EXPLANATORY STATEMENT
Telecommunications (Carrier Licence Charges) Act 1997
Determination under Paragraph 15(1)(b) No. 1 of 2015
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 $14,974,676 is the amount determined to be the proportion of ACCC’s cost for the 2013-14 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.
Overview
The Telecommunications (Carrier Licence Charges) Act 1997, enacted by the Commonwealth Parliament, was introduced to establish a method for calculating annual charges applicable to carrier licences held by telecommunications carriers. The Act aims to ensure that the total charges imposed on carrier licences do not exceed certain specified costs, including those attributable to the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC) for their telecommunications functions and powers, as well as other specified amounts. The 2015 Determination, made under paragraph 15(1)(b) of the Act by the Australian Competition and Consumer Commission, provides that the proportion of the ACCC's costs for the 2013-14 financial year attributable to its telecommunications functions and powers is $14,974,676. This Determination was made without consultation as it is based on actual costs incurred by the ACCC in its regulatory role.
Scope and Application
The Telecommunications (Carrier Licence Charges) Act 1997 applies to telecommunications carriers who hold a carrier licence and mandates the calculation of annual charges imposed on these licences. The Act outlines a specific method for determining these charges, ensuring they do not exceed certain calculated amounts, including the proportion of costs attributable to the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC) for their telecommunications functions and powers. The Act is a Commonwealth statute and therefore applies nationally. The Act does not explicitly exclude any persons or entities, but the charges are specifically directed towards those who hold a carrier licence within the telecommunications industry. The Act can extend its application through subordinate instruments, such as the recent determination by the ACCC regarding the proportion of its costs attributable to telecommunications functions. This determination, amounting to $14,974,676 for the 2013-14 financial year, is made without consultation as it is based on actual costs incurred by the ACCC.
Key Provisions
The Telecommunications (Carrier Licence Charges) Act 1997 (the Act) lays out the framework for determining the annual charges that apply to carrier licences held by telecommunications carriers. Specifically, section 15(1) of the Act mandates that the total charges imposed on these licences must not surpass a certain sum calculated based on various costs and contributions. These costs 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 that are linked to their telecommunications functions and powers (subsection 15(1)(a) and (b)). It also includes the proportion of the Commonwealth's contribution to the budget of the International Telecommunication Union (ITU) for the calendar year in which the financial year begins (subsection 15(1)(c)). Additionally, the charges account for any amounts paid under section 136C of the Telecommunications Act 1997 during the preceding financial year (subsection 15(1)(ca)), and the estimated total amount of grants likely to be made under section 593 of the same Act during the financial year (subsection 15(1)(d)).
Entities governed by the Act, primarily telecommunications carriers, are required to comply with the determined charges as set out in the determination. These charges are based on the calculations made by the ACMA and the ACCC, as well as other stipulated factors. The carriers must ensure that their licence fees align with the amounts specified in the determination, which is calculated based on the actual costs incurred by the regulatory bodies in performing their telecommunications-related functions. Furthermore, the determination process itself is transparent and consistent with prior years, as it is based on actual costs and accrual-based accounting principles.
Failure to comply with the determined charges could potentially result in legal repercussions. While specific penalties for non-compliance are not detailed in the provided text, it can be inferred that the Act likely includes provisions for enforcement and penalties for carriers that do not adhere to the mandated charge structure. Non-compliance could lead to civil or criminal consequences, including fines or other legal actions, as typically enforced under similar legislative frameworks.
The Act also includes provisions for the creation of legislative instruments, such as the determination made under subsection 15(1) of the Act, which serves to formally set the annual charges for telecommunications carriers. This determination is a critical component in ensuring that the charges are fair and reflective of the actual costs associated with telecommunications regulation. The process for calculating these costs, as outlined in paragraph 15(4)(b) of the Act, ensures that the charges are based on accrual-based accounting principles, providing a clear and transparent methodology.