Australian Competition and Consumer Commission (Inquiry into Price Control Arrangements) Direction (No. 1) 2009

Administered by Department of Communications and the Arts

Legislation au F2010L00135 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Telecommunications (Consumer Protection and Service Standards) Act 1999

 

Australian Competition and Consumer Commission

(Inquiry into Price Control Arrangements)

 Direction (No. 1) 2009

 

Issued by the authority of the Minister for Broadband, Communications and the Digital Economy

 

 

Purpose

 

The Australian Competition and Consumer Commission (Inquiry into Price Control Arrangements) Direction (No. 1) 2009 (the Direction) is made under subsection 496(1) of the Telecommunications Act 1997 (Tel Act).

 

Subsection 496(1) of the Tel Act allows the Minister to give the Australian Competition and Consumer Commission (ACCC) a direction to hold a public inquiry under Division 3 of Part 25 of the Tel Act about a specified matter concerning carriage services, content services or the telecommunications industry.

 

The Direction requires the ACCC to:

  • hold a public inquiry about price control arrangements for carriage services, content services and facilities supplied by Telstra Corporation Limited (Telstra) after 30 June 2010; and
  • provide a report to the Minister setting out the ACCC’s findings as a result of the inquiry (as required by subsection 505(2) of the Tel Act).

 

The ACCC must provide its report to the Minister by 12 March 2010.

 

Background

 

Under Part 9 of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (Consumer Protection Act) the Minister has the power to determine that charges for specified Telstra retail services are subject to price controls.

 

The Telstra Carrier Charges - Price Control Arrangements, Notification and Disallowance Determination No. 1 of 2005 (the 2005 Determination) applies to Telstra’s retail fixed line telephony services and caps the price of basic line rental and several “baskets” composed of telephone calls, line rentals and service connections. It also imposes various other pricing requirements on Telstra, including capped charges for untimed local calls from fixed lines and payphones, and the provision of a basic line rental offer at a uniform price throughout Australia.

 

The 2005 Determination was originally due to expire on 30 June 2009.  However, on 5 June 2009 the Minister extended the expiration date by 12 months to 30 June 2010.

The period of the 2005 Determination was extended to enable a detailed review of

retail price controls to be undertaken. Such a review would be required to take into account the impact that the transition to the new National Broadband Network (NBN) will have on pricing policy. Given that the NBN is at an early stage of development, rather than further extend the 2005 Determination, the Minister considers that it is appropriate to direct the ACCC to conduct an inquiry focussing on a few limited issues, so that a new determination can be put into place. It is intended that the new determination will have effect for a period of two years. This will allow for adjustments to be made to the price control arrangements, whilst allowing time for more analysis and further policy development to occur so that more substantial changes can be implemented at a later date.

 

The ACCC is directed to inquire and report on the appropriate composition of service baskets, and the design and level of price caps, given that the ACCC is the responsible regulator for monitoring and approving Telstra retail price movements. The ACCC can also provide expert advice, in consultation with industry, on any parts of the current price control arrangements which may require clarification or streamlining.

 

The ACCC is directed to report its findings to the Minister by 12 March 2010. This is to allow time for the Government to consider the ACCC’s report and formulate a new determination prior to the expiry date of the 2005 Determination.

 

Consultation

 

The ACCC has been consulted in relation to the making of this Direction. No further consultation was considered necessary, given that the ACCC will consult with industry in the course of its inquiry. 

 

Notes on clauses

 

Clause 1 provides for the citation of the Direction.

 

Clause 2 provides that the Direction will be registered on the Federal Register of Legislative Instruments and will take effect on the day after its registration.

 

Clause 3 provides that the Direction will cease on the day after the ACCC provides its report to the Minister in accordance with clause 6. A cessation date is included to overcome the requirement for this Direction to be revoked at a future date, once its effect is finished.

 

Clause 4 defines the terms to be used throughout the Direction.

 

Clause 5 requires the ACCC to hold a public inquiry under Division 3 of Part 25 of the Tel Act and sets out matters relevant to the conduct of that inquiry.

 

Subclause 5(1) specifies the nature of the public inquiry that the ACCC is directed to hold. The inquiry is to address aspects of the price control arrangements that should apply in respect of carriage services, content services and facilities supplied by Telstra after the expiry of the 2005 Determination on 30 June 2010.

 

Subclauses 5(2), (3) and (4) set out matters that the ACCC is directed to have regard to, or consider, in conducting the public inquiry.

 

Subclause 5(5) clarifies for the avoidance of doubt, that the ACCC may consider other relevant matters as a part of the inquiry.  

