EXPLANATORY STATEMENT
Telecommunications (Consumer Protection and Service Standards) Act 1999
Digital Data Service Provider Declaration Revocation 2008 (No. 1)
Issued by the authority of the Minister for Broadband, Communications
and the Digital Economy
1. Background
The universal service regime, set out in Part 2 of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the T(CPSS) Act), consists of the Universal Service Obligation (USO) and the general and special digital data service obligations, known collectively as the Digital Data Service Obligation (DDSO). The arrangements are funded by an industry levy imposed under the Telecommunications (Universal Service Levy) Act 1997.
Subsection 15(1) of the T(CPSS) Act provides that the Minister for Broadband, Communications and the Digital Economy (the Minister) may make a written determination stating that a specified carrier or carriage service provider is a general digital data service provider for a specified general digital data service area.
Subsection 15(2) of the T(CPSS) Act provides that the Minister may make a written determination stating that a specified carrier or carriage service provider is a special digital data service provider for a specified special digital data service area.
On 14 October 1999, by way of the Digital Data Service Provider Declaration 1999 (No.1), Telstra Corporation Limited (Telstra) was determined to be the general digital data service provider and the special digital data service provider for digital data service areas within Australia.
(a) General Digital Data Service Obligation
The general digital data service obligation, set out in section 10A and subsection 15A(4) of the T(CPSS) Act, requires general digital data service providers to take all reasonable steps to supply a service that broadly compares to a basic rate 64 kilobits per second Integrated Services Digital Network (ISDN) service to at least 96 per cent of the population.
(b) Special Digital Data Service Obligation
The special digital data service obligation, set out in section 10B and subsection 15A(5) of the T(CPSS) Act, requires special digital data service providers to take all reasonable steps to supply a service that broadly compares to a basic rate 64 kilobits per second ISDN service to the four per cent of the population in special digital data service areas that, for technical reasons, is unable to access ISDN.
2. Purpose of this Instrument
Under Section 33(3) of the Acts Interpretation Act 1901 (AIA Act), the Minister has the authority to revoke the Digital Data Service Provider Declaration 1999 (No. 1).
Subsection 15(3) of the T(CPSS) Act provides that in deciding whether to make a determination under section 15, the Minister is limited to considering factors that are relevant to achieving the objects of the T(CPSS) Act. The relevant objects are those set out in sections 3 and 8A of the T(CPSS) Act. Section 3 of the T(CPSS) Act provides that the objects of the Telecommunications Act 1997 apply to the T(CPSS) Act in a corresponding way to the way in which they apply to the Telecommunications Act 1997. In making the decision to revoke Telstra’s general and special DDSO, the Minister has considered the following relevant objectives:
(a) the efficient, economical, and competitive supply of services in accordance with subsection 3(1) and paragraphs 3(2)(a) and (d) of the Telecommunications Act 1997;
(b) providing consumers with appropriate access to services and appropriate protection in accordance with paragraphs 3(2)(a), (b) and (c) of the Telecommunications Act 1997; and
(c) the flexibility of the Universal Service Regime to respond to rapid changes in the telecommunications industry in accordance with paragraph 8A(g) of the T(CPSS) Act.
The DDSO was established on 14 October 1999 at a time when consumers, particularly in regional Australia, had limited access to digital data services. Since commencement of the DDSO, demand for digital data services has increased rapidly with consumers requiring increasing amounts of bandwidth and greater upload and download speeds. The commercial supply and range of technologies to provide these services has also grown commensurately. The Government considers that the market is now able to provide the majority of consumers with a choice of provider, a choice of technology and minimum digital data speeds greatly in excess of the legislated 64 kilobits per second provided for under the DDSO.
3. Policy rationale for the removal of the DDSO
The DDSO is no longer necessary as Australians now have a wide choice of access to alternative digital data services from various service providers including Telstra. Furthermore, the existence of targeted government programs such as the Australian Broadband Guarantee (ABG) program, support the view that services can be provided more effectively through a combination of the existing market providers (which includes Telstra) and Government programs than through a separate obligation on Telstra.
The ABG program seeks to ensure that all eligible Australian residential and eligible small business premises are able to access broadband services that reasonably compare to broadband services available in metropolitan areas (known as a ‘metro-comparable broadband service’). Currently under the ABG program a ‘metro-comparable broadband service’ is any broadband internet service that offers a minimum 512kbps download and 128kbps upload data speed, 3GB per month data usage at a total cost of $2,500 (GST inclusive) over three years (including installation and connection fees).
The ABG program is funded by the Australian Government until 30 June 2012. The ABG program provides a more flexible and practical safety net for consumers than that which was being provided through the DDSO. With the range of digital data service products available for consumers and the safety net provided through the ABG program, the access disadvantage that existed for much of regional Australia when the DDSO was originally introduced is no longer evident and renders the DDSO regulations unnecessary.
In addition, through the National Broadband Network (NBN) process the Australian Government has committed to providing up to $4.7 billion and to consider necessary regulatory changes to facilitate the roll-out of a new open access, high-speed, fibre-based broadband network, providing down-link speeds of at least 12 megabits per second to 98 per cent of Australian homes and businesses. The Government is also committed to longer term enhanced broadband solutions being available to the two percent of Australians living in the most remote parts of the country that may not be able to access high speed broadband through the NBN.
The revocation of the DDSO will result in the removal of related regulatory and reporting burdens that applied to Telstra as the provider for general and special digital data services. The measure will also lead to a minor reduction in the Australian Communications and Media Authority’s (ACMA’s) responsibility to monitor Telstra’s performance in meeting its digital data obligations and to oversight and pay DDSO subsidies. The removal of the DDSO is consistent with the Government’s policy to reduce unnecessary and superseded regulation.
The accompanying instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003 and has been registered on the Federal Register of Legislative Instruments.
4. Consultation
In September 2008, the Minister consulted with Telstra in respect of the proposed revocation of the general and special DDSO. Telstra wrote to the Minister on 13 October 2008 agreeing with the proposed revocation of the Service Provider Declaration and the related amendment to its Licence Conditions. The Department has also consulted with the ACMA in respect of the removal of the DDSO.
A Best Practice Regulation Preliminary Assessment was prepared by the Department for the Office of Best Practice Regulation on 14 October 2008. The Department has assessed that revocation of the DDSO will have a low impact on business and individuals.
5. Details of accompanying instrument
Details of the accompanying instrument are as follows:
Clause 1 – Name of instrument
Clause 1 of the accompanying instrument provides that the name of the accompanying instrument is the Digital Data Service Provider Declaration Revocation 2008 (No. 1).
Clause 2 – Commencement
Clause 2 of the accompanying instrument provides that the accompanying instrument commences on the day after it is registered on the Federal Register of Legislative Instruments. Once the revocation takes effect, Telstra will not be obliged to fulfil the general and special digital data service obligations.
Subsection 15(6) of the T(CPSS) Act provides that a determination made under section 15 takes effect on the day specified in the determination and that that day must not be before the day on which the instrument is published in the Commonwealth of Australia Gazette. Subsection 15(9) of the T(CPSS) Act provides that a determination under section 15 of the T(CPSS) Act is a disallowable instrument for the purposes of the AIA Act.
Clause 3 – Revocation
Clause 3 of the accompanying instrument provides for the revocation of the Digital Data Service Provider Declaration 1999 (No. 1).