Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 Instrument of Revocation 2014

Administered by Department of Communications and the Arts

Legislation au F2014L00333 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Issued by the authority of the Minister for Communications

 

Acts Interpretation Act 1901

 

Competition and Consumer Act 2010

 

Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 Instrument of Revocation 2014

 

Purpose

 

The purpose of the Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 Instrument of Revocation 2014 (the Revocation Instrument) is to revoke the Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 (the Direction).

 

Background

 

Prior to its repeal in 2011, section 151BUAAA of the Competition and Consumer Act 2010 (the Act) required the then Minister to give a special direction under section 151BUAA of that Act to the Australian Competition and Consumer Commission (ACCC) to make particular record-keeping rules applying to Telstra Corporation (Telstra). These record-keeping rules require Telstra to keep and retain particular records and prepare reports relating to Telstra’s wholesale operations and its retail operations.

 

On 19 June 2003, the Direction was made. The Direction requires the ACCC to make particular record-keeping rules for Telstra.

 

The Accounting Separation Framework

 

The Direction requires the ACCC to make record-keeping rules on current costs, imputation, and non-price terms and conditions relating to Telstra’s wholesale and retail operations. The Direction also requires the ACCC to publish reports on the level of competition in the supply of telecommunications services to the corporate sector.

 

In accordance with the Direction, the ACCC issued three accounting separation record-keeping rules under section 151BU of the Act.

 

First, the Current Cost Accounts Record-Keeping and Reporting Rules require Telstra to prepare financial statements in relation to all services that the regulatory accounting framework applies on both a historic and current cost basis. These record-keeping rules also require Telstra to provide reports to the ACCC on a periodic six-monthly and annual basis, which includes those financial statements.

 

Second, the Imputation Testing Record-Keeping and Reporting Rules require the ACCC to publish quarterly reports, prepared by Telstra, which show the margin that Telstra’s retail business units would have if they were to purchase the core services from Telstra’s wholesale business unit at the same price that Telstra offers the service to its wholesale customers. A core service means the domestic Public Switched Telephone Network originating and terminating access services, the local carriage service and the unconditioned local loop service.

 

Third, the Non Price Terms and Conditions Key Performance Indicator Record-Keeping and Reporting Rules require Telstra to prepare and provide to the ACCC for publication each quarter a report that compares its performance in supplying non-price elements of specified wholesale services to its wholesale customers and itself.

 

The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Act 2010

 

The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Act 2010 (the Amending Act) amended the Telecommunications Act 1997 to require Telstra to either functionally separate its retail business units from its wholesale and network business units or voluntarily structurally separate. Under either option, strengthened transparency and equivalence requirements would apply. In light of this, section 151BUAAA of the Act was repealed by the Amending Act.

 

A transitional provision was included in the Amending Act to provide that the repeal of section 151BUAAA of the Act did not affect the continuity of the Direction. The ACCC is required to continue to comply with the Direction and Telstra is still required to comply with any rules made by the ACCC in accordance with the Direction.  This transitional provision maintained the accounting separation framework during the period that Telstra’s functional separation or structural separation arrangements were being established.

 

On 6 March 2012, Telstra’s structural separation arrangements came into force. These arrangements contain interim equivalence and transparency obligations regarding access to Telstra’s regulated services in the period leading up to structural separation. The arrangements also include compliance monitoring processes to provide the ACCC with transparency over Telstra’s compliance with the structural separation undertaking (SSU).

 

The ACCC’s acceptance of Telstra’s SSU means that it is satisfied that the SSU provides for appropriate and effective interim transparency and equivalence arrangements to apply during the period that Telstra is structurally separating. As such, the accounting separation framework has been superseded.

 

Consultation

 

On 6 February 2014, the Department of Communications published a draft revocation instrument on its website for public comment. The Department contacted key stakeholders in the telecommunications sector as well as the ACCC.

 

Three submissions were received.  Two submissions supported repeal of the Direction, the other submission did not.  One submitter argued that the Direction and associated RKRs provide the ACCC and access seekers with information that provides an indication of Telstra’s possible engagement in anti-competitive behaviour.

 

In follow-up discussions, the ACCC indicated that information provided by Telstra under its SSU adequately replaces the information received under the Accounting Separation RKRs.  The ACCC will also retain the power to seek additional information if it is considered necessary to do so.

 

Other details

 

The Revocation Instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003 (LIA) and shall commence on the day after it is registered in the Federal Register of Legislative Instruments (FRLI).

 

Revocation of the Direction would mean that the ACCC is no longer required to maintain the record-keeping rules specified in the Direction.

 

Details of the accompanying Revocation Instrument are set out in the Attachment.

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 Instrument of Revocation 2014

 

This Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 Instrument of Revocation 2014 (the Revocation Instrument) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Revocation Instrument

 

The Revocation Instrument revokes the Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 (the Direction).

 

On 19 June 2003, the then Minister made the Direction to the Australian Competition and Consumer Commission (the ACCC) under subsections 151BUAA(1), 151BUAA(1B) and 151CMA(1) of the Trade Practices Act 1974, now the Competition and Consumer Act 2010. This Direction required the ACCC to implement particular record-keeping rules for Telstra Corporation Limited (Telstra).

 

As structural separation arrangements came into force in 2012, the accounting separation framework has been superseded. The revocation of the Direction means the ACCC is no longer required to maintain record-keeping rules specified in the Direction.

