Federal Register of Legislation - Australian Government

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A Bill for an Act to amend the Telecommunications (Carrier Licence Charges) Act 1997, and for other purposes
Administered by: DCITA
For authoritative information on the progress of bills and on amendments proposed to them, please see the House of Representatives Votes and Proceedings, and the Journals of the Senate as available on the Parliament House website.
Registered 09 Sep 2005
Introduced HR 07 Sep 2005
Table of contents.

 

2004-2005

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

TELECOMMUNICATIONS (CARRIER LICENCE CHARGES) AMENDMENT (INDUSTRY PLANS AND CONSUMER CODES) BILL 2005

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for

Communications, Information Technology and the Arts,

Senator the Hon. Helen Coonan)

 

 

 


 

TELECOMMUNICATIONS (CARRIER LICENCE CHARGES) AMENDMENT (INDUSTRY PLANS AND CONSUMER CODES) BILL 2005

 

OUTLINE

 

The Telecommunications (Carrier Licence Charges) Amendment (Industry Plans and Consumer Codes) Bill 2005 (the Bill) would amend the Telecommunications (Carrier Licence Charges) Act 1997 (the Carrier Licence Charges Act) and the Telecommunications (Carrier Licence Charges) Amendment Act 1998.

 

The amendments contained in the Bill, in connection with the proposed amendments contained in Schedule 3 to the Telecommunications Legislation Amendment (Future Proofing and Other Measures) Bill 2005 (the Future Proofing Bill), would allow the total amount of annual charges that are imposed on carrier licences to include an additional amount, which would provide for industry bodies and associations that develop consumer-related industry codes to be reimbursed by the Australian Communications and Media Authority (ACMA) for their costs in developing those codes. As a result of the changes made to the Carrier Licence Charges Act by this Bill, the Commonwealth would be able to recoup, through the charges imposed on carrier licences the amount that the ACMA would be required to pay to industry bodies and associations for the development of consumer-related industry codes.

 

The Bill also contains amendments that are consequential to the proposed amendments in Schedule 1 to the Telecommunications Legislation Amendment (Competition and Consumer Issues) Bill 2005, which would remove the requirement for carriers to have a current industry development plan.

 

This Bill would also make minor changes to the Carrier Licence Charges Act to reflect the operation of the Legislative Instruments Act 2003 and would correct an error in an amendment to the Carrier Licence Charges Act that was contained in the Telecommunications (Carrier Licence Charges) Amendment Act 1998.


 

FINANCIAL IMPACT STATEMENT

 

This Bill would amend the Carrier Licence Charges Act to increase the maximum amount of the charges that may be imposed on carrier licences under that Act.  The Future Proofing Bill would make amendments to the Telecommunications Act 1997 which would provide that industry bodies and associations that develop consumer-related industry codes can be reimbursed by the ACMA for their costs in developing those codes. 

 

Although the proposed amendment in item 3 of Schedule 1 to the Bill would result in  an increase in Commonwealth revenue, the amount of additional revenue raised in a financial year would be directly referrable to the total amount of costs reimbursed to industry bodies and associations by the ACMA during the previous financial year.  For this reason, the introduction of a scheme to reimburse industry bodies for their costs in developing consumer-related industry codes (as implemented by this Bill and the Future Proofing Bill) is not expected to have a financial impact on Commonwealth revenue or expenditure.

 

REGULATION IMPACT STATEMENT

 

PROBLEM IDENTIFICATION

 

Increasing costs of Consumer Code development

 

In recent years, increased expectations for the timely and effective development of consumer-related industry codes of practice under the Government’s self-regulatory framework have translated to increased costs to industry self-regulatory bodies.  This problem is compounded by the fact that the necessary funding to pay for those rising costs has not increased proportionately.

 

The Government has acknowledged the importance of consumer participation in the telecommunications sector, and stressed the importance of effective self-regulation in this sector. Consumer participation is an important feature of effective self-regulation. 

 

The increasing costs of consumer participation in various self-regulatory bodies, such as the telecommunications industry’s peak self-regulatory body, the Australian Communications Industry Forum (ACIF), combined with increased expectations for timely and effective code development, have resulted in difficulties with maintaining effective and efficient funding of the telecommunications self-regulatory framework.

 

For example, the recently completed Consumer Contracts code has set a new benchmark in what is considered to be an appropriate format for code development, both in the context of code development processes as well as the consideration and consultation of relevant policy issues. While the Consumer Contracts code has been recognised by both industry and consumer groups as having been developed with an appropriate balance of consumers’ and providers’ interests, and within an appropriate timeframe, the funding required to achieve such ‘best practice’ was significant.

