating competitive
pressures in uncontested or newly contested markets, promoting internal
efficiency gains in Telstra, passing efficiency gains onto consumers and
distributing those gains in particular ways. Notwithstanding this, where a
determination under this Division is not rendered ineffective by a determination
under Part 9, it will have effect to the extent that it relates to charges
imposed by Telstra as a universal service provider. That is, it is feasible
that Telstra would be subject to determinations under both this Division and
Part 9 of the Act, albeit in relation to mutually exclusive charges.
Proposed section 18E requires a universal service provider to comply with
a determination in force under this Division. Section 1 of Schedule 2 to
the Telecommunications Act makes it a statutory condition of licence that
a carrier (a universal service provider must be a carrier) comply with the Act.
Contravention of the Act and the Telecommunications Act is subject to civil
penalty provisions (see Part 31 of that Act) involving pecuniary penalties of up
to $10 million.
New Division 12 effectively re-enacts current Division 5A of Part 2. The
main change to the Division is to enable price control determinations to have
effect from the day specified in the determination ( proposed subsection 19B(3))
rather than at the commencement of a financial year. This aligns the Division
with the new arrangements that enable carriers and carriage service providers to
become DDSPs at anytime.
Proposed subsection 19(1) provides that for the purposes of this Division, a
‘digital data service charge’ is a charge imposed or proposed to be
imposed, by a general digital data service provider for a particular area for
the supply of general digital data services to persons in the
area.
Proposed subsection 19(2) provides that for the purposes of this
Division, a ‘digital data service charge’ is also a charge imposed
or proposed to be imposed, by a special digital data service provider for a
particular area for the supply of special digital data services to persons in
the area.
It is intended that the full range of charges relating to these
services should be digital data service charges and be eligible for price
control, including, but not limited to, charges for network extension, charges
for service connection, annual or periodic rental charges (including for
customer equipment) and charges for calls.
Digital data service charges
can only apply to services provided under the DDSO and in areas where a person
is a digital data service provider. Thus if a person is a digital data service
provider in one region and also supplies services in another region where it is
not a digital data service provider, its charges in the second region are not
subject to price controls under this Division.
Proposed section 19A enables the Minister, by a notice published in the
Commonwealth Gazette, to determine that specified digital data service
charges are subject to price control arrangements under this Division (proposed
subsection 19A(1)).
Proposed subsection 19A(2) makes such a
determination a disallowable instrument. The instrument must therefore be
notified in the Commonwealth Gazette, tabled in the Parliament and will
be subject to Parliamentary disallowance.
Proposed section 19B enables the Minister to determine the actual price
control arrangements to which the determined digital data service charges are to
be subject.
Proposed subsection 19B(2) enables the Minister to make a
written determination setting out:
• price-cap arrangements and
other price control arrangements that are to apply in relation to the charge;
or
• principles or rules in accordance with which the digital data
service provider may impose or alter the charge;
or both.
Price
control determinations may set out any manner of price controls, including
maximum monetary charges, parity with charges in other areas, rates at which
existing charges may change and notification and disallowance provisions. A
price control determination will be able, for example, to stipulate the exact
level of a particular charge. This is seen as particularly important where a
new digital data service provider may be commencing service in an area and it
does not yet have charges in the market place that may be otherwise regulated.
Some further examples of the kinds of controls that may be included in a
determination are given in proposed subsection 19C(1). Proposed subsection
19C(1) does not limit proposed section 19B (proposed subsection
19C(2)).
Proposed subsection 19B(3) provides that a determination made
under 19B(2) has effect accordingly, and takes effect on the day specified in
the determination which must be on or after notice of the determination is
published in the Gazette. Under the current Act determinations must take
effect from the commencement of the next financial year.
Proposed
subsection 19B(4) provides that a price control determination under proposed
section 19B may make different provision with respect to different customers.
Proposed section 19B, however, does not, by implication limit subsection 33(3A)
of the Acts Interpretation Act 1901.
It is intended that a price
control determination may provide that different (two or more) price control
arrangements apply in relation to one kind of digital data service charge, with
each of the different price control arrangements relating to customers in a
particular class. For example, a price control determination may apply
different price control arrangements in relation to residential and business
customers. (Such differentiation exists under the Telstra Carrier
Charges––Price Control Arrangements, Notification and Disallowance
Determination 1997). It is also intended that a price control determination be
able to apply particular price controls in relation to more specific classes of
customer, for example, educational institutions, medical facilities or public
libraries. This would mean, for example, that where a digital data service is
prescribed for the purposes of the DDSO, the Minister in a price determination
could require that it be provided to schools, libraries and hospitals at a
particular price, while it may be available to other customers at another
regulated price, or an unregulated price.
It is also intended that
separate determinations may apply to different digital data service providers
and different service areas. That is, it is not intended that if there are two
or more digital data service providers they must all be subject to a single
price control determination. Subjecting all digital data service providers to a
single price control determination would be too inflexible, enabling no account
to be taken of the individual circumstances of each digital data service
provider.
It is envisaged (but need not necessarily be the case) that if
the provision of digital data service is tendered out, then price requirements
in any tender specification would derive from a price control determination
under this Division.
Proposed subsection 19B(5) makes the determination a
disallowable instrument. The determination must therefore be notified in the
Commonwealth Gazette, tabled in the Parliament and will be subject to
Parliamentary disallowance.
Proposed section 19C lists some of the price control arrangements,
particularly involving notification and disallowance, that a determination under
proposed section 46C may apply to a digital data service charge.
