EXPLANATORY STATEMENT
Telecommunications Act 1997
Telecommunications (Carrier Licence Exemption) Determination 2012 (No. 2)
Issued by the authority of the Minister for Broadband, Communications
and the Digital Economy
Authority
Paragraph 51(1)(c) 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 use of a network.
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).
Purpose
The purpose of the Telecommunications (Carrier Licence Exemption) Determination 2012 (No. 2) (the Determination) is to exempt specified uses of network units owned by Ausgrid from the licensing requirements of section 42 of the Act. The specified uses relate to the operation of smart meters by utilities participating in the ‘Smart Grid, Smart City’ project. This exemption is considered necessary as it will promote the efficient use of smart metering technology by certain power and water utilities in the Hunter Valley and Sydney regions without imposing carrier licence obligations on Ausgrid.
The Determination provides that, from the date of commencement of the Determination and until 30 June 2015, section 42 of the Act does not apply to the use of Ausgrid’s communications infrastructure in support of smart metering equipment operated by Hunter Water and Sydney Water. The granting of this carrier licence exemption eliminates the need to duplicate costly infrastructure and furthers the Government’s policy aim of encouraging the rollout of smart metering technology.
Background
Ausgrid is a state-owned corporation. Ausgrid owns and manages an electricity distribution and transmission network in New South Wales. Hunter Water supplies water and waste water services to the lower Hunter region of New South Wales, and Sydney Water supplies water, waste water, recycled water and some stormwater services throughout Sydney, Illawarra and parts of the Blue Mountains.
As part of the ‘Smart Grid, Smart City’ project, Ausgrid will undertake a commercial trial of smart metering technology over several years in conjunction with the named water utilities. Ausgrid’s communications infrastructure will provide carriage services for data and related communications to be passed between the entities involved in the project, for the purpose of managing network demand and investigating new applications. Carriage services will not be provided directly to the public or other parties, nor will there be payment made for the provision of these services.
In January 2011, Ausgrid applied for a carrier licence exemption for the following purposes:
- to assist in meeting the objectives set out in the ‘Smart Grid, Smart City’ project sponsored by the Commonwealth Department of Resources, Energy and Tourism (DRET) to improve efficiency in the electricity distribution network, one of which was to investigate synergies with other utilities; and
- to provide the relevant parties involved, with the economic benefits associated with sharing a single communications network.
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) and DRET;
- the scope and duration of the exemption;
- potential 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 (for example, without an exemption, Ausgrid would be required to hold a carrier licence in order to supply communications services to the water utilities, which are outside its immediate circle (as defined in section 23) and these additional regulatory costs would impact negatively on its participation in the ‘Smart Grid, Smart City’ project.
It is considered that granting an exemption under section 51 of the Act in respect of the telecommunication services supplied by Ausgrid to Hunter Water and Sydney Water is appropriate because, among other things, it will not adversely affect the long-term interests of end-users. It is considered that granting an exemption will not have anti-competitive effects on the telecommunications market and would support the Government’s policy aims.
The Determination will apply until 30 June 2015, which will allow sufficient time for an evaluation of the project’s outcomes to be made, and for Ausgrid to determine what longer term arrangements should be put in place.
Consultation
The Department consulted with the ACMA, Ausgrid and DRET in the development of this Determination. The consultation canvassed issues of whether the water utilities were actually outside of Ausgrid’s immediate circle, the impact on the DRET project of not granting an exemption, and whether there were any competition implications. Further consultation was considered unnecessary because the scope of the exemption is relatively limited in terms of the area covered and the time involved, no direct services to the public are being supplied, and there was a clear need to support the objectives of the ‘Smart Grid, Smart City’ project.
The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Details of the accompanying Determination are set out in the Attachment.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Telecommunications (Carrier Licence Exemption) Determination 2012 (No. 2)
This Determination is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Regulation
Paragraph 51(1)(c) of the Telecommunications Act 1997 (the Act) enables the Minister to
determine that the carrier licensing obligations under section 42 of that Act do not apply in
relation to a specified use of a network unit.
The purpose of the Telecommunications (Carrier Licence Exemption) Determination 2012 (No. 2) is to exempt specified uses of network units owned by Ausgrid from the licensing requirements of section 42 of the Act. This is to enable Ausgrid to share its infrastructure with other utilities in the Hunter Valley and Sydney regions as part of a commercial trial of smart meters by utilities participating in the ‘Smart Grid, Smart City’ project. Ausgrid is a state owned corporation which owns and manages an electricity distribution and transmission network in NSW.
No human rights issues were raised during consultation on the draft Determination.
The exemption of specified uses of network units owned by Ausgrid from the licensing requirements of section 42 of the Act does not raise any human rights issues.
Human rights implications
This Determination does not engage any of the applicable rights or freedoms.
Conclusion
This Regulation is compatible with human rights as it does not raise any human rights issues.
ATTACHMENT
Details of the Telecommunications (Carrier Licence Determination) 2012 (No. 2)
Clause 1 – Name of the Determination
Clause 1 of the Determination provides that the name of the Determination is the Telecommunications (Carrier Licence Determination) 2012 (No. 2).
Clause 2 – Commencement
Clause 2 provides that the Determination commences on the day after it is registered on the Federal Register of Legislative Instruments.
Clause 3 – Definitions
Clause 3 establishes the key definitions used in the Determination.
Act means the Telecommunications Act 1997.
Ausgrid means Ausgrid Pty Ltd (ABN 39 060 979 688), a statutory corporation constituted under the Energy Services Corporations Act 1995 (NSW).
Ausgrid Communications Infrastructure means telecommunications infrastructure owned by Ausgrid and situated in New South Wales.
Hunter Water means Hunter Water Corporation (ABN 46 228 513 446), a State Owned Corporation established under the Hunter Water Act 1991 (NSW).
Permitted Smart Metering Services means a carriage service provided to Hunter Water, Sydney Water, or any of their wholly owned subsidiaries, that is required for the management of water in a pipeline or charging for the supply of water in a pipeline.
Sydney Water means Sydney Water Corporation (ABN 49 776 225 038), a State Owned Corporation established under the Sydney Water Corporation Act 1994 (NSW).
To aid the reader, a note is inserted at the end of the clause identifying that the term carriage
service has the same meaning as in section 7 of the Act.
Clause 4 – 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 Ausgrid’s supply of the specified smart metering services to Hunter Water and Sydney Water.
Clause 5 – Cessation
Clause 5 provides that the Determination will cease on 30 June 2015. This allows sufficient time for Ausgrid to complete its initial commercial trial work under the ‘Smart Grid, Smart City’ project, and to assess what longer term arrangements should be put in place.