EXPLANATORY STATEMENT
Telecommunications (Carrier Licence Charges) Act 1997
Determination under Paragraph 15(1)(b) No. 1 of 2006
Issued by the authority of the Australian Competition & Consumer Commission (‘ACCC’)
The Telecommunications (Carrier Licence Charges) Act 1997 (the Act) sets out the method of calculating annual charges that apply to the carrier licences held by the telecommunications carriers. Subsection 15(1) of the Act states that the total of charges that are imposed on carrier licences in force at the beginning of a financial year must not exceed the sum of:
a) the amount determined, by a written instrument made by the ACMA, to be the proportion of the ACA's costs for the immediately preceding financial year that is attributable to the ACA's telecommunications functions and powers; and
b) the amount determined, by a written instrument made by the ACCC, to be the proportion of the ACCC's costs for the immediately preceding financial year that is attributable to the ACCC's telecommunications functions and powers; and
c) the amount determined, by a written instrument made by the ACMA, to be the proportion of the Commonwealth's contribution to the budget of the International Telecommunication Union for the calendar year in which the beginning of the financial year occurs that is to be recovered from carriers; and
d) the amount determined, in a written instrument made by the Minister, to be the estimated total amount of grants likely to be made during the financial year under section 593 of the Telecommunications Act 1997; and
e) the amount determined by the Industry Minister, by written instrument, to be the proportion of the Commonwealth's costs for the immediately preceding financial year that is attributable to the administration of Part 2 of Schedule 1 to the Telecommunications Act 1997.
The accompanying determination has been made for the purposes of paragraph 15(1)(b) of the Act. The determination provides that $7,945,653 is the amount determined to be the proportion of ACCC’s cost for the 2004-05 financial year that is attributable to the ACCC’s telecommunications functions and powers.
Paragraph 15 (4)(b) of the Act requires that the ACCC’s costs are to be calculated in accordance with accrual-based accounting principles. This amount has been calculated in accordance with those principles.
Subsection 15(2) of the Act provides that an instrument under subsection (1) must be notified in the Gazette before the day on which the charges referred to in subsection (1) becomes due for payment. Section 56 (1) of the Legislative Instruments Act 2003 states that a requirement to publish an instrument in the gazette is satisfied if the instrument is registered on the Federal Register of Legislative Instruments (‘FRLI’). The accompanying determination will therefore be published on FRLI, and will be tabled in Parliament and is subject to Parliamentary disallowance.
Overview
The Telecommunications (Carrier Licence Charges) Act 1997 was enacted to establish the framework for calculating annual charges on carrier licences held by telecommunications carriers. The legislation addresses the need for a transparent and equitable method of determining the financial contributions that telecommunications carriers must make, based on the costs incurred by regulatory bodies such as the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC) in relation to their telecommunications functions and powers. This Act was enacted by the Australian Parliament to ensure that the financial burden on telecommunications carriers is directly linked to the costs associated with regulating the telecommunications industry. The policy objective of the Act is to provide a structured approach to determining carrier licence charges, ensuring that they are neither excessive nor insufficient, thereby maintaining a balanced regulatory environment. The accompanying determination under paragraph 15(1)(b) made by the ACCC specifies the proportion of the ACCC's costs for the 2004-05 financial year attributable to telecommunications functions, calculated in accordance with accrual-based accounting principles.
Scope and Application
The Telecommunications (Carrier Licence Charges) Act 1997 applies to telecommunications carriers who hold a carrier licence under the Telecommunications Act 1997. The Act delineates the method for calculating the annual charges imposed on these licences, ensuring that the total charges for a financial year do not exceed the sum of specified costs and contributions. This includes the Australian Communications and Media Authority's (ACMA) costs attributable to telecommunications functions, the Australian Competition and Consumer Commission's (ACCC) costs related to telecommunications, the Commonwealth's contribution to the International Telecommunication Union, grants under the Telecommunications Act 1997, and the Commonwealth's costs for administering Part 2 of Schedule 1 to the Telecommunications Act 1997. The geographic reach of the Act is national, affecting all telecommunications carriers operating within Australia. The Act also mandates that certain costs are calculated in accordance with accrual-based accounting principles. The Act’s provisions can be extended or modified through subordinate instruments, which must be notified in the Gazette and registered on the Federal Register of Legislative Instruments, with the determination being subject to Parliamentary disallowance.
Key Provisions
The main operative sections of the Telecommunications (Carrier Licence Charges) Act 1997 (the Act) are sections 15(1) and 15(2). Section 15(1) sets out the criteria for calculating the annual charges on carrier licences, ensuring that these charges do not exceed a specified sum, which includes the proportions of costs attributable to the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC), as well as other costs related to telecommunications functions and powers (s 15(1)(a)-(e)). Section 15(2) mandates that these charges must be notified in the Gazette before they become due for payment (s 15(2)). The accompanying determination under paragraph 15(1)(b) specifies the proportion of ACCC’s costs for the 2004-05 financial year attributable to its telecommunications functions and powers, which is $7,945,653, calculated in accordance with accrual-based accounting principles as required by paragraph 15(4)(b) of the Act.
The Act imposes several obligations on the parties it governs. Firstly, the ACMA and the ACCC must determine their respective costs attributable to their telecommunications functions and powers for each financial year, as specified in section 15(1)(a) and (b) of the Act. Secondly, the Commonwealth must determine its contribution to the budget of the International Telecommunication Union, and the Industry Minister must determine the proportion of the Commonwealth's costs attributable to the administration of Part 2 of Schedule 1 to the Telecommunications Act 1997, as outlined in section 15(1)(c) and (e). Thirdly, the Minister must determine the estimated total amount of grants likely to be made during the financial year under section 593 of the Telecommunications Act 1997, as per section 15(1)(d). These determinations must be made in written instruments and must adhere to the accrual-based accounting principles.
The Act does not explicitly outline specific offences, penalties, or civil and criminal consequences for breach of its provisions. However, the requirement to notify the charges in the Gazette before they become due for payment, as stipulated in section 15(2), suggests that failure to comply with this notification requirement could lead to legal consequences, although the exact nature of these consequences is not detailed in the Act. Additionally, the accompanying determination, being subject to Parliamentary disallowance, implies that if the determination is deemed unsatisfactory, Parliament has the power to disallow it, thereby preventing the charges from taking effect.