Proposed
subsection 19C(1) enables a price control determination
to:
• prohibit a charge from being imposed or altered without the
consent of the Minister or the ACCC (paragraphs 19C(1)(a) and (b));
or
• prohibit a charge from being imposed or altered without prior
notice being given to the Minister or the ACCC (paragraphs 19C(1)(c) and (d));
or
• empower the Minister to direct the ACCC to give the Minister
such reports and advice as he or she requires for the purposes of assisting the
Minister in deciding whether to give consent in accordance with the
determination (paragraph 19C(1)(e)).
Under these provisions both initial
charges (where services have previously not existed or been charged for) and
changes to existing charges for a service may be subject to consent or prior
notification requirements.
Proposed subsection 19C(2) states that
proposed subsection 19C(1) does not, by implication, limit proposed section 19B.
This makes it clear that a price control determination may provide for price
control arrangements other than those of the type described in proposed section
19C.
Proposed section 19D renders a price control determination under proposed
section 19D ineffective to the extent that it relates to a charge that is the
subject of a price control determination under subsections 154(1) or 157(1) of
the Act.
Proposed subsection 19D(1) makes this proposed section apply if
a determination under sections 154(1) or 157(1) of the Act is in force in
relation to a charge imposed by Telstra. If such a determination is in force, a
determination under this Division is of no effect in so far as it relates to
that charge (proposed subsection 19D(2)).
Proposed section 19E requires a digital data service provider to comply with
a determination in force under this Division. Clause 1 of Schedules 1
and 2 to the Telecommunications Act makes it a statutory condition of
licence that a carrier and a service provider rule that a carriage service
provider must comply with that Act and the Telecommunications (Consumer
Protection and Service Standards) Act 1999. Contravention of these Acts
gives rise to possible civil liability (see Part 31 of that Act) involving
pecuniary penalties of up to $10 million.
Major changes have been made to the provisions relating to the assessment,
collection and distribution of levy, in particular to:
• improve
the equity and sustainability of funding by extending funding base to include
carriage service providers as well as carriers; and
• improve the
general operation and reliability of the funding arrangements.
The information provided under proposed section 20 will be used by the ACA in
calculating the levy debits of participating persons under Subdivision B of
Division 13. Levy debits in turn are used to determine participating
persons’ liabilities.
Proposed section 20 requires that a
participating person in relation to an eligible revenue period must lodge with
the ACA a return of its eligible revenue for that period in a form approved by
the ACA, within the period specified in writing by the ACA for providing returns
(proposed subsections 20(1) and (2)). ‘Participating person’,
‘Eligible revenue’ and ‘eligible revenue period are defined in
proposed sections 20A, 20B and 20C respectively. The form approved by the ACA
may require verification by a statutory declaration of statements made in the
return (proposed subsection 20(2)).
Proposed subsection 20(3) sets out
details that must be included in the return, namely the carrier’s eligible
revenue, details of how that eligible revenue was worked out and any other
information required by the form approved by the ACA.
Proposed section 20A defines who is a participating person for the purposes
of Part 2. A participating person will take part in the assessment
processes for the payment of levy under this Part.
Proposed subsection
20A(1) provides that a person is ‘participating person’ in relation
to an eligible revenue period if:
• the person was a carrier at any
time during the eligible revenue period; or
• the Minister makes a
written determination that carriage service providers are participating persons
in relation to the eligible revenue period and the person was a carriage
services provider at any time during the eligible revenue period.
Under
section 62 of the current Act, only carriers could be assessed in relation to
the collection and distribution of the levy. The proposed subsection provides
that, at the Minister’s discretion, carriage service providers may also be
required to be assessed and to contribute with carriers.
Proposed
subsection 20A(2) provides that a person will not be a
‘participating person’ in relation to an eligible revenue period if
:
• the person’s gross telecommunications revenue for the
eligible revenue period is less than the amount determined in writing by the
Minister (‘gross telecommunications revenue’ has the meaning given
to it by such a determination – proposed subsection 20A(4));
or
• the person is of a kind, determined in writing by the Minister
for the purposes of this paragraph, to be exempt.
This provision will
allow the Minister to exempt persons such as small businesses from assessment
under the Part. Persons earning less that the determined gross
telecommunications revenue would automatically be exempted from USO
contributions.
Proposed subsection 20A(3) provides that a determination
under this proposed section will be a disallowable instrument for the purposes
of s. 46A of the Acts Interpretation Act 1901. It must therefore be
published in the Commonwealth Gazette, tabled in the Parliament and will
be subject to Parliamentary disallowance.
Proposed section 20B provides that the ‘eligible revenue’ of a
participation person for an eligible revenue period is the eligible revenue of
the participating person for that period in accordance with a determination in
writing made by the ACA. This determination will set out the nature of the
revenue measure to be used as eligible revenue. The determination, in providing
the amount that is taken to be the eligible revenue of a person, may refer to
the revenue of other person (proposed subsection 20B(2)). This is to put it
beyond doubt that the determination of eligible revenue may count the revenue of
another person as if it were the revenue of a participating person. This may be
necessary to enable some types of industry groupings to be adequately covered or
to deal with deliberate levy avoidance strategies.
Proposed subsection
20B(3) provides for the continuation of the regulation referred to in section 17
of the Act as a deemed determination by the ACA under subsection 20B(1).
A determination under 20B is a disallowable instrument for the purposes
of s. 46A of the Acts Interpretation Act 1901. It must therefore be
published in the Commonwealth Gazette, tabled in the Parliament and will
be subject to Parliamentary disallowance.
Proposed subsection 20C(1) provides that, for the purposes of Part 2, an
‘eligible revenue period’ is:
• the 1999-2000 financial
year and each later financial year; or
• if the Minister determines
in writing another period (this determination must be published in the Gazette
– proposed subsection 20C(3)).
