EXPLANATORY STATEMENT

Telecommunications (Annual Carrier Licence Charge) Determination 2012

Telecommunications (Carrier Licence Charges) Act 1997

Issued by the authority of the Australian Communications and Media Authority

The Telecommunications (Annual Carrier Licence Charge) Determination 2012 (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.

Purposes

The purposes of the Determination are:

• to ensure, consistently with the Australian Communications and Media Authority (Annual Carrier Licence Charge) Direction 2011 (the Direction), that the amount of annual carrier licence charge imposed on certain carrier licences is nil; and
• for all other carrier licences – 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 2011-2012 financial year.

Background

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.

On 15 September 2009, the Australian Government announced a package of reforms to telecommunications regulation in Australia which included the intention to remove unnecessary red tape by exempting smaller carriers from certain reporting obligations to the ACMA, and in effect, from paying annual carrier licence charges.

On 4 July 2011, the Minister for Broadband, Communications and the Digital Economy issued the Direction – which requires the ACMA to make determinations under subsection 14(1) of the Act, which have the effect of removing the annual carrier licence charge for a licence held by a carrier that was a “USO non-participating person” pursuant to the Telecommunications (Participating Persons) Determination 2011 (No. 1) (the Participating Persons Determination). 

The Participating Persons Determination reduces red tape for smaller carriers by exempting “USO non-participating persons” from the requirement of lodging an eligible revenue return to the ACMA and from contributing to the Universal Service Obligation and National Relay Service levies. “USO non-participating persons” are carriers or group of associated carriers with revenues less than $25 million (either initial sales revenue, gross telecommunications sales revenue, or eligible revenue).

Section 5 of the Determination has the effect of imposing an annual carrier licence charge of $0 on each licence held by a carrier that was a “USO non-participating person” pursuant to the Participating Persons Determination.

Section 6 of the Determination sets out the method for ascertaining the carrier licence charge for the 2011-2012 financial year for all other carrier licences in force at the beginning of the 2011-2012 financial year.

Consultation

On 9 November 2011, the ACMA commenced a six week consultation process which included advising all telecommunications carriers that held licences on 30 June 2011 of the ACMA’s review of existing fees and charges under cost recovery arrangements.  

An estimate of the total annual carrier licence charge was included in the discussion paper that was made available on the ACMA website.  

The ACMA received three submissions regarding the estimated total annual carrier licence charge.  All submissions were published on the ACMA website. 

The ACMA considered all of the issues raised in the submissions which were relevant to the Determination.

Importantly, the ACMA notes that submissions received from two telecommunications carriers argued that the proposed methodology for calculating the annual carrier licence charge should be changed. However, the ACMA notes that it developed the methodology having regard to the need to comply with the Direction and the need to ensure that the total of the charges imposed on carrier licences did not exceed the sum of the amounts listed in section 15 of the Telecommunications (Carrier Licence Charges) Act 1997. The ACMA is of the view that the methodology achieves these objectives.

Submissions from two telecommunications carriers also questioned the estimated increase of 7% for the annual carrier licence charge.  One carrier noted that the increase is significant and the other carrier noted that the rationale for the 7% increase is unclear.  The ACMA can now confirm that the actual amount of the annual carrier licence charge is only 1% higher than the charge for the previous year. Further, the ACMA highlights again that the amount of charge imposed is determined by reference to the Direction and to the categories specified at section 15 of the Telecommunications (Carrier Licence Charges) Act 1997.

The ACMA is satisfied that its consultation process in relation to the Determination was appropriate for the purposes of section 17 of the Legislative Instruments Act 2003.

Regulation Impact

On 1 October 2011 the Office of Best Practice Regulation advised that a Regulation Impact Statement was not required for the Determination (reference number ID 2011/13142) on the basis that the changes would have a low impact on business, and would appear to impose no or low compliance costs.

Notes on Sections

The provisions of the Determination are described in Attachment 1.

Statement of Compatibility with Human Rights

A statement of compatibility with human rights for the purposes of Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is set out in Attachment 2.

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 its registration on the Federal Register of Legislative Instruments or the day after the commencement of the Telecommunications (Specification of Costs by ACMA) Determination 2012, 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 at the beginning of the 2011-2012 financial year (i.e. on 1 July 2011).

Section 4 - Definitions

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

Section 5 – Carrier licence charge – exempt carrier licences

Section 5 provides that the amount of carrier licence imposed on an ‘exempt carrier licence’ is $0. This section, consistently with the Minister’s Direction, has the effect of imposing an annual carrier licence charge of $0 on each licence held by a carrier that was a “USO non-participating person” pursuant to the Participating Persons Determination.

Section 6 – Method of ascertaining carrier licence charge – other carrier licences

This section specifies the methodology used for the calculation of the annual carrier licence charge for the 2011-2012 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 2011, in relation to a carrier mentioned in Schedule 1, is calculated using the formula described.

The total annual charge  is calculated by subtracting the other telecommunication charge (OTC) from the sum of the amounts determined in accordance with paragraphs 15(1)(a), (b), (c), (ca) and (d) – i.e. MCA. The total charge is then allocated to the carriers who are not “USO non-participating persons” in the same proportion of their reported eligible revenue as set out in the Schedule 1. The formula allocates the total charge to the individual carriers in the same proportion of their eligible revenue.

Schedule 1

Column 2 sets out the names of the holders of carrier licences that were in force as at 1 July 2011.

Column 3 sets out the ACN/ARBN of each of the holders of carriers licences.

Column 4 sets out the assessment of each carrier's eligible revenue for the 2010-2011 financial year as determined by the ACMA under section 20F of the Telecommunications (Consumer Protection and Service Standards) Act 1999.

Attachment 2

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Telecommunications (Annual Carrier Licence Charge) Determination 2012

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Telecommunications (Annual Carrier Licence Charge) Determination 2012 (the Determination) has been made by the Australian Communications and Media Authority (the ACMA) under subsection 14(1) of the Telecommunications (Carrier Licence Charges) Act 1997.  The Determination sets out the method for calculating the amount of annual carrier licence charge imposed on a carrier licence that was in force at the beginning of the 2011-2012 financial year.

Subsection 14(1) of the Telecommunications (Carrier Licence Charges) Act 1997 provides that the amount of charge imposed on an carrier licence is the amount ascertained in accordance with a written determination made by the ACMA.  Subsection 14(2) provides that a determination made under subsection 14(1) is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.