Bills Digest no. 92 2015–16
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WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Jaan Murphy
Law and Bills Digest Section
29 February 2016
Purpose
of the Bill
Structure of the Bill
Background
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Concluding comments
Date introduced: 2
December 2015
House: House of
Representatives
Portfolio: Communications
Commencement: The
day after 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.
List of abbreviations
Abbreviation
|
Definition
|
ACCAN
|
Australian Communications Consumer Action Network
|
ACCC
|
Australian Competition and Consumer Commission
|
BROC
|
Binding rules of conduct
|
CCA
|
Competition and Consumer Act 2010
|
CCC
|
Competitive Carriers’ Coalition
|
RSP
|
Retail service provider
|
SAO
|
Standard access obligation
|
SAU
|
Special access undertakings
|
SFAA
|
Standard Form Access Agreement
|
The purpose of the Telecommunications Legislation Amendment
(Access Regime and NBN Companies) Bill 2015 (the Bill) is to amend the
Telecommunications Act 1997, the Competition and Consumer Act 2010 (CCA),
the National Broadband Network Companies Act 2011 (NBN Companies Act)
and the National Transmission Network Sale Act 1998 to:
- clarify
the interaction between the facilities access regimes in Part XIC of the CCA
and Schedule 1 of the Telecommunications Act
- facilitate
increased competition and innovation in the telecommunications industry and greater
choice for consumers by:
- introducing
a new obligation on access providers to give access to in-building cabling that
they own or control and use to supply an active declared service, so that other
service providers can supply carriage and/or content services through that
cabling
- exempting
pilots or trials of new eligible services or enhanced declared services conducted
by NBN corporations (such as the NBN Corporation) and other relevant carriers
from the CCA’s existing non‑discrimination obligations and
- making
various amendments to how the Australian Competition and Consumer Commission
(ACCC) makes access determinations, binding rules of conduct (BROCs) and
approves special access undertakings (SAUs)
- amend
the existing line of business restrictions under the NBN Companies Act
to provide the NBN Corporation (and any other NBN corporation) with greater
flexibility in its business operations by permitting:
- NBN
companies to dispose of surplus assets and
- allowing
regulations to be made that can relax restrictions on supplying
non-communications goods, services or investments and
- support
the object of ensuring that superfast carriage services are reasonably
accessible to all people in Australia, wherever they reside or carry on
business by amending existing provisions that authorise the NBN Corporation to
engage in certain types of anti-competitive conduct including:
- limiting
interconnection to listed points on its network and
- requiring
customers to purchase bundled services but
- providing
that those authorisations cease once the NBN is built and fully operational.[1]
The Bill is divided into a number of parts:
- Part
1 proposes changes to the interaction between the Telecommunications Act
and CCA access regimes
- Part
2 deals with access to in-building cabling
- Part
3 proposes to exempt pilots or trials of certain services from existing
non-discrimination obligations
- Part
4 proposes changes to how the ACCC makes access determinations, interim access
determinations and BROCs
- Part
5 proposes changes to how and when a SAU can be varied
- Part
6 proposes changes to how the ACCC considers ‘fixed principles’ when
determining a SAU
- Part
7 proposes amendments that will provide NBN corporations with greater business
flexibility and
- Part
8 proposes changes to the definition of a ‘declared service’ to exclude certain
commercial agreements between NBN Co, Optus and Telstra as well making
consequential amendments and other minor changes.
Vertigan Panel
In December 2013 the Government established a Panel of Experts
headed by Dr Michael Vertigan AC (the Panel) to conduct an independent
cost-benefit analysis of broadband policy and review the regulatory
arrangements.[2]
The Panel produced two reports to Government in 2014:
- a
statutory review under section 152EOA of the CCA (the Statutory Report)
and
- an
NBN Market and Regulatory Report, released in August 2014 (the Market Report).[3]
Together, the reports contained 53 recommendations on
regulatory and market structure matters.
