BILLS DIGEST NO. 68, 2015–16              21 January 2016

Communications Legislation Amendment (Deregulation and Other Measures) Bill 2015

Dr Rhonda Jolly
Social Policy Section 

Date introduced: 2 December 2015

House:  House of Representatives

Portfolio: Communications and the Arts

Commencement:  The day after the Act receives Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.

The Bills Digest at a glance

Purpose of the Bill

The purpose of the Communications Legislation Amendment (Deregulation and Other Measures) Bill 2015 is to:

•      amend administrative requirements imposed on broadcasters and datacasting licensees

•      remove tariff filing requirements for certain carriers and carriage service providers

•      amend the role of the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC) with regards to monitoring and reporting of information and

•      allow for the telecommunications industry to develop an industry scheme to manage telephone numbering.

The Bill also repeals redundant legislation and spent Acts.

Background

The Bill represents part of the Government’s commitment to reducing the cost to Australian businesses of red and green tape by repealing legislation and regulations which it considers unnecessary and counter-productive.

Stakeholder concerns

There has been little stakeholder comment on this specific Bill.

Key issues

•      Most of the proposed administrative changes are non-controversial and in general deliver more flexibility to ACMA and the ACCC in their administrative and regulatory capacities.

•      Some aspects of the changes could be opposed because it may be argued that rather than simplifying administration, they make it easier for industry to disregard accepted public standards and expectations of quality of service delivery.

Purpose of the Bill

The purpose of the Communications Legislation Amendment (Deregulation and Other Measures) Bill 2015 (the Bill) is to:

•      amend what the Government has deemed are unnecessary administrative requirements imposed on broadcasters and datacasting licensees under the Broadcasting Services Act 1992 (BSA) to:[1]

–      modify audit requirements

–      extend the classes of people able to make statutory declarations about gross earnings

–      provide the Australian Communications and Media Authority (ACMA) with discretion with regards to pursuing unpaid licence fees

–      remove duplicated requirements to notify ACMA about certain changes in the control of media assets

–      provide consistent classification arrangements for all television programs and

–      remove duplication in ACMA’s complaint handling and investigation processes

•      remove what is seen as ‘unduly burdensome’ tariff filing requirements for certain carriers and carriage service providers imposed under the Competition and Consumer Act 2010 (Competition Act)[2]

•      amend the role of the ACMA under the Telecommunications Act 1997 and the Australian Competition and Consumer Commission (ACCC) under the Competition Act with regards to monitoring and reporting of information.[3] These amendments are intended to ensure that the regime for the statutory collection of information ‘keeps pace with changing markets and consumer behaviour’[4]

•      amend the Telecommunications Act 1997 and the Telecommunications (Consumer Protection and Service Standards) Act 1999 so the telecommunications industry is able to develop an industry scheme to manage telephone numbering (provided certain safeguards for consumers are met)[5] and

•      repeal redundant legislation and spent Acts.

Structure of the Bill

The Bill consists of six schedules:

•      Schedule 1 removes audit and reporting requirements which have been deemed to be unnecessarily duplicative and burdensome for broadcasters.

•      Schedule 2 amends the BSA and the Australian Communications and Media Authority Act 2005 (ACMA Act) to redefine ACMA’s powers of investigation with regards to complaints made about commercial and national broadcasters and datacasting services.

•      Schedule 3 removes requirements that businesses provide the ACCC with certain tariff-related information within a specified period.

•      Schedule 4 makes technical amendments to the Australian Broadcasting Corporation Act 1983 and the Special Broadcasting Service Act 1991 to repeal redundant provisions and provide for consistency in definitions across these Acts and the BSA.[6]

•      Schedule 5 repeals spent and redundant legislation.

•      Schedule 6 provides a framework by which a transition can occur from the current numbering system for carriage services that is regulated by ACMA, to a system which is industry-managed.

Background

Administrative efficiency

The extent to which government rules and regulation which affect the communications sector has imposed excessively onerous burdens on the industry has been noted and considered in a number of documents in recent times. The final report of the Convergence Review Committee, commissioned under a Labor Government to examine Australia’s rapidly changing media landscape, for example, concluded that many elements of the current communications regulatory regime are outdated and unnecessary, while other rules are becoming ineffective as the communications landscape evolves.[7]

Soon after its election in late 2013 the Coalition Government appointed an independent body to review and report on the performance, functions and roles of the Commonwealth Government. The peak body for free-to-air broadcasters, FreeTV, told this body, the National Commission of Audit (NCoA), in 2014 that the industry faced significant costs as the result of administrative inefficiencies. Free TV listed these as ‘excessive, onerous reporting requirements’ and ‘outdated complaints systems’.[8]

The Coalition vowed to reduce the cost to Australian businesses of red and green tape by repealing legislation and regulations which it considered unnecessary and counter-productive.[9] The communications portfolio was a particular target for red tape reduction with two Department of Communications’ discussion papers agreeing with industry that there were substantial levels of complex regulation that may not be appropriate in a twenty first century media environment.[10]

Upon introduction of this Bill the Minister for Communications, Mitch Fifield, commented that 2015 had delivered significant progress in the implementation of the Government’s regulatory reform agenda in the communications sector.[11] The Minister added that during 2014 and 2015 the Government had introduced more than 65 communications sector measures aimed at simplifying regulation and removed more than 3,400 pages of unnecessary regulation. This had ‘delivered an estimated cumulative annual savings of $340 million for businesses and consumers in the communications sector’.[12]

Numbering Plans

Telephone numbering was introduced after it became possible for telephone subscribers to connect to telephone exchanges outside their area and to by-pass the assistance of an operator in doing so. Australia’s telephone numbering has been re-organised a number of times to accommodate increases in the numbers of subscribers and the development of new technologies. A major re-organisation took place in the 1990s as mobile phones were first being developed. This organisation occurred in the context of a government desire to implement a new regulatory framework for the telecommunications industry.

