Do Not Call Register (Access Fees) Amendment Determination 2008 (No. 1)

EXPLANATORY STATEMENT

Issued by the authority of the Australian Communications and Media Authority

Do Not Call Register (Access Fees) Amendment Determination 2008 (No.1)

Do Not Call Register Act 2006

Purpose

The Do Not Call Register (Access Fees) Amendment Determination 2008 (No.1) (the Amendment Determination) has been made by the Australian Communications and Media Authority (ACMA) to amend the Do Not Call Register (Access Fees) Determination 2007 (the principal Determination). The Amendment Determination updates the fees for services provided under subsections 19(2) and 19(3) of the Do Not Call Register Act 2006 (the Act) and clarifies certain aspects relating to the treatment of unused numbers on annual subscriptions, invoicing arrangements for fees, suspension of access-seekers’ registration and assessment of written applications for refunds by access-seekers.

Legislative Provisions

Under section 13(1) of the Act, ACMA must keep or arrange for another person (the contracted service provider) to keep on behalf of ACMA a register of telephone numbers for the purposes of the Act. The register is to be known as the Do Not Call Register (the Register).

The Register allows individuals to ‘opt out’ of receiving certain unsolicited telemarketing calls by registering their home or mobile telephone numbers that are used or maintained exclusively or primarily for private or domestic purposes.

It is generally unlawful under section 11 of the Act to make, or to cause to be made, telemarketing calls to telephone numbers placed on the Register. However, the Act allows access-seekers to submit lists of telephone numbers to ACMA, or the contracted service provider, for checking against the Register (section 19 of the Act). ACMA, or the contracted service provider, must then inform the access-seeker which numbers (if any) on the access-seeker’s list are (or are not) listed on the Register. This process of ‘washing’ access-seekers’ lists will help access-seekers to avoid breaching the Act (see subsection 11(3) of the Act).

Under subsection 21(1) of the Act, ACMA may make a determination about the fees payable for the provision of a ‘washed list’ (access fees) or the refunds of fees for those services. The determination may also make provision for any exemption from fees payable (subsection 21(2) of the Act). The charges must not be such as to amount to taxation.

A determination made under subsection 21(1) is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Background

On 1 May 2007, ACMA made the principal Determination.

ACMA reviewed its access fees as part of a scheduled periodic review of its cost recovery arrangements and to implement a Budget measure requiring industry to fund the full operational costs of the Register from 1 July 2008.  Access-seekers have been partially funding these costs through the payment of access fees since the Register commenced operating in May 2007. 

ACMA reviewed its existing access fees and cost recovery arrangements against the cost recovery principles outlined in the Australian Government’s Cost Recovery Guidelines.  The original Cost Recovery Impact Statement for the first year of operation of the Register has been updated to reflect the new cost recovery arrangements.

The review resulted in updates to the fees for the ‘washing’ services provided under subsections 19(2) and 19(3) of the Act.  As it did before the first year of operation, ACMA engaged Access Economics (an independent consultancy organisation) to assist in determining the revised access fees.  The pricing structure, which was previously developed in consultation with industry, has not been changed. The pricing structure caters for access-seekers that expect to wash only a small amount of data right through to access-seekers that expect to wash 100 million numbers or more per annum.  The new fees have been set to recover an estimated $2.68 million in operating costs (net of applicable excess fees[1] that have been paid by industry in the first year of operation of the Register) in operating the Register in 2008-09.

The review also resulted in some minor changes and clarifications to the principal Determination relating to the treatment of unused numbers on annual subscriptions, invoicing arrangements for fees, suspension of an access-seeker’s registration and assessment of written applications for refunds by access-seekers.  These amendments codify how aspects of the ‘washing’ service operate and how ACMA’s invoicing, suspension and refund policies operate in practice.  Information on the treatment of unused numbers on annual subscriptions, invoicing arrangements for fees and the suspension of an access-seeker’s registration is available to access-seekers from the Do Not Call Register industry website at www.donotcall.gov.au/dncrtelem/index.cfm

Regulation Impact

Given the expected minimal impact the minor increase in fees will have on industry and consumers, an exemption for a Regulatory Impact Statement and Business Cost Calculator Report has been obtained.  The original Cost Recovery Impact Statement (CRIS) for the first year of operation of the Register has been updated to reflect the new cost recovery arrangements. The updated CRIS has been approved by the Department of Finance and Deregulation and can be found online at www.acma.gov.au/WEB/STANDARD/pc=PC_300340

Consultation

ACMA issued a media release on 19 May 2008 inviting comment on the discussion paper, Options for New Fees for Accessing the Do Not Call Register.  A copy of the discussion paper was sent to key stakeholders and emailed to all access-seekers that have taken out a subscription to wash their calling lists against the Register.  Interested parties were invited to comment on the following two options for the new fees that access-seekers will be charged to access the Register from 1 July 2008.

Option 1 – Stable pricing regime. Under this option, the excess fees collected in the first year would be returned evenly over the next three years. This option would assist in minimising price fluctuations and deliver a relatively stable scale of fees over the initial four-year Register contract period.

Option 2 – Fluctuating pricing regime. Under this option, all excess fees collected in the first year would be returned in 2008-09. This option would result in the fees reducing by a third from 1 July 2008, but then (on current projections) more than doubling in the following year, before falling again in 2010-11.

ACMA received 13 submissions on the proposed fee options from corporate participants in the telemarketing industry and bodies that represent various sections of the telemarketing industry, including banking organisations and real estate agents.  One submission was received from an individual participant in the telemarketing industry.  All submissions supported, or did not oppose, option 1 (stable pricing regime). No submissions were received in support of option 2 (fluctuating pricing regime).

