EXPLANATORY STATEMENT

Approved by the Australian Communications and Media Authority

Telecommunications (Carrier Licence Charges) Act 1997

Telecommunications (Annual Carrier Licence Charge) Determination 2018

Authority

The Telecommunications (Annual Carrier Licence Charge) Determination 2018 (the Determination) is made by the Australian Communications and Media Authority (the ACMA) under subsection 14(1) of the Telecommunications (Carrier Licence Charges) Act 1997 (the Charges Act).

Legislative provisions

Under section 12 of the Charges Act, an annual charge is imposed on a carrier licence that is in force at the beginning of a financial year (an annual carrier licence charge). 

Subsection 14(1) of the Charges Act provides that the amount of an annual carrier licence charge imposed on a carrier licence is the amount ascertained in accordance with a written determination made by the ACMA. 

Section 15 of the Charges Act limits the total of charges that may be imposed.  Subsection 15(1) provides that the total of the annual carrier licence charges that are imposed on carrier licences in force at the beginning of a financial year must not exceed the sum of the amounts determined under paragraphs 15(1)(a) to (d).

Under subsection 14(1) of the Australian Communications and Media Authority Act 2005, the Minister may give written directions to the ACMA in relation to the performance of its functions and the exercise of its powers.  On 21 April 2017, the Minister for Communications made the Australian Communications and Media Authority (Annual Carrier Licence Charge) Direction 2017 (the 2017 Ministerial Direction) which directed the ACMA to make such determinations as are necessary under subsection 14(1) of the Charges Act to have the effect of imposing an annual carrier licence charge of $0 on each carrier licence that is:

• in force at the beginning of a relevant financial year; and
• held by a carrier that was a “non-participating person” for the eligible revenue period immediately preceding that financial year.  

The 2017 Ministerial Direction defines “relevant financial year” as the financial year that begins on 1 July 2017 and each later financial year. The term ‘non-participating person’ has the same meaning as in the Telecommunications (Participating Persons) Determination 2015 (the Participating Person Determination).

A provision-by-provision description of the Determination is set out in the notes at Attachment 1.

The Determination is a legislative instrument for the purposes of the Legislation Act 2003 (the LA).

Purpose and operation of the instrument

The purpose of the Determination is to set out a method for ascertaining the amount of annual carrier licence charge imposed on each carrier licence that was in force at the beginning of the 2017-2018 financial year, in accordance with subsection 14(1) of the Charges Act and the 2017 Ministerial Direction.

The Determination sets out a method for ascertaining the amount of annual carrier licence charge for each other carrier licence that was in force at the beginning of the 2017-2018 financial year. (Further information about that method is set out below in the notes on section 8 of the Determination).

The Determination imposes an annual carrier licence charge of $0 on a carrier licence that was in force at the beginning of the 2017-2018 financial year and held by a carrier that was a non-participating person for the eligible revenue period that began on 1 July 2016 and ended on 30 June 2017.

Documents incorporated by reference

The Participating Persons Determination is incorporated as in force from time to time in accordance with section 10 of the Acts Interpretation Act 1901 and section 13(1) of the LA.   

The Participating Persons Determination is registered on the Federal Register of Legislation.  The Federal Register of Legislation may be accessed at www.legislation.gov.au.

Consultation

Before the Determination was made, the ACMA was satisfied that consultation was undertaken to the extent appropriate and reasonably practicable, in accordance with section 17 of the LA.

The ACMA consulted with industry stakeholders on the making of the instrument for a six-week period from 16 April 2018 inviting feedback on the proposed changes to the annual carrier licence charge determined under cost recovery arrangements.  The consultation was facilitated through the release of a consultation paper and a draft cost recovery implementation statement on the ACMA’s website.

The ACMA received two written submissions[1] on 25 May 2018 in response to its consultation and the submissions did not raise any substantive issues regarding the drafting of this Determination. The submissions commented on the eligible revenue thresholds in the Participating Persons Determination and on the ACMA’s cost recovery implementation statement. The ACMA responded to the submissions.

Regulation Impact Statement

On 19 February 2014, the Office of Best Practice Regulation provided a standing exemption and advised that a Regulation Impact Statement was not required for the Determination as proposed to be made on the basis that the changes would be minor in nature (reference number ID 2014/16581).

Statement of Compatibility with Human Rights

Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires the rule maker in relation to a legislative instrument to which section 42 (disallowance) of the LA applies to cause a statement of compatibility with human rights to be prepared in respect of that legislative instrument.

