EXPLANATORY STATEMENT
Issued by the Australian Communications and Media Authority
Telecommunications (Annual Charge) Amendment Determination 2013 (No. 1)
Purpose
The Telecommunications (Annual Charge) Amendment Determination 2013 (No. 1) (the Amendment Determination will add the following four types of short-digit special services numbers[1] to the list of exempt numbers in the Telecommunications (Annual Charge) Determination 2007 (No.2) (the Charges Determination):
- international access codes
- carriage service provider identification codes
- virtual private network access codes
- incoming only international access codes.
The purpose of the Amendment Determination is to remove an identified price disincentive on new market entrants seeking their own short-digit special services numbers, and to address the disproportional effect of the high ongoing annual numbering charge (ANC) for smaller carriage service providers (CSPs) who hold these numbers. By removing the ANC from these numbers it is anticipated that new and smaller CSPs will have more opportunity to enter the telecommunications market and compete for the provision of services using their own short-digit special service numbers.
In addition to the Amendment Determination, the Australian Communications and Media Authority (the ACMA) has made a variation to the Telecommunications Numbering Plan 1997 by means of the Telecommunications Numbering Plan Variation 2013 (No.1) (the Variation). The Variation establishes rules to limit the allocation of one type of short-digit special services number, the carriage service provider identification (CSPID) codes. The purpose of the Variation is to ensure CSPID codes are allocated efficiently after they are exempt from the ANC as the numbers available to be allocated by the ACMA are limited[2].
Legislative provisions
Part 3 of the Telecommunications (Numbering Charges) Act 1997 (the Charges Act) requires the ACMA annually to collect a set amount of revenue from carriage service providers (CSPs) that hold telephone numbers. This revenue is known as the annual numbering charge (ANC).
The amount of revenue that the ACMA must collect is set each year in the Federal Budget. The purpose of the ANC is to derive payment to the Commonwealth from CSPs for the use of telephone numbers as they are a public resource.
To calculate ANC liabilities under subsections 20(1) and 22(2) of the Charges Act, the ACMA has made the Charges Determination. The Charges Determination sets out the formula to calculate the ANC and lists numbers that are exempt from the ANC or charged at a reduced rate[3].
Subsection 33(3) of the Acts Interpretation Act 1901 (the AIA) provides that where an Act confers a power to make, grant or issue any instrument, the power includes a power to amend or vary that instrument, in the like manner and subject to the like conditions as making the instrument.
The ACMA has amended the Charges Determination by means of the Amendment Determination. The Amendment Determination has been made under subsection 22(2) of the Charges Act and subsection 33(3) of the AIA.
Background
The ACMA is required to collect a set amount of revenue each year in ANC from CSPs that hold telephone numbers. This requirement is based on the principle that telephone numbers are a public resource and therefore an appropriate price should be paid by CSPs who use these numbers to provide commercial services.
The Charges Act sets out the general framework under which ANC is imposed on CSPs that hold telephone numbers. Under subsection 18(1) of the Charges Act, if a CSP holds an allocated number on a date determined by the ACMA each year, a charge is imposed on the number, unless the number is exempt from ANC under the Charges Determination. This date is referred to by the ACMA as the Census Date.
The Charges Determination sets the formula used to calculate the ANC and the revenue target to be achieved each year (currently $60M) and lists the numbers that are exempt from the ANC or charged at a reduced rate.
The formula in the Charges Determination is based on the length of the number, such that the shorter digit numbers attract higher charges. Under section 21 of the Charges Act the maximum allowable charge that may be imposed on any one number is $100,000. Four and five digit numbers, such as the four types of special services numbers exempted by the Amendment Determination, attract the highest amount of ANC[4].
During 2010 and 2011, the ACMA examined a wide range of issues related to the regulatory framework for telephone numbers. These issues emerged as a result of significant changes in industry structures, service offerings and consumer behaviour since the Telecommunications Numbering Plan 1997 was created.
An issue of concern raised by the ACMA with stakeholders was the impact on competition in the telecommunications market caused by the ANC levied on short-digit special services numbers. Submissions to the ACMA stated that the high ongoing cost of ANC acted as a barrier to new market entrants or smaller providers applying for allocation of these numbers, potentially reducing competition in service provision. Submissions on this issue indicated that ANC on these numbers disproportionately affected smaller CSPs.