Since 1997 the regulation and organisation of numbering has been the prerogative of ACMA when subsection 455(1) of the Telecommunications Act 1997 required the Australian Communications Authority (now ACMA) to devise a set of rules which regulated the use and administration of Australian telephone numbers. This was known as the Telecommunications Numbering Plan 1997 (the Numbering Plan).[13]

Consultations on the Telephone Numbering Plan have occurred at times since the introduction of the original Numbering Plan and a number of revisions have been made to the Plan. The latest consultations took place in 2012. These were in response to an ACMA discussion paper, Telephone numbering: future directions, which articulated ACMA’s medium to long term vision for numbering in Australia.[14] The paper proposed changes to increase the flexibility and efficiency of numbering arrangements and make pricing clearer for consumers.

A new version of the Plan was put in place in March 2015.[15]

Policy position of non-government parties/independents

At the time of writing this Digest there appears to have been no comments made by the non-government parties or independents on this legislation.

Position of major interest groups

There appears to have been no comments made by the broadcasting industry in relation to the changes to be made by this Bill.

Communications Alliance, the primary telecommunications industry body in Australia, has welcomed the introduction of this Bill and the Telecommunications (Numbering Charges) Amendment Bill 2015, labelling them ‘sensible deregulatory reform, toward which industry has been working with Government for some time’. [16]

The Alliance has noted that similar arrangements elsewhere have produced ‘more agile, cost-effective and dynamic systems for managing numbering’ and this has been to the benefit of consumers and industry alike.[17]

While it appears that there has been no other comment made in relation to the introduction of an industry-based numbering scheme it is worth noting that in 2012 the Australian Communications Consumer Action Network commented on the importance of numbering policy in achieving ‘availability, accessible and affordable services that enhance the welfare of all Australians’.[18] It is likely, therefore, that this group, and perhaps other consumer groups, may want to know the details of any industry-based scheme before voicing support for change.

It is interesting that ZOAK Solutions, the company involved in the administration of an updated Numbering Plan introduced by ACMA in early 2015 noted that feedback from ‘several industry participants is that the new system provides an outstanding customer experience because it is an intuitive system that is simple to use’.[19]

Financial implications

According to the Explanatory Memorandum to this Bill, it will not have a ‘significant impact’ on Government expenditure or revenue.[20]

Presumably, given the reduced role for ACMA and the ACCC in review and monitoring processes there will be some financial benefit to those agencies.

In addition, given that Free TV noted in its submission to the NCoA in 2013 that the cost to broadcasters of administering government regulations was ‘significant’, there is likely to be at least some financial benefits to business from a reduction in regulatory requirements.[21]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[22]

The Statement of Compatibility notes that the main implication for human rights in this Bill relates to the changes to the classification provisions under Schedule 1, item 5. This item repeals subsections 123(3A) to (3D) of the BSA so that the classification of all programs broadcast by commercial and community broadcasters and open narrowcasting services will solely reflect classifications under industry codes of practice. The Statement of Compatibility argues this is not contrary to Australia’s obligations under the Convention on the Rights of the Child as ‘the similarities that currently exist between the film and television classification ratings frameworks mean that there will be no significant change in a practical sense to the classification of films broadcast’.[23]

In addition, the Statement of Compatibility makes the point that safeguards exist in the BSA so that industry codes of practice should reflect prevailing community standards for all programs broadcast, including films. There is further provision that if industry codes of practice are deficient ACMA can determine programs standards.[24]

At the time of writing this Bills Digest, the Parliamentary Joint Committee on Human Rights had not commented on the Bill.

Committee consideration

At the time of writing this Digest the Senate Scrutiny of Bills Committee had not commented on the Bill.

On 3 December 2015 the Senate Selection of Bills Committee deferred consideration of this Bill to its next meeting.[25]

Key issues and provisions

This section does not discuss all provisions in this Bill. For a detailed analysis of all provisions, see the Explanatory Memorandum.

Schedule 1: streamlining regulations

Control and declarations

Part 5 of the BSA explains the rules regarding who is able to exercise control of commercial television and radio broadcasting licences, datacasting transmitter licences and newspapers that are ‘associated’ with commercial television or radio broadcasting licence areas (known as regulated media assets). This part requires that certain persons must notify ACMA when changes to the control of regulated media assets occur.

Section 63 of the BSA requires individual licensees and publishers to notify ACMA within ten business days when a person becomes, or ceases to be, in a position to exercise control of the licence or newspaper. Section 64 then requires the person who comes into a position of control of a regulated media asset also to notify ACMA within ten business days of the change.

Because these requirements are ‘unnecessarily duplicative’, item 1 will repeal section 64.

