EXPLANATORY STATEMENT
Statutory Rules 1988 No. 99
Issued by the Authority of the Attorney-General
Trade Practices (Telecommunications Exemptions) Regulations
These Regulations, are made under section 172 of the Trade Practices Act 1974 (the Act) which provides the Governor-General with a regulation making power. Paragraph 172(2)(c) of the Act provides that the regulations may, either unconditionally or subject to such conditions as are specified in the regulations, exempt from the application of the Act or the provisions of the Act specified in the regulations, prescribed conduct engaged in the course of a business carried on by a prescribed authority of the Commonwealth.
Subsection 2A of the Act provides that the Act (other than Part X) binds the Crown in the right of the Commonwealth insofar as it carries on a business by an authority and that the Act applies to a Commonwealth authority as if it were a corporation. Subsection 4(1) of the Act provides that “authority of the Commonwealth” means a body corporate established for a purpose of the Commonwealth by or under a law of the Commonwealth or an incorporated company in which the Commonwealth has a controlling interest.
These regulations give effect to decisions announced by the Government on 25 May 1988 concerning new telecommunications arrangements and exempt conduct specified below from the application of sections 46 and 47 of the Act. Section 46 is the prohibition that a corporation which has a substantial degree of power in a market not take advantage of that power for anti competitive purposes in that or any other market. Section 47 prohibits corporations from engaging in the practice of exclusive dealing.
The Australian Telecommunications Commission (Telecom) is a Commission established under Section 4 of the Telecommunications Act 1975 with the functions and duties specified in Sections 5 and 6 of that Act. The Overseas Telecommunications Commission (Australia) (OTC) is a body corporate established under Section 8 of the Overseas Telecommunications Act 1946 for the purposes specified in Division 3 of Part II of that Act. Aussat Pty Ltd (Aussat) is a company incorporated in the Australian Capital Territory in which the Commonwealth has a controlling interest.
Regulation 4 sets out the conduct exempted from sections 46 and 47 of the Act and the subsequent regulations specify the duration of the exemption, where a limit exists, and the authority to which the exemption applies.
The regulations exempt -
• Telecom in its role as sole provider of the first telephone until 30 June 1991 (paragraph 4(a) and regulation 5) - the “first instrument policy”.
• Telecom in respect of its policies precluding the competitive supply of standard feature telephones for second and subsequent telephones until 31 December 1988 (paragraph 4(b) and regulation 6) - the “second phone policy”.
• Telecom in respect of its Private Automatic Branch Exchange (PABX) maintenance and servicing agreements policy until 31 December 1988 (paragraph 4(c) and regulation 7).
• Telecom in respect of its policy of refusing to connect small business telephone systems to its network unless the system is supplied by Telecom until 30 June 1989 (paragraph 4(d) and regulation 8).
• Telecom, OTC and Aussat in respect of their policies restricting shared use and resale of simple carriage of all traffic over private networks where lines are leased from Telecom or OTC or services provided by Aussat (paragraph 4(e) and regulation 9).
• Telecom and OTC in respect of their policies as exclusive providers of:
- basic switched voice communications services
- public switched data services
- public switched integrated digital network services
- leased circuit services
public mobile telephone services
(paragraph 4(f) and regulation-10).
Regulation 11 limits the scope of the conduct exempt from section 46 by providing that the prescribed authority may not take advantage of its power in a market for anti-competitive purposes in any market other than the market in which it has that power.