EXPLANATORY STATEMENT
Telecommunications (Consumer Protection and Service Standards) Act 1999
Telecommunications Universal Service Obligation (Declaration Deferral Period) Declaration 2017
Issued by the Authority of the Minister for Communications
Authority
The Telecommunications Universal Service Obligation (Declaration Deferral Period) Declaration 2017 (the Declaration) is made by the Minister for Communications (the Minister) under paragraphs 8J(1)(b) and 8K(1)(b) of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the Act). These provisions enable the Minister to declare a ‘declaration deferral period’ in relation to alternative contractual arrangements for standard telephone services (STS) and payphones universal service obligation (USO).
Purpose
The Declaration provides that the 24-month period starting immediately after the Declaration is made is the ‘declaration deferral period’ for the purposes of sections 8J and 8K of the Act.
The Declaration is a legislative instrument for the purposes of subsection 8(2) of the Legislation Act 2003 (see subsections 8J(8) and 8K(8) of the Act).
Background
The USO is Australia’s base-level telecommunications consumer safeguard. Specifically, Telstra, as the Primary Universal Service Provider (PUSP), must ensure that STS and payphones are reasonably accessible to all people in Australia on an equitable basis (under paragraphs 9(1)(a) and 9(1)(b) of the Act.
In June 2011, the Government announced it had entered into an agreement with Telstra for the delivery of certain public interest telecommunications services which included the provision of the STS and payphones under the USO (Telstra Agreement). This agreement commenced on 1 July 2012 and remains in force with neither party having given notice of termination of the agreement. The agreement has undergone amendments since its execution; however, these have not been relevant to the STS or payphones USO Modules for the purposes of this declaration.
In 2012, the Parliament passed legislation establishing a framework for phasing out the legislated USO and replacing it with a contractual framework under the Telecommunications Universal Service Management Agency Act 2012 and the Telecommunications Legislation Amendment (Universal Service Reform) Act 2012. As part of that legislative package, sections 8J and 8K in their original form were inserted into the Act to enable the progressive removal of STS and payphone USO obligations from Telstra.
Under sections 8J and 8K in their original form, the Minister was required to make declarations as to whether there were satisfactory alternative contractual arrangements relating to STS and payphone services or declare the ‘first declaration deferral period’ for the purposes of those sections. As a result, the Minister made the Telecommunications Universal Service Obligation (First Declaration Deferral Period) Declaration 2014, which had the effect of deferring the declaration that there were satisfactory contractual arrangements for delivery of STS and payphones. The Minister’s declaration was largely based on impending negotiations that included possible changes to the Telstra Agreement. The Minister determined that the Government could not consider lifting the regulatory requirements during the re-negotiation process due to the possibility of modifications to the delivery of the STS and payphone services.
The Telecommunications Universal Service Management Agency was abolished in 2015 and its functions were transferred to the Department of Communications (see the Telecommunications Legislation Amendment (Deregulation) Act 2015). At that time, sections 8J and 8K of the Act were repealed and substituted with new provisions. Those amendments simplified the operation of sections 8J and 8K, but the processes set out in those provisions remain substantially the same (see Schedule 1 to the Telecommunications Legislation Amendment (Deregulation) Act 2015). The re-enacted sections 8J and 8K commenced on 1 July 2015.
Under subsection 8J(1) of the Act, the Minister must make a declaration as to whether there are satisfactory alternative contractual arrangements in place for STS or that the 24-month period starting immediately after the declaration is made is the ‘declaration deferral period’ for the purposes of section 8J. This declaration must take place during the period of 24 months that began at the commencement of section 8J. Separately, and during the same time period, under subsection 8K(1) of the Act, the Minister must make a similar declaration in relation to satisfactory alternative contractual arrangements for payphones.
In relation to both STS and payphones, the Minister is not able to make a declaration that there are satisfactory alternative contractual arrangements unless certain criteria are satisfied. These include that the Telstra Agreement remains in force, and the Minister is satisfied that Telstra is likely to substantially comply with the agreement if this part of USO regulation is removed. In deciding whether Telstra is likely to substantially comply with the agreement, the Minister must have regard to a range of non-exhaustive criteria, including Telstra’s record of compliance with relevant contractual obligations and the nature of those obligations, as well as Telstra’s compliance with its regulatory obligations (including Part 2 of the Act and Part 5 of the Act,) (subsections 8J(4) and 8K(4)).
The Minister has decided to defer the lifting of regulatory USO obligations in relation to both STS and payphones. In reaching this decision, the Minister had regard to the Productivity Commission’s (PC) inquiry into the future of the USO. Due to the need for the government to consider future USO policy and reform, including the Telstra Agreement, resulting from the PC’s inquiry, the Minister does not consider that it is possible to declare that satisfactory contractual arrangements exist for STS and payphones.
The effect of the Declaration is that USO regulatory obligations in relation to STS and payphones continue to apply at least until the end of the ‘declaration deferral period.’ The declaration deferral period lasts for 24 months after the declaration is made. Before the end of the declaration deferral period, the Minister must make another declaration as to whether or not there are satisfactory alternative contractual arrangements in place for STS and/or payphones (subsections 8J(3) and 8K(3)).
Consultation
Consultation was undertaken with the Australian Communications and Media Authority (ACMA).
Regulatory impact
The Office of Best Practice Regulation (OBPR) has advised that, as the proposal does not alter existing regulatory obligations, a Regulatory Impact Statement is not required. The OBPR reference number is 21927.
Statement of compatibility with human rights
This statement of compatibility is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
The Declaration provides that the 24-month period starting immediately after the Declaration is made is the declaration deferral period for the purposes of sections 8J and 8K of the Act. The Declaration, in essence, retains the status quo arrangements in relation to the STS and payphone USO obligations.
The Declaration is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act. It does not engage any of the applicable rights or freedoms and does not raise any human rights issues.
Notes on sections
Section 1 - Name of Declaration
Section 1 provides that the name of the Declaration is the Telecommunications Universal Service Obligation (First Declaration Deferral Period) Declaration 2017.
Section 2 - Commencement
Section 2 provides that the Declaration commences on the day after it is registered on the Federal Register of Legislative Instruments.
Section 3 - Authority
Section 3 provides that the Declaration is made under paragraphs 8J(1)(b) and 8K(1)(b) of the Act.
Section 4 - Definitions
Section 4 defines the terms used in the Declaration.
Section 5 - Declaration
Section 5 provides that the 24-month period starting immediately after the Declaration is made is the declaration deferral period for the purposes of sections 8J and 8K of the Act.