 

Human rights implications

 

The Revocation Instrument does not engage any of the applicable rights or freedoms.

 

Conclusion

 

This Revocation Instrument is compatible with human rights as it does not raise any human rights issues.


Attachment

 

Details of the Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 Instrument of Revocation 2014

 

Section 1 – Name of instrument

 

Section 1 provides that the title of the Revocation Instrument is the Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 Instrument of Revocation 2014.

 

Section 2 – Commencement

 

Section 2 provides that the Revocation Instrument commences on the day after it is registered on the Federal Register of Legislative Instruments.

 

Section 3 – Revocation

 

Section 3 provides for the revocation of the Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003.

 

Revocation of the Direction means that the Australian Competition and Consumer Commission (the ACCC) is no longer required to maintain the record-keeping rules, disclose information and prepare reports on competition as specified in the Direction. This does not have the effect of revoking record-keeping rules already made under subsection 151BU(1) of the Act or preventing the ACCC from preparing further reports. The revocation of record-keeping rules, including the requirement of any appropriate transitional measures, is a matter for the consideration of the ACCC.

 

Section 4 – Expiry

 

Section 4 provides that the Revocation Instrument expires on the day after it commences having had its effect of revoking the Direction. By operation of subsection 7(3) of the Acts Interpretation Act 1901 and section 13 of the Legislative Instruments Act 2003, an expired instrument is taken to be repealed.

 

Overview

The Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 Instrument of Revocation 2014 (the Revocation Instrument) is a legislative instrument that revokes the Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003. This instrument was enacted to address the issue of maintaining outdated record-keeping rules for Telstra Corporation Limited (Telstra) that were no longer necessary following the implementation of its structural separation arrangements in 2012. The Revocation Instrument was developed under the authority of the Minister for Communications and is compatible with human rights, as confirmed by the Statement of Compatibility with Human Rights prepared in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011. The instrument revokes the Direction, thereby relieving the Australian Competition and Consumer Commission (ACCC) of the obligation to maintain record-keeping rules specified in the Direction. The instrument also specifies that its commencement and expiry dates are governed by the Acts Interpretation Act 1901 and the Legislative Instruments Act 2003.

Scope and Application

The Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 Instrument of Revocation 2014 (Revocation Instrument) revokes the Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003, which was made under the Competition and Consumer Act 2010. The Direction required the Australian Competition and Consumer Commission (ACCC) to implement specific record-keeping rules for Telstra Corporation Limited. The Revocation Instrument applies to the ACCC and Telstra, impacting their obligations under the repealed Direction. The revocation of the Direction means that the ACCC is no longer required to maintain the record-keeping rules, disclose information, and prepare reports on competition as specified in the Direction, although it does not affect any existing record-keeping rules or the ACCC's ability to prepare further reports. The Revocation Instrument is compatible with human rights, as it does not engage any applicable rights or freedoms. The Revocation Instrument will commence on the day after it is registered in the Federal Register of Legislative Instruments.

Key Provisions

The Australian Competition and Consumer Commission (Accounting Separation—Telstra Corporation Limited) Direction (No. 1) 2003 Instrument of Revocation 2014 (Revocation Instrument) is primarily concerned with the revocation of a previous Direction issued in 2003 (the Direction). The Direction, which was made under the Competition and Consumer Act 2010, required the Australian Competition and Consumer Commission (ACCC) to implement specific record-keeping rules for Telstra Corporation Limited (Telstra) (section 3). These rules mandated Telstra to maintain and report on various aspects of its wholesale and retail operations. As structural separation arrangements took effect in 2012, these record-keeping requirements have become redundant, leading to the decision to revoke the Direction. The Revocation Instrument imposes an obligation on the ACCC to cease maintaining the record-keeping rules specified in the Direction (section 3). This revocation signifies that the ACCC is no longer required to ensure Telstra adheres to the previously stipulated record-keeping and reporting obligations. The instrument does not, however, revoke any existing record-keeping rules already made under the Act, nor does it prevent the ACCC from preparing further reports if deemed necessary. The specific revocation of these rules and any required transitional measures are left to the discretion of the ACCC. In terms of consequences for non-compliance or breach of the provisions under the Direction prior to its revocation, it is important to note that the Direction itself did not explicitly outline penalties for non-compliance. However, under the Competition and Consumer Act 2010, there are general provisions that could apply to breaches of consumer protection laws. These may include civil penalties for corporations, which can extend up to $10 million for serious or repeated breaches, or criminal penalties that could result in fines of up to $1.1 million for individuals and $5.5 million for corporations, alongside potential imprisonment terms (section 13GA). Given that the Direction has now been revoked, any obligations previously enforced by it no longer apply, and thus, no penalties would be incurred for non-compliance with the Direction post-revocation. The Revocation Instrument itself does not introduce new offences or penalties. Its primary function is declarative, marking the end of the Direction's enforceability. However, it is worth noting that any actions taken under the Direction before its revocation could still be subject to the aforementioned penalties if they were found to be in breach of the Competition and Consumer Act 2010. The instrument’s expiration, as detailed in section 4, means it is repealed once it has had its effect, aligning with legislative practices to ensure clarity and legal certainty.

Legal classification tags

Area of Law
Competition Law
Regulatory Standards
Instrument
Instrument of Revocation
Concepts
Repeal & Amendment
Regulatory Standards
Regulatory Oversight
Catchwords
Accounting Separation

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.