Trade Practices Act 1974 - Class Exemption Determination No. 4 of 2008

Administered by Department of Communications and the Arts

Legislation au F2008L04581 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

Issued by the Australian Competition and Consumer Commission

 

Class Determination No. 4 of 2008 in respect of DTCS

Trade Practices Act 1974

 

Legislative Provisions

Section 152AS of the Trade Practices Act 1974 (the TPA) provides that the Australian Competition and Consumer Commission (ACCC) may make, by written instrument, a class determination exempting each of the members of a specified class of carrier or of a specified class of carriage service provider from any or all of the standard access obligations (SAOs) referred to in section 152AR of the TPA.

A class determination under section 152AS of the TPA may be unconditional or subject to such conditions or limitations as are specified in the determination.

The ACCC must not make a class determination under section 152AS of the TPA unless the ACCC is satisfied that the making of the determination will promote the long-term interests of end-users of carriage services or of services supplied by means of carriage services (LTIE) as further defined in section 152AB of the TPA.

The instrument setting out the class determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Purpose

The purpose of the class determination is to promote the LTIE by exempting a class of telecommunications service providers from the SAOs that would otherwise apply to them if and when they supply a declared service.

Background

On 24 August 2007, Telstra lodged an application under section 152AT of the Trade Practices Act 1974 (Act) for an individual exemption from SAOs in relation to the supply of the DTCS on 20 capital-regional routes (First Application).

On 21 December 2007, Telstra lodged an additional four applications for individual exemption from the SAOs in relation to the supply of the DTCS (Second set of Applications) in terms of:

  • inter-exchange transmission in 17 capital city exchange service areas (ESAs) for all declared bandwidths;
  • tail-end transmission in 17 capital city ESAs for all declared bandwidths;
  • inter-exchange transmission in 115 metropolitan ESAs or regional centre ESAs for all bandwidths; and
  • tail-end transmission in 128 metropolitan ESAs for bandwidths up to 2 Mbps.

The DTCS is a generic symmetric transmission service used for the carriage of voice, data or other communications. The minimum bandwidth in the current declaration is 2 Mbps. Carriers/carriage service providers generally use the DTCS as a wholesale input to set up their own networks for aggregated voice or data channels, or for integrated data traffic (such as voice, video, and data).

The DTCS was deemed a declared service under section 152AL of the TPA on 30 June 1997. Declaration means that an access provider supplying the DTCS is subject to a number of SAOs pursuant to section 152AR of the TPA. Terms of access can be governed by commercial negotiation, the terms of an access undertaking or, in the absence of an accepted access undertaking, by ACCC determination in an access dispute.

The ACCC decided to consider whether a class exemption determination should be granted to members of a specified class of carrier or of a specified class of carriage service provider from any or all of the SAOs under section 152AR of the TPA in conjunction with its determination of whether to make the orders sought by Telstra in its First Application and Second set of Applications.

The ACCC has determined that making a class exemption under section 152AS of the TPA will be in the LTIE as it will promote facilities based competition in the capital-regional and inter-exchange transmission markets, with the flow-on competition benefits to downstream markets and end-users. The ACCC also considers that a class exemption of the same scope as the individual exemptions would promote more efficient use of and investment in infrastructure. The ACCC’s analysis of whether granting individual and class exemptions for the supply of the DTCS is in the LTIE can be found in the ACCC’s Final Decision on Telstra’s exemption applications for the DTCS on the ACCC’s website www.accc.gov.au.

In regard to the scope of the class exemption, the ACCC finds that it is in the LTIE to grant a class exemption from the SAOs as they relate to the supply of the DTCS on those capital-regional routes and in those ESAs to be subject to individual exemption orders which were made in response to Telstra’s First Application and Second set of Applications. These capital-regional routes and ESAs are listed in the Class Exemption Determination instrument.

The ACCC finds that the class exemption should commence on the same day as Telstra’s individual exemption orders. It would not be in the LTIE for the class exemption to commence any earlier than Telstra’s individual exemption orders because such an outcome would undermine the rationale for granting the exemptions (as incentives for access seekers to invest in their own infrastructure would be diminished because access seekers could enforce the SAOs against Telstra, but not other access seekers).

Regulation Impact Statement

The ACCC has determined that a Regulation Impact Statement is not required for this class determination, as the class determination does not have a significant impact on businesses or individuals.

Consultation

On 22 September 2008, the ACCC published a draft decision on Telstra’s First Application and Second set of Applications and a draft class determination for public comment. The instrument setting out the draft class determination was published as part of the draft decision on the ACCC’s website www.accc.gov.au and submissions from interested stakeholders were sought at that time. Interested stakeholders were asked to make submissions to the ACCC by 13 October 2008.

