Explanatory Statement
Issued by the Authority of the Minister for Communications.
Telecommunications Act 1997
Telecommunications (Exceptions to Statutory Infrastructure Provider Obligations – Telstra and Opticomm Pty Ltd) Determination 2022
Authority
The Telecommunications (Exceptions to Statutory Infrastructure Provider Obligations – Telstra and Opticomm Pty Ltd) Determination 2022 (the Exceptions Determination) is made under subsections 360P(3) and 360Q(4) of the Telecommunications Act 1997 (the Act).
Purpose
The purpose of the Exceptions Determination is to specify exceptions to statutory infrastructure provider (SIP) obligations for Telstra and Opticomm relating to the transfer of control of fibre-to-the-premises (FTTP) networks in 130 SIP service areas. The Exceptions Determination works together with another instrument, the Telecommunications (Designated Service Area and Statutory Infrastructure Provider) Amendment Declaration (No. 5) 2022 (the Amending Declaration) to provide a framework for the phased transfer of SIP responsibilities from Telstra to Opticomm in relation to these service areas, which are known collectively as the ‘Velocity’ estates and include Telstra’s FTTP network in South Brisbane.
Background
The SIP regime
The SIP regime is set out in Part 19 of the Act and commenced on 1 July 2020. It aims to ensure that all people in Australia can access high speed broadband services. Under the Act, NBN Co is the default SIP for Australia, reflecting its role in the market. However, the SIP regime provides for alternative carriers to be the SIPs for the geographic areas where they deploy telecommunications networks. This recognises that there is a competitive market in Australia for the provision of telecommunications networks.
The key obligations of SIPs are to connect premises in their service areas to their telecommunications networks (section 360P), and supply wholesale services (section 360Q), on reasonable request from a carriage service provider (CSP) acting on behalf of an end-user within the designated SIP area. The wholesale services must allow the retail provider to supply ‘qualifying carriage services’, which are broadband services with peak download and upload speeds of at least 25/5 Mbps. On fixed-line or fixed wireless networks, the wholesale services SIPs supply must also enable retail providers to supply voice services. SIPs must also publish the terms and conditions on which they offer to connect premises and supply eligible services to carriage service providers.
Under section 360Z of the Act, the ACMA is required to maintain a register which, amongst other things, must contain the name of each SIP and, for each of those SIPs, the relevant service area or areas. The ACMA will update its register to reflect that both Opticomm and Telstra are being designated as the SIPs for the Velocity estates. The data will also be available for display on the National Map.
Telstra – Opticomm network transfer
Telstra is the SIP for 130 designated service areas in the Velocity estates. On 24 December 2020, Telstra and Uniti announced that they had entered into a commercial agreement relating to the Velocity estates. The ownership of the Telstra FTTP networks in the estates passed to Uniti at that date, but Telstra retained operational control of the networks pending a transition process. As such it has continued to be responsible for connecting premises to the networks, and for providing wholesale services under the SIP regime. It has therefore remained the SIP for the estates until now.
The transition process will commence soon. While it is anticipated to be completed in about one year, there is potential for delay and so the Amending Declaration and the Exemptions Determination allow for a transition period that ends by 1 July 2025.
Under the transition process, Telstra’s 130 SIP service areas in the Velocity estates are divided into 533 smaller areas, known as ‘Fibre Distribution Hub areas’ or FDHAs. For each of those 533 FDHAs, there is a scheduled date during the transition period for premises in the FDHA to be disconnected from the Telstra network, and then connected to the Opticomm network. Opticomm and Telstra have jointly published a Transition Roadmap and Schedule which includes transition commencement and end dates for each FDHA. This is available at https://www.telstrawholesale.com.au/products/product-exits-and-solutions/fibre-access-broadband.html and at https://www.opticomm.com.au/velocity/.
The transition process will involve the disconnection of Telstra’s equipment and the installation of new equipment owned by Uniti’s subsidiary, Opticomm. Both Telstra and Opticomm have stated that the process at any individual premises will be completed in a single day, meaning disruptions to service for end-users should be limited. Once the Opticomm equipment has been installed, Opticomm will fully control the networks and take over the role of providing network connectivity and wholesale services in the Velocity estates. As such, it should also be the SIP for the estates.