 

Another important consideration is the different funding arrangements that exist for the development of various consumer protection instruments, particularly those that are legislated as opposed to those provided via the self-regulatory framework.  For example, the costs of developing regulations made by the Australian Communications and Media Authority (ACMA) are recoverable from carrier licence charges, however the same arrangements do not currently apply to instruments developed through the self-regulatory process.  In effect, although the ultimate outcome for consumers is the same, the funding framework to achieve those outcomes differs.

 

Under existing arrangements, the financial costs of supporting code development are borne by the relevant self-regulatory body.  The sole income stream of many of those bodies is membership fees.  Given that membership of self-regulatory bodies is voluntary, the resulting inequitable financing of code development – due to the fact that while members are contributing to those costs, non-members nevertheless also reap the benefits of industry self-regulation – is making it increasingly difficult to support those costs.  This could potentially translate into a disincentive to self-regulation, particularly in the context of initiating code development.

 

Further, taking into account the changing nature and far wider scope of the industry since industry self-regulation was first provided for and promoted in the Telecommunications Act 1997, Government inaction could jeopardise the ability of industry self-regulatory bodies to continue to develop timely and effective codes and therefore the credibility and relevance of those bodies.

 

Market failure of voluntary funding arrangements

 

Self-regulatory bodies have been established in response to the Government’s policy to promote self-regulation in the telecommunications sector.  The funding arrangements put in place for those bodies were mainly membership funding, and for many self-regulatory bodies this remains their sole income stream. 

 

Membership fees for the major self-regulatory bodies, particularly in the telecommunications sector, are generally based on a sliding scale according to the bodies’ telecommunications revenue per annum.  For example, in ACIF, carriers pay according to a sliding scale dividing their eligible revenue into brackets (> $10 billion, >$3 billion, >$1 billion, >$400 million, >$200 million, and <$200 million); carriage and content service providers (CSPs) are charged at a lesser rate, but according to the same revenue classification; and associations (usually not-for-profit bodies) pay flat fees, with a maximum of $15,000 for industry groups and $2,000 for consumer groups. 

 

Because membership of self-regulatory bodies is generally voluntary, a large proportion of industry does not contribute to the bodies either financially or by way of labour, but nevertheless reap the benefits of industry self-regulation.  Of the approximately 150 carrier licences issued in Australia, only 15 carriers are members of ACIF.  Approximately ten carriers meet most of ACIF’s costs and contribute the bulk of resources required for ACIF’s work.  The remainder of resources is provided by some eight CSPs, seven industry associations, four consumer associations and eight other bodies.

 

Relying on the market in conjunction with the general application of existing laws will not solve the funding problem, because there are no commercial incentives under the existing framework for currently non-contributing industry stakeholders to financially support and share in the costs of industry self-regulation. 

 

Further, relying on the ‘goodwill’ of stakeholders to voluntarily contribute provides insufficient certainty in terms of ensuring that funding for necessary activities is commensurate with increasing stakeholder expectations for timely and effective codes.

 

OBJECTIVE

 

One objective is to establish a funding arrangement for consumer-related codes of practice that promotes industry self-regulation to the maximum practicable extent, in accordance with section 4 of the Telecommunications Act 1997.

 

A second objective is to achieve adequate funding for the development of consumer-related codes, in recognition of the desirability of a sustained increase in the level of consumer participation in code development.

 

Third, the funding arrangements for consumer-related codes should be equitable, that is, contributions should be distributed among industry participants in accordance with the benefits and costs.

 

REGULATORY OPTIONS

 

The following options were considered for promoting the above objectives:

 

1.      Reduction of carrier licence charges for members of self-regulatory bodies.

2.      Government subsidy of membership fees to self-regulatory bodies, and legislated membership obligation .

3.      Cost recovery for the development of consumer-related codes via carrier licence charges.

 

1.                  Reduction of carrier licence charges for members of industry self-regulatory bodies

 

Carrier licence charges imposed on carriers could be reduced by the amount paid by the carriers to specified industry self-regulatory bodies in membership fees. To the extent that carriers contribute to the costs of self-regulatory bodies through membership fees, this would reduce their total contribution and provide a commercial incentive for carriers to participate in those bodies.  