The statement of compatibility set out below has been prepared to meet that requirement.

Overview of the Legislative Instrument

Under section 12 of the Charges Act an annual carrier licence charge is imposed. 

Subsection 14(1) of the Charges Act provides that the amount of an annual carrier licence charge imposed on a carrier licence is the amount ascertained in accordance with a written determination made by the ACMA. 

The Determination has been made by the ACMA under subsection 14(1) of the Charges Act.  It sets out the method for ascertaining the amount of annual carrier licence charge imposed on the holder of each carrier licence that was in force at the beginning of the 2017-2018 financial year.

Human rights implications

The ACMA has assessed whether the Determination is compatible with human rights, being the rights and freedoms recognised or declared by the international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 as they apply to Australia.

Having considered the likely impact of the instrument and the nature of the applicable rights and freedoms, the ACMA has formed the view that the Determination does not engage any of those rights or freedoms. 

Conclusion

The Determination is compatible with human rights as it does not raise any human rights issues.

Attachment 1

Notes on sections of the Telecommunications (Annual Carrier Licence Charge) Determination 2018

Section 1 - Name of Determination

This section provides for the Determination to be cited as the Telecommunications (Annual Carrier Licence Charge) Determination 2018.

Section 2 - Commencement

This section provides that the Determination commences on the later of the start of the day after it is registered on the Federal Register of Legislation and the commencement of the Telecommunications (Specification of Costs by the ACMA) Determination 2018. Both events must occur before the Determination commences.

The Federal Register of Legislation may be accessed at www.legislation.gov.au.

Section 3 – Authority

This section identifies the provision of the Act that authorises the making of the instrument, namely subsection 14(1) of the Act.

Section 4 – Repeal of this Determination

This section provides that the Determination is repealed at the end of 30 June 2020.

Section 5 - Application

This section provides that the Determination applies to carrier licences that were in force at the beginning of the 2017-2018 financial year.

Section 6 - Definitions

Subsection 6(1) sets out definitions for the key terms used in the Determination.  Terms such as Act, carrier licence, carrier licence charge, and exempt carrier licence are largely unchanged from the Telecommunications (Annual Carrier Licence Charge) Determination 2017.

The term eligible revenue period has the same meaning as in the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the TCPSS Act) and the term non-participating person is defined as having the same meaning as in the Participating Persons Determination.  

Subsection 6(2) provides that legislative instruments referenced in the Determination are referenced as in force from time to time.

Section 7 – Carrier licence charge – exempt carrier licence

This section provides that the amount of carrier licence charge imposed on an exempt carrier licence is $0, in accordance with the 2017 Ministerial Direction.

Section 8 – Method of ascertaining carrier licence charge – other carrier licences

This section sets out the method for ascertaining the amount of carrier licence charge imposed on a carrier licence that is not an exempt carrier licence (a relevant carrier licence).

The amount is ascertained, for a relevant carrier licence, using the following formula:

Where:

• MCA (maximum charge amount) is the total sum of the amounts determined under subsection 15(1) of the Charges Act;
• OTC (other telecommunication costs) is an amount relating to costs that:

(a)               are part of the proportion of the ACMA’s costs for the 2016-2017 financial year that is attributable to the ACMA’s telecommunications functions and powers; and

(b)               have been recovered from telecommunications charges (other than annual carrier licence charges) or the ACMA considers are not appropriate to recover from carriers because of the nature of the activities with which the costs are associated;

• ER (eligible revenue), for the holder of the relevant carrier licence, is the eligible revenue of the holder for the 2016-2017 financial year as assessed by the ACMA under subsection 47(1) of the TCPSS Act;
• TER (total eligible revenue) is the total sum of the eligible revenue of all holders of a relevant carrier licence for the 2016-2017 financial year as assessed by the ACMA under subsection 47(1) of the TCPSS Act.

The total charge amount is calculated by subtracting the other telecommunication costs from the maximum charge amount. The total charge amount is then allocated to each holder of a relevant carrier licence in the same proportion as that holder’s eligible revenue to the total eligible revenue.

Schedule 1

Schedule 1 sets out, for each holder of a relevant carrier licence, the holder’s:

• Name;
• ACN/ARBN/ABN; and
• eligible revenue for the 2016-2017 financial year as assessed by the ACMA under subsection 47(1) of the TCPSS Act.

[1]  These can be accessed from: https://www.acma.gov.au/theACMA/changes-to-annual-carrier-licence-charge-2017-18