Explanatory Statement

Telecommunications Act 1997

Telecommunications (Carrier Licence and Nominated Carrier Declaration Exemption—Wireless Network Unit) Determination 2019

Issued by the Authority of the Minister for Communications, Cyber Safety and the Arts

Purpose

The Telecommunications (Carrier Licence and Nominated Carrier Declaration Exemption—Wireless Network Unit) Determination 2019 (the new Determination) is made by the Minister for Communications, Cyber Safety and the Arts under subsection 51(1) of the Telecommunications Act 1997 (the Act).

Subsection 33(3) of the Acts Interpretation Act 1901 provides that where an Act confers a power to make an instrument of a legislative character, the power shall be construed as including a power exercisable in like manner and subject to like conditions to repeal any such instrument.

Subsection 33(3A) of the Acts Interpretation Act 1901 provides that where an Act confers a power to make, grant or issue any instrument of a legislative character with respect to particular matters, the power shall be construed as including a power to make, grant or issue such an instrument with respect to a particular class or to particular classes of those matters.

The new Determination repeals and remakes the Determination under subsection 51(1) (No. 1 of 2002) (the sunsetting Determination). The sunsetting Determination was operating effectively and is remade in substantially the same form.

The new Determination will exempt the owners of Wireless Network Units from the requirement to hold a carrier licence or for a nominated carrier declaration to be in force where:

• the Wireless Network Unit is used to supply a carriage service to users in the same distinct place as the network unit; and
• a carrier licence or nominated carrier declaration would not be required in respect of the use of a fixed-line network in the same circumstances.

The new Determination is intended to continue to allow businesses like cafés, hotels and airport lounges to provide wireless local area networks (‘WiFi hotspots’) to customers within their premises on a paid or incidental basis without first obtaining a carrier licence. In doing so, the new Determination will continue to prevent an undue regulatory burden falling on those businesses.

Notes on the provisions of the new Determination are set out in Attachment A.

This instrument is a legislative instrument for the purposes of section 8 of the Legislation Act 2003.

Background

Under section 42 of the Act, an owner or owners of a network unit must not use the unit, or allow it to be used, to supply a carriage service to the public without either holding a carrier licence, or having a nominated carrier licence declaration in force in relation to the network unit, unless an exemption applies. Subsection 51(1) of the Act enables the Minister to exempt a specified use of a network unit from the licensing requirements under section 42.

Under the Telecommunications Act 1997, ‘designated radiocommunications facilities’ require a carrier licence or nominated carrier declaration to supply a service in a distinct place, while fixed line networks delivering the same service do not. Places are considered distinct when they are not in the same area (for the purposes of section 36 of the Act).

Designated radiocommunications facilities are defined under section 31 of the Act, and include base stations that are part of a Terrestrial Radiocommunications Customer Access Network (TRCAN). Under subsection 34(1) of the Act, a base station can be considered part of a TRCAN where inter alia:

• the base station is used, or is for use, in connection with the supply of carriage services; and
• customer equipment used for the supply of the service is not in physical contact with any part of the telecommunications network by means of which the service is supplied; and
• the service is wholly or principally used, or wholly or principally for use, by each end-user at premises occupied or used by the end-user, or in the immediate vicinity of these premises; and
• the network does not have intercell hand-over functions; and
• the network is not an exempt network.

In the absence of the new Determination, a network unit that is a designated radio communications facility which is a base station that is part of a TRCAN may trigger the section 42 carrier licence requirement where it is supplying the same carriage service as a fixed line network within the same area. A TRCAN is an exempt network for the purposes of paragraph 34(3)(a) if it is used for the sole purpose of supplying carriage services on a non‑commercial basis.

Prior to the making of the sunsetting Determination in 2002, concerns were raised that under the Act designated radiocommunications facilities required a carrier licence or nominated carrier declaration to commercially supply such a service in a distinct place, while fixed line networks delivering the same service did not. In response to those concerns, the sunsetting Determination was made.

Wireless Local Area Networks (WLANs) were originally designed for business local area networks. However their commercial use has grown beyond their original purpose, resulting in their use in a variety of settings, including in ‘WiFi hotspots’ which provide connectivity to the internet to customers in a localised area, such as in a café, a hotel or an airport lounge.

The operators of WiFi hotspots often receive an indirect or direct monetary or other reward for the use of their networks. They may receive direct payment, membership fees or provide a network connection if customers purchase other goods or services. As a result, absent the new Determination, they may not be exempt networks for the purposes of paragraph 34(3)(a) of the Act.

An assessment of the sunsetting Determination has found that, with the ongoing relevance of WiFi hotspots, an instrument of this effect continues to be required. The new Determination will continue to address an anomaly in the carrier licensing regime which arose as a result of the emergence of WLANs as a substitute for wired networks. The new Determination prevents an undue regulatory burden falling on businesses that operate WiFi hotspots.

Remaking the sunsetting Determination is preferable to amending the Act. Making a determination is an appropriate and reasonable use of the Minister’s power under the Act. At present, it is sensible that entities providing WiFi hotspots within a localised area should not be obliged to seek a carrier licence. However, it is conceivable that in the future there may be a need to make adjustments to this instrument depending on how wireless internet technologies develop and how businesses and consumers use them.

The new Determination would remake the sunsetting Determination in substantially the same form. Minor amendments have been made so that the new Determination reflects current drafting practices.