Key recommendations
The recommendations made by the Panel in these reports that
are pertinent to the matters covered by the Bill include:
- clarifying
the ACCC’s powers in relation to directly regulating access to facilities under
Part XIC of the CCA (recommendation 1 of the Statutory Report)
- amending
Part XIC of the CCA so that provision of access to in-building cabling
controlled by a carrier or service provider for use in conjunction with a
declared service is included in the standard access obligations (SAOs) (recommendation
5 of the Statutory Report)
- amending
the CCA to allow the NBN to discriminate where this would aid efficiency
or is otherwise authorised by the ACCC (recommendations 13 and 15 of the
Statutory Report)
- amending
the CCA to provide that when the ACCC sets access charges via an access
determination for infrastructure providers other than NBN Co, it should be
required, along with other factors, to take account of the manner in which it
sets charges for NBN Co (recommendation 17 of the Statutory Report)
- amending
Part XIC of the CCA so that the ACCC, when making access determinations
and BROCs, must make ‘reasonable efforts’ to consult with affected parties (but
the mere fact it fails to do so should not invalidate the decision by the ACCC)
(recommendation 20 of the Statutory Report)
- simplifying
the SAU assessment process (recommendation 24) and providing greater
flexibility in responding to a notice to vary a SAU (recommendation 23 of the
Statutory Report) and
- streamlining
the operation of the ‘fixed principles’ (recommendation 25 of the Statutory
Report)[4]
- introducing
a price capping policy for NBN‐type services under which prices continue
to be affordable but not necessarily uniform nationally (recommendation 8 of
the Market Report) and
- to
deal with situations such as pilots and trials, amending Part XIC of the CCA
to allow the ACCC to determine that specified NBN Corporation services are not
to be treated as declared services in circumstances where it is satisfied this
is in the long‐term interests of end‐users (recommendation 15 of
the Market Report).[5]
The Government’s response to the
Vertigan Panel recommendations
The Government’s framework for regulatory reform in
the telecommunications sector, and its response to the recommendations made by
the Panel were set out in a policy paper released on 11 December 2014 entitled
‘Telecommunications Regulatory and Structural Reform’ (the Government
Response).[6]
Consultation
The Explanatory Memorandum states that the Government ‘consulted
industry stakeholders on an exposure draft of the legislation and on the early
assessment [Regulation Impact Statement] RIS’.[7]
The consultation process consisted of sending these materials to ‘major
telecommunications carriers (about 20 industry members)’ and key interest
groups such as the Australian Communications Consumer Action Network (ACCAN), Communications
Alliance and the Competitive Carriers’ Coalition (CCC). The Government also provided
the draft RIS and legislation to the ACCC for comment.[8]
While six submissions were received during the
consultation process,[9]
those submissions do not appear to have been made publically available. The
Explanatory Memorandum indicates that in the submissions:
Opinion was divided on the non-discrimination proposals. One
submission proposed broadening the changes to permit any discrimination that
aids efficiency. Another supported the proposed changes but sought a specific
exemption for itself. Four submissions indicated concern that the changes could
advantage larger providers over smaller ones, especially in the context of NBN
Co migrating services from Telstra’s networks to the NBN. While the Government
accepts that there are risks of such advantages being conferred, it also notes
that general competition law provides adequate powers to the ACCC to monitor
the sector and take action against anti-competitive conduct. No submitters
commented on the regulatory burden measurement costings in the early assessment
RIS.[10]
In their submissions to the current Senate Environment and
Communications Legislation Committee’s inquiry into the Bill (discussed below),
Macquarie Telecom and the CCC both express concern about the exposure draft
consultation process. Macquarie Telecom states that it had:
... provided its views on an exposure draft of the Bill to the
Department [of] Communications in September 2015. We are disappointed that
those concerns, which we understand to be reflective of the views of the vast
majority of the industry, appear to have gone largely unheeded.[11]
(emphasis added).
The CCC expresses similar concerns:
... competitors have expressed serious and fundamental concerns
with several elements of the proposed amendments in response to an exposure
draft of the Bill that was released last year. A joint submission from the CCC
and Optus to the exposure draft is attached to this submission. The concerns
raised at that time do not appear to have been addressed... There seems no
evidence these representations have been take into account in the present Bill.[12]
(emphasis added).
These comments suggest that some of the changes proposed
by the Bill may not have wide-spread support within the telecommunications
industry.
Senate Environment and
Communications Legislation Committee
The Bill has been referred to the Senate Environment and
Communications Legislation Committee for inquiry and report by 22 February 2016
(the Committee Inquiry). Details of the Inquiry are available here.[13]
The Committee recommended that the Bill be passed.[14]
However, the Labor and Australian Greens’ Senators on the Committee issued a
dissenting report disagreeing with the Committee’s recommendation and opposing
the Bill.[15]
Labor and the Greens consider the Bill to be:
...a misguided and ideological attempt by Government to roll
back a number of competition- and consumer-friendly reforms underpinning the National
Broadband Network (NBN).[16]
The dissenting report advises that Labor and the Greens
would not oppose the passage of Part 1, 2 and 6 of the Bill, which they
consider to be ‘non-contentious’.[17]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills had
no comment on the Bill.[18]
The Opposition and Greens have indicated opposition Parts 3
to 7 and 8 of the Bill.[19]
In addition, the Opposition has previously indicated opposition to wholesale
price capping if it leads to ‘people in the bush’ paying ‘more than people in
the cities to access the NBN’.[20]
At the time of writing, the position of other
non-government parties and independents on the Bill as a whole was not clear.
The table below summarises the position of interest and
industry groups that made submissions to the Committee Inquiry on Parts 1 to 8
of the Bill.
Table 1: Position of major interest groups
Interest group
|
Part 1
|
Part 2
|
Part 3
|
Part 4
|
Part 5
|
Part 6
|
Part 7
|
Part 8
|
Optus[21]
|
Supports
|
Supports
|
Opposes
|
Opposes
|
Opposes
|
No comment
|
Opposes Division 1
|
|
Telstra[22]
|
|
|
|
|
|
No comment
|
Opposes Division 1
|
|
Macquarie Telecom[23]
|
|
|
Opposes
|
Opposes
|
Opposes
|
No comment
|
Opposes Division 1
|
|
ACCAN[24]
|
|
|
Opposes
|
Opposes
|
Opposes
|
No comment
|
|
|
Australian Smart Communities Association (ASCA)[25]
|
Generally supports
the Bill
|
Competitive Carriers Coalition (CCC)[26]
|
Supports
|
|
Opposes
|
Opposes
|
Opposes
|
No comment
|
Opposes Division 1
|
Opposes
|
Source: as per footnotes in the table above.
