EXPLANATORY STATEMENT
Telecommunications (Carrier Licence Charges) Act 1997
Determination under Paragraph 15(1)(b) No. 1 of 2010
Issued by the Australian Competition & Consumer Commission
Legislative Provisions
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 telecommunications carriers. Subsection 15(1) of the Act provides 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 ACMA's costs for the immediately preceding financial year that is attributable to the ACMA'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
(ca) the amount determined, by a written instrument made by the ACMA, to be the sum of the amounts paid under section 136C of the Telecommunications Act 1997 during the immediately preceding financial year; 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.
Paragraph 15(4)(b) of the Act defines “costs” and provides that in relation to the ACCC, costs means an amount that, in accordance with accrual-based accounting principles, is treated as a cost of the ACCC. This amount has been calculated in accordance with those principles.
A Determination made under subsection 15(1) of the Act is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Purpose
The Determination has been made for the purposes of paragraph 15(1)(b) of the Act. The determination provides that $11,767,358 is the amount determined to be the proportion of ACCC’s cost for the 2008-09 financial year that is attributable to the ACCC’s telecommunications functions and powers.
Consultation
The ACCC did not consult in the calculation of the costs that are attributable to the ACCC’s telecommunications functions and powers under paragraph 15(1)(b) of the Act. Consultation was not undertaken as the calculation of costs is based on actual costs incurred directly by the ACCC in undertaking its regulatory role. This methodology is the same as in prior years.
The Best Practice Regulation Preliminary Assessment was completed and this assessed the impact on business of compliance costs as low or no cost.
Overview
The Telecommunications (Carrier Licence Charges) Act 1997, enacted by the Commonwealth Parliament, establishes a framework for the calculation of annual charges applicable to carrier licences held by telecommunications carriers. This legislation was introduced to address the need for a transparent and equitable method of allocating costs related to the regulatory functions of the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC) to telecommunications carriers. The explanatory statement accompanying the 2010 Determination under Paragraph 15(1)(b) No. 1 of the Act, issued by the ACCC, confirms that the calculation of costs attributable to the ACCC's telecommunications functions and powers is based on actual costs incurred, consistent with accrual-based accounting principles. The policy objective of this Act is to ensure that the charges imposed on carriers accurately reflect the costs associated with their regulatory oversight, thereby maintaining a balanced and efficient telecommunications market.
Scope and Application
The Telecommunications (Carrier Licence Charges) Act 1997 governs the calculation of annual charges applicable to carrier licences held by telecommunications carriers in Australia. This Act applies specifically to telecommunications carriers, ensuring they contribute towards the regulatory costs incurred by the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC) in relation to their telecommunications functions. The Act delineates the maximum total charges that can be imposed on carrier licences at the start of each financial year, establishing a cap that must not be exceeded. This cap is determined by a written instrument and encompasses the proportion of the ACMA's and ACCC's costs attributable to telecommunications functions, the Commonwealth's contribution to the International Telecommunication Union, and other specified amounts. The geographic reach of the Act is national, applying across Australia. Subordinate instruments may further extend or restrict the application of the Act, though in this instance, the determination is based on actual costs incurred and does not require consultation as per the legislative framework.
Key Provisions
The Telecommunications (Carrier Licence Charges) Act 1997 (the Act) sets out the method of calculating the annual charges that apply to carrier licences held by telecommunications carriers. Section 15(1) of the Act requires that the total charges imposed on carrier licences at the beginning of a financial year must not exceed a specific sum, which includes various components calculated by different authorities. These components include the proportion of the Australian Communications and Media Authority's (ACMA) and the Australian Competition and Consumer Commission's (ACCC) costs for the preceding financial year, attributable to their telecommunications functions and powers, as well as the Commonwealth's contribution to the budget of the International Telecommunication Union and other specific amounts (subsections 15(1)(a)-(d)). The proportion of the ACCC's costs for the 2008-09 financial year that is attributable to its telecommunications functions and powers has been determined to be $11,767,358 under paragraph 15(1)(b) of the Act, as detailed in the Explanatory Statement.
The Act imposes obligations on telecommunications carriers to pay the annual charges as calculated under section 15(1). It mandates that the ACMA, the ACCC, and the Minister for Communications determine specific components of the charges based on written instruments and calculations that adhere to accrual-based accounting principles. Paragraph 15(4)(b) clarifies that the term "costs" in relation to the ACCC means an amount treated as a cost of the ACCC according to these principles. The determination process for the proportion of the ACCC's costs is consistent with prior years and does not involve consultation as it relies on actual costs incurred by the ACCC.
Breach of the requirements under the Act may result in legal consequences for the telecommunications carriers. Although the Explanatory Statement does not explicitly detail specific offences, penalties, or consequences for non-compliance, the Act's legislative framework suggests that failure to pay the determined charges could lead to enforcement actions by the relevant authorities. The determination is a legislative instrument under the Legislative Instruments Act 2003, indicating a formal and binding nature of the charges set forth by the Act. The Best Practice Regulation Preliminary Assessment completed by the ACCC indicates that the impact on business of compliance costs is low or no cost, suggesting that the regulatory burden is minimal for carriers adhering to the Act's provisions.