EXPLANATORY STATEMENT
Telecommunications (Carrier Licence Charges) Act 1997
Determination under Paragraph 15(1)(b) No. 1 of 2011
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 $12,223,338 is the amount determined to be the proportion of ACCC’s cost for the 2009-10 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 was enacted to regulate the method of calculating annual charges imposed on carrier licences held by telecommunications carriers, thereby addressing the need for a structured and fair approach to cost allocation for regulatory activities related to telecommunications. The Act was passed by the Commonwealth Parliament to ensure that the costs associated with the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC) in their telecommunications functions are appropriately recovered from carriers. This legislative framework aims to maintain the efficiency and effectiveness of the regulatory environment while ensuring that the financial burden is fairly distributed among the telecommunications carriers.
Under the Act, the total charges on carrier licences are determined by a combination of factors, including the proportion of costs attributable to telecommunications functions and powers of the ACMA and ACCC, and other specified contributions. In 2011, the Australian Competition and Consumer Commission issued a determination under paragraph 15(1)(b) of the Act, setting the proportion of ACCC’s costs for the 2009-10 financial year attributable to its telecommunications functions and powers at $12,223,338. This determination was made without consultation as the calculation was based on actual costs incurred by the ACCC, maintaining consistency with prior years. The assessment of the impact on business compliance costs indicated low or no cost, reflecting the streamlined and practical approach to the regulatory framework.
Scope and Application
The Telecommunications (Carrier Licence Charges) Act 1997 applies to telecommunications carriers who hold a carrier licence in Australia, establishing the framework for the calculation of annual charges imposed on these licences. This Act ensures that the total charges do not exceed a specified sum which includes the Australian Communications and Media Authority's (ACMA) and the Australian Competition and Consumer Commission's (ACCC) costs related to telecommunications functions, a proportion of the Commonwealth's contribution to the International Telecommunication Union, and other related costs. The Act is of national scope, applicable across the Commonwealth of Australia, and affects entities involved in telecommunications services. The Act allows for the creation of subordinate instruments to further refine or expand its application, such as the determination of specific costs attributable to regulatory functions. However, the Determination under paragraph 15(1)(b) No. 1 of 2011 specifically addresses the ACCC's costs for the 2009-10 financial year related to telecommunications functions, setting a particular amount for that year without requiring consultation as the calculation was based on actual costs incurred by the ACCC.
Key Provisions
The main operative sections of the Telecommunications (Carrier Licence Charges) Act 1997 (the Act) are Sections 15(1) and 15(4)(b). Section 15(1) sets out the method of calculating the annual charges that apply to carrier licences held by telecommunications carriers. It stipulates that these charges must not exceed the sum of certain costs and contributions, as defined in subsections (a) to (d). Section 15(4)(b) defines "costs" and specifies that, in relation to the Australian Competition and Consumer Commission (ACCC), these costs mean amounts treated as expenses of the ACCC according to accrual-based accounting principles.
The Act imposes several obligations and requirements on the parties it governs. The Australian Communications and Media Authority (ACMA) and the ACCC are mandated to determine the proportion of their respective costs attributable to their telecommunications functions and powers. The ACMA is also responsible for calculating the proportion of the Commonwealth's contribution to the budget of the International Telecommunication Union (ITU) to be recovered from carriers. The Minister, on the other hand, must determine the estimated total amount of grants likely to be made during the financial year under section 593 of the Telecommunications Act 1997.
Any breaches of the provisions outlined in the Act may result in civil or criminal consequences. While the Explanatory Statement does not specify exact penalties, under Australian law, breaches of statutory requirements can lead to fines, legal action, and potential reputational damage. The severity of the penalty typically depends on the nature and extent of the breach, as well as any associated harm caused. For instance, failure to comply with the requirements for calculating carrier licence charges could potentially lead to financial penalties or legal sanctions against the responsible entities.