Details of the positions of major interests groups on specific
issues raised by each Part of the Bill are discussed below under the heading ‘Key issues and provisions’.
The Explanatory Memorandum states that the Bill will not
impose any financial impact on the Commonwealth.[27]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), 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.[28]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights considers that
the Bill does not raise any human rights concerns.[29]
Part 1: interaction between the
Telecommunications Act and Competition and Consumer Act
Part 1 of the Bill deals with the interaction
between the access regimes contained in the Telecommunications Act and
the CCA by proposing amendments to the Telecommunications Act to clarify
the ACCC’s powers.
Current law
Currently both the Telecommunications Act and the CCA
contain access regimes that allow carriers to access the infrastructure of
other carriers in certain situations.
The Telecommunication Act access
regime
Parts 3 and 5 of Schedule 1 of the Telecommunications Act
create a regime that provides carriers with the right to access certain
facilities owned by other carriers. The policy underpinning Schedule 1 of the
Act is that, wherever practicable, carrier facilities should be co-located to
avoid unnecessary duplication and proliferation of carrier infrastructure (such
as transmission towers and underground ducts).[30]
The regime applies to any facility, land on which such a
facility is located, buildings or structures on such land, customer cabling and
equipment connected to a telecommunications network, an eligible underground
facility or telecommunications transmission tower owned or operated by the
carrier of which the request is made.[31]
In short, under the Telecommunications Act access scheme,
a carrier must give another carrier access to its facilities or network
information where the following conditions are met:
- access
is for the sole purpose of providing competitive facilities and carriage
services or for the requesting carrier to establish its own facilities
- the
request is reasonable and
- reasonable
notice is given of the request.[32]
A request will only be reasonable where compliance with the
request will ‘promote the long-term interests of end-users of carriage services
or of services supplied by means of a carriage service’.[33]
The Telecommunications Act specifically provides that the determination
of whether access will promote the long-term interests of end‑users is to
‘be determined in the same manner as it is determined for the purposes of Part
XIC’ of the CCA.[34]
The terms and conditions of access to such facilities are
those agreed by the carriers or, in the absence of agreement, determined by an
arbitrator or, where the carriers cannot agree on an arbitrator, by the ACCC.[35]
Additionally, the Minister may make a determination (by
legislative instrument) setting out principles dealing with price-related terms
and conditions relating to the obligation to provide access to certain facilities
and network information, and for the ACCC to make a binding Code setting out
conditions that are to be complied with in relation to the provision of access
to transmission towers and so forth.[36]
As a result, both the Minister and ACCC can (in effect) set price limits and
impose certain conditions that apply to all agreements involving one carrier
accessing the facilities of another.
The Competition and Consumer Act
2010 access regime
Part XIC of the CCA creates a regulated access regime
for the telecommunications industry. The regime provides for the ‘declaration’
of carriage services, and services which facilitate the supply of carriage services.
The circumstances in which this can occur include as a result of the ACCC
holding a public inquiry, a SAU being submitted, or an NBN Corporation
publishing a Standard Form Access Agreement (SFAA).
Once a service is declared, ‘standard access obligations’
(SAOs) apply to carriers or carriage service providers who supply those
services, unless otherwise exempt. In addition, once a service is declared the
ACCC can make an ‘access determination’ that sets out any or all of the default
terms and conditions of access to that service. Whilst the ACCC can make
interim access determinations on an ex ante (up-front) basis, it must
hold a public inquiry before making a final access determination.[37]
However, the CCA also provides that, prior to
supplying a declared service, or before an eligible service is declared by the
ACCC, a carrier or carriage service provider may give the ACCC a SAU specifying
terms and conditions which it undertakes to comply with in relation to the
applicable SAOs.[38]
SFAAs (issued by NBN Corporations) operate in a similar manner. SAUs and SFAAs
override access determinations.[39]
This is intended to provide greater regulatory certainty, and thus promote
investment in infrastructure.
In addition, the ACCC has the power to make binding BROCs.
BROCs are intended to operate as short-term regulatory measures that enable the
ACCC to urgently address concerns relating to the way a carrier or carriage
service provider is complying with a SAO. BROCs override access determinations
and may be issued without the ACCC holding a public inquiry.[40]
The diagram below highlights the steps involved in declaring
a service, producing access obligations and the hierarchy of precedence between
existing commercial agreements, SAUs, access determinations and BROCs (an issue
raised by a number of submissions to the Committee’s inquiry into the Bill, discussed
below).
Figure 1: roadmap to the Part XIC CCA access
regime
Source: CCH, Australian Competition and Consumer Law
Commentary (at 15 August 2011), Telecommunications, ‘¶21 Roadmap of Pt XIC’
[¶21-465].