Most of the responses received addressed the pricing fee options.  No concerns were raised regarding the other proposed amendments to the principal Determination.  Other issues that were raised by submitters were considered to relate to the Government’s decision to require industry to fund the full operational costs of the Register from 1 July 2008 and the legislation supporting the Register.

Participants in the telemarketing industry

Ten submissions were received from participants in the telemarketing industry.  Six of these submissions had a clear preference for option 1 (stable pricing regime) over option 2 (fluctuation pricing regime).  It was generally believed among these six submitters that option 1 will make future telemarketing activity easier to plan and budget for, and will deliver added certainty and stability for businesses engaged in telemarketing.  Four submissions, three from corporate participants in the telemarketing industry and one from an individual participant, did not clearly indicate a preference for one option over the other.

Two of the ten submissions received from participants recommended that there should be additional subscription types incorporated into the current access fee pricing regime. As multiple subscriptions of varying types can be taken-out (with the exception of the free subscription type A), ACMA considers that need for additional subscriptions is not warranted at this time.

Industry bodies

Three submissions were received from industry bodies representing various sectors of the telemarketing industry.  The responses were received from the Australian Direct Marketing Association (ADMA), the Australian Bankers’ Association and the Real Estate Institute of Australia. The responses from the three industry bodies suggested that the objectives of option 1 (stable pricing regime) in providing certainty and stability would seem to make it the preferred option with the majority of members canvassed.  ADMA did note in its submission that a sizeable minority of members it canvassed did not favour either option and instead proposed a third option where the excess fees would be returned fully in 2008-09 and the fees across the years 2009-10 and 2010-11 would be smoothed to remove the fluctuations experienced under option 2.  However, the majority of members it canvassed supported option 1 over option 2 and the third option it raised.

NOTES ON SECTIONS

Section 1 - Name of determination

Section 1 provides for the citation of the Amendment Determination as the Do Not Call Register (Access Fees) Amendment 2008 (No. 1).

Section 2 - Commencement

Section 2 provides that the Amendment Determination commences on 1 July 2008.

Section 3 – Amendment of Do Not Call Register (Access Fees) Determination 2007

Section 3 amends the Do Not Call Register (Access Fees) Determination 2007, with reference to the Schedule.

Schedule 1- Amendments

Item 1 substitutes a new subsection 4(1) in the principal Determination, inserting a new revised fee schedule for the services provided under subsection 19(2) and (3) of the Act. Item 1 also amends the definition of the fee for services provided under subsection 19(2) or (3) of the Act, so that the fee for those services will comprise the total of the amount mentioned in the table for the subscription type that the access-seeker obtains and any bank fees incurred by ACMA or the Commonwealth for the purpose of processing a payment, made or originating outside Australia for the services provided. This was considered necessary as there have been a number of incidences during the first year of operation of the Register where bank fees were charged for the processing of international payments and were taken out of the subscription fee received by ACMA, so that ACMA did not recover the full fee.

Item 2 inserts new subsections 5(4), 5(5) and 5(6) into the principal Determination. These new subsections clarify the treatment of unused numbers on current and expired subscriptions and whether or not unused numbers will or will not be included for use in purchased subscriptions.

The following tables summarise the treatment of unused numbers on subscriptions.

Information to this effect has been available to access-seekers on the industry website (TAP).

Item 3 substitutes a new first example in the notes to subsection 6(1) to reflect the new subscription fees in the revised fee schedule inserted by item 1.

Item 4 substitutes a new second example in the notes to subsection 6(1) to reflect the new subscription fees in the revised fee schedule inserted by item 1.

Item 5 inserts a new subsection 6(1A) clarifying that the fee mentioned in subsection (1) is payable by the access-seeker on the issue of an invoice to the access‑seeker for that amount.

Item 6 omits subsection 6(4) from the principal Determination.  Subsection 6(4) dealt with ACMA’s obligation to provide a refund to an access-seeker if the access-seeker paid an amount it did not have to pay under the Determination. The Amendment Determination inserts a new section 9 which sets out with ACMA’s obligations to assess and make decisions about refunds of fees.

Item 7 inserts a new section 8 and section 9 to the principal Determination.

Subsection 8(1) explains that an invoice for services provided under subsection 19(2) or 19(3) must be paid within 30 days of the date of issue of the invoice. This is standard commercial practice and information to this effect has already been available to access-seekers on the industry website.

Subsection 8(2) provides that if an invoice is not paid in accordance with subsection (1), ACMA may do either or both of the following:

(a) suspend the access-seeker’s registration mentioned in subsection 4(3) of the Do Not Call Register (Access to Register) Determination 2007;

(b) commence legal proceedings to recover the debt.

Suspending an access-seeker’s registration will prevent the access-seeker from submitting a list of telephone numbers for checking against the Register. Information to this effect has already been available to access-seekers on the industry website. Subsection 8(2) does not prevent ACMA from taking any other course of action available to it in the event of an unpaid invoice.

Subsection 8(3) provides that ACMA may ‘reactivate’ the access-seeker’s registration once an outstanding invoice is paid.

Subsection 8(4) explains that if an access-seeker’s registration is suspended, the annual subscription periods for any subscriptions held by the access-seeker will still end in accordance with subsection 6(2).

Section 9 sets out that ACMA may, on application made by the access-seeker, refund any part of the fees for services provided under subsection 19(2) or 19(3) of the Act. This is a broad discretion conferred on ACMA under subsection 21(1) of the Act.

[1] ACMA estimates receiving $2.12 million in total revenue from access-seekers in the first year of operation. This is $0.88 million more than the adjusted costs in operating the Register under the partial cost recovery arrangements. These excess fees were largely due to the demand for ‘washing’ services being underestimated in the initial modelling of fees.