The current BSA requires that commercial television and radio broadcasting licensees provide to ACMA an annual statutory declaration of their gross earnings. Subsection 205B(4) of the BSA requires that the statutory declaration be made by the chief executive officer (CEO) or secretary of the licensee. Item 6 of Schedule 1 proposes to amend the subsection so that those eligible to make a statutory declaration concerning gross earnings will include a director of the licensee and a person who has knowledge of the financial affairs of the licensee (and is authorised to make the declaration by the CEO or secretary). Item 9 of Schedule 1 will make a corresponding amendment to subsection 205BA(2) to extend the class of office holders eligible to make a statutory declaration concerning gross earnings in relation to a channel A datacasting transmitter licence.[26]

Classification

Section 123 of the BSA requires that groups representing commercial broadcasting licensees, community broadcasting licensees, providers of subscription broadcasting and narrowcasting services and providers of open narrowcasting services develop codes of practice that apply to the broadcasting operations of those sections of the broadcasting industry.[27]

Under subsections 123(3A), (3B), (3C) and (3D), codes of practice developed for commercial and community television broadcasting licensees and providers of open narrowcasting television services must ensure that those licensees and providers apply the film classification system provided for by the Classification (Publications, Films and Computer Games) Act 1995 (the Classification Act) when broadcasting films, rather than the code-based television classification guidelines that apply to other television programmes broadcast.[28] It is argued in the Explanatory Memorandum that this situation represents yet another unnecessary regulatory task for broadcasters as the film and television classifications do not now differ significantly.[29] Item 5 of Schedule 1 proposes therefore to remove the need for broadcasters to take into account classification under the Classification (Publications, Films and Computer Games) Act 1995 when classifying films for viewing on commercial and community television and on open narrowcasting services.[30]

Items 12 to 14 propose to repeal licence conditions that place restrictions on broadcasters in relation to the airing of films that have been classified as RC (Refused Classification), X18+ or R18+ by the Classification Board. With the repeal of the licence conditions, breaches in relation to the airing of these types of films will be treated as code of practice breaches, rather than licence condition breaches.

ACMA discretion

Item 7 of Schedule 1 repeals subsection 205B(4A) of the BSA which requires that financial documents detailing balance sheets and profit and loss information provided to ACMA is audited. The proposed replacement subsection gives ACMA discretion on a case by case basis to decide if it is necessary for these documents to be audited. The new subsection will authorise ACMA to notify licensees in writing if it requires a balance sheet or profit and loss account sheet to be audited.

Under the BSA, a person or entity providing a commercial broadcasting service on radio or television must hold a commercial radio or television broadcasting licence. The Television Licence Fees Act 1964, Radio Licence Fees Act 1964 and Datacasting Transmitter Licence Fees Act 2006, require commercial television and radio broadcasting licensees and channel A datacasting transmitter licensees to pay licence fees.[31] Licence fees are calculated by licensees using a formula and take into account any rebates that may apply to particular licence categories.

ACMA then calculates if the licence fee paid is correct and currently:

… arranges for any repayments to the licensee (in respect of an overpayment of licence fees) or additional payments (in respect of an underpayment of licence fees) through issuing notices to licensees in accordance with section 205C of the BSA. Penalties for any licence fees that are unpaid by their due date are payable under section 205D of the BSA.[32]

As the Explanatory Memorandum notes, ACMA is required under current legislation to pursue full payment of all licence fees, even if amounts of underpayment are insignificant. Hence, it may at times prove uneconomical for the regulator to take action. Item 11 of Schedule 1 proposes to amend section 205C of the BSA to provide ACMA with:

… the ability to waive the amount of license fees unpaid, and any additional penalty fees, if the ACMA considers that it would not be efficient to recover that amount from the licensee. However, it would be within the discretion of the ACMA as to whether it pursues the unpaid amount (and any related additional fees)… [33]

Comment

Schedule 1 of the Bill deals with the streamlining of ‘black letter law’, which is described by the Department of Communications as:

… legislation as well as regulations, standards, directions and rules made under legislation. Black letter law may apply obligations ex‐post or ex‐ante. Compliance is compulsory and legally binding sanctions are available to ensure compliance. Black letter law is developed, administered and enforced by Government or a Government regulator. Industry involvement is generally confined to consultation during the development phase.[34]

In its discussion paper released in May 2015 the Department noted that the communications portfolio ‘includes a vast range of black letter law provisions contained in legislation as well as subordinate instruments’.[35] The intention of the proposed changes in Schedule 1 is to remove a number of duplicative reporting requirements, while still providing ACMA with certain discretion to request financial documentation. These appear to be practical amendments that will benefit both the industry and have no foreseeable adverse effects for the public. Indeed, for some time there have been calls for broadcasting regulators to be given more flexibility in dealing with industry (and imposing regulatory sanctions). During the last major update of media regulation in 2006, for example, a report by Professor Ian Ramsay noted that the regulator lacked access to flexible, ‘middle range’ administrative powers and civil penalties.[36] Areas of particular concern included the issues of late notification of licence control and lodging of financial returns and licence fee payments. Professor Ramsay was of the view that it was inappropriate in many instances to penalise broadcasters for inadvertent breaches or for late payments of licence fees.[37]

While it must be noted that the major focus of the Ramsay report was about strengthening the powers of ACMA ‘to enable it to deal more effectively with breaches of the rules’, the report also made points which support the types of administrative changes proposed in this Bill.[38] These include that flexible enforcement powers are important ‘in motivating regulated entities to have internal compliance procedures that are effective’, they provide an environment where there is more room for manoeuvrability in applying pressure for voluntary compliance and they encourage alternative solutions to problems.[39]

With regards to classification, it may be that there could be questions raised about whether it is appropriate to remove the licence condition regarding classifying films for viewing on commercial and community television and on open narrowcasting services. There may be cause for concern that making breaches of classification a code of practice violation does not in fact remove an ‘unnecessary’ task for broadcasters, rather it gives broadcasters more opportunity to infringe requirements, reduces the possibility that penalties will result from those infringements and may result in an increase in complaints about breaches.

