EXPLANATORY STATEMENT
Telecommunications Act 1997
Industry Development Plans (Declared Kinds of Carriers) Declaration (No. 1 of 2004)
Issued by the Authority of the Minister for Communications, Information Technology and the Arts
The purpose of this Declaration is to allow the Minister to declare certain kinds of carriers specified in the Declaration to be declared kinds of telecommunications carriers. The effect of being a declared kind of carrier is that the Australian Communications Authority (ACA) may issue an exemption certificate to exempt the carrier from the requirement to have a current industry development plan (IDP). The ACA may also issue an exemption certificate to an applicant for a carrier licence if the ACA is satisfied that, if the applicant were to become a carrier, the applicant would be a declared kind of carrier.
The Declaration revokes the Determination entitled Exemption from Industry Development Plan Requirements (No. 1 of 2001), which previously provided for exemptions from the requirement imposed on carriers to have an IDP. Since that Determination was made, clause 5 of Schedule 1 to the Telecommunications Act 1997 (the Act) has been amended. The Declaration, made under the amended provisions, broadens the kinds of carriers that can be exempted from the requirement to prepare an IDP. As a result the smallest carriers, comprising the bulk of the industry, should be exempt from the IDP requirements.
The Declaration provides for three classes of declared kinds of carriers.
Paragraph (a) of the Declaration applies to certain carriers and is based on the levy contribution factor worked out by the ACA for those carriers. The Telecommunications (Universal Service Levy) Act 1997 imposes a levy on telecommunications carriers to fund losses incurred by Telstra Corporation Limited, as the primary universal service provider for Australia, in fulfilling the Universal Service Obligation (USO) under Part 2 of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the TCPSS Act). The purpose of the USO is to ensure that standard telephone services, payphones, prescribed carriage services (of which there are currently none) and digital data services are reasonably accessible to all people in Australia. Most carriers are required to contribute to funding of USO costs by paying a levy based on their shares of the total eligible revenue of carriers. The ACA works out a carrier’s levy contribution factor under Division 13 of Part 2 of the TCPSS Act by dividing an individual carrier’s eligible revenue by the total eligible revenue of all carriers for an eligible revenue period. A carrier’s levy contribution factor is one element of the formula used to determine the carrier’s levy debit under section 20R of the TCPSS Act. A carrier whose levy contribution factor is less than 1% of the total of the eligible revenue of all carriers falls within this class.
Paragraph (b) of the Declaration applies to newly formed carriers in relation to which the ACA has not yet made an assessment of their eligible revenue. The basis for deciding whether a carrier falls with this class is the carrier’s estimated eligible revenue and its estimated annual capital expenditure. A carrier is a declared kind of carrier if its estimated eligible revenue is less than 1% of the total of the eligible revenue of all participating persons assessed by the ACA under section 20F of the TCPSS Act for the most recent eligible revenue period or its estimated capital expenditure is less than $20,000,000.
Paragraph (c) of the Declaration applies to a third class of carriers. Those primarily engaged in the provision of carriage services to educational and research institutions and establishments are also declared kinds of carriers.
As it takes some time for a carrier to develop an IDP, the Declaration deems a carrier to continue to be treated as a declared kind of carrier for a period of six months from the date when the carrier is first notified by the ACA that its levy contribution factor is equal to or exceeds 1%.
Words and phrases that have particular meanings are defined for the purposes of the Declaration.
Based on 2002-03 data, the effect of this Declaration is that carriers covering 95% of the industry (by eligible revenue) will still provide IDPs, while the remaining 5% of carriers (by eligible revenue) will be exempted from providing IDPs.
Overview
The Telecommunications Act 1997, enacted to regulate the telecommunications industry in Australia, was updated with the introduction of the Industry Development Plans (Declared Kinds of Carriers) Declaration (No. 1 of 2004) to address the need for more efficient regulatory processes. This Declaration was issued by the Authority of the Minister for Communications, Information Technology and the Arts with the policy objective of easing the burden on smaller carriers by exempting certain kinds from the requirement to prepare an Industry Development Plan (IDP). It aims to streamline compliance by allowing the Australian Communications Authority (ACA) to issue exemption certificates to carriers who fall into specified categories, thereby recognising the minimal impact these carriers have on the broader industry. The Declaration revokes the previous exemption framework and introduces a broader scope for exemptions, targeting carriers who represent the majority of the industry in terms of eligible revenue, thus ensuring they remain exempt from IDP requirements.
Scope and Application
The Telecommunications (Industry Development Plans (Declared Kinds of Carriers) Declaration (No. 1 of 2004)) is a legislative instrument made under the Telecommunications Act 1997, which seeks to streamline the regulatory requirements for certain carriers within the telecommunications industry in Australia. This Declaration, issued by the Minister for Communications, Information Technology and the Arts, aims to provide exemptions from the requirement to prepare an Industry Development Plan (IDP) for specific categories of carriers. The Declaration allows the Australian Communications Authority (ACA) to issue exemption certificates to carriers who fall into one of the three declared kinds of carriers, thereby exempting them from the obligation to maintain an IDP. The primary objective of this Declaration is to alleviate the administrative burden on smaller carriers who contribute less than 1% of the total eligible revenue of all carriers, ensuring that the IDP requirement does not disproportionately impact the smaller carriers that form the majority of the industry. The Declaration revokes the previous Determination entitled Exemption from Industry Development Plan Requirements (No. 1 of 2001) and introduces a broader range of carriers eligible for exemption, aligning with the amendments to clause 5 of Schedule 1 of the Telecommunications Act 1997.
Key Provisions
The Telecommunications Act 1997, as modified by the Industry Development Plans (Declared Kinds of Carriers) Declaration (No. 1 of 2004), outlines specific provisions to exempt certain carriers from the requirement to maintain an Industry Development Plan (IDP) (sections 1 and 2). This declaration allows the Minister for Communications, Information Technology and the Arts to specify certain kinds of carriers that can be exempt from the IDP requirement, thereby allowing the Australian Communications Authority (ACA) to issue exemption certificates under specific conditions. The key sections of the Act, particularly section 5 of Schedule 1, have been amended to broaden the scope of carriers that can be exempted from IDP requirements.
The obligations imposed by the Act on the parties governed by it, specifically the carriers, are primarily centred around compliance with the criteria set out in the Declaration for exemption from IDPs. Carriers falling under paragraphs (a), (b), or (c) of the Declaration are eligible for exemption. Paragraph (a) applies to carriers with a levy contribution factor of less than 1% of the total eligible revenue of all carriers, as determined by the ACA. Paragraph (b) pertains to newly formed carriers whose estimated eligible revenue is less than 1% of the total eligible revenue of all participating persons assessed by the ACA, or whose estimated annual capital expenditure is less than $20 million. Lastly, paragraph (c) exempts carriers primarily engaged in providing carriage services to educational and research institutions and establishments.
Failure to comply with the provisions of the Declaration could result in civil or criminal consequences, although the Act does not explicitly state maximum penalties. The ACA has the authority to enforce compliance, and breaches may lead to legal action. The primary consequence of non-compliance would be the requirement to develop and maintain an IDP, which could impose additional administrative and financial burdens on carriers that qualify for exemption but fail to meet the criteria or comply with the notification process.