 

2.                  Government subsidy of membership fees to self-regulatory bodies and legislated membership obligation

 

Membership subsidies would provide a commercial incentive for industry stakeholders to take up membership of relevant self-regulatory bodies.  The Government could subsidise membership fees for carriers and carriage service providers (CSPs) to industry self-regulatory bodies on a pro-rata basis according to the existing fee structures of those bodies. 

 

However, on the basis that such an arrangement would result in greater subsidies in dollar terms for larger carriers and CSPs, a sub-option could alternatively be for financial support to be provided only to carriers with revenue below a specified amount or to those that take up membership of a specified self-regulatory body within a specified period.

 

Given that it would be difficult to justify a Government subsidy without at the same time requiring all carriers and CSPs to be members of the relevant self-regulatory bodies, implementation of this option would entail legislating requirements for compulsory membership of those bodies as for the Telecommunications Industry Ombudsman (TIO) scheme in the Telecommunications (Consumer Protection and Service Standards) Act 1999. 

 

3.                  Cost recovery for the development of Consumer Codes and Guidelines via carrier licence charges

 

The costs of developing consumer-related codes (but not codes dealing with operational or technical issues) could be recovered from carriers in the following financial year via carrier licence charges.   In order to enable payments to be made within a reasonable timeframe, ACMA could be given a standing appropriation for the purposes of reimbursing industry bodies for the costs of developing consumer-related codes, with the relevant amount being drawn from consolidated revenue and then recovered from carriers in the following financial year via carrier licence charges. This option would involve amendments to the Telecommunications (Carrier Licence Charges) Act 1997 and the Telecommunications Act 1997. 

 

These amendments would:

·        allow, but not require, an industry body or association intending to develop a consumer-related code to seek reimbursement of attributable costs through carrier licence charges;

·        require the industry body to provide an independently audited statement of costs;

·        require ACMA, should it find the statement to be adequate, to pay to the relevant body or association within 30 days the costs of developing the consumer-related code; and

·        fund only consumer-related codes that are submitted to ACMA for registration.

 

Reimbursement would not be available where the code is not deemed by ACMA to be a consumer-related code, where costs claimed are determined to be non-refundable by ACMA or are excessive, or the consumer-related code is not submitted for registration upon completion.

 

Contributions based on carrier eligible revenue are a clearly well established means of recovering costs, as evidenced by the Universal Service Obligation (USO).  The recovery of the telecommunications regulatory costs of ACMA and the Australian Competition and Consumer Commission (ACCC) via eligible revenue-based carrier licence charges also provides a practical precedent for this manner of cost recovery.

 

IMPACT ANALYSIS

 

1.                  Reduction of carrier licence charges for members of industry self-regulatory bodies

 

The advantages of this option are that it would encourage carrier membership of self-regulatory bodies (but not CSP or other membership) and more equitably spread the costs of those bodies among industry participants.

 

The disadvantages are that:

·        non-carrier membership of self-regulatory bodies would be discouraged;

·        it would effectively anoint those self-regulatory bodies as the only official industry bodies responsible for industry self-regulation, technical standards and other activities;

·        participation by non-carriers in self-regulatory activities may be reduced; and

·        the cost of the ‘discount’ in carrier licence charges would need to be subsidised, either by the Government or redistributed among non-member carriers.

 

Likely impacts on relevant groups are as follows:

 

Government.  If loss in revenue due to the carrier licence charge ‘discount’ is to be absorbed by the Government, this would result in a financial cost to the Government. 

 

Telecommunications carriers. To the extent that carriers contribute to self-regulatory bodies’ costs through membership fees, this option would reduce their total contribution and provide a commercial incentive for carriers to participate in such bodies.  However, this option could potentially be viewed as imposing a financial penalty on non-member carriers, particularly if the costs of the carrier licence charge ‘discount’ were to be redistributed among non-member carriers.

 

CSPs.  The amendments would apply only to holders of carrier licences.  There should be no financial impact on a CSP unless it is also a carrier licence holder.

 

Self-regulatory bodies.  Potential net financial gain due to increased carrier membership.  However, membership fees may require significant restructuring.

 

2.                  Government subsidy of membership fees to self-regulatory bodies and legislated membership obligation

 

Adoption of the membership requirements of the TIO (which is a complaints handling body) is not justifiable in the context of most self-regulatory bodies. While compulsory membership of the TIO is appropriate, as it is the means by which coverage of all services provided to residential and small business consumers is achieved, this is not the case with self-regulatory bodies.

