Monitoring and Reporting on Competition in the Telecommunications Industry Determination 2003 (No. 1) Revocation 2007 (No. 1)

EXPLANATORY STATEMENT

Trade Practices Act 1974

Monitoring and Reporting on Competition in the Telecommunications Industry Determination 2003 (No. 1) Revocation 2007 (No. 1)

Issued by the authority of the Minister for Communications, Information Technology

and the Arts

The Monitoring and Reporting on Competition in the Telecommunications Industry Determination 2003 (No. 1) (the Determination), made under subsections 151CMA(1) and (3) of the Trade Practices Act 1974 (TPA), requires the Australian Competition and Consumer Commission (ACCC) to monitor and report quarterly to the Minister on competition in the supply by relevant carriage service providers of broadband services in Australia.

The Monitoring and Reporting on Competition in the Telecommunications Industry Determination 2003 (No. 1) Revocation 2007 (No. 1) revokes the Determination.

Legislative basis

Section 151CMA of the TPA provides for the ACCC to report on competition matters in a manner specified by the Minister for Communications, Information Technology and the Arts in a written determination.  Subsection 33(3) of the Acts Interpretation Act 1901 provides that where an Act confers a power to make an instrument, the power shall, unless the contrary intention appears, be construed as including a power exercisable in the like manner and subject to the like conditions to revoke any such instrument.  In the absence of a contrary intention in the TPA, subsection 33(3) of the Acts Interpretation Act 1901 allows the Minister to revoke any determination made in relation to section 151CMA of the TPA.

Subsection 151CMA(6) of the TPA provides that a determination under section 151CMA of the TPA is a disallowable instrument for the purposes of the Acts Interpretation Act 1901.

As a consequence of the commencement of the Legislative Instruments Act 2003 (LIA) and the repeal of section 46A of the Acts Interpretation Act 1901 on 1 January 2005, the accompanying instrument is a legislative instrument for the purposes of the LIA (see paragraph 6(d) of the LIA).  The accompanying instrument must therefore be registered on the Federal Register of Legislative Instruments, tabled in Parliament and is subject to Parliamentary disallowance.

Background

The Determination was issued by the Minister in 2003 with the primary aim of monitoring the provision and take-up of broadband services in Australia with a view to stimulating increased competition. The Determination specified that information be collected each quarter from Internet Service Providers (ISPs) with more than 50 subscribers as a means of obtaining data on broadband usage disaggregated down to postcode-level. Aside from monitoring and promoting ISP competition, this data would also be useful to Government agencies such as the Department of Communications, Information Technology and the Arts (DCITA) and the Australian Communications and Media Authority (ACMA) in designing Internet assistance programs, regulating the industry and meeting international reporting commitments.

However, in light of concern from industry about the cost of providing the specified information, and the practical difficulties of collecting and analysing large amounts of data on a quarterly basis in the context of limited ACCC resources, the Determination is being revoked.

Reasons for repealing the Determination

Several developments have led the Government to conclude that the Determination is no longer the best way to collect data on broadband take-up:

1. Competition in the sector has demonstrably increased, with a greater range of ISPs entering the market at all levels and retail prices falling significantly, as shown by the ACCC’s own high-level quarterly ‘Broadband Snapshot’. Facilities-based competition has increased with the installation of non-Telstra owned broadband equipment in exchanges and other technologies such as wireless, mobile 3G and satellite services providing viable alternative broadband platforms. These developments reduce the need for disaggregated statistics to assess and promote competition in the sector.
2. ISPs have expressed concern about the cost and practical difficulties presented by the extensive data collection contained in the Determination. Under one requirement, ISPs were asked to break-down their business subscribers by industry category and the number of employees – information which is not readily obtainable by ISPs.
3. The Australian Bureau of Statistics (ABS) is better placed to conduct in-depth surveys relating to information and communications technologies. The ABS currently runs a twice-yearly Internet Activity Survey (IAS) of ISPs and has a number of other IT-focussed statistical collections which provide useful data on broadband take-up.   
4. The Report of the Taskforce on Reducing Regulatory Burdens on Business (The Banks Report) issued in April 2006 focussed attention on the problem of over-regulating industry and contained a recommendation to minimise reporting requirements applied to business wherever possible. The Government is concerned that the Determination may impede industry rather than assist it, especially as there are other ways to collect the needed information.

The Minister has considered these factors and concluded that the Determination should be repealed.  Henceforth primary reliance will be placed on the ABS’ IAS. DCITA in consultation with the ABS and ACMA is exploring alternative sources of data such as the Population Census, other ABS surveys and commercial polling surveys, as well as occasional expanded IAS collections, to obtain more disaggregated information on broadband take-up. These arrangements will be less burdensome to industry and better focussed on obtaining information relevant to the design and implementation of Government broadband policy and programs.

Consultation

DCITA has received advice on this matter from the ACCC, which consulted widely with industry on the barriers to implementing the Determination. The Department has also consulted with the ABS and ACMA on the matter of broadband data collection. These consultations formed the basis of the Minister’s decision to repeal the Determination.

The Office of Best Practice Regulation (OBPR) has advised the Department that a regulation impact statement is not required to be prepared in relation to the revocation of the Determination as the revocation would alleviate reporting requirements on industry and is machinery of government in nature.

Details of accompanying instrument

Details of the clauses are as follows:

Clause 1 – Name of Instrument

Clause 1 of the accompanying instrument provides that its name is the Monitoring and Reporting on Competition in the Telecommunications Industry Determination 2003 (No. 1) Revocation 2007 (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.

Clause 3 – Revocation

Clause 3 of the accompanying instrument provides for the revocation of the original determination.