Submissions to the Australian Law Reform Commission’s investigation into the classification system have already noted concerns about existing television classification codes. The Australian Council on Children and the Media (ACCM) maintained that self-regulatory codes do not stop the industry from ‘doing what it wants’ and that if limits are needed to protect the public interest those limits should be imposed by ‘public institutions’.[40] The Commissioner for Children and Young People (WA) also believed that industry codes of practice ‘are not sufficient to ensure the safety, protection and wellbeing of children and young people’.[41] It may be these groups will see the proposed change to the legislation as a further opportunity for broadcasters to ‘do as they want’.

While there may be some substance to these types of claims, it must be noted that ACMA retains the power to investigate complaints made by the public relating to industry codes of practice (under section 148 of the BSA). See Box 1 below:

Box 1: Broadcasting Services Act 1992, section 148

If:

a)        a person has made a complaint to a provider of broadcasting services on a matter relating to:

i)         program content; or

ii)        compliance with a code of practice that applies to those services and that is included in the Register of codes of practice; and

b)       if there is a relevant code of practice relating to the handling of complaints of that kind—the complaint was made in accordance with that code of practice; and

c)        either:

i)         the person has not received a response within 60 days after making the complaint; or

ii)        the person has received a response within that period but considers that response to be inadequate;

the person may make a complaint to the ACMA about the matter.

Schedule 2: ACMA complaints handling

Under section 147 of the BSA complaints may be made to ACMA about offences relating to, or breaches of licence conditions. ACMA may investigate these complaints if it chooses to do so. Under section 151 of the BSA (Division 2, Part 11 of the BSA) a complaint can also be made to ACMA about the Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS).If ACMA chooses to investigate the complaint and finds it justified then it can ‘encourage’ the ABC or SBS to comply and recommend actions the national broadcasters should take.

In addition to the power bestowed upon it under Part 11 (sections 147 to 153), ACMA is given a general power under Division 2 Part 13 of the BSA to investigate broadcasters and datacasters. The Explanatory Memorandum to the Bill argues that as complaints of the type referred to in Part 11 can be investigated under the general investigation powers in Part 13, the powers in Part 11 duplicate those in Part 13. This Bill proposes therefore to repeal Part 11 of the BSA.

It is intended that in addition to the repeal of Part 11, item 4 of Schedule 2 would then insert proposed section 170A ‘to make clear that under Part 13 persons have the same ability to make, and the ACMA has the same powers to investigate, complaints about licensed and national broadcasters as were available under Part 11’.[42]

Further amendments under item 5 would insert proposed section 171A which would make clear that investigations are at the discretion of ACMA (proposed subsection 171A(1)) and that the regulator must publish on its website the procedures it will usually follow in investigating complaints, although the regulator is not prevented from adopting different procedures in relation to a particular complaint (proposed subsection 171A(2)).

Item 6 will insert proposed sections 181 and 181A into Part 13 of the BSA to address actions which specifically relate to complaints about the national broadcasters currently dealt with in Division 2 of Part 11. These proposed sections reflect current sections 150 to 153 of the BSA by providing that unresolved complaints about code of practice violations by the national broadcasters and complaints about failure of the broadcasters to comply with captioning obligations in Part 9D of the BSA can be investigated at ACMA’s discretion. As is currently the case, ACMA will be able to recommend the action the broadcasters should take to remedy the situation and, if this is not acted upon, make a report to the Minister.

Comment

Changes in Schedule 2 are based on a 2015 Federal Court decision in Harbour Radio Limited v the Australian Communications and Media Authority [2015] FCA 371 (see brief background in Box 2 below).

In this case, Justice Buchanan found that ACMA has ‘discretion to investigate under section 170 [the general investigations power], whereas it had an obligation to do so in an appropriate case under section 149 [the power to investigate complaints relating to offences and breaches of licence conditions or codes of practice]’.[43] At the same time the Court held that the operation of sections 149 and 170 of the BSA are not mutually exclusive. The operation of section 149 does not prevent ACMA from also exercising the discretion afforded to it by section 170 of the BSA. In other words, there is nothing to prevent ACMA from commencing what is called an ‘own motion’ investigation into a matter which is already under an obligatory investigation by the Regulator under section 149. This is essentially the basis for the contention by the Explanatory Memorandum that Part 11 duplicates the regulator’s powers in Part 13.[44]

In proposing to repeal Part 11 and retain Part 13 this Bill is in keeping with the Government’s stated intention of providing the Regulator with more discretion and flexibility in handling complaints. ACMA’s powers to deal with breaches of Codes of Practice will not be affected by this change. The Regulator continues to have a range of powers to deal with breaches. These include requiring broadcasters to agree to enforceable undertakings to secure future compliance with a code or imposing additional licence conditions requiring licensees to comply with codes.

Box 2: Harbour Radio complaints investigations

Harbour Radio is a commercial broadcasting licensee which broadcasts as station 2GB in Sydney and syndicates its programs to a number of other stations.

In Harbour Radio Limited v the Australian Communications and Media Authority the Federal Court considered ACMA investigations into complaints made by listeners regarding on air statements by Alan Jones in 2013.

