EXPLANATORY STATEMENT
Approved by the Australian Communications and Media Authority
Telecommunications (Numbering Charges) Act 1997
Telecommunications (Numbering Charges) (Allocation Charge) Amendment Determination 2022 (No. 1)
Authority
The Australian Communications and Media Authority (the ACMA) has made the Telecommunications (Numbering Charges) (Allocation Charge) Amendment Determination 2022 (No. 1) (the instrument) under subsection 13(1) of the Telecommunications (Numbering Charges) Act 1997 (the Numbering Charges Act) and subsection 33(3) of the Acts Interpretation Act 1901 (the AIA).
Subsection 13(1) of the Numbering Charges Act allows the ACMA, by legislative instrument, to determine the amount of charge imposed on the allocation of a number to a carriage service provider, other than in accordance with an allocation system.
Subsection 33(3) of the AIA provides that where an Act confers a power to make a legislative instrument, the power shall be construed to include a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend or vary any such instrument.
The instrument amends the Telecommunications (Numbering Charges) (Allocation Charge) Determination 2015 (the Charges Determination) which determines the amount of charge imposed on the allocation of numbers by the Numbering Charges Act.
Purpose and operation of the instrument
Since August 2015, the majority of the ACMA’s numbering allocation and administration functions have been provided under delegation by ZOAK Pty Ltd (ZOAK). The delegated services are provided pursuant to a contract with ZOAK.
In June 2015, the ACMA made the Charges Determination, which set allocation charges for numbers in accordance with the Numbering Charges Act. The charges were intended to recover the cost of the provision of numbering services under the contract with ZOAK. The Charges Determination set a flat-fee allocation charge of $19.50 for each number allocated under the Telecommunications Numbering Plan 2015, other than “geographic numbers” and “smartnumbers”[1]. The charge was calculated by dividing the annual recoverable contract value by the anticipated number of transactions per annum.
In 2017, following lower than anticipated transactions in the Numbering System, the fee was increased to $35 via the Telecommunications (Numbering Charges) (Allocation Charge) Amendment Determination 2017 (No. 1). These charges have been unchanged since 2017.
As a result of a continued downward trend in demand from users, revenue generated from the current fee of $35 per transaction has been insufficient to meet the cost of the contract and has resulted in a cumulative under-recovery as of June 2022 of $0.26m which is estimated to increase to $0.4m by the end of the ACMA’s contract with the outsourced provider of the Numbering Service in 2024.
In March 2022, the ACMA engaged external economic consultants to review and update the fee and cost recovery model including forecasting future demand, and estimating the fee required to obtain neutral cost recovery by 2024.
The fee required to achieve neutral cumulative cost recovery by 2024, noting the forecast decline in demand, is $57.
Consequently, the ACMA has decided to increase the flat-fee allocation charge to $57.
A provision-by-provision description of the instrument is set out in the notes at Attachment A.
The instrument is a legislative instrument for the purposes of the Legislation Act 2003 (the LA).
Documents incorporated by reference
The instrument does not incorporate any documents by reference.
Consultation
Before the instrument was made, the ACMA was satisfied that consultation was undertaken to the extent appropriate and reasonably practicable, in accordance with section 17 of the LA.
On 27 June 2022, the ACMA released a consultation paper which set out the reason for the under-recovery. The consultation paper was published on the ACMA’s website and was provided to the ACMA’s Numbering Advisory Committee, which includes representatives from government, consumer organisations, the peak communications organisation (Communications Alliance) and telecommunications carriers and carriage services providers.
The ACMA received four written submissions in response to the consultation paper. All relevant issues were considered in making the instrument.
Submissions included that the proposed numbering fee increase (63%) is significant and may impact smaller resellers of numbers in the market and it could have a further downward impact on already declining demand for free-phone and local rate numbers (FLRNs) leading to needing further charging increases in the future. Respondents also commented that the current charging framework and cost recovery model for numbering may not be sustainable and should be reviewed.