 

While this option may help to achieve broader membership of self-regulatory bodies and increase the available funding, there are a number of disadvantages, namely that:

 

·        it would effectively anoint the respective self-regulatory bodies as the only official industry bodies responsible for industry self-regulation, technical standards and other activities; and

·        there do not appear to be precedents for requiring membership of such an industry body, in Australia or overseas.

 

Further, given the absence of licensing requirements (other than carrier licences), there are inherent difficulties in identifying which industry participants should be required to join relevant self-regulatory bodies.

 

The sub-option identified in the previous section of providing financial support only to carriers and CSPs with revenue below a specified amount or to those that take up membership within a specified period, may also be criticised for unfairly assisting non-members or smaller carriers and CSPs.

 

Likely impacts on relevant groups are as follows:

 

Government.  The financial impact on Government would be dependent upon the level of subsidy to be provided. There could be possible savings in regulatory costs if membership of certain self-regulatory bodies were mandated.

 

Telecommunications carriers and CSPs. While membership fee subsidies would provide a commercial incentive for industry stakeholders to participate in the relevant self-regulatory bodies, there would be an increase in costs to industry, as all carriers and CSPs would be required to contribute financially to the costs of relevant self-regulatory bodies.  Impacts are likely to be felt more acutely by current non-contributing or non-member industry stakeholders.

 

Self-regulatory bodies.  Potential positive net financial gain due to increased membership.  However, self-regulatory bodies may consider their autonomy and independence to be reduced by Government support.

 

3.                  Cost recovery for the development of consumer-related codes via carrier licence charges

 

A key advantage of this option is that it may be seen as resulting in a more equitable distribution of costs of self-regulation.

 

In addition, this option also has the advantages that:

·        consumer protections are financed the same way, regardless of whether they arise from the actions of a self-regulatory body or ACMA;

·        consumer-related codes would be financed in the same way regardless of the responsible self-regulatory body;

·        compared with option 2, it is likely to provide greater certainty of funding for self-regulatory bodies; and

·        as carriers who contribute financially to self-regulatory bodies via carrier licence charges may be encouraged to join, it could encourage greater membership of, and participation in, self-regulatory processes than the other options. 

 

It is not possible to make a reliable estimate of the annual cost of developing consumer-related codes.  The number of consumer-related codes developed is likely to vary from year to year.  Further, the resources devoted to these codes will vary according to the importance of the code, and the complexity and scope of the issues addressed. 

 

Under this option, most of the cost of consumer-related codes would be recovered from carriers through carrier licence charges.  The costs of consumer-related codes not submitted to ACMA for registration would not be recoverable, however the policy of self-regulatory bodies at present is to submit all consumer-related codes to ACMA for registration. 

 

Likely impacts on relevant groups are as follows:

 

Government.  Some administrative costs would be incurred by ACMA as it would be responsible for administering the scheme.  ACMA would have a role in assessing which codes are consumer-related codes, certifying that the costs claimed by self-regulatory bodies were reasonable, and setting and collecting charges from carriers in the following financial year. 

 

Telecommunications carriers.  On the basis of calculations derived from ACIF’s 2004/05 revenue and expenditure figures and the assumption that approximately one third of current membership fees fund consumer-related code development, the main effect is likely to be a rebalancing of contributions among existing member carriers, such that contributions would be more closely related to eligible revenue.  While carrier licence charges would increase due to the proposal, total membership fees for self-regulatory bodies would be expected to decline.  A small number of existing carrier members of self-regulatory bodies would be expected to pay more under the proposal, while others would pay less.  The largest carriers, particularly Telstra and Optus, are likely to incur additional costs under the proposal, while the remaining member carriers are likely to experience a decrease in costs.  Existing non-member carriers will experience a minor increase in costs.

 

CSPs.  The amendments would apply only to holders of carrier licences.  There should be no impact on a CSP unless it is also a carrier licence holder.

 

Self-regulatory bodies.  It is likely that these bodies will experience a positive net financial gain due to increased funding. Benefits would also include greater certainty about funding prior to commencing code development.

 

CONSULTATION

 

Government Agencies

 

Comment was sought from ACMA concerning the recommended option as set out in the Bill.  ACMA’s comments were as follows.

 

·        Making refund conditional on the development of codes that are registered by the ACMA would increase the incentive for industry bodies to develop codes that meet the objectives of the legislation.