On 27 September 2012, the ACMA announced its decision to implement 24 actions in response to consultation on the review of numbering arrangements. One of the actions arising from the review was for the ACMA to consult on the proposal to exempt the four types of short-digit special services numbers from the ANC.
The Amendment Determination has been made to remove an identified price disincentive on new market entrants or smaller CSPs from obtaining the four types of short-digit special services numbers from the ACMA. The removal of ANC of up to $100,000 per number will remove a barrier to market entry and provide an opportunity for new and smaller CSPs seeking their own special services numbers to compete more effectively in the provision of services to their customers.
Consultation
Section 17 of the Legislative Instruments Act 2003 (LIA) requires rule makers to be satisfied that consultation that is appropriate and reasonably practicable to undertake has been undertaken before a legislative instrument is made.
In November and December 2012, the ACMA consulted with industry and other affected parties by providing copies of the draft Amendment Determination to:
- all providers who pay ANC; and
- the Numbering Advisory Committee, whose membership includes the larger service providers, Communications Alliance and other industry and consumer organisations.
The ACMA also published information about the proposed changes and the draft instruments on its website for comment by interested persons.
Submissions received
Six submissions were received in response to consultation by the ACMA. The complete list of submissions has been made available on the ACMA’s website. In finalising the Amendment Determination, the ACMA has considered the submissions it received.
Regulation impact
The Office of Best Practice Regulation (OBPR) requested that the ACMA lodge a Regulation Impact Statement (RIS) for the proposed ANC exemption.
The OBPR approved the RIS on 22 July 2013.
Detailed description of the Instrument
Section 1 names the instrument as the Telecommunications (Annual Charge) Amendment Determination 2013 (No. 1).
Section 2 provides that the instrument commences on the day after it is registered. The exemption of the special services numbers from ANC will take effect for the 2014 ANC process which will occur in the 2013-14 financial year.
Section 3 specifies that the Telecommunications (Annual Charge) Amendment Determination 2007 (No. 2) is amended as set out in Schedule 1.
Schedule 1 Amendments
Item 1 inserts the definition of special services number into section 4 of the Charges Determination, giving it the same meaning as it is given by section 3.11 of the Telecommunications Numbering Plan 1997.
Item 2 omits “plan.” and inserts “plan;” into paragraph 7(d) of the Charges Determination (to take account of the next change).
Item 3 adds the following special services numbers to the list of numbers that are exempt from the Charges Determination:
- international access codes in Part 2 of Schedule 4 to the Telecommunications Numbering Plan 1997
- carriage service provider identification codes in Part 3 of Schedule 4 to the
Telecommunications Numbering Plan 1997
- virtual private network access codes in Part 4 of Schedule 4 to the
Telecommunications Numbering Plan 1997
- four and five digit incoming only international access codes in Part 6 of Schedule 4 to the Telecommunications Numbering Plan 1997.
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 LIA applies to cause a statement of compatibility to be prepared in respect of that legislative instrument. This statement is Attachment A.
Attachment A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Telecommunications (Annual Charge) Amendment Determination 2013 (No.1)
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 legislative instrument amends the Telecommunications (Annual Charge) Determination 2007 (No. 2) by adding the following four types of short-digit special services numbers to the list of exempt numbers:
- international access codes
- carriage service provider identification codes
- virtual private network access codes
- four and five digit incoming only international access codes.
The intended impact of this action is to remove an identified financial disincentive affecting new and smaller CSPs from providing telecommunications services using their own short-digit special services numbers.
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.
[1] Four and five digit special services numbers specified in Parts 2, 3, 4 and 6 of Schedule 4 of the Telecommunications Numbering Plan 1997.
[2] 90 CSPID codes are available for allocation. As at August 2013, 18 CSPID codes had been allocated by the ACMA, leaving 72 still available for allocation.
[3] Incoming only international numbers, numbers used only for an internal network service and numbers used only for a testing service are charged at a reduced rate. Community service numbers, geographic numbers, international signalling point codes and telex numbers are exempt from the annual numbering charge.
[4] In 2013, four digit numbers were subject to ANC of $100,000 per number, and five digit numbers were subject to ANC of $66,025.85 per number. This resulted in the ACMA collecting a total of $2,917,737.88 in ANC from 17 CSPs for holding short-digit special services numbers.