The role of the Exceptions Determination in the transition
The Exceptions Determination and the Amending Declaration establish a framework for SIP obligations in the Velocity estates to transfer from Telstra to Opticomm on a phased basis during the transition period, consistent with the Transition Roadmap and Schedule. The objective is to deliver a smooth and streamlined switchover for end-users and maintain continuity of service.
The Amending Declaration inserts key definitions and interpretive clauses into the Telecommunications (Designated Service Area and Statutory Infrastructure Provider) Declaration (No. 1) 2020 that are required to establish the framework for the transition. It makes both Telstra and Opticomm SIPs for the Velocity estates during the transition period, with Opticomm becoming the sole SIP for the estates after the transition period ends.
The Exceptions Determination performs three key functions.
First, it defines a Premises Transition Date, which establishes a time when individual premises are transferred from Telstra’s operational control to Opticomm’s.
Second, the Exceptions Determination specifies exceptions from Telstra’s and Opticomm’s SIP obligations as follows:
Opticomm does not have to fulfil SIP obligations at individual premises prior to the Premises Transition Date for those premises.
Telstra does not have to fulfil SIP obligations at individual premises after the Premises Transition Date for those premises.
Third, the Exceptions Determination specifies conditions in relation to the exceptions. The exceptions only apply if the conditions are met. The conditions are:
Telstra and Opticomm have executed an agreement on the operational measures required to comply with a request to fulfil SIP obligations.
Details of those measures are made available on their respective websites.
The details remain on the websites during the transition period.
The agreement remains in force during the transition period.
Consultation
The Department of Infrastructure, Transport, Regional Development, Communications and the Arts consulted Opticomm and Telstra on the two instruments, and also consulted NBN Co Limited, as the default SIP for Australia, consumer and industry representatives and the ACMA, as the regulator for the SIP regime. These organisations did not raise any concerns with the instruments.
Legislative requirements
The Exceptions Determination is a legislative instrument for the purposes of the Legislation Act 2003 and therefore subject to the default consultation and disallowance requirements under that Act. The instrument will be repealed on the day after 1 July 2025. The Exceptions Determination commences the day after it is registered.
The Exceptions Determination is covered by a standing Regulatory Impact Statement (RIS) exemption issued by the Office of Best Practice Regulation (OBPR), as the regulatory impacts of the Exceptions Determination are minor and/or machinery in nature, and were considered and costed as part of the implementation of the wider SIP regime (OBPR ID: 44338).
Details of the Exceptions Determination are set out in Attachment A.
Statement of Compatibility with Human Rights
A statement of compatibility with human rights for the purposes of Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is set out at Attachment B.
Attachment A
Details of the Telecommunications (Exceptions to Statutory Infrastructure Provider Obligations – Telstra and Opticomm Pty Ltd) Determination 2022
Section 1 – Name
This section provides that the name of the instrument is the Telecommunications (Exceptions to Statutory Infrastructure Provider Obligations – Telstra and Opticomm Pty Ltd) Determination 2022 (the Exceptions Determination).
Section 2 – Commencement
This section provides for the Exceptions Determination to commence immediately after the commencement of the Amending Declaration. That instrument must commence before the Exceptions Determination because it establishes that both Telstra and Opticomm are the SIPs for the Velocity estates.
Section 3 – Authority
This section provides that the Exceptions Determination is made under subsections 360P(3) and 360Q(4) of the Telecommunications Act 1997 (the Act). Subsection 360P(3) permits the Minister to determine, by legislative instrument, circumstances in which a SIP does not have an obligation to connect premises to its networks. Subsection 360Q(4) similarly permits the Minister to determine, by legislative instrument, circumstances in which a SIP does not have an obligation to supply eligible services to a carriage service provider (CSP) in order that the CSP can provide qualifying carriage services to end-users at premises
Section 4 – Interpretation
Subsection 4(1) provides definitions of key terms used in the Exceptions Determination.
The Note at the start of Section 4 provides that the expressions carriage service provider, designated service area and statutory infrastructure provider are defined in the Act.
