EXPLANATORY STATEMENT

Telecommunications (Annual Carrier Licence Charge) Determination 2011

Telecommunications (Carrier Licence Charges) Act 1997

Issued by the authority of the Australian Communications and Media Authority

The Telecommunications (Annual Carrier Licence Charge) Determination 2011 (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).

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).

A determination made under subsection 14(1) of the Act is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Purpose

The purpose of the Determination is to set out the method for calculating the amount of the annual carrier licence charge imposed on a carrier licence that was in force at the beginning of the 2010-2011 financial year.

Consultation

On application for a licence, carriers are advised that a determination made by the ACMA under subsection 14(1) of the Act specifies the method for calculating the amount of annual carrier licence charge imposed on a carrier licence in force on the first day of the relevant financial year and that the charge is payable by the holder of the licence. 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 14 April 2011 the Office of Best Practice Regulation advised that a Regulation Impact Statement was not required for the Determination (reference number ID 12559) on the basis that the changes would have a low impact on business, and would appear to impose no or low compliance costs.

On 7 March 2011 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 2010 calendar year. 

Related legislative instruments

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 2011.

On 16 March 2011 the Australian Competition and Consumer Commission (the ACCC) made a determination under paragraph 15(1)(b) of the Act. The determination provides that $12 223 338 is the amount determined by the ACCC to be the proportion of the ACCC’s costs for the 2009-2010 financial year that is attributable to the ACCC’s telecommunications functions and powers.

On 6 April 2011 the Minister for Broadband, Communications and the Digital Economy made a determination under paragraph 15(1)(d) of the Act. The determination provides that $2 032 000 is the estimated total amount of grants likely to be made during the 2010-2011 financial year under section 593 of the Telecommunications Act 1997.

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 after its registration on the Federal Register of Legislative Instruments or the day after the commencement of the Telecommunications (Specification of Costs by ACMA) Determination 2011, whichever occurs last.  Both of these events must occur in order for the Determination to commence.

Section 3 - Application

This section provides that the Determination applies to the imposition of annual carrier licence charges in respect of carrier licences that were in force on 1 July 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 2010-2011 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 2010, 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 2010-2011 financial year, the fixed component is $281 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 names of the holders of carrier licences that were in force as at 1 July 2010.

Column 4 sets out the assessment of each carrier's eligible revenue for the 2009-2010 financial year as determined by the ACMA under section 20F of the Telecommunications (Consumer Protection and Service Standards) Act 1999.