EXPLANATORY STATEMENT
Telecommunications (Consumer Protection and Service Standards) Act 1999
Telecommunications Universal Service Obligation (First Declaration Deferral Period) Declaration 2014
Issued by the Authority of the Minister for Communications
Authority
The Telecommunications Universal Service Obligation (First Declaration Deferral Period) Declaration 2014 (the Declaration) is made by the Minister for Communications (the Minister) under paragraphs 8J(1)(d) and 8K(1)(d) of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the Act). These provisions enable the Minister to declare a ‘first declaration deferral period’ in relation to alternative contractual arrangements for the standard telephone services (STS) and payphones universal service obligation (USO).
Purpose
The Declaration provides that the 18-month period starting immediately after the Declaration is made is the ‘first declaration deferral period’ for the purposes of sections 8J and 8K of the Act.
Background
The USO is Australia’s base-level telecommunications consumer safeguard. Specifically, Telstra, as the Primary Universal Service Provider (PUSP), has an obligation to supply STS to all people in Australia on request (under paragraph 9(1)(a) of the Act), and the obligation to supply, install and maintain payphones in Australia (under paragraph 9(1)(b) of the Act).
Various legislative instruments have also been made under the Act in relation to these obligations, including:
- a determination setting out requirements on Telstra when it supplies STS, and circumstances in which it does not need to supply a STS under the USO; and
- various instruments setting out rules, standards and benchmarks for Telstra’s supply of payphones, including its obligations when it removes a payphone, which were also made in 2011 and took effect from 1 January 2012.
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 (TUSMA Act). As part of the consequential amendments to the TUSMA Act, sections 8J and 8K were inserted into the Act to enable the progressive removal of STS and payphone USO obligations from Telstra.
Under subsection 8J(1) of the Act, the Minister must make a declaration as to whether or not there are satisfactory alternative contractual arrangements in place for STS. This declaration must take place in the period beginning 18 months after commencement of the amendments to the Act and ending 23 months after commencement (i.e. between 1 January 2014 and 31 May 2014). Separately, and during the same time period, under subsection 8K(1) of the Act, the Minister must make a similar declaration in relation to whether or not there are satisfactory alternative contractual arrangements in place for payphones.
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 USO (Telstra Agreement). This agreement commenced on 1 July 2012 and remains in force with neither party having given notice of termination of the contract.
In relation to both STS and payphones, the Minister is not able to make a positive declaration unless the relevant part of the Telstra agreement remains in force; and the Minister is satisfied that Telstra is likely to substantially comply with the contract if this part of USO regulation is removed. In deciding whether Telstra is likely to substantially comply with the contract, the Minister will be able to 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, the universal service regime and Part 5 of the Act, the customer service guarantee) (subsections 8J(6) and 8K(6)).
The Minister has decided to defer the lifting of regulatory USO obligations in relation to both STS and payphones. In making this decision the Minister has had particular regard to the Australian Communications and Media Authority’s (ACMA) Communications Reports for 2011-12 and 2012-13 in which it was noted that Telstra did not meet all the benchmarks applicable to the Customer Service Guarantee set out in the Telecommunications (Customer Service Guarantee – Retail Performance Benchmarks) Instrument (No. 1) 2011. Telstra was issued with an infringement notice and a formal warning by the ACMA on 27 November 2013 in relation to breaches of the benchmarks.[1]
The Minister also has had particular regard to Telstra’s performance in relation to its payphones obligations. Telstra has not complied with all the requirements of the Telecommunications Universal Service Obligation (Location of Payphones) Determination 2011 and the Telecommunications Universal Service Obligation (Public Consultation on the Location or Removal of Payphones) Determination 2011 and was issued with a formal warning by the ACMA on 27 November 2013 in relation to breaches of these instruments.[2]
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 ‘first declaration deferral period’. The first declaration deferral period lasts for 18 months after the Declaration is made – i.e. until November 2015. Before the end of the first 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.
Consultation
The Department consulted Telstra, the Telecommunications Universal Service Management Agency and the ACMA in respect to this instrument.
Regulatory impact
The Office of Best Practice Regulation (the OBPR) has agreed that the regulatory changes arising from the Declaration are machinery in nature and that no further regulatory impact analysis is required. The OBPR regulatory impact statement exemption number is ID 2012/15257.
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 18-month period starting immediately after the Declaration is made is the first 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.
The Declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
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 2014.
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 - Definitions
This section defines the terms used in the Declaration.
Section 4 - Declaration
This section provides that the 18-month period starting immediately after the Declaration is made is the first declaration deferral period for the purposes of sections 8J and 8K of the Act.
[1] See http://www.acma.gov.au/Industry/Telco/Carriers-and-service-providers/Obligations/telstra-pays-financial-penalty.
[2] Ibid.