As a result, the CCA creates a number of mechanisms
through which a carrier or carriage service provider can access the
infrastructure and services of other carriers or carriage service provides:
- by
direct negotiation between the relevant parties
- where
an NBN Corporation publishes a SFAA
- when
a SAU is accepted
- through
the ACCC making an interim or final access determination or
- through
the ACCC making BROCs.
Importantly, the CCA provides that an access provider
(that is, a carrier or carriage service providing an active declared service)
must comply with statutory SAOs on:
- the
terms and conditions commercially agreed with the relevant access seeker(s) in
an access agreement or
- if
a particular matter is not covered by an access agreement, on any terms and
conditions relating to that matters as:
- specified
in any SAU
- determined
by the ACCC in any BROCs or
- determined
by the ACCC in an access determination.[41]
As a result, access determinations, along with SAUs, BROCs,
and SFAAs can potentially all play a role in determining the terms and
conditions on which access to facilities is provided by one carrier to another
under the CCA access regime.
Hence the facilities access regime in the CCA is based
not only on negotiation and arbitration, but also on the direct intervention
and determination by the relevant regulator (the ACCC). Additionally, the CCA
provides the Minister with the power (by legislative instrument) to make a
determination setting out principles dealing with price-related terms and
conditions relating to SAOs.[42]
As a result, the Minister can set out principles that may (in effect) set price
limits or impose other conditions on SAOs (other than those arising from
commercially negotiated access agreements or a SFAA published by a NBN
Corporation).[43]
Issues arising from the existence
of two statutory access regimes
In its Statutory Report, the Panel noted that a number of the
submissions to its inquiry had pointed to a degree of overlap between the Telecommunications
Act and CCA access regimes. These submissions suggested that the Telecommunications
Act access regime should be replaced by the CCA access regime.[44]
Whilst noting the overlap, the Panel rejected either repealing the Telecommunications
Act access regime or aligning it with the CCA’s on the basis that:
It would not be appropriate to align the facilities access
regime with Part XIC by providing the ACCC with a new explicit access
determination power for the purposes of these provisions of the Telecommunications
Act. This is because the types of facilities covered by the Schedule 1
regime tend to have specific characteristics and cost profiles and it is not
clear that generic determinations could readily be developed. By contrast,
the case-by-case approach provided for under Schedule 1 enables outcomes
tailored to the individual circumstances.[45]
(emphasis added).
Although the Panel concluded that despite the overlap between
the two access regimes, repealing the Telecommunication Act access
regime was not required at this point in time. It recommended that the ACCC’s
powers in relation to directly regulating access to facilities under Part XIC
of the CCA should be more clearly specified.[46]
The Panel also noted that ‘should it become apparent with
the course of time that Part XIC can effectively supersede the Schedule 1
regime’, then repealing the Telecommunications Act access regime could be
considered at that time as a deregulatory measure.[47]
The proposed changes: clarifying
the powers of the ACCC and the interaction between the access regimes
The changes proposed by Part 1 of the Bill are
consistent with recommendation 1 of the Panel’s Statutory Report.
Proposed clauses 19A and 39A, at items 1 and
2 of the Bill, seek to give effect to recommendation 1 of the
Statutory Report by providing that a carrier must not request access to
facilities under the Telecommunications Act access regime if the service
giving access to the facility is (or becomes) a declared service under part XIC
of the CCA. The intention is said to be to reduce the ‘uncertainty of
having two competing access regimes operating simultaneously’.[48]
Neither proposed provision affects the terms and conditions
of existing agreements under the Telecommunications Act access regime. Both
provisions also restrict the definition of a ‘declared service’ to ensure that
they will not apply to active declared services being supplied under a special
access undertaking, or to declared services being supplied by the NBN Corporation
under a SFAA. It is said that this will ‘ensure that carriers retain the right
to seek ex ante access to facilities from NBN Co’ under the Telecommunications
Act access regime ‘until a service is declared by the ACCC’.[49]
Position of key interest groups
In their submissions to the Committee Inquiry into the Bill,
Optus and the CCC indicate their support for the measures proposed under Part
1 of the Bill.[50]
Other submitters do not comment on the proposed measures.
Part 2: access to in-building
cabling
Part 2 of the Bill deals with access to in-building
cabling under the CCA access regime. It clarifies the obligations of
carriers and carriage service providers in relation to such cabling (for active
declared services) by proposing amendments to Part XIC of the CCA (and a
consequential amendment to the National Transmission Network Sale Act 1998).
Current law
Access providers who provide active declared services in
accordance with Part XIC of the CCA are required to comply with both the
statutory SAOs and any relevant terms of conditions contained in a commercially
negotiated access agreement, SAU, SFAA, BROC or access determination relating
to the supply of those services. The current statutory SAOs contained in the CCA
do not directly deal with access providers giving access to in‑building cabling
to access seekers.[51]
As a result, access to in-building cabling presently falls outside the
statutory SAOs, and is a matter for an access agreement, SAU, SFAA, BROC or
access determination.