The current Act applies on the basis
of financial years. The concept of an ‘eligible revenue period’
provides a more flexible framework for the application of the
USO.
Proposed subsection 20C(2) provides that, if the Minister determines
another period, the Minister may, in the determination, modify the way in which
this Part applies to participating persons. The modifications may include
additions, omissions and substitutions. This provision
will allow the Minister to deal with unanticipated difficulties relating to
changes to timing of claim periods.
In the first instance it is intended
that an eligible revenue period will be the financial year immediately preceding
the financial year which constitutes the claim period to which the relevant
eligible revenues data applies. This means levy contribution factors (see
proposed section 20H) will be available during the associated claim period,
potentially facilitating the making and settlement of claims on a part year
basis.
Proposed section 20D provides that an eligible revenue return given to the
ACA under proposed section 20 must be accompanied by a report of an approved
auditor that:
• is in a form approved in writing by the ACA;
and
• states that the auditor has audited the return;
and
• contains a determination, in the terms specified in the form,
of the auditors opinion; and
• states that the auditor has been
given sufficient information and assistance in order to audit the return;
and
• includes all other statements and information required by the
form to be included.
The ACA may add additional auditing requirements in
the form it approves for the purposes of paragraph 20D(1)(a). The ACA may, for
example, require that an auditor must notify the ACA if the person lodging the
eligible revenue return has contravened the Act.
The ACA may exempt a
person from the application of this section under proposed subsection 20D(2).
Proposed section 20E enables the ACA to make whatever inquiries it thinks
necessary or desirable to determine the correctness of a revenue return.
Information and documents obtained as a result of such inquiries are to be used
by the ACA in making its assessment of liabilities.
Proposed subsection 20F(1) requires the ACA to make a written assessment of
the eligible revenue for an eligible revenue period of each participating person
in respect of the period. The assessment may be include in the same document as
other assessments made by the ACA under Part 2, such as an assessment of a
person’s levy debt or credit balance under proposed section
20U.
Proposed subsection 20F(2) provides for the application of a
threshold amount, as determined in writing by the Minister. Where a
person’s eligible revenue is less than this threshold amount is less that
the threshold amount, the person’s eligible revenue must be assessed as
zero dollars. In any other case, a person’s eligible revenue will be
reduced by the threshold amount. (This effectively establishes a levy free
threshold, thus minimising the impact on persons crossing the threshold and
reducing incentives for structuring revenues to stay below the threshold.) The
Minister’s determination of the threshold amount must be published in the
Gazette (proposed subsection 20F(4)).
While smaller carriers and
carrier service providers may be required to lodge returns of eligible revenue
because they have a higher gross telecommunications revenue than the amount
determined by the Minister under proposed section 20A, proposed paragraph
20F(2)(a) will allow the Minister to exempt smaller carriers and carrier service
providers from contributing levy.
Proposed subsection 20F(3) provides
that, subject to 20G and subsection 20F(2), the ACA’s assessment must be
based upon:
• the person’s eligible revenue return;
• the information and documents obtained by the ACA because of its
inquiries into the correctness of the return; and
• any other
information or documents that the ACA had and that it thinks relevant to making
the assessment.
This subclause is important because it makes it clear
that the ACA does not need to rely solely on the information provided to it in
claims and returns to make its assessment. The clause gives the ACA
considerable discretion to take into account the findings of its inquiries and
other relevant matters in making its assessment.
Proposed subsection
20F(5) provides that the ACA must give a copy of an assessment of a
person’s eligible revenue to the person concerned.
Proposed section 20G sets out how a participating person’s eligible
revenue may be assessed where a person fails to lodge its eligible revenue
return with the ACA. Persons may fail to lodge returns in an attempt to delay
or avoid the payment of levy contributions. Such failures delay the whole levy
process with consequences for the payment of entitlements to USPs. Under
proposed subsection 20G(1) the ACA may estimate the person’s eligible
revenue for that period, and may make a written assessment of the person’s
eligible return under proposed section 20F based on that estimate (but taking
into account the threshold amount under proposed subsection 20F(2)). The
proposed approach draws on similar arrangements under the Income Tax
Assessment Act 1936 to deal with failures to lodge income tax returns.
Proposed subsection 20G provides that the ACA must give at least two
weeks written notice to a person who has not lodged its return, to make the
assessment based on the estimate, and of the amount of eligible return proposed
to be assessed.
If the ACA receives an eligible revenue return for the
period from the person concerned, the ACA must not make an assessment based on
an estimate if it has not already made an assessment (proposed subsection
20G(3)). However, if the ACA has already made an assessment based on an
estimate, the ACA is not required to change it if an eligible revenue return is
later give to the ACA (proposed subsection 20G(4)).
Proposed section 20H sets out how the levy contribution factor, which is used
to work out the levy debit of a participating person, is to be calculated. The
levy contribution factor as calculated under proposed subsection 20H(2) will
represent a person’s proportion of the total market liability for levy
contribution, based on the amount of the person’s assessed eligible
revenue.
Proposed subsection 20H(1) provides that, after the ACA has
assessed the eligible revenue of participating person for an eligible revenue
period, the ACA must work out a levy contribution factor for the period for each
of those persons.
Proposed subsection 20H(2) provides that the formula
for the calculation of a person’s levy contribution factor will be the
person’s ‘individual eligible revenue’, divided by the
‘total eligible revenue’. The ‘individual eligible
revenue’ is the assessed eligible revenue of the participating person for
the eligible revenue period. The ‘total eligible revenue’ is the
total assessed eligible revenue for the eligible revenue period of all the
participating persons in relation to the period.