Complaints alleged that Mr Jones had breached the Commercial Radio Code of Practice in commenting on a [then forthcoming] report on climate change in September 2013 and on a proposal to build an airport in Toowoomba in Queensland in November and December 2013.

Harbour Radio argued that ACMA could not investigate the climate change complaints as the complainants had not fulfilled requirements under the Commercial Radio Code for lodging complaints. After ACMA considered this response it then decided to investigate the matter under section 170 of the BSA.[45]

The second complaint was made by the company which intended to build an airport at Toowoomba. Harbour Radio again claimed that the complaint was not legitimate and that ACMA lacked the jurisdiction to investigate after ACMA notified the broadcaster that it had commenced an investigation under the BSA.[46]

Schedule 3: monitoring the telecommunications industry

Item 3 of this schedule proposes to repeal Divisions 4 and 5 of Part XIB of the Competition Act.[47] Part XIB states the rules that apply to the communications industry with regards to anti-competitive conduct actions and record keeping. Division 4 of Part XIB requires the ACCC to collect certain tariff information from telecommunications carriers and carriage service providers (CSPs) that hold a substantial degree of power in the market. Division 5 sets out the tariff filing requirements that apply specifically to Telstra. Under the existing regime the ACCC is able to request information within a specific timeframe.

According to the Explanatory Memorandum these requirements impose an unnecessary regulatory burden on business as the information that it is required to provide to the ACCC is ‘readily available’ through ‘other avenues’.[48] The Explanatory Memorandum considers also that as the information supplied to the ACCC is of little benefit in assisting in the investigation of anti-competitive behaviour, it ‘cannot be justified’.[49]

Division 6 of Part XIB currently provides that the ACCC can require carriers and CSPs to keep and retain records and to provide reports on certain matters. These include ascertaining whether the ‘competition rule’ has been, or is being, complied with or whether tariff filing directions have been, or are being, complied with (subsection 151BU(4)).[50] The ACCC introduced record keeping rules, Division 12 Record-Keeping and Reporting Rules in December 2004 under Division 12 of Part XIB and it has revised these rules on a number of occasions in response to changes in industry trends.[51]

Item 5 of Schedule 3 will however, insert proposed subsections 151BU(4A) and (4B) to make it a formal requirement that the ACCC review its record-keeping rules within one year of commencement of the Bill and then at least once every five years to ensure that they ‘remain up-to-date, reflect changing markets and consumer behaviour and minimise the regulatory burden on industry’.[52] In reviewing rules the ACCC would need to take into account whether information is publicly available, whether consumer demand for goods and services about which the information relates has changed and what use the information will be for consumers, the Minister and the Parliament.

As the Explanatory Memorandum notes, while the proposed subsections represent ‘a statutory minimum level of review’, there is nothing in the legislation that would prevent the ACCC from undertaking more regular reviews ‘if circumstances warrant’.[53]

Division 12 of Part XIB of the Competition Act requires the ACCC to monitor charges paid by consumers for listed carriage services and goods and services used in connection with those carriage services. The ACCC must provide an annual report on these matters and include in the report information on Telstra’s compliance with the price control arrangements under Part 9 of the Telecommunications (Consumer Protection and Service Standards) Act 1999.

Items 22 and 23 of this Bill amend the ACCC’s monitoring and reporting function with the intention to deliver a ‘more flexible regime’.[54] According to the Explanatory Memorandum, this also reflects the fact that the current monitoring and reporting obligations apply largely to traditional providers of services, and as such, they may not fully reflect the telecommunications market.[55]

Item 24 of Schedule 3 of the Bill also deals with reporting. Subsections 105(1) to (4) of the Telecommunications Act 1997 currently require that ACMA monitors and reports to the Minister on certain aspects of the telecommunications industry.[56] This Bill will repeal these subsections, according to the Explanatory Memorandum because the ‘policy rationale’ for such reporting is no longer ‘compelling’.[57] Item 24 therefore reduces the reporting requirements to include only those relating to national interest matters under Part 14 of the Telecommunications Act 1997, the costs of compliance with Part 14 and the costs of compliance with data retention under the Telecommunications (Interception and Access) Act 1979.

Comment

The Explanatory Memorandum states that the legislative requirement imposed almost twenty years ago in the Telecommunications Act 1997 for ACMA to monitor and report annually on consumer satisfaction with, consumer benefits of and the quality of service delivered by the telecommunications industry ensured there was a high degree of oversight of the industry when it was needed. The Explanatory Memorandum argues this is no longer a compelling argument for this requirement to continue, because of increased competition in the industry and in light of the introduction of a new regulatory framework.[58] Hence, it is more beneficial to industry and the Government if ACMA produces targeted reports.

While the reports produced by ACMA in response to the legislative requirements under section 105 have been prepared using information supplied by the industry and not by means of independent analysis, they have nevertheless been excellent sources of information on the telecommunications industry. It is unlikely that targeted reports will provide information which can give rise to the same degree of comparative analysis as would result from ACMA continuing to collect and publish this information.

Schedule 6: numbering

Under the Telecommunications Act 1997 ACMA is required to make a plan which deals with the numbering of telecommunications carriage services and the the use of numbers in connection with the supply of these services. The Numbering Plan for Australia specifies rules for the allocation, transfer, surrender, portability and use of different types of numbers in connection with the supply of carriage services. Rights and responsibilities relating to numbers are contained in a number of legislative and regulatory instruments. Industry codes and guidelines and contractual arrangements between parties also affect how numbers are managed.[59]

The Numbering Plan covers geographic numbers, free phone numbers (1800), local rate numbers (13, 1300), premium rate numbers (19) and mobile phone numbers. The Numbering Plan also specifies emergency services numbers.

