EXPLANATORY STATEMENT
Issued by the authority of the Australian Communications and Media Authority
Telecommunications Act 1997
Telecommunications Numbering Plan Variation 2010 (No.1)
Statutory basis
Under subsection 455(1) of the Telecommunications Act 1997 (the Act), the
Australian Communications and Media Authority (ACMA) must, by written instrument, make a plan for the numbering of carriage services in Australia and the use of numbers in connection with the supply of such services. This is known as the Telecommunications Numbering Plan 1997 (the Numbering Plan).
On 8 May 2010, the ACMA varied the Numbering Plan, by written instrument, titled the Telecommunications Numbering Plan Variation 2010 (No. 1) (the instrument). The instrument is made under s 455(10) of the Act (which sets out the matters the ACMA must have regard to in varying the Numbering Plan).
Purpose of the variation
The purpose of this variation is to make consequential amendments to the Numbering Plan, following the revocation of the Telecommunications (Freephone and Local Rate Numbers – Charities) Allocation Determination 2007 (No.1) (the Charities Determination). The Charities Determination was repealed by the Telecommunications (Freephone and Local Rate Numbers — Charities) Allocation (Repeal) Determination 2010 (No. 1), which is intended to commence on the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 on which the Telecommunications (Freephone and Local Rate Numbers) Allocation Determination Variation 2010 (No. 1) (the amending Determination) commences. These amendments include the removal of references to the Charities Determination throughout the Numbering Plan generally.
A consequential effect of the repeal of the Charities Determination, and the removal of references to it from the Numbering Plan, is that Freephone and Local Rate Numbers (FLRN) previously obtained by 'eligible charities' under the Charities Determination will no longer be subject to the restrictions that had previously applied to their ability to trade the 'rights of use' in the number (under subsection 3.75J(3) of the Numbering Plan), and will no longer be subject to cancellation of rights of use under section 3.75Q of the Numbering Plan.
Background
In 2004, the Australian Communications Authority (ACA) implemented a web-based system for allocating FLRN and provided charitable organisations, that are considered to be 'eligible charities' as defined under the Charities Determination, with preferential arrangements for the allocation of FLRN. These arrangements were made under subsection 463(1) of the Act which provides that the ACMA may, by written instrument, determine an allocation system for allocating specified numbers to carriage service providers (CSPs).
Freephone numbers are 10-digit numbers beginning with 1800. Calls made to
freephone numbers are free to end-users, as all associated call charges are borne by the recipient of the call.
Local rate numbers are 10-digit numbers beginning with 1300, or six-digit numbers beginning with 13. The charges for calls made to local rate numbers are shared between the person who makes the call (to a maximum of the amount chargeable for a local call) and the recipient of the call (who pays the remaining charge). The call charge costs may be higher from mobile phones or pay phones.
FLRN may be highly valued as marketing tools, especially if a number is memorable by virtue of a pattern of digits or corresponds to a meaningful ‘phoneword’, which is derived from the alphabetical keypad translation of the number. In addition, FLRN may encourage calls through the reduced or free call cost.
Paragraph 455(5)(a) of the Act, provides that the Numbering Plan may set rules relating to the allocation of numbers to CSPs, including rules to authorise the allocation of specified numbers in accordance with an allocation system determined under section 463 of the Act.
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[1] from ten working days to four working days to reduce the waiting time between auctions;
- change the definition of ‘active service’ in the Numbering Plan so that connecting a service to a voice recording message advertising the FLRN for sale would not be construed as ‘active service’.[2]
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 section 460 and subsection 464(1) of the Act.
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 change proposing the removal of the current allocation process 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 a FLRN.
Consultation
The ACMA has undertaken substantial 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 has undertaken consultation with the Australian Competition and Consumer Commission (ACCC) as required under s 461 of the Act, and the ACCC had no comments on the changes.
As discussed above, public consultation was also 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 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.
NOTES ON SECTIONS
Section 1 provides that the variation may be cited as the Telecommunications Numbering Plan Variation 2010 (No.1).
Section 2 provides that the instrument takes effect on commencement of the Telecommunications (Freephone and Local Rate Numbers) Allocation Determination Variation 2010 (no. 1), or the date of registration of the instrument, whichever is the later.
Section 3 specifies that the Numbering Plan is amended as set out in the Schedule 1.
Schedule 1 Variations relating to the repeal of the Charities Determination
Items 1, 2, 4, 5, 6 and 8 of the instrument omit references to the Charities Determination in ss 3.75A(1), 3.75B, 3.75C(1), 3.75E(1), 3.75F(3) (respectively) of the Numbering Plan. These are consequential amendments made following the repeal of the Charities Determination.
Item 3 of the Variation removes the definition of the Charities Determination (following its repeal) from s 3.75B of the Numbering Plan.
Item 7 replaces the note in subsection 3.75E(1) of the Numbering Plan, so that reference to section 2.3 of the Charities Determination is removed, following the repeal of the Charities Determination.
Item 9 omits subsection 3.75J(3) of the Numbering Plan, which makes provision in relation to 'rights of use' for a number obtained by a charity under the Charities Determination. This is a consequential amendment to remove provisions that are no longer applicable following the repeal of the Charities Determination.
Item 10 repeals subsection 3.75J(4)(d) of the Numbering Plan, which relates to trading the rights of use for a number obtained under the Charities Determination. This is a consequential amendment, for clarification purposes, resulting from the repeal of the Charities Determination.
Item 11 repeals section 3.75Q of the Numbering Plan, which is a consequential amendment following the repeal of the Charities Determination. Section 3.75Q of the Numbering Plan was applicable if the 'rights of use' holder under the Numbering Plan was an eligible charity, and provided that the 'rights of use' holder could not retain an 'excess number' (as defined by subsection 3.75Q(2) of the Numbering Plan) for longer than 12 months. Following the repeal of the Charities Determination, this provision is no longer required.
[1] The nomination period is the period before the auction when users may submit an opening bid.
[2] Under section 3.75P of the Numbering Plan 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 changes have not been pursued by the ACMA in the amendments made by the amending Determination.