The proposed changes
In its Statutory Report, the Panel noted that it was not
clear if the CCA’s current access regime would apply to in‑building
cabling because:
...such in-building cabling is not ordinarily owned or
controlled by carriers or carriage service providers (being the persons who would
be bound by the Part XIC regime). However, to the extent the cabling is within
the legal and operational control of a carrier or service provider, there may
be an argument that the regime has some application.[52]
The Panel noted that there were three possible solutions,
but ultimately recommended that the CCA be amended to include within the
SAOs the provision of access to in-building cabling controlled (but not
necessarily owned) by an access provider for use in conjunction with a declared
service.[53]
However the Panel also noted that the first option (amending the CCA to
make it clear that where an access provider controls customer cabling (whether
its own or another party’s), access to that cabling is able to be declared
under Part XIC) ‘may also need to be utilised to provide clarity that access to
such cabling is covered’.[54]
Proposed subsections 152AR(5A) and 152AXB(5A) of
the CCA, at items 5 and 6 of the Bill, reflect the Panel’s
recommendation and preferred option. Both proposed provisions will ensure that
access providers (including a NBN corporation) will be required to give access
to customer cabling:
- it
either owns or controls physical access to[55]
and
- uses
to supply an active declared service (whether to itself or other persons)[56]
for the purpose of allowing the access seeker to supply carriage
services and/or content services.[57]
The Government notes that the use of the word ‘controls’
in the proposed amendments is intended to:
...capture circumstances where a person, by virtue of an
agreement with the legal owner or some other arrangement or understanding
(express or implied by conduct) between the person and the owner of the
cabling, is able to determine who can access and use the in-building cabling.[58]
The Explanatory Memorandum states that the proposed amendments
will remove the potential for a single access provider who controls customer in-building
cabling from ‘being able to create an access bottleneck as a result of its
control over the cables, thereby favouring its own operations over those of its
competitors’.[59]
It also notes that the amendments will not create an obligation on a person
controlling in-building cabling to provide access to that cabling in the
absence of a declared service that is dependent on that in-building cabling for
its supply.[60]
Position of key interest groups
In its submission to the Committee Inquiry into the Bill,
Optus indicates its support for the measures proposed in Part 2 of the
Bill.[61]
Other submitters do not comment on the proposed measures.
Part 3: exempting pilots and trials
from existing non-discrimination obligations
Part 3 of the Bill will relax some of the non-discrimination
obligations that apply to the NBN Corporation so as to permit it to ‘better
conduct’ pilots or trials. The Bill proposes various restrictions on such
trials or pilots, including that the NBN Corporation must notify the ACCC of
the details of the trial or pilot, which cannot last more than 12 months
(without approval by the ACCC).
Current law
Currently the CCA imposes a number of non-discrimination
obligations on the NBN Corporation in relation to the supply of layer-2
bitstream services, developing new eligible services, enhancing declared
services, enhancing certain facilities or the supply of declared services.[62]
As a result, if the NBN Corporation (or another carriage service provider)
wants to test a new service or technology on the NBN, the NBN Corporation is
required to make the same service or technology available to all customers.
Issues arising from the application
of existing non-discrimination provisions to pilots and trials
The Panel recommended in the Market Report:
NBN Co should generally continue to be permitted to supply
only declared services within the meaning of Part XIC of the Competition and
Consumer Act 2010. However, to provide flexibility to deal with
situations such as pilots and trials, the integration of new networks, the
provision of services in contestable markets, and greater competition following
full disaggregation, Part XIC should be amended to allow the ACCC to determine
that specified NBN Co services are not to be treated as declared services in
circumstances where the ACCC is satisfied this is in the long‐term
interests of end‐users.[63]
(emphasis added)
Whilst the proposed changes in Part 3 of the Bill give
effect to part of the Panel’s recommendation (providing flexibility to deal
with situations such as pilots and trials), arguably they do not provide the
ACCC with the ability to ‘determine that specified NBN Co services are not to
be treated as declared services’. This is because, as drafted, provided the NBN
Corporation meets the relevant requirements in proposed subsections 152F(1)
and (3), the pilot or trial will be automatically approved. In other
words, the ACCC does not have the power to ‘determine’ or decide if such a
trial is ‘in the long-term interests of end-users’ and hence should be exempted
from the usual non—discrimination obligations imposed by the CCA.
The proposed changes
Proposed section 152F of the CCA (at item
16 of the Bill) provides that the non-discrimination obligations imposed by
sections 152ARA, 152ARB, 152AXD and 152CJA will not apply to pilots or trials if
the following conditions are met:
- the
pilot or trial is of a new eligible service, enhanced declared service (or
something ancillary to either)[64]
- the
pilot or trial will not operate for more than 12 months (unless the ACCC has
agreed to a longer period)[65]
- the
ACCC is notified of the proposed trial or pilot prior to its commencement[66]
- the
person conducting the pilot or trial publishes an appropriate notice on its
website,[67]
and
- the
notice remains published on the person’s website until the end of the pilot or
trial.[68]
Pages 58 to 60 of the Explanatory Memorandum adequately
describe the requirements that will apply to the notices given to the ACCC
under proposed section 152F and other consequential amendments made by Part
3 of the Bill.