Schedule 6 of this Bill will set up a framework under which the responsibility for numbering, with the exception of emergency numbers, may be transferred to industry and be undertaken by a numbering scheme manager, who will be approved by the Minister. The numbering scheme manager will be able to be a person or a body corporate.

Item 1 proposes to repeal the reference to ACMA’s role in regulating telecommunications numbers by means of a numbering plan in the simplified outline of the Telecommunications Act. The item will substitute the statement that numbering may be administered by a numbering scheme manager (or ACMA in the case that a numbering scheme manager is not appointed by the Minister). The Explanatory Memorandum explains that emergency numbers will remain the responsibility of ACMA given their importance to the community.[60]

Item 10 will insert a new subdivision (Subdivision AA) into Division 2 of Part 22 of the Telecommunications Act to deal with the management of the numbering scheme by the numbering manager.

Proposed section 454A in this subdivision will allow the Minister to determine the numbering scheme manager by legislative instrument. The numbering scheme manager must administer the scheme in accordance with ‘numbering scheme principles’ (proposed subsection 454C(1)). Before determining the numbering scheme manager the Minister must consult with ACMA and the ACCC. It is proposed that the Minister will be able to direct the numbering scheme manager to amend the rules of the numbering scheme or to changes its processes (proposed subsection 454E(1)) and that ACMA and the ACCC will also be able to give directions to the numbering scheme manager following consultation with the Minister and the manager (proposed subsections 454E(3) to (6)). The numbering scheme manager must comply with these directions (proposed subsection 454E(7)). Failure to do so could result in the imposition of a civil penalty (proposed subsection 454E(8)).

The proposed numbering scheme principles are detailed in proposed section 454C. These are shown in Box 3 below:

Box 3: numbering scheme: proposed principles

(a)              there must be an adequate and appropriate supply of numbers for carriage services

(b)               future needs for numbering must be planned for, having regard to community needs, industry needs and global trends

(c)               numbering arrangements must be effective and efficient and support the effective and efficient supply of carriage services

(d)               numbering arrangements must have regard to recognised international standards and ensure that numbering in Australia operate16s in conjunction with international numbering arrangements

(e)               there must be fair and transparent access to numbers for all carriage service providers

(f)               the interests of users of carriage services must be protected, including in relation to the use and portability of numbers

(g)               the numbering scheme’s provisions for the portability of numbers must be consistent with any directions made by the ACCC to the ACMA under subsection 458(2) in relation to portability of numbers

(h)               the numbering scheme must support the use of emergency call services

(i)               numbering arrangements must meet the requirements of Australian law enforcement and national security agencies

(j)               numbering arrangements must provide for the collection of charges imposed under the Telecommunications (Numbering Charges) Act 1997

(k)               the Register of allocated numbers must be kept up to date

(l)               the rules and processes of the numbering scheme, including a plan for numbering of carriage services:

(i)              must be adhered to by the numbering scheme manager

(ii)               must be published and available at no charge

(m)               the numbering scheme must include compliance mechanisms to provide for enforcement of scheme rules

(n)               the numbering scheme must make effective complaints processes available to both the telecommunications industry and users of carriage services

(o)               the recovery of costs in relation to the management of the numbering scheme must reasonably reflect costs and must be fair and transparent

(p)               public consultation must be undertaken before any significant change is made to the numbering scheme

(q)               any additional principles determined by the Minister by legislative instrument.

Comment

As noted earlier in this digest, Communications Alliance, the primary telecommunications industry body in Australia considers that an industry based numbering scheme will be more cost effective and efficient and similar schemes overseas have delivered benefits for customers and industry. [61] The Alliance provides no example or detail to substantiate this claim. There are, however certainly examples of the proposed type of scheme. Administration of the North American Numbering Plan, for example, is not undertaken by governments; the overall administration of the Plan is undertaken by a company appointed by the United States Government regulator and other members involved in the Plan appoint individual country administrators (see Box 4 below for more detail).

Box 4: North American Numbering Plan Administration

The North American Numbering Plan is administered by the North American Numbering Plan Administration (NANPA). NANPA is allocated to a company by the American Federal Communications Commission (FCC). This last occurred in 2012 when the FCC allocated the administration to the Neustar Company for a period of five years.

Legislation requires the FCC to create or designate one or more impartial entities to administer telecommunications numbering and to make numbers available on an equitable basis. It also requires that costs of number administration and number portability are borne by all telecommunications carriers.

NANPA is required to administer numbering resources in a neutral manner; it is not a policy-making entity and is subject to regulatory directives and industry-developed guidelines. NANPA’s responsibilities are defined in FCC rules and in technical requirements drafted by the telecommunications industry and approved by the FCC.

Regulatory authorities in various NANPA countries name national administrators to oversee the numbering resources assigned by NANPA. Neustar is the national administrator for the United States and its territories. In other participating countries, regulatory authorities either serve as the national administrator or delegate the responsibility to the dominant carrier.