Proposed section 20J enables a person that is a universal service provider or
a digital data service provider in relation to a financial year to submit a
claim for levy credit, that is the credit it has in the event of levy being
levied. A USP or DDSP accrues this levy credit in fulfilling the USO or DDSO.
The amount of its credit is, in effect, the sum of the USP’s or
DDSP’s universal service subsidy entitlements and its digital data cost
for the period.
Proposed subsection 20J(1) provides that, within the
period of 45 days after the end of a claim period (or such other period as is
determined in writing by the Minister), a universal service provider or a
digital service provider in relation to a claim period may give the ACA a claim
for a levy credit for that period. The use of ‘such other period as is
determined’ is intended to enable the Minister to determine a period for
lodging a levy credit claim that is a period before the start of, or during, a
claim period rather than a period after the end of a claim period. This would
enable claims to be lodged in advance of, or during, a claim period with a view
to reducing the time between when a USP or DDSP earns its entitlements and when
it is paid for them. This approach is considered feasible with the introduction
of advance determination of subsidies (subject to how the subsidies are defined)
and eligible revenue relating to a period prior to the claim
period.
Proposed subsection 20J(2) provides that a person’s levy
credit for a claim period is the total of:
• all amounts of
universal service subsidy to which the person is entitled for the period (the
universal service subsidy is worked out under proposed section
16)
• the person’s digital data cost for the period (as
calculated under proposed section 17)
The claim must be in a form
approved in writing by the ACA (proposed subsection 20J(3)). Proposed
subsection 20J(3) sets out the details that must be included in a levy credit
claim. The approved form may require verification by a statutory declaration of
statements in the claim (proposed subsection 20J(4)).
Proposed subsection 20K(1) provides that a claim must be accompanied by a
report of an approved auditor that:
• is in a form approved in
writing by the ACA; and
• states that the auditor has audited the
return; and
• contains a determination, in the terms specified in
the form, of the auditors opinion; and
• states that the auditor
has been given sufficient information and assistance in order to audit the
return; and
• includes all other statements and information
required by the form to be included.
The ACA may add additional auditing
requirements in the form it approves for the purposes of paragraph 20K(1)(a).
The ACA may, for example, require that an auditor must notify the ACA if the
person lodging the eligible revenue return has contravened the Act.
The
Minister may modify the auditing requirements in proposed subsection 20K(1) by a
determination (proposed subsection 20K(2)). A copy of the determination must be
published in the Gazette (proposed subsection 20K(4).
The ACA may
exempt a person from the application of this section under proposed subsection
20D(3).
Proposed clause 20L provides a mechanism for the public scrutiny of claims
for levy credit (including a variation of a claim – proposed subsection
20L(2)) lodged with the ACA under proposed section 20J. Proposed subsection
20L(1) provides that the ACA will, within 14 days of the period for making
claims, publish on the Internet or by any other means that the ACA considers
appropriate a copy of each claim, or a summary of claims made in respect of the
claim period.
Proposed section 20E enables the ACA to make
whatever inquiries it thinks necessary or desirable to determine the correctness
of a claim by a USP or DDSP. Information and documents obtained as a result of
such inquiries are to be used by the ACA in making its assessment of
entitlements to levy credit.
Proposed subsection 20N(1) requires the ACA to make a written assessment, in
respect of each person who submits a levy credit claim for a claim period under
proposed section 20J, of the person’s levy credit for that period. The
assessment may be include in the same document as other assessments made by the
ACA under Part 2, such as an assessment under proposed section
20U.
Proposed subsection 20N(2) requires that the assessment must set out
the universal service subsidy to which a person is entitled if they are a USP in
relation to the claim period, and the digital service cost of a person if the
person is a DDSP in relation to the claim period.
Proposed subsection
20N(3) provides that the ACA’s assessment must be based
upon:
• the person’s claim;
• the information
and documents obtained by the ACA because of its inquiries into the correctness
of the return; and
• any other information or documents that the
ACA had and that it thinks relevant to making the assessment.
This
subclause is important because it makes it clear that the ACA does not need to
rely solely on the information provided to it in claims to make its assessment.
The clause gives the ACA considerable discretion to take into account the
findings of its inquiries and other relevant matters in making its
assessment.
Proposed subsection 20N(4) provides that the ACA must give a
copy of an assessment of a person’s claim to the person
concerned.
The Minister may determine principles that are to be applied in assessing and
adjusting claims for a levy credit., and the principles will apply from the date
specified in the determination (proposed subsection 20P(1)). The use of
principles will ensure consistency in the treatment of claims. The ACA must
apply the principles (if any) (proposed subsection 20P(3).
Before making
the determination, the Minister must consult all affected carrier and carriage
service providers and invite submissions within a reasonable specified period
(proposed subsection 20P(2)).
A determination of principles under this
proposed section will be a disallowable instrument. A determination must
accordingly be notified in the Commonwealth Gazette, tabled in both
Houses of Parliament and will be subject to Parliamentary
disallowance.
These provisions are intended to provide a means by which
the Minister can provide policy guidance in relation to the assessment
(including the adjustment) of claims should the need arise.
It will not be necessary to collect any levy where no-one has claimed a
digital data cost or an entitlement to a universal service subsidy. For this
reason proposed section 20Q provides that, if no claim for a levy credit for a
claim period has been made within the period for making such claims, no person
will be liable to pay an amount of levy in respect of that period.
Proposed section 20R established the mechanism for calculating a
participating person’s levy debit. For each claim period, the ACA must
work out the levy debit of each participating person in relation to the last
eligible revenue period that ended before the start of the claim
period.
