EXPLANATORY STATEMENT
Telecommunications (Consumer Protection and Service Standards) Act 1999
Contestable Service Obligation Determination (No. 1) 2001
Issued by the authority of the Minister for Communications, Information Technology and the Arts.
This Determination is one of a series of instruments that give effect to the Government’s decision to pilot multi-provider competition in the supply of the Universal Service Obligation (USO). The objective of this decision is to bring about greater competition in the supply of USO services and thus deliver greater service choice and better service standards for regional consumers.
The Contestable Service Obligation Determination (No. 1) 2001 activates competition in the supply of the standard telephone service under the USO in designated universal service areas.
Clause 1 – Name of Determination
Clause 1 provides for the citation of the Determination.
Clause 2 – Commencement
Clause 2 provides that the Determination commences on 1 July 2001.
Clause 3 – Definitions
Clause 3 defines ‘Act’ for the purposes of the Determination.
Clause 4 – Contestable Service Obligation
Section 11C of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the Act) enables the Minister to determine that a service obligation is a contestable service obligation for a universal service area. As a result of section 11F of the Act, the Minister can make determinations under section 11C initially only in relation to pilot areas. These pilot areas are identified in the Pilot Areas Determination (No.1) 2001. The Universal Service Areas Determination (No. 1) 2001 identifies universal service areas within the pilot areas in which the standard telephone obligation under the USO is being made contestable. It is envisaged that other universal service areas will be determined in the New South Wales and Queensland pilot area in which the standard telephone service obligation will be made contestable.
Clause 4 provides that for the purposes of section 11C of the Act, the obligation referred to in paragraph 9(1)(a) of the Act (dealing with the standard telephone service) is determined as a contestable service obligation for the universal service areas determined under the Universal Service Areas Determination (No. 1) 2001.
This means that the standard contestability arrangements contained in Division 6 of Part 2 of the Act apply to the universal service areas determined under the Universal Service Areas Determination (No. 1) 2001 for the service obligation dealing with the standard telephone service. Under these arrangements carriers and carriage service providers can seek approval from the Australian Communications Authority to compete with the primary universal service provider, Telstra, to provide standard telephone services or alternative telephone services in fulfilment of the standard telephone service obligation under the USO.
Overview
The Telecommunications (Consumer Protection and Service Standards) Act 1999, enacted by the Australian Parliament, was designed to safeguard consumer interests and establish service standards within the telecommunications sector. The Act was introduced to address the need for robust consumer protection measures and to ensure high service standards as the telecommunications industry evolved. The Contestable Service Obligation Determination (No. 1) 2001, issued under the authority of the Minister for Communications, Information Technology and the Arts, was created to pilot multi-provider competition in the supply of the Universal Service Obligation (USO). The primary objective of this determination is to foster greater competition in providing USO services, thereby enhancing service choice and standards, particularly for consumers in regional areas. This initiative aims to activate competition in the provision of the standard telephone service under the USO in specified universal service areas, ultimately benefiting consumers by improving the quality and variety of services available to them.
Scope and Application
The Contestable Service Obligation Determination (No. 1) 2001 applies to designated universal service areas within pilot areas where the standard telephone service under the Universal Service Obligation (USO) is contestable. This Determination, made under section 11C of the Telecommunications (Consumer Protection and Service Standards) Act 1999, identifies specific geographic areas where competition for the provision of standard telephone services is encouraged. The primary objective is to foster competition among carriers and carriage service providers, including the potential for entities other than the incumbent provider, Telstra, to compete in providing these services. The Determination ensures that the contestability arrangements outlined in Division 6 of Part 2 of the Act apply to these areas, allowing for the Australian Communications Authority to approve competing service providers. This approach aims to enhance service choice and improve service standards for consumers in these regions.
Key Provisions
The Telecommunications (Consumer Protection and Service Standards) Act 1999 (the Act) has been amended to allow for the contestability of certain service obligations in designated areas, as per the Contestable Service Obligation Determination (No. 1) 2001 (the Determination). Specifically, section 11C of the Act (section 11C) allows the Minister to designate a service obligation as a contestable service obligation in a universal service area. This provision enables competition in the provision of standard telephone services under the Universal Service Obligation (USO) in specified areas. The Determination commences on 1 July 2001 (Clause 2), and it applies to the universal service areas identified in the Universal Service Areas Determination (No. 1) 2001 (Clause 4).
The Determination imposes obligations on carriers and carriage service providers seeking to compete with the primary universal service provider, Telstra, to provide standard or alternative telephone services in fulfilment of the standard telephone service obligation under the USO. These parties must seek approval from the Australian Communications Authority (ACA) to compete for these services in the designated universal service areas (section 11F). The contestability arrangements outlined in Division 6 of Part 2 of the Act apply to these areas (Clause 4), which means that carriers and carriage service providers must adhere to the specific guidelines and requirements set forth by the ACA in order to compete for the provision of these services.
Failure to comply with the requirements of the Determination or the contestability arrangements could result in legal consequences. While the Determination does not explicitly outline specific penalties for non-compliance, breaches of the Act or the contestability arrangements could potentially result in civil or criminal penalties, as stipulated in other sections of the Act. The maximum penalties for breaches of the Act may include fines of up to $1.1 million for corporations and $220,000 for individuals, as well as imprisonment for up to five years for serious offences (section 283). Additionally, the ACA has the authority to issue infringement notices for certain breaches, which may result in fines of up to $22,000 for corporations and $4,400 for individuals (section 284).