EXPLANATORY STATEMENT
Issued by the authority of the Australian Communications and Media Authority
Telecommunications (Freephone and Local Rate Numbers) Allocation Determination Variation 2010 (No. 1)
Telecommunications Act 1997
PURPOSE
The Telecommunications (Freephone and Local Rate Numbers) Allocation Determination 2010 (No. 1) (the amending Determination) has been made by the Australian Communications and Media Authority (ACMA) to amend the Telecommunications (Freephone and Local Rate Numbers) Allocation Determination 2007 (No. 1) (the existing Determination). The purpose of the amending Determination is to amend the allocation system provided for under the existing Determination, which provides for public auction of specified freephone and local rate numbers (FLRN). The amendments are to achieve two things:
- To facilitate the repeal of the Telecommunications (Freephone and Local Rate Numbers – Charities) Allocation Determination 2007 (No. 1) (the Charities Determination)[1]. ‘Eligible charities’ who were able to register and apply for FLRN under the Charities Determination will now be able to register and apply for FLRN using the public auction process set out in the existing Determination;
- To reduce the nomination period that applies to FRLN from ten working days to four working days. The nomination period is the period between when a number is validly nominated for auction and the day the auction will be held for the number nominated.
LEGISLATIVE PROVISIONS
Under section 463 of the Telecommunications Act 1997 (the Act), the ACMA may, by written instrument, determine an allocation system for allocating specified numbers to carriage service providers (CSPs).
Subsection 463(6) of the Act requires that any such allocation system must provide for the successful applicant for a particular number, and the amount paid for the number, to be determined by reference to the results of a tender process, a public auction, or another process, carried out or conducted as provided by the system.
In 2003, the Australian Communications Authority (the ACA) made two determinations relating to the allocation of FLRN.[2] One determination set out the arrangements for allocating FLRN by public auction, the other determination set out the arrangements for allocating FLRN by single sealed bid auction for eligible charities. Since the implementation of these arrangements, the ACA and, later, the ACMA have made a number of amendments to the operation of these determinations by repealing and replacing the instruments in 2004, 2005 and 2007. The most recent determinations are the existing Determination and the Charities Determination.
BACKGROUND
In 2009, the ACMA proposed to make further changes to the existing Determination, the Charities Determination, and the reserve prices applying to the auctions. The ACMA released a discussion paper entitled ‘smartnumbers® Discussion Paper’ setting out these proposed changes. The changes suggested were to:
- reduce the reserve prices and thereby make numbers more accessible to those people that want them;
- remove the preferential arrangements available to charities; and
- reduce the nomination period[3] from ten working days to four working days, to reduce the waiting time between auctions.
This discussion paper was published on the ACMA’s website on 22 December 2009 and submissions were invited. The public consultation was conducted in accordance with the requirements of subsection 464(1) of the Act, which requires a 30-day public consultation period. A notice was placed in The Australian newspaper on 9 January 2010, inviting public comment by 26 February 2010. The draft amending Determination was also published on the ACMA website along with an information paper explaining the proposed amendments and identifying its impact.
The ACMA also consulted the Australian Competition and Consumer Commission (ACCC), as required under section 461 of the Act, in relation to these proposed changes. Consultation was also undertaken with the Numbering Advisory Committee (whose members include CSPs, Industry Number Management Services Ltd (INMS), business groups, consumer groups, industry associations and other government bodies) and the Australian Phone Words Association (APWA). The APWA represents businesses which are the largest purchasers and users of FLRN. Approximately 60 registered charities were targeted for consultation, to ensure that charities were given the opportunity to comment on the changes, particularly in relation to the repeal of the Charities Determination, which would have the effect of removing the preferential allocation arrangements that have previously been available to charities.
The feedback received in stakeholder discussions generally supported the proposed amendments, with the exception of the proposed changes to the definition of ‘active service’.[4] The ACCC has advised that it has no comment on the amending Determination.
REGULATORY IMPACT
Given the expected minimal impact the slight increase in fees will have on industry and competition, an exemption for a Regulatory Impact Statement and Business Cost Calculator Report has been obtained.
NOTES ON SECTIONS
Section 1 – Name of Determination
Section 1 provides for the citation of the amending Determination as the Telecommunications (Freephone and Local Rate Numbers) Determination Variation 2010 (No. 1).
Section 2 – Commencement
Section 2 reflects the intention that the Determination, once registered, will commence on 8 May 2010.
Section 3 – Variation of Telecommunications (Freephone and Local Rate Numbers) Allocation Determination
Section 3 amends the existing Determination, known as the Telecommunications (Freephone and Local Rate Numbers) Allocation Determination 2007 (No. 1).
Schedule 1 – Variations
Item 1 substitutes a new subsection 1.3(2) in the existing Determination, which effectively removes the provision relating to the allocation of a number to a charity within the meaning of the Charities Determination. However, it maintains that the determination will not apply to the allocation of a number for emergency purposes as set out in section 3.75T of the Telecommunications Numbering Plan 1997.
This is to reflect the repeal of the Charities Determination, which will take effect under the Telecommunications (Freephone and Local Rate Numbers — Charities) Allocation (Repeal) Determination 2010 (No. 1), which is also intended to commence on 8 May 2010.