Proposed subsection 20R(2) defines a person’s
‘levy debit’ as the amount worked out by multiplying the
person’s levy contribution factor, worked out under proposed section 20H,
by the ‘total levy credits’. The ‘total levy credits’
are the sum of all the levy credits to which persons are entitled for the claim
period.
Proposed subsection 20R(3) provides that the Minister may, by
written determination, modify the formula in subsection (2). This would allow
the Minister, for example, to establish a default margin and provide for the
carrying forward of any unused default margin. The power might otherwise be
used to compensate for defaults in the payment of levy for a claim period.
Under proposed subsection 20R(4), the determination would be a disallowable
instrument for the purposes of s. 46A of the Acts Interpretation Act
1901. It must therefore be published in the Commonwealth Gazette,
tabled in the Parliament and will be subject to Parliamentary
disallowance.
Proposed section 20S provides that if a participating person’s levy
debit for a claim period under proposed section 20R exceeds the person’s
levy credit as assessed by the ACA under proposed section 20N, then the person
has a levy debit balance for the period and the amount of the balance is the
amount of the excess. Once assessed by the ACA under proposed section 20U, the
levy payable on a levy debit balance must be paid to the Commonwealth under
proposed Subdivision C.
Propose section 20T provides that if a participating person’s levy
credit for a claim period as assessed by the ACA under proposed section 20N
exceeds the person’ levy credit under proposed section 20R, then the
person has a levy credit balance and the amount of the balance is the amount of
the excess. Once assessed by the ACA under proposed section 20U, the balance
will be payable to the person out of the Universal Service Account under
proposed section 21C.
Proposed section 20U requires the ACA to make a written assessment
of:
• each participating person’s levy debit, levy debit
balance and levy payable;
• each USP’s subsidy entitlement, levy
credit balance, and levy receivable;
• each DDSP’s digital
data cost, levy credit balance and levy receivable; and
• the total
of all levy credits to which persons are entitled.
Proposed subsection
20U(2) identifies matters that the assessment must set out in relation to each
participating person.
Proposed subsection 20U(3) identifies matters that
the assessment must set out in relation to each universal service provider in
relation to the claim period.
Proposed subsection 20U(4) identifies
matters that the assessment must set out in relation to each digital data
service provider in relation to the claim period.
Proposed subsection
20U(5) sets out the basis on which the assessment must be made. The assessment
must be made on the basis of the levy credit claims lodged under proposed
section 20N, eligible revenue returns lodged under proposed section 20F and any
other information or documents the ACA has and thinks relevant to making the
assessment. This subclause is important because it makes it clear that
the ACA does not need to rely solely on the information provided to it in claims
and returns to make its assessment. It could also rely on information and
documents obtained by the ACA because of its inquiries under proposed
subsections 20E and 20M. The clause gives the ACA considerable discretion to
take into account the findings of its inquiries and other relevant matters in
making its assessment.
Proposed subsection 20U(6) provides that the ACA
must act expeditiously in preparing its assessment. Failure to act
expeditiously, however, will not affect the validity of the assessment.
Proposed section 20V requires the ACA, as soon as practicable after making an
assessment under proposed section 20U, to publish a copy of its assessment in
the Commonwealth Gazette and give a copy to each participating person.
If an assessment is amended under proposed section 20W, the amended assessment
will also need to be published and given to participating persons as such an
amended assessment is to be taken to be an assessment.
Proposed section 20W provides that the ACA may vary an assessment made under
proposed sections 20F, 20N or 20U by making such alterations and addition as it
thinks necessary, even if the levy credits or levy has been paid in respect of
an assessment. The amended assessment will be taken to be an assessment made
under the same section as the original assessment.
Proposed section 20X provides that the ACA is making an assessment (ie of an
eligible revenue return or a claim) under Part 2, may partly a completely accept
a statement in claim or an eligible revenue return.
Proposed section 20Y allows the ACA to include in the same document more than
one assessment made under this part. It may be more administratively efficient
for the ACA to combine assessments.
Proposed section 20Z sets out when levy will be payable by a participating
person who is assessed to have a levy debit balance under section 20U. The levy
becomes payable on the 28th day after the ACA gives the person a copy
of the assessment, or such later day as determined in writing by the ACA. An ACA
determination under this proposed section must be published in the Gazette
(proposed subsection 20Z(2)).
Proposed section 20ZA makes levy that is due and payable recoverable in a
court of competent jurisdiction as a debt due to the Commonwealth.
Proposed section 20ZB provides that the validity of an assessment under
Division 8 is not affected by a contravention of this Act. Proposed section
20ZB is intended to include a contravention by either the ACA or a participating
person. It is intended to prevent the validity of an assessment being
challenged on a minor technical matter or a failure of procedure.
Proposed section 20ZC creates a presumption that a copy, or purported copy,
of a Commonwealth Gazette setting out what purports to be a copy of an
assessment made under proposed section 20U does set out a copy of the
assessment, and that the ACA has duly made the assessment and the details set
out are correct.
Proposed section 20ZD puts the onus of establishing that an assessment under
proposed section 20U is incorrect on the party that asserts that. Placing the
onus on this party recognises the numerous checks under the Part designed to
ensure the accuracy of the USO process. A person challenging an assessment has
the benefit of the information disclosure provisions of new Division 15.
Proposed section 20ZE relates to an overpayment of levy by a participating
person. If a participating person overpays levy, the overpayment is to be
refunded. This provision will deal with overpayments that come to light as a
result of an amendment of an assessment.
