EXPLANATORY STATEMENT

Telecommunications (Annual Carrier Licence Charge) Determination 2010

Telecommunications (Carrier Licence Charges) Act 1997

The Telecommunications (Annual Carrier Licence Charge) Determination 2010 (the Determination) is made by the Australian Communications and Media Authority (the ACMA) pursuant to subsection 14(1) of the Telecommunications (Carrier Licence Charges) Act 1997 (the Act).

The Determination sets out the method for calculating the annual carrier licence charge imposed on a carrier licence for the 2009-2010 financial year.

Legislative Provisions

Section 12 of 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. 

Subsection 15(1) of the Act provides that the total amount of charges imposed on carrier licences in force at the beginning of a financial year must not exceed the sum of the amounts determined in accordance with paragraphs 15(1)(a), (b), (c), (ca) and (d).

For the purposes of the Legislative Instruments Act 2003, the Determination is 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 an instrument made under subsection 14(1) of the Act specifies the amount of annual carrier licence charge imposed on persons who hold a carrier licence on the first day of the relevant financial year. The Determination is therefore minor or machinery in nature and consultation is not required in accordance with section 18 of the Legislative Instruments Act 2003.

On 26 March 2010 the Office of Best Practice Regulation advised that a Regulation Impact Statement was not required for the Determination (reference number ID 11270) on the basis that the changes would have a low impact on business, and would appear to impose no or low compliance costs.

On 24 February 2010 the Australian Competition and Consumer Commission (ACCC) confirmed the registration of the Telecommunications (Carrier Licence Charges) Act 1997 - Determination under paragraph 15(1)(b) No. 1 of 2010 which specifies the proportion of the ACCC’s costs for the financial year 2008-09 that is attributable to the ACCC’s telecommunications functions and powers.

On 9 March 2010 the Department of Broadband, Communications, and the Digital Economy provided the figures for the Commonwealth’s contribution to the budget of the International Telecommunication Union for the 2009 calendar year. 

On 16 April 2010, the Minister for Broadband, Communications and the Digital Economy made the following determination:

• Telecommunications (Carrier Licence Charges) Act 1997 - Determination under paragraph 15(1)(d) No. 1 of 2010

The determination provides that $2,000,000 is the amount estimated to be the amount of grants likely to be made for the financial year 2009-10 under section 593 of the Telecommunications Act 1997.

The ACMA has made a determination pursuant to its powers under  paragraphs 15(1)(a), (c), and (ca) of the Act and which is entitled the Telecommunications (Specification of Costs by ACMA) Determination 2010. 

Attachment 1

Notes on the Instrument

Section 1 - Name of Determination

This section sets out the name of the Determination.

Section 2 - Commencement

This section provides that the Determination commences on the day after it is registered.

Section 3 - Application

This section provides the date from which this Determination has application which is on and after the later of:

• the day after it is registered; and
• the day after the commencement of the Telecommunications (Specification of Costs by ACMA) Determination 2010;

Section 4 - Definitions

This section sets out the definitions of key terms used in the Determination.

Section 5– Method of ascertaining carrier licence charge

This section specifies the methodology used for the calculation of the annual carrier licence charge for the 2009-2010 financial year.

It states the annual charge imposed on a carrier licence in force at the beginning of the financial year that began on 1 July 2009, in relation to a carrier mentioned in Schedule 1, 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 2009-10 financial year, the fixed component is $285 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 2009.

Column 4 sets out the assessment of each carrier's eligible revenue for the 2008-09 financial year as determined by the ACMA under section 20F of the Telecommunications (Consumer Protection and Service Standards) Act 1999.