The term Premises Transition Date is defined in relation to individual premises in the Velocity estates. It means either the day on which Telstra has disconnected all Telstra-Equipped Services supplied to the premises, or, if Telstra was not supplying Telstra-Equipped Services, the date published on Telstra’s and Opticomm’s respective websites after which Telstra-Equipped Services are not to be supplied. The definition is used in the exceptions specified at section 5 below, and helps determine when Telstra is no longer required to fulfil SIP requests in relation to premises, and therefore Opticomm instead must fulfil those requests.
A number of the key terms are defined to have the meanings specified in the Telecommunications (Designated Service Area and Statutory Infrastructure Provider) Declaration (No. 1) 2020. Some of these terms are being introduced by the Amending Declaration. These include Telstra-Equipped Services, Transition Period and Transition End Date. Further discussion of these definitions will be found in the explanatory statement to the Amending Declaration.
Section 4 includes definitions of Opticomm Pty Ltd and Telstra. Opticomm Pty Ltd is defined by reference to its Australian Company Number. Telstra is defined to mean either Telstra Corporation Limited or Telstra Limited. Both of these entities are defined by reference to their Australian Company Numbers.
The use of both Telstra Corporation Limited and Telstra Limited in the Exceptions Determination reflects the restructure of Telstra into different corporate entities, which will see Telstra assets and business lines split between different entities from 1 January 2023. Under the restructure, operational control of the FTTP networks in the Velocity estates will be transferred from Telstra Corporation Limited to Telstra Limited, and so the Amending Declaration provides for Telstra Limited to become the SIP for the estates when the restructure takes effect. As the restructure will take effect during the transition period covered by the Amending Declaration and the Exceptions Determination, the two instruments therefore accommodate it.
Subsection 4(2) provides further information on when the change from Telstra Corporation Limited to Telstra Limited will take effect. This states that, for the purposes of the definition of Telstra at subsection 4(1), Telstra will only mean Telstra Limited if Schedules 2 and 3 of the Telstra Corporation and Other Legislation Amendment Act 2021 (the Telstra Amendment Act) commence. In all other circumstances, Telstra means Telstra Corporation Limited.
Schedules 2 and 3 of the Telstra Amendment Act commence when any of the property of Telstra Corporation Limited is transferred to, and vested in, Telstra Limited by virtue of a court order. A court order was made on 19 October 2022. As noted above, property, including control of the FTTP networks in the Velocity estates, will be transferred from Telstra Corporation Limited to, and vested in, Telstra Limited on 1 January 2023.
Section 5 – Exception to statutory infrastructure provider obligations
Section 5 specifies two exceptions to the SIP obligations in sections 360P and 360Q of the Act, which concern connecting premises and supplying wholesale services in order that a CSP can supply broadband and voice services to an end-user. Section 5 also specifies conditions that must be met for the exceptions to have effect.
First, Opticomm will not have to fulfil a SIP connection or supply request if it receives a request from a CSP, and that request is made prior to the Premises Transition Date of the premises specified in the request. This exception will mean that Opticomm would not be required to fulfil SIP obligations before it is capable of doing so, because the premises are still being supplied with Telstra-Equipped Services (or capable of being supplied).
Second, Telstra will not have to fulfil a SIP connection or supply request if it receives a request from a CSP, and that request is made after the Premises Transition Date of the premises specified in the request. This exception will mean that Telstra would not be required to fulfil SIP obligations when it is no longer capable of doing so, because Telstra-Equipped Services have been disconnected and the network is now under the operational control of Opticomm (or the premises are in an area that is now serviced by Opticomm).
There are four conditions specified in relation to the operation of the exceptions.
First, the exceptions only have effect if Telstra and Opticomm execute an agreement, as soon as practicable but no later than 55 business days after the commencement of the Exceptions Determination, on the operational measures they will put in place to enable them to comply with a request by a CSP for a SIP connection or SIP service. The timeframe of 55 business days was considered to provide adequate time to complete the agreement.