·        ACMA does not have a clear understanding of Government expectations about a range of matters, including the setting of auditing requirements and the determination of costs that will not be refundable, making it difficult to assess the practicality of the proposals.  Making such assessments is potentially onerous and resource intensive.

·        ACMA may not be particularly well-qualified to determine arm’s-length costs.

·        It may provide greater clarity and certainty if ACMA were to specify categories of refundable, rather than non-refundable, costs.

·        ACMA should be able to consider other factors, as well as those set out in new section 136B, in determining whether to refuse an application for eligibility for refund of costs.

 

Non-Government

 

On the basis of prior correspondence and meetings with key stakeholders on related issues, views on this proposal are likely to be as follows:

 

Self-Regulatory bodies

·        ACIF has indicated that it would welcome greater certainty about likely costs of code development and availability of funding prior to commencing code development.  This is also likely to be the case for other self-regulatory bodies.

·        ACIF has also recognised the need to identify and provide incentives for industry to increase its participation in ACIF and be part of the self-regulatory process.

 

Telecommunications carriers and CSPs

·        While commercial incentives for membership of self-regulatory bodies would be welcome, industry (particularly smaller carriers and CSPs) would not support any moves that would require it to incur significant increases in expenditure.

·        Carriers that are not members of self-regulatory bodies would be critical of any arrangements that favoured members over non-members.

·        Legislating for compulsory membership of a self-regulatory body is unlikely to be supported.

 

Consumers

·        In their report ‘Consumer Driven Communications: Strategies for Better Representation’, consumer groups were highly critical of the current consumer participation arrangements in ACIF.

·        While advocating greater consumer participation in self-regulatory activities, consumer groups recognise that funding is required to assist in the realisation of this objective.

·        Consumer groups are likely to welcome greater certainty about funding of consumer-related codes prior to commencing code development.

 

CONCLUSION AND RECOMMENDED ACTION

 

As outlined in option 3, the Government proposes to implement a scheme enabling the recovery of the costs of developing consumer-related codes from carriers in the following financial year via carrier licence charges. 

 

For the following reasons, Option 3 appears the best of the options identified: 

·        It promotes self-regulation’s objectives in a cost-effective and efficient manner, consistent with the statement of regulatory policy articulated in the Telecommunications Act 1997 that self-regulation in telecommunications be used to the maximum practicable extent, and that public interest considerations be addressed in a way that does not impose undue financial and administrative burdens on industry participants.

·        It provides an equitable method of recovery of the costs occasioned by industry players, despite difficulties in identifying which industry participants’ contributions should be collected (due to the absence of licensing requirements, other than carrier licences).

·        It is a well established means of equitable cost recovery, as evidenced by the eligible revenue based systems for the recovery of the telecommunications regulatory costs of ACMA and the ACCC, and for financing the USO.

·        It is more equitable than the options that do not involve eligible revenue based systems (for example, subsidisation of membership fees) in that it does not favour either members or non-members of relevant self-regulatory bodies.

 

The other options, while meeting some of the objectives, may present potential unintended side-effects that are inconsistent with Government policy or outweigh any benefits.

 

IMPLEMENTATION AND REVIEW

 

It is proposed that the recommended option be implemented via legislative amendments to the Telecommunications (Carrier Licence Charges) Act 1997 and the Telecommunications Act 1997.

 

These amendments would:

·        allow, but not require, any body or association intending to develop a consumer-related code to seek reimbursement of costs;

·        allow ACMA to reimburse costs from the consolidated revenue fund through a standing appropriation, with subsequent recovery from industry through carrier licence charges;

·        fund only consumer-related codes that are submitted to ACMA for registration, and therefore likely to be enforceable; and

·        not make funding dependent on registration, as registration is not within the control of the body or association.

 

The Department of Communications, Information Technology and the Arts will continue to monitor the development and implementation of consumer-related codes under the telecommunications self-regulatory framework, with a view to reviewing the funding arrangements should the circumstances which led to their introduction change.

 

 


ABBREVIATIONS

 

 

The following abbreviations are used in this explanatory memorandum:

 

 

ACMA:                                    Australian Communications and Media Authority

 

ACCC:                                    Australian Competition and Consumer Commission

 

AIA:                                         Acts Interpretation Act 1901

 

Bill:                                           Telecommunications (Carrier Licence Charges) Amendment (Industry Plans and Consumer Codes) Bill 2005

 

Carrier Licence Charges Act:    Telecommunications (Carrier Licence Charges) Act 1997

 

Future Proofing Bill                   Telecommunications Legislation Amendment (Future Proofing and Other Measures) Bill 2005

 

LIA                                          Legislative Instruments Act 2003

 

Minister:                                   Minister for Communications, Information Technology and the Arts

 

Telecommunications Act:          Telecommunications Act 1997

 

 

 

 

 

 


NOTES ON CLAUSES

 

Clause 1 – Short title

 

Clause 1 provides that the Bill, when enacted, may be cited as the Telecommunications (Carrier Licence Charges) Amendment (Industry Plans and Consumer Codes) Act 2005.