As proposed subsection 152F(5) provides that if the
ACCC declares an eligible service that is being supplied as part of a pilot or
trial, for the duration of the pilot or trial the service is not a declared
service. The declaration would therefore not apply to contracts in place to
supply those pilot or trial services. The Explanatory Memorandum notes:
As a result, an access provider supplying the pilot or trial
service in accordance with the contract in force during the pilot or trial
period (as set out in the notice given to the ACCC), could not be found to have
breached the non‑discrimination obligations in the event that there were
different terms and conditions in the pilot or trial contract from the terms
and conditions in access agreements for the declared service. However, the
protection is only temporary and as soon as the pilot and trial ceases, the
access provider will be required to comply with the access declaration.[69]
The Explanatory Memorandum states that this provision is necessary
to ‘provide certainty to industry in relation to investments and the
commercially negotiated terms for pilots and trials’.[70]
Position of key interest groups
With the exception of Telstra and the ASCA, all the
submissions to the Committee Inquiry specifically oppose the changes proposed
by Part 3 of the Bill.[71]
Optus opposes the amendments proposed by Part 3 of
the Bill for a number of reasons including that:
...there is no evidence we are aware of that suggests the
non-discrimination obligations have operated either to restrict NBN Co’s
product development or to discourage innovation. Further, Optus notes that the
issue of non‑discrimination was hotly contested when the NBN legislation
was considered and Parliament made specific amendments aimed at reinforcing the
principle of non-discrimination and ensuring that it applies on a consistent
basis to all of NBN Co’s activities.[72]
Optus also argues that enabling the NBN Corporation ‘to
discriminate by limiting participation in pilots or trials could give a single
RSP [retail service provider] a significant first mover advantage in the market’,
leading to ‘adverse competition impacts' especially in circumstances where ‘significant
systems, processes or commercial arrangements need to be put in place to bring
a product or service to market’.[73]
Optus considers that ‘the principle of non-discrimination is fundamental to the
level playing field credentials of the NBN’ and hence, it recommends either that
the amendments be removed from the Bill, or that the Bill be amended so that:
- the
application of Part 3 of the Bill is delayed until the roll-out of the
NBN is complete or
- the
NBN Corporation is limited to participating in pilots/trials only to the extent
that it can demonstrate to the ACCC’s satisfaction that it faces practical
constraints in offering broader industry participation.[74]
The ACCAN is also concerned that the proposed amendments ‘may
result in anti-competitive behaviour in the industry’ and that:
There is no mechanism to object to the conduct or for the
ACCC to insist that the non-discrimination obligations apply to trials or
pilots which it would otherwise deem to be anti-competitive.[75]
ACCAN recommends that ‘the Bill be amended to provide the
ACCC with powers to reject the switching off of non-discrimination obligations
for pilots and trials which it determines to be anti-competitive’.[76]
The CCC is also highly critical of the amendments proposed
by Part 3 of the Bill, stating:
The proposal to dilute the non-discrimination requirements in
order to allow NBN to do exclusive deals for “pilots and trials” is highly
risky, unnecessary and supported by no persuasive evidence that there is a
problem in existing rules.[77]
The CCC also notes that the ACCC has issued guidelines ‘that
would allow for pilots and trials on the condition that NBN allowed
participation by any access seekers that wished to take part’ and that the CCC
was ‘unaware of any pilot or trial proposal that has been proposed and
prevented under the present rules’.[78]
As a result, the CCC concludes that the non-discrimination rules are ‘a core
element’ in restraining market power in the telecommunications industry and
that ‘they should not be changed’.[79]
Macquarie Telecom made similar points, noting that it is
unaware of ‘any examples of pilots or trial proposed by non-incumbents that
have been unable to proceed because of the non-discrimination rules’.[80]
Macquarie Telecom also submits that there is no evidence that ‘there is some
“chilling” effect arising from the non‑discrimination rules’ that prevents
access seekers from ‘coming forward with ideas to NBN’,[81]
and that, as a result:
...the case for change to the non discrimination rules has not
been made out and, in the absence of a demonstrated, forward looking problem,
the risks of making the proposed amendments are too great.[82]
In relation to the operation of the CCA’s existing
non-discrimination provisions to trials and pilots, Optus and the CCC note in
their joint submission:
The Respondents do not consider that it would be
discriminatory for NBN Co to participate in a bilateral trial at the request of
an RSP. The ACCC in its XIC Non-Discrimination Guidelines published in
April 2012 clearly takes the same view. The ACCC at page 21 and 22 of its
Guideline make clear that it considers that non-discrimination requires NBN Co
to generally provide equality of opportunity to participate in trials, not that
all parties would be entitled to participate in each trial... It should also be
noted that the Guideline remains currently unchallenged, and must be considered
to represent the status quo. Accordingly, it appears extraordinary that the
Bill seeks to amend the legislation to take of account of a 'problem' when
there is no evidence that such a problem currently exists, on the basis of an
interpretation of the current legislation which is at odds with the
unchallenged view of the industry regulator.[83]
In summary, the amendments proposed by Part 3 of the
Bill appear to go further than the recommendation made by the Panel in the
Market Report and have attracted substantial criticism from relevant interest
groups and industry participants.