NANPA costs are allocated to participating countries based on population, and then further adjusted based on NANPA services used by each country. Participants pay their share of the costs of the NANPA services they require. Regulatory authorities in each participating country determine how to recover these costs.[62]

It should be noted that there is no indication of the order of savings to industry which will result from the change to an industry managed scheme. And one reading of the Explanatory Memorandum would be that they will be ‘insignificant’ as the Government sees no major revenue changes resulting from this Bill.[63]

While it appears that there have been no other comments made in relation to the introduction of an industry-based numbering scheme it is worth noting that in 2012 the Australian Communications Consumer Action Network commented on the importance of numbering policy ‘in achieving availability, accessible and affordable services that enhances the welfare of all Australians’.[64] It is likely, therefore, that this group, and perhaps other consumer groups, may want to know the details of any industry-based scheme before voicing support for change. This would especially apply with reference to the question of whether an industry managed scheme would impose any financial burdens on customers.

A paper produced for the International Telecommunications Union (ITU) makes the point that there is widespread agreement that national telephone numbering plans are a national resource and that they should be managed in the overall national interest. In a competitive telecommunications environment, it is the job of an independent regulator to ensure this happens, with one of the prime roles of the regulator being to resolve conflicts of interest.[65] There may therefore be some question of the extent to which potential conflicts of interest may be exacerbated if the Numbering Plan is managed by an industry body.

This paper argues that it is possible for a regulator not to take a role in the day-to-day running of a plan, however, and avoid such conflicts of interest, provided that it is given the capacity to maintain a long-term vision for a numbering scheme and that vision is structured to foresee potential capacity shortages, instigate reviews of a Plan and take overall responsibility for its operation with the national interest as its objective.[66] There may be some question about the extent to which this role is possible for ACMA if the proposed changes are enacted. It appears that the role of planning for future needs for example is to be undertaken by the numbering scheme manager (proposed subsection 454C(2)(b)). It could be argued that powers provided to the Minister and ACMA to enable them to direct the numbering scheme manager to amend rules, change processes or refrain from acting in a certain manner in relation to the proposed scheme are sufficient, but there could be a countervailing argument that these powers are reactive, and dealing with numbering in an ever-changing telecommunications environment needs to be proactive.

In light of the above comments it is interesting that ZOAK Solutions, the company involved in the administration of ACMA’s updated Numbering Plan, noted that feedback from ‘several industry participants is that the new system provides an outstanding customer experience because it is an intuitive system that is simple to use’.[67] The updated Plan reflects ACMA’s own assessment in 2011 that the Plan as it existed then was:

…a cumbersome legislative artefact that has the potential to unnecessarily raise information costs for industry and—to the extent that it is unnecessarily complex and prescriptive—raise barriers to innovation.[68]

The recent revision has been informed by design principles. These were meant to inform future development of the Plan and are as follows:

•      broad-based use of numbers—so that the use of numbers is not unduly restricted by the Numbering Plan

•      technical neutrality—so that the specification of numbers based on the technical characteristics of the service or the platform over which it is provided is minimised in the Numbering Plan

•      price transparency—so that where it is necessary to use numbering to facilitate end users recognising the costs of calls, this is supported by the structure of the Numbering Plan and

•      clarity—so that the structure of the Numbering Plan is simple and capable of being readily understood.[69]

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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[1].              Broadcasting Services Act 1992, accessed 15 December 2015.

[2].              Competition and Consumer Act 2010, accessed 16 December 2015.

[3].              Australian Communications and Media Authority Act 2005, accessed 16 December 2015.

[4].              Explanatory Memorandum, Communications Legislation Amendment (Deregulation and Other Measure) Bill 2015, p. 3, accessed 10 December 2015.

[5].              Telecommunications Act 1997 and Telecommunications (Consumer Protection and Service Standards) Act 1999, accessed 16 December 2015.

[6].              Australian Broadcasting Corporation Act 1983 and Special Broadcasting Service Act 1991, accessed 13 January 2016.

[7].              Convergence Review Committee, Convergence review: final report, report prepared for the Department of Broadband, Communications and the Digital Economy (DBCDE), DBCDE, Canberra, March 2012, p. 1, accessed 13 January 2016.

[8].              Free TV Australia, Submission to National Commission of Audit (NCoA), 29 November 2013, p. 4, accessed 10 December 2015.

[9].              T Abbott (Prime Minister) and J Frydenberg (Parliamentary Secretary to the Prime Minister), Reducing red tape to build a strong and prosperous economy, joint media release, 19 March 2014, accessed 14 December 2015.

[10].              Department of Communications (DoC), Deregulation in the communications portfolio, policy background paper, 1, DoC, November 2013, p. 3 and DoC, Regulating harms in the Australian communications sector, policy background paper, 2, DoC, May 2015, accessed 14 December 2015.

[11].              M Fifield (Minister for Communications), Regulation reform agenda continues to benefit the communications sector, media release, 2 December 2015, accessed 16 December 2015.

[12].              Ibid.

[13].              Telecommunications Numbering Plan 1997, accessed 16 December 2015.

[14].              ACMA, Telephone numbering: future directions, November 2011, accessed 16 December 2015.

[15].              Telecommunications Numbering Plan 2015, accessed 11 December 2015.

[16].              Communications Alliance, Industry welcomes government move to facilitate an industry-based scheme to manage telephone numbering, media release, 2 December 2015, accessed 11 December 2015.

[17].              Ibid.

[18].              Australian Communications Consumer Action Network (ACCAN), Submission to ACMA, Telephone numbering: future directions, February 2012, accessed 11 December 2015.

[19].              ZOAK Solutions, ‘ZOAK Solutions switches on Australia’s new numbering system’, ZOAK Solutions website, n.d., accessed 11 December 2015.