 

Clause 6 directs the ACCC to provide the Minister with a report setting out its findings as a result of the inquiry by 12 March 2010. 

Overview

The Australian Competition and Consumer Commission (Inquiry into Price Control Arrangements) Direction (No. 1) 2009 was issued under subsection 496(1) of the Telecommunications Act 1997 and aims to address the need for a detailed review of retail price controls for Telstra Corporation Limited, particularly in light of the transition to the National Broadband Network (NBN). This Direction mandates the Australian Competition and Consumer Commission (ACCC) to conduct a public inquiry into the appropriate price control arrangements for carriage services, content services and facilities supplied by Telstra after the expiration of the Telstra Carrier Charges - Price Control Arrangements, Notification and Disallowance Determination No. 1 of 2005. The objective is to ensure that any new determinations will be well-informed by a thorough analysis of current pricing policies and their implications in the evolving telecommunications landscape. The ACCC is required to submit a report to the Minister by 12 March 2010, allowing the government sufficient time to consider the findings and implement necessary changes before the existing price controls expire on 30 June 2010.

Scope and Application

The Australian Competition and Consumer Commission (Inquiry into Price Control Arrangements) Direction (No. 1) 2009 applies to the Australian Competition and Consumer Commission (ACCC), mandating it to conduct a public inquiry into the price control arrangements for carriage services, content services, and facilities supplied by Telstra Corporation Limited (Telstra) post the expiration of the Telstra Carrier Charges - Price Control Arrangements, Notification and Disallowance Determination No. 1 of 2005 on 30 June 2010. The Direction also requires the ACCC to submit a report to the Minister for Broadband, Communications and the Digital Economy by 12 March 2010, detailing the findings from the inquiry. This inquiry is aimed at ensuring that appropriate price control measures are in place for Telstra services, taking into account the transition to the new National Broadband Network (NBN). The Direction extends the jurisdiction of the ACCC in its regulatory oversight of Telstra’s pricing policies, ensuring that any new price control arrangements are adequately justified and aligned with current market conditions and technological advancements.

Key Provisions

The Australian Competition and Consumer Commission (Inquiry into Price Control Arrangements) Direction (No. 1) 2009 (the Direction) is a legislative instrument issued under the Telecommunications Act 1997 (Tel Act) and requires the Australian Competition and Consumer Commission (ACCC) to hold a public inquiry into the price control arrangements for carriage services, content services, and facilities supplied by Telstra Corporation Limited (Telstra) after 30 June 2010 (clause 5). The ACCC must consider several specified matters in conducting the inquiry, including the appropriate composition of service baskets and the design and level of price caps (subclause 5(2)-(4)). The Direction also allows the ACCC to consider any other relevant matters (subclause 5(5)). The ACCC is required to submit a report to the Minister, detailing its findings, by 12 March 2010 (clause 6). The Direction imposes several obligations on the ACCC. Firstly, the ACCC is required to hold a public inquiry into the price control arrangements for Telstra's services (clause 5). This inquiry must be conducted in accordance with Division 3 of Part 25 of the Tel Act, and the ACCC must have regard to the matters specified in subclauses 5(2)-(4) of the Direction. Secondly, the ACCC must submit a report to the Minister by 12 March 2010, setting out its findings as a result of the inquiry (clause 6). This report must be provided to the Minister within the specified timeframe, to allow for the Government to consider the ACCC's findings and formulate a new determination prior to the expiry of the 2005 Determination. There are no explicit offences or penalties outlined in the Direction. However, failure to comply with the requirements of the Direction may result in civil or criminal consequences under the Tel Act. For example, under section 496 of the Tel Act, a person who fails to comply with a direction given by the Minister may be liable to a penalty of up to $10,000 for each day that the contravention continues. In addition, under section 132 of the Tel Act, a person who makes a false or misleading statement in connection with a matter to which the Tel Act applies may be liable to a penalty of up to $1.1 million for an individual and $5.5 million for a body corporate. It is important to note that these penalties are not specific to the Direction and may not apply in all cases. In summary, the Australian Competition and Consumer Commission (Inquiry into Price Control Arrangements) Direction (No. 1) 2009 requires the ACCC to hold a public inquiry into the price control arrangements for Telstra's services after 30 June 2010 and submit a report to the Minister by 12 March 2010. The Direction imposes obligations on the ACCC to conduct the inquiry in accordance with Division 3 of Part 25 of the Tel Act and to consider specified matters in conducting the inquiry. Failure to comply with the requirements of the Direction may result in civil or criminal consequences under the Tel Act.

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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.