Proposed section 20ZF cancels the effect of a provision of another Act that
would have the effect of exempting a person from liability to pay levy, except
if the provision of the other Act is enacted after the commencement of this
clause and refers specifically to levy imposed by the Telecommunications
(Universal Service Levy) Act 1997.
The purpose of this provision is
to set out the circumstances in which a provision of another Act can cancel a
person’s liability to pay levy. It is particularly aimed at preventing
the unintentional exemption from levy of Commonwealth authorities that can be
made liable to taxation by law of the Commonwealth (see proposed section 20ZG).
Such authorities would remain liable for levy unless legislation specifically
gave them exemption from levy and referred specifically to the
Telecommunications (Universal Service Levy) Act 1997.
Proposed section 20ZG provides that the Commonwealth is not liable to pay
levy and states that a reference in this clause to the
‘Commonwealth’ includes a reference to an authority of the
Commonwealth that cannot, by law of the Commonwealth, be made liable to taxation
by the Commonwealth. This is consistent with usual Constitutional practice that
the Commonwealth does not impose tax on itself.
Proposed section 20ZH provides that the Minister may, by written
determination, require a person, who has or will have a liability to pay levy,
to obtain performance bonds (as defined by the determination – proposed
subsection 20ZH(4)) or guarantees in respect of the liability or anticipated
liability (proposed subsection 20ZH(1)). The person must comply with the
determination (proposed subsection 20ZH(2)).
The determination will be a
disallowable instrument. The determination must accordingly be notified in the
Commonwealth Gazette, tabled in both Houses of Parliament and will be
subject to Parliamentary disallowance.
Proposed section 21 provides for the continuation of the Universal Service
Account (formerly known as the Universal Service Reserve). The Account is a
Special Account for the purposes of section 21 of the Financial Management
and Accountability Act 1997 (FMA Act)(proposed subsection 21(1)). The
purposes of the Account are set out in proposed section 84.
Under
proposed subsection 21(3), the Universal Service Account is to be administered
by the Department or the ACA if the ACA becomes a prescribed Agency under the
FMA Act. Where there is a change in who is to administer the account, the
Minister may determine arrangements to deal with relevant transitional matters
(proposed subsection 21A(4)). A copy of the determination must be published in
the Gazette (proposed subsection 21A(5)).
Proposed section 83 sets out the amounts that are to be credited to
Universal Service Account, as required by subsection 21(1) of the FMA Act. These
amounts will consist of amounts equal to the levies paid under Part 2, all
moneys appropriated by the Parliament for the purposes of the Account, and
amounts equal to amounts that were overpaid to person under proposed section 21C
and have been recovered.
Clause 21B sets out the purposes of the Universal Service Account, as
required by subsection 21(1) of the FMA Act.
Under paragraph
21B(1)(e), one of the purposes of the Account is to reimburse the Commonwealth
for the costs or expenses it or the ACA incurs in administering the
Telecommunications (Universal Service Levy) Act 1997 and Division 6 of
Part 2. The Minister administering the Financial Management and
Accountability Act 1997, currently the Minister for Finance and
Administration may, from time to time, determine the amount of such a
reimbursement (proposed subsection 21B(2)). Under proposed subsection 21B(3),
however, the total of amounts reimbursed for these purposes must not exceed the
total of the amounts appropriated by law for the Universal Service
Reserve’s purposes, as paid into the Universal Service Account under
proposed subsection 21A(b). Any reimbursements to the Commonwealth or the ACA
under proposed paragraph 21B(1)(e) would therefore not be deducted from levy to
be paid to universal service providers.
Proposed section 21C sets out how the Universal Service Levy will be
distributed through the account.
Proposed subsection 21C(1) provides
that if a person has a levy credit balance because of proposed section
20T for a claim period, an amount equal to the amount of that balance is payable
to that person out of the Account. It is by this means that a USP or DDSP who
has incurred an entitlement in fulfilling its USO or DDSO receives payment.
Proposed subsection 21C(2) prevents the levy being paid from the Account
in relation to a claim period until the ACA has made an assessment under
proposed section 20U for the claim period. Currently section 86 of the Act also
requires that each participating person in respect of which levy was assessed to
have paid the levy. This requirement has been omitted in the new proposed
subsection to provide for greater flexibility in the administration of the
account by allowing amounts to be paid from the Account, notwithstanding that
not all levy payments may have been received. The current approach has the risk
of payments to USPs and DDSPs being substantially delayed, at a cost to them,
should any contributor delay payment or default.
Where not all levy
payments have been received and payments are made under proposed subsection
21C(2), it is possible that there may be insufficient funds to pay all persons
eligible for payment. Proposed subsection 21C(3) provides that where there are
insufficient funds in the Account (after the payment of refunds under proposed
section 20ZE) the ACA must work out the amount owed to each person as a
proportion of the total amount payable, and ensure that any payments out of the
Account are made in accordance with those proportions.
Proposed
subsection 21C(4) provides if the Minister determines in writing a different
method for making payments that that prescribed in proposed subsection 21C(3),
then the ACA must act in accordance with that determination. It is intended
that this would enable the Minister, for example, if circumstances warranted it,
to require priority payment to USPs of a specified kind, for example, PUSPs,
CUSPs or smaller USPs.
Proposed subsection 21C(5) provides that a
determination made under proposed subsection 21C(4) will be a disallowable
instrument for the purposes of s. 46A of the Acts Interpretation Act
1901. It must therefore be published in the Commonwealth Gazette,
tabled in the Parliament and will be subject to Parliamentary
disallowance.