[20].              Explanatory Memorandum, op. cit., p. 2.

[21].              Free TV Australia, Submission to NCoA, op. cit.

[22].              The Statement of Compatibility with Human Rights can be found at pages 3–5 of the Explanatory Memorandum to the Bill.

[23].              Explanatory Memorandum, op. cit., p. 5.

[24].              Ibid.

[25].              Senate Standing Committee for Selection of Bills, Report, 16, 2015, The Senate, Canberra, 3 December 2015, accessed 16 December 2015.

[26].              Under the Radiocommunications Act 1992 persons can be issued licences that authorise them to operate specified radiocommunications transmitters of a specified kind (section 98). Conditions on channel A datacasting transmitter licences include that persons must not operate a transmitter for transmitting a datacasting service unless: the service is provided under, and in accordance with the conditions of, a BSA datacasting licence, and the service is capable of being received by a domestic digital television receiver or the service is an open narrowcasting television service that is capable of being received by a domestic digital television receiver or the service is a community television broadcasting service that is capable of being received by a domestic digital television receiver (section 109A).

[27].              Explanatory Memorandum, op. cit., p. 8.

[28].              Ibid.; Classification (Publications, Films and Computer Games) Act 1995, accessed 15 January 2016.

[29].              Explanatory Memorandum, op. cit., p. 9.

[30].              Narrowcasting services are defined in the BSA under sections 17 and 18 as broadcasting services whose reception is limited by: being targeted to special interest groups; intended only for limited locations; provided during a limited period of time; because they provide programs of limited appeal or for some other reason. The difference between open and subscription narrowcasting services is that subscription narrowcasting services are made available only on payment of a subscription fee.

[31].              Television Licence Fees Act 1964, and Radio Licence Fees Act 1964 and Datacasting Transmitter Licence Fees Act 2006, accessed 16 December 2015.

[32].              Explanatory Memorandum, op. cit., p. 10.

[33].              Ibid.

[34].              DoC, Regulating harms in the Australian communications sector, op. cit., p. 6.

[35].              Ibid., p. 7.

[36].              L Maddock, foreword to report by I Ramsay, Reform of the broadcasting regulator’s enforcement powers, ACMA, Sydney, November 2005, p. iii, accessed 5 January 2016.

[37].              Ramsay, Reform of the broadcasting regulator’s enforcement powers, op. cit., pp. 9–10.

[38].              Ibid., p. 5.

[39].              Ibid., pp. 9–10.

[40].              Australian Council on Children and the Media, Submission CI 2495 to the Australian Law Reform Commission, Inquiry into the classification system, cited in Australian Law Reform Commission (ALRC), Classification—content regulation and convergent media, report, 118, ALRC, Sydney, February 2012, p. 309, accessed 5 January 2016.

[41].              Commissioner for Children and Young People Western Australia, Submission CI 2480 to the Australian Law Reform Commission, Inquiry into the classification system, cited in Classification—content regulation and convergent media, op. cit., p. 310.

[42].              Explanatory Memorandum, op. cit., p. 12.

[43].              Harbour Radio Pty Limited v Australian Communications and Media Authority [2015] FCA 371 at [90], accessed 6 January 2016. Note that section 149 was amended by the Omnibus Repeal Day (Autumn 2014) Act 2014. The amended section replaced ‘the duty to investigate with a general discretion to investigate’, Explanatory Memorandum, Omnibus Repeal Day (Autumn 2014) Bill 2014, p. 12, accessed 21 January 2016.

[44].              Explanatory Memorandum, op. cit., p. 12.

[45].              ACMA, Radio Investigation Report 3151, accessed 6 January 2016.

[46].              The investigation into this complaint has yet to be finalised.

[47].              Competition and Consumer Act 2010, accessed 16 December 2015.

[48].              Explanatory Memorandum, op. cit., p. 14.

[49].              Ibid.

[50].              The competition rule is contained in section 151AK of the Competition Act and states that a 'carrier or carriage service provider must not engage in anti-competitive conduct’. The circumstances in which a carrier will engage in anti-competitive conduct are set out at section 151AJ.

[51].              ACCC, Division 12 report: record-keeping and reporting rules, ACCC, July 2013, accessed 6 January 2016.

[52].              Explanatory Memorandum, op. cit., p. 15.

[53].              Ibid.

[54].              Ibid., p. 16.

[55].              Ibid.

[56].              Telecommunications Act 1997, accessed 16 December 2015.

[57].              Explanatory Memorandum, op. cit., p. 16.

[58].              Ibid.

[59].              ACMA, ‘Numbering Plan’, ACMA website, 31 July 2015, accessed 17 December 2015.

[60].              Explanatory Memorandum, op. cit., p. 25.

[61].              Communications Alliance media release, op. cit.

[62].              Information in this box derived from the North American Numbering Plan Administration website and the Federal Communications Commission’s information pages on the Plan, accessed 7 January 2016.

[63].              Explanatory Memorandum, op. cit., p. 2.

[64].              Australian Communications Consumer Action Network (ACCAN), Submission to ACMA, op. cit.

[65].              C Milne, Numbering trends: a global overview, paper prepared for the International Telecommunications Union (ITU), ITU, 2002, pp. 54–55, accessed 7 January 2016.

[66].              Ibid.

[67].              ZOAK Solutions, ‘ZOAK Solutions switches on Australia’s new numbering system’, op. cit.

[68].              ACMA, Telephone Numbering: future directions, op. cit., p. 2.

[69].              Ibid.