Regulation Impact Statement

The Office of Best Practice Regulation (OBPR) has advised that, as the new Determination will have a minor economic impact, a Regulatory Impact Statement is not required. The OBPR reference number is 25545.

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 B.

Consultation

Major carriers and carriage service providers, the Australian Competition and Consumer Commission, the Australian Communications and Media Authority and the Home Affairs portfolio were consulted. Those consulted agreed that the sunsetting Determination should be remade.

Attachment A

Notes on the Telecommunications (Carrier Licence and Nominated Carrier Declaration Exemption—Wireless Network Unit) Determination 2019

Section 1 provides that the name of the instrument is the Telecommunications (Carrier Licence and Nominated Carrier Declaration Exemption—Wireless Network Unit) Determination 2019 (the Determination).

Section 2 provides that the instrument will commence on the day it is registered.

Section 3 provides that the source of authority for making the Determination is subsection 51(1) of the Telecommunications Act 1997.

Section 4 sets out relevant definitions for the instrument.

There is a note at the beginning of section 4 of the Determination indicating that a number of expressions used in the instrument are defined in section 7 of the Act, it includes a list of terms that are defined in the Act.

The term Act means the Telecommunications Act 1997.

The term fixed line network means a network made up of one or more line links. A line link is defined in section 30 of the Act to mean lines that are connected to one another, where a line is a wire, cable, optical fibre, tube, conduit, waveguide or other physical medium used, or for use, as a continuous artificial guide for or in connection with carrying communications by means of guided electromagnetic energy, as per section 7 of the Act.

The term Wireless Network Unit means a network unit which is a base station that is part of a terrestrial radiocommunications customer access network. A base station that is part of a terrestrial radiocommunications customer access network is one that satisfies all of the characteristics under subsection 34(1) of the Act.

Section 5 provides that each instrument that is specified in a Schedule to the instrument is amended or repealed as set out in the Schedule, and that any other item has effect according to its terms. Only one instrument is specified in the Schedule; the sunsetting Determination, entitled ‘Determination under subsection 51(1) (No. 1 of 2002)’.

Section 6 sets out when a Wireless Network Unit is to be exempt from section 42 of the Act.

A Wireless Network Unit is to be exempt where it satisfies both paragraph (a) and (b).

A Wireless Network Unit satisfies paragraph (a) where the unit is used to supply a carriage service to users where the users are not in a distinct place from the Wireless Network Unit.

A distinct place is defined in section 36 of the Act. Places are essentially distinct unless they are:

• in the same property (i.e. situated on a property subject to a single freehold or leasehold title);
• contiguous properties and the same person is the principal user of those properties; or
• the same eligible Territory (i.e. the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands or any prescribed external Territory, as defined in section 7 of the Act).

A Wireless Network Unit satisfies paragraph (b) where a carrier licence or nominated carrier declaration would not be required for a fixed line network supplying a carriage service under the same circumstances as referred to in paragraph (a) (i.e. supplying a carriage service to users that are not in a distinct place from the fixed line network).

This second requirement is designed to prevent disparity in regulatory licensing outcomes between fixed line networks and wireless based networks that are used to supply carriage services under the same circumstances. For example, if at any time in the future the Minister were to determine under section 29 of the Act that a specified line-link (a fixed line facility) within a distinct place was a network unit, then by operation of paragraph (b), a Wireless Network Unit supplying a carriage service under the same circumstances would no longer be exempt from the licensing/declaration requirements under section 42.

Schedule

The schedule lists one instrument to be repealed, namely, Determination under subsection 51(1) (No. 1 of 2002).

Attachment B

Statement of Compatibility with Human Rights

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

Telecommunications (Carrier Licence and Nominated Carrier Declaration Exemption—Wireless Network Unit) Determination 2019

This Determination 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 Telecommunications (Carrier Licence and Nominated Carrier Declaration Exemption—Wireless Network Unit) Determination 2019

The Telecommunications (Carrier Licence and Nominated Carrier Declaration Exemption—Wireless Network Unit) Determination 2019 (the Determination) is made under subsection 51(1) of the Telecommunications Act 1997 (the Act). The Determination exempts Wireless Network Units from the application of section 42 of the Act where certain requirements are met.

Section 42 of the Act prohibits the owner of a network unit from using the unit to supply a carriage service to the public without a carrier licence or a nominated carrier declaration being in force in relation to the unit. Subsection 51(1) empowers the Minister to determine by legislative instrument that section 42 does not apply in relation to a specified network unit, a specified person or a specified use of a network unit.

The Determination repeals and remakes the Determination under subsection 51(1) (No. 1 of 2002), which is due to sunset on 1 October 2019. The 2002 Determination was operating effectively, and is remade in substantially the same form.

The Determination will exempt the owners of Wireless Network Units from the requirement to hold a carrier licence or for a nominated carrier declaration to be in force where the Wireless Network Unit is used to supply a carriage service to users in the same distinct place as the network unit, and a carrier licence or nominated carrier declaration would not be required in respect of the use of a fixed-line network in the same circumstances.

The Determination is intended to continue to allow businesses like cafés, hotels and airport lounges to provide wireless local area networks (‘WiFi hotspots’) to customers within their premises on a paid or incidental basis without first obtaining a carrier licence. The Determination prevents an undue regulatory burden falling on those businesses.

Human rights implications

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

Conclusion

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