Proposed section 21D sets out how the balance of the Universal Service
Account may be distributed. The balance of the Universal Service Account, once
all amounts payable in relation to a claim period have been paid, may be
distributed by the ACA to persons who are or were participating persons under
the Act (proposed subsection 21D(1)). Such a process may be necessary, for
example, if a default margin is established under proposed section 20R, there
are no defaults and the margin is allowed to accumulate. The Minister may
determine rules for making distributions and the ACA must comply with those
rules (proposed subsection 21D(2)). The Minister’s determination would be
a disallowable instrument for the purposes of section 46A of the Acts
Interpretation Act 1901 (proposed subsection 21D(3)). It must therefore be
published in the Commonwealth Gazette, tabled in the Parliament and will
be subject to Parliamentary disallowance.
Proposed subsection 21E which is designed to enable an amount of levy
overpaid to a universal service provider under proposed subsection 21C to be
recovered. Such an overpayment may come to light where an amended assessment
recognises that a universal service provider is entitled to less levy than a
previous assessment stated.
For the purposes of the proposed subsection
section, an ‘overpaid amount’ is so much of an amount paid to a
universal service provider under proposed section 85 as represents an
overpayment (proposed subsection 21E(1)).
Under the proposed subsection ,
an overpaid amount is a debt due to the Commonwealth (proposed subsection
21E(2)) and recoverable by the Commonwealth in a court of competent jurisdiction
(proposed subsection 21E(3)). The proposed subsection provides a mechanism for
the Commonwealth to pursue bad debts of universal service providers that fail to
repay overpaid levy.
An overpaid amount may be deducted from one or more
other payments payable to the person (for example, further instalment of levy,
including for subsequent financial years). Where this is done, the other
amounts are taken to be paid in full (proposed subsection 21E(4)).
The purpose of new Division 15 is to open the USO and DDSO assessment process
to scrutiny by both the public and industry.
The current information
disclosure provisions in Subdivision D of Part 6 have effectively been
re-enacted as default arrangements. Under these provisions members of the
public, universal service providers, digital data service providers and
participating persons can obtain from the ACA information about the basis on
which the ACA has made its assessment under proposed section 20U and information
about how the ACA has worked out that assessment. The information is to be
available to the greatest extent possible without undue damage being caused to
the interests of a universal service provider or digital data service provider
by the disclosure of confidential commercial information. In light of concerns
about the efficacy of these provisions, however, and in the interests of
flexibility, the Minister will also be able to modify the way in which the
Division applies by way of a disallowable instrument.
Proposed section 22 is modelled on section 71 of the current Act. It enables
a person to request information about an assessment, namely information on which
the assessment is based and about the methodology, and requires the ACA to
comply with the request except in relation to certain information. The ACA must
not make available information obtained from, or relating to, a universal
service provider or digital data service provider that could reasonably be
expected to cause substantial damage to the provider, or information prescribed
in regulations.
Proposed section 22A is modelled on section 72 of the current Act. It
enables a universal service provider, a digital data service provider or a
participating person in relation to a claim period to request the ACA to provide
specified information, being information the ACA cannot provide under proposed
section 22, and sets out rules in relation to the ACA’s compliance with
the request.
Proposed section 22B is based on section 73 of the current Act. It sets out
how the ACA is to comply with a request for information under proposed sections
22 and 22A in terms of the manner in which it is to provide the information
requested to the requesting party.
Proposed section 22C will enable the Minister to obtain from a carrier or
carriage service provider information that is relevant to exercise of the
Minister’s powers or performance of the Minister’s functions under
Part 2 of the Act. The Minister may give written notice to the carrier or
carriage service provider requiring the provision of information, and the
carrier of provider must comply with this notice.
It is envisaged the
Minister could use this power, for example, in developing alternative USO
arrangements (new Division 7), determining a service obligation to be
contestable in respect of a universal service area (new Division 6) or in
determining various arrangements to deal with issues of a transitional nature.
The provision has its antecedents in current sections 24 and 26E.
Proposed section 22D will enable the Minister to modify the way in which new
Division 15 applies by way of a disallowable instrument. This is to enable any
continuing concerns about the efficacy of the provisions to be addressed and to
deal with new issues that may arise.
As a disallowable instrument, any
determination made by the Minister under proposed section 22D will need to be
notified in the Commonwealth Gazette, tabled in both Houses of Parliament
and will be subject to Parliamentary disallowance.
Proposed section 23 – ACA must maintain
Register/s
Proposed section 23 requires the ACA to maintain a
register or registers of various instruments and other documents required under
the proposed Part. The register or registers may be maintained by electronic
means such as a computer database (proposed section 23(2)).
Proposed
subsection 23(3) allows a person to inspect any such register and take copies or
extracts from it. For this the person is required to pay any charge (if any)
determined by the ACA under s. 53 of the Australian Communications Authority
Act 1997. That provision restricts the ACA to recovery of its costs in
relation to the provision of the service to which the charge applies so that a
charge may not amount to taxation.
Proposed subsection 23(4) makes it
clear that a print-out from a register, if it is kept in an electronic , is to
be taken to be an extract from the register.
Proposed subsection 23(5)
makes it clear that the ACA may provide extracts or copies of a register in the
form of a data processing device (paragraph (a)) such as a floppy disk or a CD;
or by way of electronic transmission (paragraph (b)) such as email or on the
Internet.
The proposed register or registers is similar to other public
registers maintained by the ACA. The register or registers should enable
greater public awareness and scrutiny of the operation of the universal service
regime and the obligations of USPs and DDSPs and facilitate public action to
ensure providers fulfil their obligations.