Part 4: how the ACCC makes access
determinations
Part 4 of the Bill contains amendments to the CCA
that will clarify the factors the ACCC must consider when making access
determinations, interim access determinations and BROCs. The proposed
amendments arguably go somewhat further than those foreshadowed by recommendations
17 and 20 of the Panel in its Statutory Report.[84]
Current law
Currently sections 152BCA and 152BDAA of the CCA set
out matters the ACCC must take into account when making access determinations
or BROCs respectively. These include:
- whether
the determination will promote the long-term interests of end-users of carriage
services or of services supplied by means of carriage services[85]
- the
legitimate business interests of a carrier or carriage service provider who
supplies, or is capable of supplying, the declared service[86]
and
- the
interests of all persons who have rights to use the declared service.[87]
In relation to the process by which the ACCC makes interim
access determinations and BROCs, current section 152BCG does not require
the ACCC to observe procedural fairness by, for example, consulting with
affected parties.
The proposed changes
In seeking to clarify the factors the ACCC must consider when
making access determinations, the proposed amendments would require the ACCC to:
- if
the access determination applies to an NBN Corporation: have regard to the
method it uses to determine the non-price and price-related terms and
conditions it includes in access determinations that do not apply to the NBN
Corporation[88]
and
- if
the access determination applies to other access providers: to the method
it applies in determining non‑price and price-related terms and
conditions in NBN Corporation-specific access determinations.[89]
The Bill does not amend virtually identical provisions in the
CCA relating to the factors to be taken into account by the ACCC in
making BROCs.[90]
The Panel made no recommendation for such an amendment.
Consistent with the Panel’s recommendations, in making
interim access determinations and BROCs, the ACCC would be required to make
reasonable efforts to consult with affected parties.[91]
Position of key interest groups
With the exception of those from Telstra and the ASCA, all
submissions the Committee Inquiry specifically oppose the changes proposed by Part
4 of the Bill.[92]
Optus opposes these amendments for a number of reasons including that:
...it is possible to envisage circumstances in which these
provisions interfere with or constrain the decision making of the ACCC to the
detriment of consumers. As a minimum, they appear to open the scope for further
debate as to appropriate approach to setting access prices. This is likely to
add complexity and delay in the ACCC’s decision making processes. More
significant is the possibility that these provisions might be used to limit or
frustrate the ACCC’s decision making powers by encouraging legal challenges to
those decisions.[93]
Optus also argues that ‘whilst the amendments respond to
recommendations of the Vertigan Review’ they ‘appear to go beyond the specific
concerns raised’ by the Panel as they:
...clearly go further than ensuring that an access provider is
not disadvantaged as compared to NBN Co, since it also requires the ACCC to
ensure that NBN Co is not disadvantaged compared to other access providers.[94]
As a result, Optus recommends that the amendments be removed
from the Bill, or alternatively, that the Bill be amended so that ‘the ACCC is
required to have regard to consistency between NBN Co and other access
providers only in relation to pricing decisions for services that are
supplied in the same wholesale market(s) as NBN Co services.’[95]
The ACCAN is also critical of the amendments proposed in Part
4 of the Bill, arguing that they ‘appear to restrict’ the ACCC’s ability to
‘make markets work for consumers’ and would instead ensure that ‘markets work
for service providers’.[96]
ACCAN is also:
...not convinced that the problems triggering these proposed
amendments currently, or will in the future, exist. The amendments are likely
to add further complexity to the telecommunications regime and increase the
amount of time it takes for the regulator to arrive at, and implement,
decisions. ACCAN suggests removing the proposed measures...[97]
The CCC is also critical of the amendments proposed by Part
4 of the Bill, stating that the ‘proposed new legislative requirements
relating to the way the ACCC performs its duties represent unnecessary red tape
at best, an unwelcome injection of uncertainty at worst’.[98]
Macquarie Telecom makes a similar point, stating:
Proposed changes to the processes the ACCC must follow in
access determinations and binding rules of conduct do not reflect any
demonstrated problem, but do add red tape, risk creating further delay and
complexity to an already highly bureaucratic process, and, in so doing, create
further barriers to smaller stakeholders participating in these important
regulatory processes.[99]
Optus and the CCC note in their joint submission:
... the proposed amendments in Part 4 of the Bill add
unnecessary further complexity to Part XIC, which is already unduly lengthy and
complex. These amendments will also tend to exacerbate the tendency to delay
and cost in inquiries referred to above. In addition, the Respondents do not
believe that these amendments address any current problem... the ACCC already
devotes huge amounts of time and effort to consideration of access
determination and is already required to consider a broad ambit of relevant
factors. To add additional factors which the ACCC is required to consider is
highly unlikely to impact on decisions made by the ACCC, as the ACCC already
consults very widely with all industry stakeholders and is required to take
account of a broad range of factors. The proposed amendments will however add a
further formal requirement to the decision making process... this is a clear step
in the wrong direction – towards further complexity and delay.[100]
In summary, the amendments proposed by Part 4 of the
Bill appear to go somewhat further than the recommendations made by the Panel,
and have attracted criticism from relevant interest groups and industry
participants.
Part 5: how and when a special
access undertaking can be varied
SAUs are intended to provide certainty around the terms of
access to certain facilities by allowing the owner of those facilities to
propose the price, terms and conditions on which it will make access to them available
to other carriers.