 

Clause 2 – Commencement

 

Clause 2 of the Bill provides for the commencement of the Act.

 

Clauses 1 to 3 of the Bill would commence on Royal Assent and Schedule 1 to the Bill would commence on the day after the day on which the Bill receives the Royal Assent.

 

Schedule 2 would commence immediately after the time specified in the Telecommunications (Carrier Licence Charges) Amendment Act 1998 for the commencement of item 2 of Schedule 1 to that Act.  Item 2 of Schedule 1 to the Telecommunications (Carrier Licence Charges) Amendment Act 1998 is specified to commence on the day on which that Act received the Royal Assent (section 2 of the Telecommunications (Carrier Licence Charges) Amendment Act 1998).  That Act was assented to on 30 June 1998.  Schedule 2 would commence retrospectively because the purpose of the amendment in Schedule 2 is to correct a minor drafting error in the Telecommunications (Carrier Licence Charges) Amendment Act 1998 (see Schedule 2 to the Bill) and to remove any possible arguments about the effectiveness of the amendment that was made by item 2 of Schedule 1 to the Telecommunications (Carrier Licence Charges) Amendment Act 1998.

 

Clause 3 – Schedule(s)

 

Clause 3 provides that each Act that is specified in a Schedule to the Bill is amended or repealed as set out in that Schedule and any other item in a Schedule has effect according to its terms.  There are two Schedules to the Bill.  Schedule 1 would make amendments to the Carrier Licence Charges Act and Schedule 2 would make an amendment to the Telecommunications (Carrier Licence Charges) Amendment Act 1998.

 

Schedule 1 – Amendment of the Telecommunications (Carrier Licence Charges Act) 1997

 

Item 1 – Subsection 9(2)

 

Part 2 of the Carrier Licence Charges Act deals with application charges.  Subsection 9(1) provides that the ACMA may make a determination as to the amount of the charge imposed on an application for a carrier licence.  Subsection 9(2) provides that a determination made by the ACMA under subsection 9(1) is a disallowable instrument for the purposes of section 46A of the AIA.  Since 1 January 2005, the effect of subparagraph 6(d)(i) of the Legislative Instruments Act 2003 is that determinations made by the ACMA under subsection 9(1) are declared to be legislative instruments for the purposes of that Act and have been subject to the requirements of the LIA, including in relation to registration and disallowance.  In order to reflect the commencement of the LIA, Item 1 would repeal and replace subsection 9(2).  Proposed subsection 9(2) would provide that a determination made by the ACMA under subsection 9(1) is a legislative instrument for the purposes of the LIA. 

 

Item 2 – Subsection 14(2)

 

Part 3 of the Carrier Licence Charges Act deals with the annual charge imposed on carrier licences.  Subsection 14(1) provides that the amount of the annual charge imposed on a carrier licence is the amount ascertained in a written determination by the ACMA.  Subsection 14(2) provides that a determination made by the ACMA under subsection 14(1) is a disallowable instrument for the purposes of section 46A of the AIA.  Similarly to the proposed amendment in item 1, item 2 would repeal and replace subsection 14(2) in order to reflect the commencement of the LIA.  Proposed subsection 14(2) would provide that a determination made by the ACMA under subsection 14(1) is a legislative instrument for the purposes of the LIA. 

 

Item 3 – After paragraph 15(1)(c)

 

Item 3 would insert new paragraph (ca) into subsection 15(1) in Part 3 of the Carrier Licence Charges Act. 

 

Subsection 15(1) provides that the total amount of annual charges that are imposed on carrier licences in force at the beginning of a financial year must not exceed the sum of the amounts that are specified in paragraphs (a) through (e).  (However, item 5 would repeal paragraph (e) as a result of proposed amendments contained in Schedule 1 to the Telecommunications Legislation Amendment (Competition and Consumer Issues) Bill 2005.)

