EXPLANATORY STATEMENT
Issued by the authority of the Australian Communications Authority
Telecommunications (Freephone and Local Rate Numbers Auctions – Registration Charge) Determination 2005 (No. 1)
Australian Communications Authority Act 1997
Legislative Provisions
Subparagraph 53(1)(b)(ii) of the Australian Communications Authority Act 1997 (the ACA Act) allows for the ACA to make determinations fixing charges for any matter in relation to which expenses are incurred by the ACA under the Telecommunications Act 1997. Subsection 53(2) of the ACA Act requires that the charges so fixed must be reasonably related to the expenses incurred or to be incurred in relation to the matters to which the charge relates and must not be such as to amount to taxation. Subsection 53(4) of the ACA Act provides that a determination made under subsection 53(1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901. The accompanying determination must therefore be tabled in Parliament and is subject to disallowance by Parliament.
Background
Section 53 of the ACA Act obliges the ACA to ensure accurate cost recovery and charging. Consequently, the ACA has adopted a rigorous activity based costing methodology to ensure the costings which underpin pricing decisions accurately and equitably reflect the costs incurred by the ACA for the services it provides to clients.
This determination sets a fee to recover expenses incurred by the ACA in providing a registration facility for those people wishing to participate in public auctions using the smartnumbers™ auction system for allocating 13, 1300 and 1800 telephone numbers. This is an online system established by the Telecommunications (Freephone and Local Rate Numbers) Allocation Determination 2005 (No. 1).
The fee set by this determination will not be imposed on eligible charities seeking to register for special charities auctions on the smartnumbers™ auction system, which is the preferential allocation process described by the Telecommunications (Freephone and Local Rate Numbers – Charities) Allocation Determination 2005 (No. 1).
The registration fee has been determined on a ‘user pays’ basis, and in addition to cost-recovery is intended to serve the purposes of:
- deterring parties that do not have a legitimate interest in participating in the allocation process from using the auction system, thereby reducing the potential for system failure and reducing the potential for improper behaviour in the auction process; and
- providing a means of identity verification (relevant to ensuring systems integrity).
The expenses to be incurred in relation to registration for public auctions that are to be recovered are:
- capital costs attributable to the IT system component used to support the registration process;
- registration IT system operation and maintenance costs;
- the cost of help desk support for the new registration system;
- costs associated with internal and external reporting that relates to the registration process;
- the cost of activity relating to deregistration or deactivation of registrations to remedy anomalies in auction activity; and
- the costs of processing the registration fee, including expenses incurred in relation to payment using an Online Payment Gateway.
The fee has been set on the basis of the assumption that there will be 1200 registrations to participate in public auctions per year over five years. This assumption is based on analysis of demand for numbers.
The fee has been determined in accordance with the Commonwealth Cost Recovery Guidelines for Regulatory Agencies.
In ensuring its cost recovery regime is robust, the ACA has employed an external financial consultancy firm in a quality assurance role. This has included review of the activity based costing model for setting standard ACA hourly rates, which have been used, where relevant, to calculate the expenses to be recovered by this fee.
NOTES ON SECTIONS
Section 1 – Name of Determination
This is the determination title.
Section 2 – Commencement
This section provides for the determination to commence on the day after it is registered.
Section 3 – Revocation
Section 3 provides that the Telecommunications (Freephone and Local Rate Numbers Auctions – Registration Charge) Determination 2004 (No. 2) is revoked. This means that the previous instrument has no effect because it is superseded by the determination to which this statement relates.
Section 4 – Definitions
This section defines words and references to legislation and subordinate instruments referred to in the determination. Specifically, the section includes references to the Telecommunications (Freephone and Local Rates Numbers) Allocation Determination 2005 (No. 1) and the Telecommunications (Freephone and Local Rates Numbers - Charities) Allocation Determination 2005 (No. 1) (the Determinations) as amended from time to time.
Section 5 – Purpose of this Determination
This section states the purpose of the determination is to fix the charges to be applied to recover expenses incurred in providing registration services under the Determinations.
Subsection (1) states that the Australian Communications Authority (ACA) is authorised by subsection 53(1) of the Australian Communications Act 1997 to fix charges for services and facilities provided by the ACA and to recover expenses incurred under specified Acts (including the Telecommunications Act 1997).
Subsection (2) states that the ACA may, pursuant to section 463 of the Telecommunications Act 1997, determine a system for allocating specified numbers to carriage service providers. The subsection also states that the ACA has determined such a system via the Determinations.
Subsection (3) states that the ACA will incur expense in providing registration facilities set down in the Determinations.
Subsection (4) confirms that the purpose of the determination is to fix a charge for the purposes of recovering those expenses.
Section 6 – Charge
This section states that the charge which is to be applied is specified in Schedule 1.
Section 7 – By whom and when is the charge payable
This section specifies when and by whom a charge is payable. Specifically, subsection (1) states that the charge is payable in accordance with the Determinations.
Subsection (2) states that the charge is not payable by charities which meet the definition of “eligible charity” within the meaning of the Telecommunications (Freephone and Local Rates Numbers - Charities) Allocation Determination 2005 (No. 1). The exemption for eligible charities applies to applications for registration lodged under either of the Determinations.
Schedule 1 – Charges payable
Schedule 1 states that the charge for applications for registration under the Determinations is $88 inclusive of GST. The fee is specified for both Determinations, notwithstanding that eligible charities are exempt under subsection 6(2), as it is possible that non-eligible charities may attempt to, or will in fact be, registered under the Telecommunications (Freephone and Local Rates Numbers - Charities) Allocation Determination 2005 (No. 1). Their participation in the auction process as eligible charities is governed by the terms of the Determinations.