Item 2 adds a new definition of ‘person’ to subsection 1.4(1) of the existing Determination. The new definition provides that a charity, that has been endorsed as an income tax exempt charitable entity under Subdivision 50-B of the Income Tax Assessment Act 1997, will be a ‘person’ for the purpose of the existing Determination. This enables a charity that was considered to be an ‘eligible charity’ under the Charities Determination, to access the public FLRN allocation arrangements under the Determination.
Item 3 amends the definition of ‘registered person’ contained in subsection 1.4(1) of the existing Determination by removing references to the repealed determinations that set out the arrangements for allocating FLRN to an eligible charity.
Item 4 amends subsection 2.1(3) of the existing Determination to remove reference to the Charities Determination, consequent upon its repeal.
Item 5 amends subsection 2.2(3) of the existing Determination to remove the reference to the Charities Determination, consequent upon its repeal.
Item 6 removes paragraph 2.10 (1)(b) of the existing Determination which effectively removes the reference to the Charities Determination, consequent upon its repeal.
Item 7 amends paragraph 2.11(5)(b) to change the specified cooling-off period that applies before a number, that has been nominated for auction, may go to auction.
Section 2.11 of the existing Determination provides for the withdrawal of a participation notice (or nomination) within a cooling-off period which is stipulated in subsection 2.11(5). A precondition is that the participation notice has not already been rejected under subsection 2.9(1) or 2.10(1).
The cooling-off period starts on the day the participation notice is given in accordance with section 2.8. Item 7 amends paragraph 2.11(5)(b) of the existing Determination so that the time period ends 4 working days before the nominal auction day for the FLRN listed in the notice. The existing Determination previously provided for a period of 10 working days.
The nominal auction day means the auction day worked out in accordance with subsection 3.1(1) for a participation notice, if the nomination had not been withdrawn.
Item 8 amends subsection 3.1(1) of the existing Determination to state that the auction of FLRN must be held on the next auction day that is at least 4 working days after the date the notice was given. This reduces the time period from 10 working days to 4 working days and is reflective of the change to the cooling-off period, made by Item 7.
The ACMA believes that a period of 4 working days is sufficient to provide people with reasonable time to make arrangements to bid for a number, without causing undue delay to those who are interested in having an auction occur as quickly as possible.
Item 9 amends paragraph 4.5(1)(a) of the existing Determination, to remove the reference to the Charities Determination, consequent upon its repeal.
Item 10 amends paragraph 4.8(a) of the existing Determination, to remove reference to the Charities Determination, consequent upon its repeal.
Item 11 removes paragraph 5.2(3)(b) of the existing Determination, to remove a reference to the Charities Determination consequent upon its repeal.
Item 12 repeals Division 2 of Part 5 to the existing Determination, and replaces it with a new Division 2 of Part 5 which sets out new transitional and savings provisions in relation to the repealed Charities Determination.
New section 5.7 inserts the following definitions for the purposes of the transitional provisions contained in the existing Determination:
repealed Determination means the Telecommunications (Freephone and Local Rate Nubmers – Charities) Allocation Determination 2007 (No. 1)
commencement day means the day on which the Telecommunications (Freephone and Local Rate Numbers) Allocation Determination Variation 2010 (No. 1) commences.
New subsection 5.8(1) provides that an eligible charity registered, or taken to be registered under the repealed Determination or the Telecommunications (Freephone and Local Rate Numbers – Charities) Allocation Determination 2005 (No. 1), immediately before the commencement day is taken to be registered under this Determination on the commencement day. This has the effect of ensuring that any eligible charity that had registered under the Charities Determination, or the preceding Determination, will be taken to be ‘registered’ for the purpose of section 2.2 of the existing Determination.
New subsection 5.8(2) provides that any other thing done under, or in force under, a provision of the repealed Determination (the Charities Determination) immediately before the commencement day will be taken to have been done under, or be in force under, the corresponding provision of the existing Determination. This means, for example that an application for a FLRN that an eligible charity may have given to the ACMA under subsection 2.3(1) of the Charities Determination prior to the commencement date will, after the commencement date, be taken to be an application for FLRN made to the ACMA under subsection 2.3(1) of the existing Determination.
[1] The Charities Determination is repealed by the Telecommunications (Freephone and Local Rate Numbers — Charities) Allocation (Repeal) Determination 2010 (No. 1), which is intended to commence on the same day as the amending Determination commences.
[2] These determinations were the Telecommunications (Freephone and Local Rate Numbers – Charities) Allocation Determination 2003 and the Telecommunications (Freephone and Local Rate Numbers) Allocation Determination 2003. These were repealed and replaced by subsequent instruments in 2004, 2005, and 2007.
[3] The nomination period is the period before the auction when users may submit an opening bid.
[4] ‘Active service’ is defined under s 3.75B of the Telecommunications Numbering Plan 1997. Section 3.75P also provides the ACMA must cancel the rights of use for a number if there has been no active service on the number for a continuous period of 3 years. The proposed changes have not been pursued by the ACMA in the amendments made by this amending Determination.