Noting all the submissions, the ACMA considers the 63% increase in the numbering transaction fee is consistent with Australian Government Charging Framework. Regarding the potential impact on carriage service providers and resellers of the price increase, the ACMA notes that for transactions that involve allocations of large blocks of numbers (such as mobile numbers which are typically allocated in blocks of 100,000), the impact of any price increase is likely to be small when the per allocated number rate is considered. For example, in 2020–21, the average number of geographic telephone numbers allocated to carriage service providers per transaction was 48,758 numbers. This means the proposed fee increase of $22 would equate to an additional 0.05 cents per allocated number.
Regarding the potential impact of the increased charges on demand for FLRNs, the ACMA acknowledges the falling demand for these numbers but considers the impact of the fee increase on actual demand is likely to be small noting the transaction fee usually forms only a small component of the overall costs to users of the purchase and ongoing use of FLRNs. Noting long-term declining demand for certain numbering transactions and the impact of FLRNs transactions on cost recovery, the ACMA will explore the merits of a broader review. However, changes in numbering charges should not be delayed pending that consideration.
Copies of the submissions are available on the ACMA website.
No material changes were made to the instrument as a result of the consultation.
Regulatory impact assessment
The Office of Best Practice Regulation has determined that the regulatory change effected by the instrument is minor or machinery in nature and has therefore verified that a Regulatory Impact Statement is not required (OBPR ID - OBPR22-02335).
Statement of compatibility with human rights
Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires the rule-maker in relation to a legislative instrument to which section 42 (disallowance) of the Legislation Act 2003 applies to cause a statement of compatibility with human rights to be prepared in respect of that legislative instrument.
The statement of compatibility set out below has been prepared to meet that requirement.
Overview of the instrument
The Telecommunications (Numbering Charges) (Allocation Charge) Amendment Determination 2022 (No. 1) (the instrument) amends the Telecommunications (Numbering Charges) (Allocation Charge) Determination 2015 (the Charges Determination) to increase the amount of charge imposed on the allocation of numbers to carriage service providers other than in accordance with an allocation system. The Charges Determination and the instrument are made under subsection 13(1) of the Telecommunications (Numbering Charges) Act 1997.
Human rights implications
The ACMA has assessed whether the instrument is compatible with human rights, being 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.
Having considered the likely impact of the instrument and the nature of the applicable rights and freedoms, the ACMA has formed the view that the instrument does not engage any of those rights or freedoms.
Conclusion
The instrument is compatible with human rights as it does not raise any human rights issues.
Attachment A
Notes to the Telecommunications (Numbering Charges) (Allocation Charge) Amendment Determination 2022 (No. 1)
Section 1 Name
This section provides for the instrument to be cited as the Telecommunications (Numbering Charges) (Allocation Charge) Amendment Determination 2022 (No. 1).
Section 2 Commencement
Section 2 provides that the instrument commences on 1 October 2022.
Section 3 Authority
This section identifies the provision that authorises the making of the instrument, namely subsection 13(1) of the Telecommunications (Numbering Charges) Act 1997.
Section 4 Amendments
This section gives effect to the amendments set out in Schedule 1.
Schedule 1 - Amendments
Item 1
This item amends table 1 in subsection 5(1) of the Charges Determination, so that the charge for the allocation of freephone and local rate numbers (other than smartnumbers) and premium rate numbers that are 6 or 8 digits long is $57.
Item 2
This item amends table 2 in subsection 5(2) of the Charges Determination, so that the charge for the allocation of access codes, special services numbers, premium rate numbers that are 10 digits long, assigned, unallocated smartnumber and international signalling point codes and mobile network codes is $57.
Item 3
This item amends the calculation in the Example following table 2 in subsection 5(2) of the Charges Determination, so that the example provided reflects the new relevant charge of $57.
[1] These terms are defined in the Telecommunications Numbering Plan 2015.