EXPLANATORY STATEMENT

Telecommunications Act 1997

Carrier Licence Conditions (Telstra

Corporation Limited) Declaration 1997

(Amendment No. 2 of 2001)

Issued by the authority of the Minister for Communications, Information Technology and the Arts (Minister).

Subsection 63(3) of the Telecommunications Act 1997 (Cth) (the Act) enables licence conditions to be imposed on a particular licence prior to its grant and to come into force upon that grant.  The Carrier Licence Conditions (Telstra Corporation Limited) Declaration 1997 (the original Telstra licence conditions) was made on 24 June 1997 in reliance on this provision and came into force on 1 July 1997.  The original Telstra licence conditions have since been varied by a number of declarations noted under clause 3 of the accompanying amending declaration.

The accompanying amending declaration has been made in reliance on subsection 63(5) of the Act.  Subsection 63(5) of the Act enables the Minister, by written instrument, to vary an instrument under subsection 63(3) of the Act.  Subsection 63(13) of the Act provides that an instrument under subsection 63(5) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 (Cth).

Section 68 of the Act provides that a carrier must not contravene a condition of its carrier licence.  In the event of a contravention of a carrier’s licence conditions:

(a)                section 69 of the Act enables the Australian Communications Authority (ACA) to give a carrier a remedial direction aimed at ensuring that the carrier does not contravene its licence conditions in future;
 

(b)               section 70 of the Act enables the ACA to issue a formal warning to a carrier in relation to the contravention; and
 

(c)                Part 31 of the Act enables the Minister or the ACA to institute proceedings in the Federal Court for the recovery of a pecuniary penalty of up to $10 million for each contravention.
 

The accompanying amending declaration provides for new licence conditions to apply to Telstra Corporation Limited in relation to certain of its obligations in the Extended Zones of rural and remote Australia.  These zones cover close to 80 per cent of Australia’s land area.  All of the obligations on Telstra are specified in an agreement entitled "Agreement for the provision of untimed local calls, untimed Internet access and other carrier services to Extended Zones", dated 1 June 2001 between the Commonwealth and Telstra (Agreement).

The purpose of the new licence conditions is to maximise the enforcement of certain obligations on Telstra through a regulatory mechanism as well as through the Agreement.  This approach has been taken because of the Commonwealth’s substantial financial contribution to the network upgrade and to ensure the provision of core services and agreed service levels over the ten year contractual term.

Enforcement of the core pricing services has been maximised through inclusion of the prices in the Telstra Carrier Charges―Price Control Arrangements, Notification and Disallowance Determination No. 1 of 2001.  The new licence conditions apply to certain other important services, detailed in the Attachment.  The licence conditions reflect the Agreement, and do not go beyond it in any way.  Section 64 of the Telecommunications Act 1997 (Cth) provides that before making an instrument under subsection 63(5) the Minister must arrange for a draft version of the instrument to be provided to the licence holder and invite the holder to make a submission to the Minister on the draft.  Telstra has made a submission, expressing views that have been considered and incorporated in the accompanying amending declaration.

ATTACHMENT

Clause 1 – Name of Declaration

Clause 1 provides for the citation of the Carrier Licence Conditions (Telstra Corporation Limited) Declaration 1997 (Amendment No. 2 of 2001).

Clause 2 – Commencement

Clause 2 provides that the accompanying amending declaration commences on gazettal.

Clause 3 – Variation

Clause 3 provides that the Carrier Licence Conditions (Telstra Corporation Limited) Declaration 1997 is varied as set out in the accompanying amending declaration.

Clause 4 – Omission of clause 16 of Telstra’s licence conditions – Provision of information about carriage services provided in extended charging zones

Clause 16 of the Carrier Licence Conditions (Telstra Corporation Limited) Declaration 1997 imposes obligations on Telstra to make available information in relation to Extended Zone services for the purposes of untimed local call tender in relation to which Telstra was the successful tenderer.  Clause 16 is no longer relevant and has therefore been omitted and replaced by a new clause 18 (see clause 5 of the accompanying amending determination). 

Clause 5 - Obligations in relation to the Extended Zones (new clause)

Clause 5 provides that a new clause, Obligations in relation to the Extended Zones, be inserted after clause 17 of the Carrier Licence Conditions (Telstra Corporation Limited) Declaration 19973.

Clause 18 - Obligations in relation to the Extended Zones

Subclause 18(1) defines key terms used in the licence condition.

Subclauses 18(2) to 18(13) specify the obligations on Telstra in relation to the Extended Zones as being:

(2) to continue to make available the BPS Service (a 2-way broadband Satellite Internet service) to Extended Zone customers according to the indicative timetable for delivery and the service levels as specified in the Agreement.  The Agreement details the various service plans available; maximum data speeds; access and usage charges; and the conditions for the supply of the service to Extended Zone customers;

(3) to commit to an improved timeframe, applying from a specified date, for connection of new telephony services within 10 working days where there is existing infrastructure with sufficient capacity to support additional telephony services;

(4) to continue certain customer support services by supporting and resourcing call-centre based customer service teams to assist customers served by radio and satellite technologies and by making available on-line billing, whitepages and yellowpages services (the latter items subject to Telstra continuing to provide such services to metropolitan customers);

(5) from 31 December 2002, to provide certain customer support services, namely online fault reporting for telephony services and for Extended Zone customers subscribing to the Always-on Service; online notification of system faults; online user instructions; online answers to frequently asked questions on Telstra’s products and services; and online direct customer email access to Area General Managers;

(6) to make available to all Extended Zone customers, as the network upgrade is completed in customers’ areas, a service that supports faster dial-up data access speeds of 14.4 kbps, with speeds of 19.2 kbps or higher to be made available to as large a proportion of Extended Zone customers as possible.  The Agreement sets out the conditions under which Telstra is to upgrade or replace the line free of charge if the 14.4 kbps access speed is not already supported by the customer’s access service;

(7) to ensure that Extended Zone customers who subscribe to the Always-on service have the opportunity to take advantage of future applications development.  For example, the purchase of future broadband content packages from Telstra BigPond, including the ability to personalise subscriptions to various information services, such as specialised content for rural communities.  Subject to certain conditions, Telstra will assist local rural and remote communities to develop localised content and continue to work on developing a community of interest portal product.   Telstra will ensure each Always-on service is enabled to receive “Interactive Distance Learning” by free installation of certain software for the SkyConnect Tutor service; and will examine on an ongoing basis other commercial opportunities to foster the development and implementation of information technology based applications;

(8) to ensure that from 1 July 2002, Extended Zone customers who subscribe to the Always-on service will be offered access to video conferencing (point to point and point to multipoint) services, at rates of up to 64 kbps under the standard service and up to 128 kbps as an optional extra that involves additional cost to the customer;

(9) to provide reports in accordance with Telstra’s notification and reporting obligations under the Agreement;

(10) to include certain customer information about Telstra’s obligations under the Agreement in the Telstra Public Switched Telephone Service Section of the Telstra Standard Form of Agreement or in individual agreements with customers, depending on which alternative Telstra uses with the customer;

(11) to ensure that from specified dates and under certain conditions, all new access technologies be capable of supporting dial-up data speeds of at least 14.4 kbps;

(12) obligations will cease at the time specified in the Agreement, being the earlier of the date of termination of the Agreement (other than termination in certain circumstances) or 31 May 2011;

(13) obligations are subject to the provisions set out in clause 7 of the Agreement for service disruptions and continuity and any amendments to the obligations agreed between the Commonwealth and Telstra.