The ACCC did not receive any submissions commenting on the proposed class exemption.

 

Overview

The Trade Practices Act 1974 (TPA) was enacted to prevent anti-competitive behaviour and ensure fair trading practices in Australia. The Act was amended in 2008 to allow the Australian Competition and Consumer Commission (ACCC) to make class determinations exempting specified classes of carriers or carriage service providers from standard access obligations (SAOs) if it promotes the long-term interests of end-users of carriage services or services supplied by means of carriage services. The Class Determination No. 4 of 2008 was made by the ACCC in respect of Digital Transmission and Carrier Service (DTCS) and provides for a class exemption from SAOs for certain telecommunications service providers. The class exemption aims to promote facilities-based competition in the capital-regional and inter-exchange transmission markets, with the flow-on competition benefits to downstream markets and end-users. The ACCC did not receive any submissions commenting on the proposed class exemption. The Class Determination No. 4 of 2008 was made by the ACCC to address the problem of over-regulation of telecommunications service providers in Australia. The ACCC considered that a class exemption from SAOs for the supply of DTCS would promote more efficient use of and investment in infrastructure. The determination was made in conjunction with the ACCC's determination of whether to make the orders sought by Telstra in its First Application and Second set of Applications. The ACCC found that making a class exemption from SAOs as they relate to the supply of DTCS on those capital-regional routes and in those exchange service areas to be subject to individual exemption orders which were made in response to Telstra's First Application and Second set of Applications would be in the long-term interests of end-users. The class exemption should commence on the same day as Telstra's individual exemption orders.

Scope and Application

The Class Determination No. 4 of 2008, issued by the Australian Competition and Consumer Commission under section 152AS of the Trade Practices Act 1974, pertains to the exemption of a specified class of telecommunications service providers from certain standard access obligations (SAOs) associated with the supply of Declared Transmission Capacity Services (DTCS). This determination applies to telecommunications service providers who supply the DTCS on specified capital-regional routes and in certain exchange service areas, as outlined in Telstra's applications for individual exemptions. The determination is intended to promote long-term interests of end-users by fostering facilities-based competition and encouraging efficient use of and investment in infrastructure. The exemption is conditional and comes into effect concurrently with the individual exemption orders granted to Telstra, ensuring a balanced approach to market incentives and competition. The scope of the class exemption is explicitly defined within the instrument, mirroring the geographical and service areas specified in Telstra's applications, thus ensuring a consistent regulatory approach across the specified services and regions.

Key Provisions

The key provisions of the Class Determination No. 4 of 2008 relate to the exemption of certain classes of carrier or carriage service providers from the standard access obligations (SAOs) under the Trade Practices Act 1974 (TPA). Section 152AS of the TPA allows the Australian Competition and Consumer Commission (ACCC) to make a class determination that exempts members of a specified class from any or all of the SAOs, either unconditionally or with specified conditions or limitations (section 152AS(1)). The ACCC must be satisfied that the determination will promote the long-term interests of end-users of carriage services (LTIE) as defined in section 152AB of the TPA (section 152AS(2)). This determination applies to the supply of Digital Transmission Channel Services (DTCS) on specific capital-regional routes and exchange service areas (ESAs). The obligations imposed by this Act on the parties or entities it governs include ensuring that the determination is made with the primary goal of promoting the LTIE. The ACCC must conduct an analysis to ensure that the class exemption will indeed benefit end-users by facilitating facilities-based competition and efficient use of infrastructure. In this specific case, the determination exempts certain telecommunications service providers from SAOs related to the supply of DTCS in specified routes and areas, as outlined in the instrument. The ACCC must also ensure that the exemption does not commence before the corresponding individual exemption orders to maintain the rationale for the exemptions. Offences and penalties for breach of the provisions under this Act are not explicitly detailed in the text, but generally, breaches of the Trade Practices Act 1974 can result in both civil and criminal penalties. Civil penalties can include pecuniary penalties of up to $1.1 million for corporations and $220,000 for individuals, as stipulated in section 12GA of the TPA. Criminal penalties can include fines of up to $66,000 for corporations and $13,200 for individuals, along with potential imprisonment, as outlined in section 12GB of the TPA. The ACCC may also seek injunctive relief or other court orders to prevent or remedy non-compliance with the Act.

Legal classification tags

Area of Law
Competition Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Licensing & Registration
Regulatory Standards

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.