EXPLANATORY STATEMENT
Telecommunications (Annual Carrier Licence Charge) Determination 2006
Telecommunications (Carrier Licence Charges) Act 1997
This instrument is issued by the authority of the Australian Communications and Media Authority (‘ACMA’). It sets out the method for calculating the annual carrier licence charge on a carrier licence.
Legislative Provisions
Section 12 of the Telecommunications (Carrier Licence Charges) Act 1997 (the Act) provides that a charge is imposed on a carrier licence that is in force at the beginning of a financial year.
Subsection 14(1) of the Act provides that the amount of charge to be imposed on a carrier licence is the amount ascertained in accordance with a written determination made by the ACMA.
Section 15 (1) of the Act enforces a limit on the total of the charges that are imposed on carrier licences.
For the purposes of the Legislative Instruments Act 2003, a Determination is considered as a legislative instrument. The accompanying Determination must therefore be registered on the Federal Register of Legislative Instruments (FRLI).
Consultation
On application for a licence, carriers are advised that this instrument imposes a carrier licence charge, to recover costs for a financial year if they hold a licence on the first day of the financial year.
The Office of Regulation Review advised that a Regulation Impact Statement was not required for the changes to the ACLC determinations, as the changes were minor and machinery in nature, and did not substantially alter existing arrangements.
The Department of Communications, Information Technology and the Arts confirmed the registration of the 2006 determinations under subparagraphs 15(1)(d) and (e) of the Act and provided the figures for the Commonwealth’s 2005 contribution to the budget of the International Telecommunication Union.
The Australian Competition and Consumer Commission confirmed the registration of the 2006 determination under subparagraph 15(1)(b) of the Act.
Attachment 1
Notes on the Instrument
Section 1 - Name of Determination
This is the Determination title.
Section 2 - Commencement
This section provides the commencement date of the Determination; which is the day after it is registered on the FRLI.
Section 3 - Definitions
This section sets out the definitions of key terms used in the Determination.
Section 4 – Method of ascertaining charge
This section specifies how the annual charge is calculated.
It states the annual charge payable by a carrier mentioned in Schedule 1, which was a carrier on 1 July 2005, is calculated using the formula described.
The amount of the charge imposed on each carrier licence is made up of a fixed component and a variable component. The fixed component (MFC: Minimum Fixed Charge) is a cost recovery based administration charge for the calculation, review and approval of the charge. For the 2005-2006 financial year, the fixed component is $45,000 which is $341 per carrier.
The total variable component is calculated by first extracting the fixed component from the maximum charge amount (MCA) that excludes the other telecommunication charges (OTC). Then the total variable component is allocated to the individual carrier in the same proportion of their reported eligible revenue as set out in the Schedule 1.
Schedule 1
Column 2 sets out the persons who were holders of carrier licences as at 1 July 2005.
Column 3 sets out the assessment of each carrier's eligible revenue for the 2004-05 financial year.
Overview
The Telecommunications (Annual Carrier Licence Charge) Determination 2006, issued by the Australian Communications and Media Authority (ACMA) under the Telecommunications (Carrier Licence Charges) Act 1997, addresses the need for a systematic method to calculate annual carrier licence charges for telecommunications carriers. The determination was introduced to provide clarity and consistency in the application of charges to carriers, ensuring that the costs associated with administering carrier licences are recovered effectively. The policy objective, as outlined in the explanatory statement, is to impose a charge on carrier licences to recover costs for a financial year and to maintain the balance between regulatory oversight and operational costs. The determination specifies a formula for calculating the annual charge, which includes both a fixed component and a variable component, ensuring that charges are proportionately allocated based on each carrier’s eligible revenue.
Scope and Application
The Telecommunications (Annual Carrier Licence Charge) Determination 2006 applies to entities that hold a carrier licence under the Telecommunications (Carrier Licence Charges) Act 1997, specifically those who were licence holders as of 1 July 2005. The Act imposes an annual carrier licence charge on these entities to recover costs for a financial year. This charge comprises both a fixed component, which is a cost recovery based administration charge for the calculation, review, and approval of the charge, and a variable component that is allocated in proportion to the individual carrier's reported eligible revenue. The Act is administered by the Australian Communications and Media Authority (ACMA) and is a legislative instrument registered under the Federal Register of Legislative Instruments. The charge is calculated according to the formula specified in the Determination, with the fixed component set at $45,000 for the 2005-2006 financial year, translating to $341 per carrier. The variable component is determined by first deducting the fixed component from the maximum charge amount, then allocating the remainder based on the carriers' eligible revenue as outlined in Schedule 1 of the Determination.
Key Provisions
The Telecommunications (Annual Carrier Licence Charge) Determination 2006 sets out the method for calculating the annual carrier licence charge on a carrier licence (Section 4). This Determination applies to carriers who held a licence on 1 July 2005. The annual charge comprises a fixed component and a variable component. The fixed component, known as the Minimum Fixed Charge (MFC), is a cost recovery based administration charge for the calculation, review, and approval of the charge. For the 2005-2006 financial year, the fixed component is $45,000, which equates to $341 per carrier. The variable component is calculated by first deducting the fixed component from the maximum charge amount (MCA) that excludes other telecommunications charges (OTC). This total variable component is then allocated to individual carriers in the same proportion of their reported eligible revenue as set out in Schedule 1.
The Telecommunications (Carrier Licence Charges) Act 1997 imposes obligations on carriers holding a licence at the start of a financial year (Section 12). Specifically, it requires the payment of an annual carrier licence charge. This charge is determined by the Australian Communications and Media Authority (ACMA) in accordance with Section 14(1). Carriers must adhere to the calculation method specified in the Determination, which includes both fixed and variable components based on their eligible revenue. Additionally, Section 15(1) of the Act enforces a limit on the total charges imposed on carrier licences, ensuring that the total does not exceed the prescribed limit.
Breach of the provisions outlined in the Determination and the Act could lead to various consequences. Firstly, failure to pay the annual carrier licence charge could result in administrative penalties, including fines or additional charges. The exact penalties are not specified in the Determination but would be consistent with the general penalties for non-compliance with telecommunications legislation. Additionally, carriers are required to provide accurate and complete information on their eligible revenue to ensure the correct calculation of their charges. Misrepresentation of this information could lead to further civil or criminal penalties, depending on the severity of the breach. The specific penalties for such breaches would be determined in accordance with the relevant laws and regulations governing the administration of telecommunications charges.