 

The effect of new proposed paragraph 15(1)(ca) would be that the total amount of annual charges imposed on carrier licences that are in force at the beginning of a financial year could include the amount determined by the ACMA in a written instrument to be the sum of the amounts paid by the ACMA under proposed section 136C of the Telecommunications Act during the previous financial year.  Proposed section 136C would be in a part of new Division 6A that would be inserted into Part 6 of the Telecommunications Act by the Future Proofing Bill (see Item 1 of Schedule 3 to that Bill).  Proposed section 136C would provide that the ACMA must reimburse an industry body or association for its costs in developing a consumer-related industry code, provided that certain conditions are met.  The proposed section would also create a standing appropriation to the Consolidated Revenue Fund to allow the ACMA to pay the relevant industry bodies or associations the amounts that they are entitled to be reimbursed under new Division 6A.

 

The inclusion of proposed paragraph 15(1)(ca) would mean that the total of the amounts that would be paid to industry bodies or associations under new Division 6A by the ACMA can be recouped by the Commonwealth through carrier licence charges.

 

Item 4 – Paragraph 15(1)(d)

 

Item 4 would make a minor consequential amendment to paragraph 15(1)(d) to reflect the repeal of paragraph 15(1)(e) (see item 5).

 

Item 5 – Paragraph 15(1)(e)

 

Section 15 of the Carrier Licence Charges Act specifies the limit on the total charges that may be imposed on carrier licences in force at the beginning of the financial year.  Paragraph 15(1)(e) relates to the proportion of the Commonwealth’s costs for the immediately preceding financial year that is attributable to the administration of Part 2 of Schedule 1 to the Telecommunications Act.  These costs are determined by the Industry Minister (defined to mean the Minister for Communications, Information Technology and the Arts or the Minister for the Arts and Sport, see item 9) by written instrument and form a component of the sum that the amount of charges imposed on carrier licences must not exceed.

 

Item 5 repeals paragraph 15(1)(e).  The proposed amendment is consequential to the proposed repeal of Part 2 of Schedule 1 to the Telecommunications Act 1997 by Item 1 of Schedule 1 to the Telecommunications Legislation Amendment (Competition and Consumer Issues) Bill 2005.

 

Item 6 – Subsections 15(2) and (3)

 

Item 6 would repeal subsections 15(2) and (3) of the Carrier Licence Charges Act. 

 

Subsection 15(3) provides that an instrument made by the ACMA is a disallowable instrument for the purposes of section 46A of the AIA.  Similarly to the proposed amendments in Items 1 and 2, item 6 would repeal subsection 15(3) and replace it with new subsection 15(2).  In order to reflect the commencement of the LIA, proposed subsection 15(2) would provide that instruments made under subsection 15(1) are legislative instruments for the purposes of the LIA.

 

Subsection 15(2) provides that an instrument that the ACMA makes under subsection 15(1) must be notified in the Gazette before the day on which the charges referred to in that subsection became due for payment. 

 

Section 56 of the LIA deals with the relationship of gazettal requirements in relation to legislative instruments in their enabling legislation and to the registration requirements under the LIA.  Subsection 56(1) provides that where legislation that was in force before the commencement of the LIA provides for a legislative instrument to be made and requires the text of the instrument to be published in the Gazette, the requirement for publication in the Gazette is taken to be satisfied by registration of the instrument on the Federal Register of Legislative Instruments.  Subsection 56(2) provides that, where legislation as enacted or amended after the commencement of the LIA provides for a legislative instrument to be made and requires that instrument to be published in the Gazette, the requirement for publication in the Gazette applies in addition to the requirement for registration of the instrument on the Federal Register of Legislative Instruments

 

As the Bill would amend section 15 to provide that an instrument made by the ACMA under subsection 15(1) is a legislative instrument for the purposes of the LIA, if subsection 15(2) were to remain in the Carrier Licence Charges, the effect of subsection 56(2) of the LIA would be that the ACMA would have to publish determinations it makes under subsection 15(1) in the Gazette in addition to registering them on the Federal Register of Legislative Instruments.  This would be an unnecessary administrative burden on the ACMA.  Item 6 would therefore repeal subsection 15(2), to ensure that the ACMA is not obliged to publish an instrument it makes under subsection 15(1) in the Gazette in addition to registering the instrument.

 

Item 7 – Subsection 15(4) (paragraph (b) of the definition of cost)

 

Item 7 makes a minor consequential amendment to paragraph (b) of the definition of cost to reflect the repeal of paragraph (c) of that definition (see item 8).