Proposed section 23A enables the Minister to delegate, in writing, any of
his powers under new Part 2 (including his powers to make determinations) to an
SES employee or an acting SES employee of the ACA (proposed subsection 23A(1)).
The terms ‘SES employee’ and ‘acting SES employee’ are
defined in the Public Service Act 1999.
The Minister’s
delegation may be made subject to specified conditions (proposed subsection
23A(2)).
The Minister must arrange for the publication in the
Commonwealth Gazette of a notice giving details of the
delegation.
Proposed section 23B provides that a failure by the Minister or the ACA
to publish a notice in the Commonwealth Gazette as required by a
provision of the Act will not affect the validity of anything else done in
accordance with the Act.
Clause 1 provides that the Bill, when enacted, may be cited as the
Telecommunications (Universal Service Levy) Amendment
Act 2000.
Clause 2 provides that the Bill, when enacted, will commence or is taken to
have commenced immediately after the commencement of the Telecommunications
(Consumer Protection and Service Standards) Amendment Act (No.2).
Clause 3 provides that the provisions in an 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 to the Bill makes amendments to the Telecommunications
(Universal Service Levy) Act 1997 that are consequential upon the proposed
new universal service regime introduced by the Bill. The amendments reflect the
extension of funding of the USO and DDSO to carriage service providers as well
as carriers as well as new arrangements in relation to eligible revenue periods
and claim periods.
The Telecommunications (Universal Service Levy) Act
1997 currently imposes a levy on telecommunications carriers with a view to
funding losses incurred by universal service providers in fulfilling the USO
under the Telecommunications (Consumer Protection and Service Standards) Act
1999.
Section 5 of the current Telecommunications (Universal Service Levy) Act
1997 defines ‘participating carrier’ for the purposes of that
Act, giving it the same meaning as in section 16 of the Telecommunications
(Consumer Protection and Service Standards) Act 1999. Section 16 provides
that unless exempted by the regulations a person is a participating carrier in
relation to a financial year if the person was a carrier at any time during the
financial year.
As a result of new Part 2 of the Telecommunications
(Consumer Protection and Service Standards) Act 1999 introduced by the Bill,
the concept of ‘participating carrier’ has been replaced by the
concept of ‘participating person’. Item 1 of Schedule 2 to the Bill
therefore repeals the definition of ‘participating carrier’ in
section 5 of the Telecommunications (Universal Service Levy) Act 1997
Item 2 replaces the definition of ‘participating carrier’ in
section 5 of the current Act with a definition of ‘participating
person’.
The term ‘participating person’ will have the
same meaning as in new Part 2 of the Telecommunications (Consumer Protection
and Service Standards) Act 1999. Proposed section 20A in new Part 2 of that
Act defines who is a participating person for the purposes of that Part. A
participating person will be subject to assessment for the payment of levy under
this Part. A person will be a ‘participating person’ in relation to
an eligible revenue period if:
• the person was a carrier at any
time during the eligible revenue period; or
• the Minister makes a
written determination that carriage service providers are participating persons
in relation to the eligible revenue person and the person was a carriage
services provider at the time during the eligible revenue period.
Section 6 of the current Telecommunications (Universal Service Levy) Act
1997 imposes a levy on the levy debit balance in relation to a financial
year (as determined by section 68 of the Telecommunications (Consumer
Protection and Service Standards) Act 1999) of a participating carrier. In
general, the levy is only payable where a participating carrier’s
liability to contribute to the net costs of fulfilling the USO exceeds the net
costs (levy credit) that the carrier has itself incurred.
As a
consequence of the replacement of the ‘participating carrier’
concept by the ‘participating person’ concept (discussed above) in
new Part 2 of the Telecommunications (Consumer Protection and Service
Standards) Act 1999, item 3 of Schedule 2 to the Bill repeals section 6 of
the Telecommunications (Universal Service Levy) Act 1997 and replaces it
with a new section 6.
New section 6 will provide that if the
participating person has a levy debit for a claim period because of proposed
section 20S of the Telecommunications (Consumer Protection and Service
Standards) Act 1999, levy is imposed on that balance.
Section 7 of the current Telecommunications (Universal Service Levy) Act
1997 provides that the amount of the levy imposed is the amount of the
participating carrier’s levy debit balance for a financial
year.
Item 4 of Schedule 2 to the Bill omits ‘financial year’
in section 7 of the Telecommunications (Universal Service Levy) Act 1997
and replaces it with ‘claim period’. This amendment is
consequential on the replacement of the ‘financial year’ concept by
the ‘claim period’ concept in proposed section 8D in new Part 2 of
the Telecommunications (Consumer Protection and Service Standards) Act
1999.
Section 8 of the current Telecommunications (Universal Service Levy) Act
1997 provides that the levy imposed on a participating carrier is payable by
the participating carrier.
As a consequence of the replacement of the
‘participating carrier’ concept by the ‘participating
person’ concept (discussed above) and the replacement of the
‘financial year’ concept by the ‘claim period’ concept
in new Part 2 of the Telecommunications (Consumer Protection and Service
Standards) Act 1999, item 5 of Schedule 2 to the Bill repeals section 8 of
the Telecommunications (Universal Service Levy) Act 1997 and replaces it
with a new section 8.
New section 8 will provide that levy imposed on a
participating person’s levy debit balance for a claim period is payable by
the participating person.
Item 6 of Schedule 2 to the Bill provides that despite the amendments made by Schedule 1 to the Bill, the Telecommunications (Universal Service Levy) Act 1997 will continue to apply, after the commencement of item 6, in relation to levy for a financial year that ended on or before 30 June 2000 as if those amendments had not been made and that repeal had not happened.