Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
1998-1999-2000
THE PARLIAMENT OF THE COMMONWEALTH
OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TELECOMMUNICATIONS (CONSUMER PROTECTION AND SERVICE
STANDARDS) AMENDMENT BILL (NO. 2) 2000
FURTHER
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be moved on behalf of the
Government
(Circulated by authority of the Parliamentary
Secretary to the Minister
for Communications, Information Technology and the
Arts,
Senator the Hon. Ian Campbell)
ISBN: 0642 453764
AMENDMENTS TO THE TELECOMMUNICATIONS (CONSUMER
PROTECTION AND SERVICE STANDARDS) AMENDMENT BILL (NO. 2)
2000
OUTLINE
The Telecommunications (Consumer Protection and Service Standards) Amendment
Bill (No. 2) 2000 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. The Bill improves the delivery
and funding of the universal service obligation (USO) and the digital data
service obligation (DDSO). It does not seek to alter the substance of the
obligations. Rather it seeks to improve service levels and provide greater
choice for consumers, by improving delivery mechanisms.
The proposed
Government amendments to the Telecommunications (Consumer Protection and Service
Standards) Amendment Bill (No. 2) 2000 restrict the capacity of the Minister to
expand the contestability arrangements beyond two pilot areas until the
Australian Communications Authority (ACA) conducts a public inquiry on whether a
net public benefit has accrued from the operation of the pilots and a report of
this inquiry is tabled in both Houses of Parliament.
The proposed Government amendments are not expected to have any
significant financial impact on Commonwealth expenditure or revenue.
NOTES ON AMENDMENTS
TELECOMMUNICATIONS
(CONSUMER PROTECTION AND SERVICE STANDARDS) AMENDMENT BILL (No. 2)
2000
AMENDMENTS (1), (2) AND (3)
An important component of the Government’s USO reform strategy is
to introduce competition into the provision of services supplied under the USO.
Recognising the challenging nature of this initiative, the Government is moving
forward by way of two USO contestability pilots. The Government’s policy
has always been that the pilots would be fully evaluated before USO
contestability was extended. Amendments (1), (2) and (3) give statutory effect
to this intention by providing for a legislative evaluation
process.
Amendments (1) and (2) insert a new note under proposed section
11C referring to the restriction under proposed new section 11F on the Minister
making contestability determinations under section 11C until the requirements of
proposed new subsection 11F(1) are satisfied.
Amendment (3) inserts a new
section 11F into the Bill. This amendment restricts the capacity of the
Minister to make contestable service obligation determinations under proposed
section 11C until after a review of the operation of USO contestability in the
pilot areas.
Under proposed new subsection 11F(1), the Minister may
determine universal service obligations to be contestable under proposed section
11C only in relation to pilot areas until the Minister has satisfied two
conditions. First, the Minister must have received a comprehensive report,
following a public inquiry by the ACA, on whether a net benefit has accrued from
the operation for a period of 12 months or more, of the standard contestability
arrangements in the pilot areas. Second, the Minister must have arranged for
the report to be tabled in each House of Parliament within 10 sitting days of
that House after the Minister receives the report.
A pilot area is
determined in writing by the Minister. The Minister may determine a maximum of
two pilot areas and cannot later change the boundaries of a pilot area (proposed
new subsection 11F(2)). The reference to the boundaries of a pilot area is a
reference to the external boundaries of the pilot area and is intended to
prevent the Minister extending USO contestability by expanding the size of a
pilot area. The provision does not, however, affect the Minister’s
ability to determine universal service areas, to which subsidies relate, within
the pilot areas.
The proposed amendments will effectively replace
proposed subsections 11C(4) and (5) which were included by the Senate but which,
in the Government’s view, are technically flawed. The Senate amendments
not only restrict the extension of USO contestability beyond the two pilots
proposed, but also significantly inhibit the conduct of the pilots. The Senate
amendments have this result because they effectively prevent the Minister
determining more than two universal service areas to be contestable whereas it
is envisaged that the pilot areas will be comprised of a large number of
universal service areas, to which specific subsidy levels attach, and which may
need to change over time as experience with USO contestability is gained. While
correcting the technical flaws inherent in the Senate amendments, the amendments
incorporate the substantive elements of those amendments, namely
that:
• the ACA conduct a public inquiry before any expansion of
USO contestability;
• that inquiry should include a judgment about
whether the pilots have accrued a net public benefit compared with the standard
arrangements;
• a comprehensive report of the inquiry may not be
tabled for at least 12 months from the commencement of the operation of the
arrangements; and
• the Minister must arrange for the report to be
tabled in Parliament within 10 sitting days of receiving it.
The
Government announced its two proposed pilot areas on 23 August 2000, consisting
of local government areas in:
• central-west and south-west
Victoria and south-east South Australia; and
• north-east New South Wales and inland south-east
Queensland.
Proposed new subsection 11F(3) requires the Minister to make
a determination of one or more universal service areas (under proposed new
section 9G) covering the pilot areas before making a contestable service
obligation determination (under proposed section 11C). The provision
establishes a link between pilot areas, universal service areas and
determinations of contestability.
The Minister’s determination of a
pilot area must be published in the Commonwealth Gazette (proposed new
subsection 11F(4)). The determination is not disallowable because it is
essentially administrative in nature, giving effect to the Government’s
intention to conduct two pilots in two already identified areas.