 

Item 8 – Subsection 15(4) (paragraph (c) of the definition of cost)

 

Subsection 15(4) contains definitions of terms used in section 15.  Paragraph (c) of the definition of ‘cost’ in subsection 15(4) provides the meaning of cost in relation to the Commonwealth for the purposes of section 15.  This is because paragraph 15(1)(e) requires the amount determined by the Industry Minister(defined to mean the Minister for Communications, Information Technology and the Arts or the Minister for the Arts and Sport, see item 9) to be the Commonwealth’s costs of administering Part 2 of Schedule 1 to the Telecommunications Act (dealing with IDP requirements) for a financial year to be included in the amount which operates as a cap on the amount of charges that may be imposed on carrier licences for the following year.

 

Paragraph (c) of the definition of ‘cost’ was inserted by the Telecommunications (Carrier Licence Charges) Amendment Act 1998, although the amendment made by that Act was misdescribed.  This error is retrospectively corrected by Item 1 of Schedule 2 to this Bill.

 

As a consequence of the amendment in item 5 to repeal paragraph 15(1)(e), item 8 would repeal paragraph (c) of the definition of ‘cost’.

 

Item 9 – Subsection 15(4) (definition of Industry Minister)

 

Subsection 15(4) contains definitions of terms used in section 15.  For the purposes of section 15, ‘Industry Minister’ is defined in subsection 15(4) to mean the Minister for Industry, Science and Tourism.  However, as a result of the Acts Interpretation (Substituted References) Order 1998 and the Acts Interpretation (Substituted References – Section 19B) Amendment Order 2001, ‘Industry Minister’ in subsection 15(4) means the Minister for Communications, Information Technology and the Arts or the Minister for the Arts and Sport.

 

Item 9 repeals the definition of ‘Industry Minister’.  The proposed amendment is consequential to the proposed repeal of paragraph 15(1)(e) (Item 5).  No other reference to ‘Industry Minister’ is made in the Carrier Licence Charges Act.

 

Item 10 – Application of amendments

 

Item 10 deals with the application of the proposed amendments in Schedule 1.  The amendments will apply in relation to charges imposed on carrier licences in force at the beginning of the first financial year that ends after the commencement of Item 10 if the immediately preceding year is a ‘zero-cost year’.  The amendments will also apply to subsequent financial years.  Subclause 10(1) defines a ‘zero-cost financial year’ as a financial year in which the Commonwealth did not incur any costs that were attributable to the administration of Part 2 of Schedule 1 to the Telecommunications Act 1997.

 

The effect of Item 10 would be that paragraph 15(1)(e) will continue to apply (allowing the cost of the administration of Part 2 of Schedule 1 to the Telecommunications Act to be included in the ACMA’s assessment of the charges on carrier licences) until the end of a zero-cost financial year (ie. until a financial year has passed in which the Commonwealth did not incur any costs attributable to the administration of the Part 2 of Schedule 1 to the Telecommunications Act).

 

Schedule 2—Amendment of the Telecommunications (Carrier Licence Charges) Amendment Act 1998

 

Item 1 – Item 2 of Schedule 1 (heading)

 

Item 1 would amend the heading of item 2 of Schedule 1 to the Telecommunications (Carrier Licence Charges) Amendment Act 1998 which referred to the definition of ‘costs’ in section 15 of the Carrier Licence Charges Act in order to insert a paragraph (c) into that definition that provided for a definition of that term in relation to the Commonwealth.  However, section 15 of the Carrier Licence Charges Act contains a definition of ‘cost’, not ‘costs’.  This proposed amendment in the Telecommunications (Carrier Licence Charges) Amendment Act 1998 was therefore misdescribed.

 

The amendment in this item would correct this error, with retrospective application, so that the amendment would be taken to have commenced immediately after the Telecommunications (Carrier Licence Charges) Amendment Act 1998 commenced on 30 June 1998.  The proposed amendment is to remove any possible arguments about the effectiveness of the amendment that was made by item 2 of Schedule 1 to the Telecommunications (Carrier Licence Charges) Amendment Act 1998.

 

(Paragraph (c) of the definition of ‘cost’ in the Carrier Licence Charges Act is repealed by item 8 of Schedule 1 to this Bill, as a consequence of the amendments contained in Schedule 1 to the Telecommunications Legislation Amendment (Competition and Consumer Issues) Bill 2005 which would remove the requirement for carriers to have a current industry development plan.  This amendment takes effect from the day after Royal Assent.)