EXPLANATORY STATEMENT
Issued by the authority of the Australian Communications and Media Authority
Telecommunications Act 1997
Telecommunications (Freephone and Local Rate Numbers - Charities) Allocation (Repeal) Determination 2010
purpose
The Telecommunications (Freephone and Local Rate Numbers - Charities) Allocation (Repeal) Determination 2010 (the Determination) has been made by the Australian Communications and Media Authority (ACMA) to repeal the Telecommunications Freephone and Local Rate Numbers - Charities) Allocation Determination 2007 (No. 1) (the Charities Determination).
The purpose of the Determination is to replace the current allocation system for the Freephone and Local Rate Numbers (FLRN) that was provided under the Charities Determination, with the public allocation process available under the Telecommunications (Freephone and Local Rate Numbers) Allocation Determination 2007 (the existing Determination). The repeal of the Charities Determination will mean that an 'eligible charity'[1] that was able to register and apply for FLRN under the Charities Determination, will be able to register and apply for FLRN using the public auction process set out in the existing Determination.
Background
In 2004, the Australian Communications Authority (ACA) implemented a web-based system for allocating FLRN and provided eligible charities with preferential arrangements for the allocation of FLRN. These arrangements were made under section 463(1) of the Telecommunications Act 1997 (the Act) which provides that the ACMA may, by written instrument, determine an allocation system for allocating specified numbers to carriage service providers (CSPs).
In 2009, the ACMA conducted a review which analysed the current operating arrangements for FLRN and found that they could be improved. The ACMA released a discussion paper entitled ‘smartnumbers® Discussion Paper’ setting out some 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 separate arrangements available to charities in order to reduce the administrative burden in assessing the validity of applications from eligible charities;
- reduce the nomination period[2] from ten working days to four working days to reduce the waiting time between auctions;
- change the definition of ‘active service’ in the Telecommunications Numbering Plan 1997 so that connecting a service to a voice recording message advertising the FLRN for sale would not be construed as ‘active service’.[3]
This discussion paper was published on the ACMA’s website on 22 December 2009 and submissions were invited.
The change proposing to replace the current allocation system for allocation of FLRN to eligible charities with the public allocation process, was intended to simplify the process by which eligible charities could apply for FLRN by removing the requirement for the charity to be able to establish a ‘strategic link’ to the FLRN it had applied for.
The ACMA had formed the view that the ‘strategic FLRN’ criteria, which were set out in subsection 1.5(1) of the Charities Determination, can be confusing, problematic, and difficult to understand. Since January 2005, almost 50 per cent of the applications received have been rejected for failing to meet the strategic FLRN criteria and this creates an administrative cost for the ACMA, as well as possibly wasting resources for the charities whose applications were rejected. In practice, due to the complexity created by the strategic FLRN requirement, a charity took 35 days on average to be allocated the number applied for. This is a significantly longer period than it takes allocation of FLRN via the public auction process (usually less than 20 days).
The revocation of the Charities Determination, together with the reduction in reserve prices, should ensure that the FLRN auction process continues to be an efficient means of allocating 13, 1300 and 1800 numbers to those who would like the choice and the additional benefits of FLRN.
Consultation
The ACMA has undertaken consultation regarding the proposal to revoke the preferential arrangements for allocation of FLRN to charities under the Charities Determination.
In its consultation process, the ACMA contacted approximately 60 registered charities that had used the FLRN auction process in the last 12 months to see if they had any concerns with the proposed changes. None of these charities responded with concerns. Consultation was also undertaken with the Numbering Advisory Committee (whose members include CSPs, Industry Number Management Services Ltd, 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. The ACMA also consulted the Australian Competition and Consumer Commission (ACCC) as required under s 461 of the Act, and the ACCC had no comments on the changes.
Public consultation was conducted in accordance with sections 460 and 464 of the Act, which require 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 legal instruments associated with the proposed changes were also published on the ACMA website together with a discussion paper explaining the proposed amendments and identifying their impact.
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.
[1] ‘eligible charity’ is defined under the Charities Determination as a charity that has been endorsed as an income tax exempt charitable entity under Subdivision 50‑B of the Income Tax Assessment Act 1997.
[2] The nomination period is the period before the auction when users may submit an opening bid.
[3] Under section 3.75P of the Telecommunications Numbering Plan 1997 the ACMA must cancel the rights of use of a FLRN if there has been no active service on the number for a period of 3 years. The proposed change to the definition of ‘active service’ has not been pursued by the ACMA.