EXPLANATORY STATEMENT
Telecommunications Act 1997
Telecommunications (Carrier Licence Exemption) Determination 2009 (No. 1)
Issued by the authority of the Minister for Broadband, Communications
and the Digital Economy
Subsection 51(1) of the Telecommunications Act 1997 (the Act) enables the Minister to determine that section 42 of the Act does not apply in relation to a specified:
(a) network unit; or
(b) person; or
(c) use of a network unit.
Section 42 of the Act provides that a network unit must not be used to supply a carriage service to the public without a carrier licence or a nominated carrier declaration (which enables a nominated telecommunications carrier to assume the responsibilities imposed on another telecommunications carrier in relation to specified network units). Therefore subsection 51(1) of the Act in effect enables the Minister to exempt a specified network unit, a specified person, or a specified use of a network unit, from the licensing requirements. The expression ‘network unit’ is defined in Division 2 Part 2 of the Act and includes ‘line links’ such as optical fibre cable.
The Telecommunications (Carrier Licence Exemption) Determination 2009 (No. 1) (the Determination) is made by the Minister under subsection 51(1) of the Act and exempts specified uses of network units owned by QR Limited (QR) (formerly Queensland Rail), QR Network Pty Ltd (a wholly owned subsidiary of QR) and the Queensland Electricity Transmission Corporation Limited (Powerlink) from the licensing requirements of the Act.
Powerlink applied for an exemption from the carrier licensing obligations contained in the Act to enable:
(a) Powerlink’s communications network to be used by Powerlink for the supply of train services to QR or QR’s wholly owned subsidiaries; and
(b) QR’s and QR Network’s communications network to be used by QR and QR Network for the supply of electricity services to Powerlink.
The Determination provides that, from the date of commencement of the Determination and until 1 July 2019, section 42 of the Act does not apply in relation to Powerlink’s use of its own telecommunications infrastructure, where that use is for the purpose of supplying certain rail-related services. It further provides that section 42 of the Act does not apply in relation to QR or QR Network’s use of its own telecommunications infrastructure, where that use is for the purpose of supplying certain electricity-related services during the same period.
The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Background
QR operates passenger and freight rail services in Queensland, New South Wales and Western Australia. QR Network (a wholly owned subsidiary of QR) is responsible for managing most fixed rail infrastructure in the State of Queensland as well as access to the infrastructure owned by licensed rail operators.
Powerlink is a Queensland government-owned corporation that owns, develops, operates and maintains Queensland’s high-voltage electricity transmission network.
Both entities own and operate back-haul fibre optic cable networks (hereafter referred to as ‘networks’) that are used principally for communications purposes associated with conducting their respective businesses. However, each entity also uses the other’s network for the purposes of its own business, such as undertaking monitoring of electricity load and capacity requirements, rail signalling and communications for train services in Queensland.
Powerlink provides communications services to QR in relation to QR’s train services. QR provides communications services to Powerlink in relation to Powerlink’s electricity supply services. Such shared use also allows for an element of system redundancy and removes the need to duplicate costly infrastructure.
Historically, both QR and Powerlink were part of the single legal entity, namely the Crown in right of the State of Queensland, and therefore, were not providing services outside their ‘immediate circle’ (for the purposes of section 44 of the Act). However, since the corporatisation of both QR and Powerlink, neither is within the same ‘immediate circle’. In continuing to provide telecommunications services to one another, both entities ordinarily would be required to hold a carrier licence accordance with section 42 of the Act, unless a ministerial exemption has been granted under section 51 to QR and Powerlink.
In considering whether to grant an exemption, the Minister has taken into consideration the following:
- the views of the Australian Communications and Media Authority (ACMA);
- the scope and duration of the exemption;
- competition and economic effects;
- the impact of not imposing carrier licensing obligations on a particular network unit, or owner or use of a network unit, including revenue losses to the Government and universal service contributions; and
- regulatory compliance costs.
On balance, it is considered that granting an exemption under section 51 of the Act in respect of the telecommunication services supplied by QR and Powerlink to one another is appropriate because, among other things, it will not adversely affect the long-term interests of end-users. Furthermore it is considered that granting an exemption will not have anti-competitive effects on the telecommunications market and will provide economic benefits from financial savings to both entities and their customers.
Consultation
The Department consulted extensively with the ACMA, QR, QR Network and Powerlink in the development of the Determination. The consultation canvassed competition and economic issues, any possible regulatory compliance costs as well as the impact of the Determination on the parties themselves. Further consultation was not considered necessary due to the limited operation of the Determination.
Notes on clauses
Clause 1 – Name of Determination
Clause 1 of the Determination provides for its citation as the Telecommunications (Carrier Licence Exemption) Determination 2009 (No. 1).
Clause 2 – Commencement
Clause 2 provides for the Determination to commence on the day after it is registered on the Federal Register of Legislative Instruments.
Clause 3 – Definitions
Clause 3 sets out the key definitions used in the Determination.
Permitted Electricity-related Services are carriage services provided to Powerlink necessary or desirable for managing the generation, transmission, distribution or supply of electricity or the charging for the supply of electricity.
Permitted Rail-related Services are carriage services provided to any one or more of QR or its wholly owned subsidiaries necessary or desirable for the workings of train services.
Powerlink Communications Infrastructure means telecommunications infrastructure owned by Powerlink. Powerlink does not conduct operations interstate and accordingly, does not own any communications network outside of the State of Queensland. As such, this term is limited to such infrastructure owned in the State of Queensland.
QR Network Communications Infrastructure means telecommunications infrastructure owned by QR or QR Network. QR and QR Network conducts operations interstate; it owns infrastructure in Queensland, News South Wales and Western Australia. As such, the definition of ‘QR Network Communications Infrastructure’ has not been limited to any particular State or Territory.
Powerlink, QR and QR Network are identified by the legislation under which each is constituted and the respective Australian Company Number (ACN) of each company.
Clause 4 – Cessation
Clause 4 provides that the Determination will cease on 1 July 2019. This date allows QR and Powerlink to manage their investment cycles while providing certainty as to the date of cessation.
This cessation date will arise slightly sooner than that date which would have applied as a result of the application of the sunsetting provisions of subsection 50(2) of the Legislative Instruments Act 2003. The specification of the date provides certainty to QR and Powerlink and will assist people reading the legislative instrument.
Clause 5 – Exemption
The exemption clause provides that the requirement in section 42 of the Act to hold a carrier licence if using a network unit to supply a carriage service to the public, does not apply in relation to specified services supplied by QR, QR Network and Powerlink.
Powerlink’s use of its own telecommunications infrastructure in the State of Queensland, to supply Permitted Rail-related Services is exempted from the section 42 requirement. This exemption applies to Powerlink’s provision of these services to QR or QR Network.
QR’s or QR Network’s use of its own telecommunications infrastructure, to supply Permitted Electricity-related Services is exempted from the section 42 requirement. This exemption applies to QR’s or QR Network’s provision of these services to Powerlink.