EXPLANATORY STATEMENT
Telecommunications (Consumer Protection and Service Standards) Act 1999
Universal Service Subsidies (2004-05 Extended Zones) Determination (No. 1) 2002 (Amendment No. 1 of 2005)
Issued by the authority of the Minister for Communications, Information Technology and the Arts.
Background
The accompanying Determination makes minor corrections to the subsidy amounts set out in the Universal Service Subsidies (2004-05 Extended Zones) Determination (No. 1) 2002, which determined the subsidy amounts available to universal service providers for the supply of standard telephone services and the supply, installation and maintenance of payphones in the 2004-05 claim period in the Extended Zones of Australia.
Under sections 9G and 12E of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the Act), the Minister for Communications, Information Technology and the Arts (the Minister) has determined, or is taken to have determined, universal service areas as follows:
- The Universal Service Areas Determination (No. 1) 2001 (as amended) specifies universal service areas in north-east New South Wales and inland south-east Queensland; central-west and south-west Victoria and central-west Victoria and south-east South Australia in which the universal service obligation relating to the standard telephone service (as set out in section 9 of the Act) has been made contestable (the contestable pilot areas).
- On 1 June 2001 the Commonwealth and Telstra Corporation Limited (Telstra) entered into a written agreement under section 57 of the Telstra Corporation Act 1991 that is expressed to have effect for the purpose of subsection 12E(1) of the Act. By virtue of this agreement, paragraph 12E(2)(a) of the Act deems the Minister to have determined under section 9G of the Act that the Extended Zones are a universal service area for the purposes of the service obligation referred to in paragraphs 9(1)(a), (b) and (c) of the Act (dealing with standard telephone services, payphones and prescribed carriage services – there are currently no prescribed carriage services). The Extended Zones are call charge zones outside Telstra’s standard local call charge zones, covering approximately 80 per cent of the Australian landmass. This deemed Determination was published by notice in the Commonwealth of Australia Gazette No. GN29 of 25 July 2001.
- By virtue of subsection 9G(3) of the Act, the remaining service areas in Australia constitute a default area in their own right.
Sections 16 and 16B of the Act provide for the Minister to determine subsidies for the supply of services under the universal service obligation (USO) in a universal service area for up to 3 years in advance. Section 16A of the Act requires the Minister to seek the advice of the Australian Communications Authority (ACA) prior to determining or varying USO subsidies for a universal service area.
On 13 May 2002 the Minister made the Australian Communications Authority (Advice about Universal Service Subsidies) Direction (No. 1) 2002 under section 16A of the Act. This Direction required the ACA to provide advice to the Minister on universal service subsidies for the various universal service areas for the 2004-05 financial year. In accordance with the ACA’s advice to the Minister as a result of this Direction, the Minister made subsidy determinations including the Universal Service Subsidies
(2004-05 Extended Zones) Determination (No. 1) 2002.
In advice provided to the Minister on 20 December 2004, the ACA advised that an error in the calculation of the proportional standard telephone service and payphone subsidies for the Extended Zones for the 2004-05 financial year had been noted. While the error did not impact on the total subsidies available for the Extended Zones for the 2004-05 financial year, the ACA considered it was appropriate to amend the proportional amounts to facilitate comparison between years. The accompanying Determination corrects this error.
Consultation
Consultation on the accompanying Determination was considered unnecessary due to the minor and machinery nature of the Determination (see paragraph 18(2)(a) of the Legislative Instruments Act 2003).
Operation of the Legislative Instruments Act
The accompanying Determination is a legislative instrument as defined in section 5 of the Legislative Instruments Act 2003 (LIA). It is therefore required to be registered on the Federal Register of Legislative Instruments and to be tabled in each House of Parliament within 6 sitting days of that House after it is registered (see LIA ss. 24 and 38). However, as a result of regulation 8 and item 9 of Schedule 2 to the Legislative Instruments Regulations 2004, the accompanying Determination is not subject to Parliamentary disallowance.
The requirement in subsection 16(1) of the Telecommunications (Consumer Protection and Service Standards) Act for a copy of the accompanying determination to be gazetted has been satisfied by its registration on the Federal Register of Legislative Instruments (see LIA s.56(1)).
Clause 1 – Name of Determination
Clause 1 provides for the citation of the Determination as the Universal Service Subsidies (2004-05 Extended Zones) Determination (No. 1) 2002 (Amendment No. 1 of 2005).
Clause 2 – Commencement
Clause 2 provides that the Determination commences on the day after it is registered on the Federal Register of Legislative Instruments.
Clause 3 – Amendment of the Universal Service Subsidies (2004-05 Extended Zones) Determination (No. 1) 2002
Clause 3 provides that Schedule 1 amends the Universal Service Subsidies (2004-05 Extended Zones) Determination (No. 1) 2002.
Schedule 1 – Amendments
Schedule 1 makes amendments to correct the universal service subsidy amounts for the 2004-2005 financial year, in respect to the service obligations set out in paragraphs 9(1)(a) and (b) of the Act in the Extended Zones (i.e. the supply of standard telephone services and the supply, installation and maintenance of payphones).
As part of a review of the process to set subsidies for the 2004-05 financial year, the ACA found an error in the calculation of the subsidies relating to the Extended Zones for the standard telephone service and payphone components. This error has no impact on the total subsidies for that year (or for the 2005-06 to 2007-08 financial years). Prior to the 2004-05 financial year, the Minister had not required the ACA to separate the subsidies for the standard telephone service and payphone obligations in the Extended Zones. Consequently, the initial calculation for the 2004-05 financial year required the ACA to excise the subsidies relating to payphones from the total Extended Zones subsidies. The ACA incorrectly calculated the payphone subsidies to be $240,603. A review of the process noted that the correct amount should have been $2,036,676. This also requires a corresponding reduction in the subsidies in the Extended Zones for the standard telephone service component in the 2004-05 financial year from $25,490,705 to $23,694,631. The accompanying Determination corrects this error and facilitates comparisons with subsidy amounts across years (given that the ACA’s process for setting subsidies for the 2005-06 to 2007-08 financial years is now premised on the correct calculation).