The operational measures would be expected to include how both SIPs will handle requests. For example, if Opticomm receives a request from a CSP to connect premises where it is not required to fulfil SIP requests, then Opticomm could refer the CSP to Telstra, or forward the request to Telstra and advise the CSP that it has done so, and Telstra would be expected to have processes in place for managing such requests. Similarly, if Telstra receives the request after it has disconnected its equipment and is no longer required to fulfil SIP requests, then Telstra should liaise with Opticomm to make sure that the request is fulfilled.
Ultimately, the operational measures must provide for access to qualifying carriage services for end-users in the Velocity estates, so that requests are fulfilled by the appropriate SIP, and there are not extended delays caused by a lack of coordination between the two SIPs.
The second condition is that Telstra and Opticomm must make available details of the operational measures on their respective websites as soon as practicable but no less than 65 business days after the commencement of the Exceptions Determination. This will mean that there is a public commitment to coordination between the two SIPs, and also transparency for end-users about the arrangements.
Third, the agreement between Telstra and Opticomm must remain in force during the Transition Period. If the agreement is not in force, then there may not be coordination between the two SIPs and clarity for end-users, and so the exceptions should not apply.
Fourth, the details of the operational measures must remain on Telstra’s and Opticomm’s respective websites during the Transition Period. This will mean that there is ongoing transparency of the measures for the public.
Subsection 5(4) is an interpretive clause and provides that a request includes a notional request by Telstra to itself. Telstra supplies the majority of SIP services within the Velocity estates directly to end-users, rather than through an intermediary CSP. As such, it would not ordinarily receive a request from a CSP, but from an end-user. It will be understood to make a notional request to itself, enabling it to accept or refuse the request as appropriate in line with the exceptions.
Section 6 – Repeal
Section 6 provides that the Exceptions Determination is repealed on the day after 1 July 2025. The date has been chosen to be consistent with the last possible date for the Transition End Date. Should the Transition End Date have occurred prior to 1 July 2025, the Exceptions Determination would remain in force until 1 July 2025, but would no longer have any work to do as Opticomm would then be the SIP for the Velocity estates, and the exceptions would have ceased as they only apply during the Transition Period.
Attachment B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Telecommunications (Exceptions to Statutory Infrastructure Provider Obligations – Telstra and Opticomm Pty Ltd) Determination 2022
Overview
The purpose of the Telecommunications (Exceptions to Statutory Infrastructure Provider Obligations – Telstra and Opticomm Pty Ltd) Determination 2022 (the Exceptions Determination) is to specify exceptions to statutory infrastructure provider (SIP) obligations for Telstra and Opticomm relating to fibre-to-the-premises (FTTP) networks in 130 SIP service areas. The Exceptions Determination works together with another instrument, the Telecommunications (Designated Service Area and Statutory Infrastructure Provider) Amendment Declaration (No. 5) 2022 (the Amending Declaration), to provide a framework for the phased transfer of SIP responsibilities from Telstra to Opticomm in relation to these service areas, which are known collectively as the ‘Velocity’ estates and include Telstra’s FTTP network in South Brisbane.
On 24 December 2020, Telstra announced that it had sold the networks in the Velocity estates to Uniti. Uniti’s subsidiary, Opticomm, has entered into a commercial arrangement with Telstra which will see a phased transfer of the networks. Telstra will disconnect its equipment at premises and Opticomm will then connect its equipment. This process will commence shortly.
The Amending Declaration provides that Telstra and Opticomm will be the joint SIPs for the Velocity estates, until such time as all Telstra equipment has been disconnected, or 1 July 2025 (whichever is the earlier). After that time, Opticomm alone will be the SIP. The Exceptions Determination sets out when Telstra and Opticomm respectively are required (or not required) to fulfil their SIP obligations in the Velocity estates during the transition period.
Together, the instruments provide for a smooth and streamlined transfer of SIP responsibilities while preserving continuity of service for people at premises in the Velocity estates. This will support ongoing access to telecommunications, which is important for social, economic, cultural and political participation.
Human rights implications
The Amending Declaration is compatible with the rights and freedoms recognised or declared by the international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 as they apply to Australia.
The Amending Declaration does not engage any of the applicable rights or freedoms.
Conclusion
The Amending Declaration is compatible with human rights as it does not raise any human rights issues.