Part 5 of the Bill contains proposed amendments to
the CCA designed to increase certainty for a person giving a SAU. The
proposed amendments would require the ACCC to specify variations to a SAU that
it considers essential for it to accept that undertaking. To increase
flexibility, variations may be proposed that, though using different wording,
have the same effect or substance. The proposed amendments are consistent with
recommendations 22 and 23 of the Panel in the Statutory Report.
Current law
Currently, section 152CBDA of the CCA provides that
where a SAU is in force, the ACCC may issue a written notice stating that, if
the person makes the variations to the SAU specified in the notice and returns the
SAU to the ACCC with those variations within a specified period, the ACCC will
consider the varied SAU as if it were the original SAU.
The proposed changes
The aim of the amendments proposed by Part 5 of the
Bill is to clarify the process by which the ACCC can request variations to a
SAU. The key thrust of the proposed changes is that the ACCC would be
restricted to specifying variations to a SAU that it considers essential to its
acceptance of a SAU, rather than the current position where it can specify variations
that it considers desirable, but not essential.[101]
However, the ACCC will retain the power to ‘suggest other variations to the
original undertaking’ that it ‘considers desirable’.[102]
The amendments will also allow a person responding to a
notice from the ACCC to vary a SAU to propose variations that have the same
effect (outcome) as those proposed by the ACCC.[103]
The Explanatory Memorandum suggests that ‘this will confer flexibility on the
person giving the SAU.’[104]
Pages 63 to 64 of the Explanatory Memorandum adequately describe other aspects
of the proposed changes.
Position of key interest groups
With the exception of Telstra and the ASCA, all submissions to
the Committee Inquiry specifically oppose the changes proposed by Part 5
of the Bill.[105]
Optus opposes these amendments for a number of reasons
including that:
...it is unclear what specific problem the changes aim to
address. They do not respond to any systemic problem with the variation notice
powers which were only recently put into the CCA.[106]
Optus also argues that whilst the amendments reflect the Panel’s
recommendations they ‘are likely to undermine the efficacy of this regulatory
tool, and may have some adverse consequences for the industry and consumers’ as
they ‘are likely to add to the delay and uncertainty of settling future SAU’s
and they will almost certainly re-open the scope for regulatory gaming’.[107]As
a result, Optus recommends that the amendments be removed from the Bill.[108]
The ACCAN also opposes Part 5 of the Bill on the
ground that the proposed amendments ‘appear to restrict’ the ACCC’s ability to ‘make
markets work for consumers’ and would instead ensure that ‘markets work for
service providers’.[109]
The CCC is also critical of the proposed amendments, noting:
There is no evidence that there is a problem with the
legislation beyond occasional complaints by those network owners with market
power that they need to work hard to satisfy the ACCC that their proposed
undertakings are reasonable and promote the long term interest of end users.[110]
The CCC also submits that ‘the proposed amendments have
the effect of shifting flexibility and discretion to the monopoly owners and
away from the ACCC’.[111]
Macquarie Telecom makes a similar point, stating:
The proposed amendments limiting the ability of the
Commission to vary SAU to changes that are necessary to satisfy the Commission
that the SAU is “reasonable” are unnecessary, and seriously risk undermining
the flexibility that the Commission needs to deal with complicated and
extensive undertakings.[112]
In summary, the amendments proposed by Part 5 of the
Bill, whilst consistent with the recommendation made by the Panel, have
attracted substantial criticism from relevant interest groups and industry
participants.
Part 6: how the ACCC considers
fixed principles when determining a special access undertaking
Part 6 of the Bill makes technical changes to how the
ACCC will consider ‘fixed principles’ when determining a SAU. Unlike other
parts of the Bill, Part 6 did not attract any commentary from relevant
interest groups and industry participants who made submissions to the Committee
Inquiry.
Current law
The ACCC may include in an access determination or SAU a
provision that is specified to be a ‘fixed principles provision’ (in the case
of Access Determinations) or a ‘fixed principles term or condition’ (in the
case of SAUs).[113]
This digest will refer to these as ‘fixed principles’. Both price and non-price
terms and conditions can be designated as fixed principles provisions.
The Explanatory Memorandum notes that fixed principles are
designed to provide long term certainty for service providers and access
seekers and have assumed particular significance in the telecommunications
industry ‘given that there can be substantial up-front costs in rolling out or
upgrading telecommunications networks, with those costs often recouped over a
lengthy period’.[114]
The effect of specifying that a provision is a fixed principle
provision is to ‘lock in’ the matters dealt with in the term or condition for a
specified period(s).[115]
An additional effect of designating fixed principles in access determinations
or SAUs is that:
- any
access determination that replaces the original access determination must
include a fixed principles provision in the same terms as that contained in the
original access determination
- where
a later SAU is submitted by that person that includes the same fixed principle,
the ACCC cannot reject that SAU because of that fixed principle
- if
the SAU is varied, the ACCC does not have the ability to reject that varied SAU
because of the fixed principles term or condition.[116]
The proposed changes
Proposed subsection 152CBD(1A), at item 26 of
the Bill, requires the ACCC to have regard to any relevant fixed principles
included in other access determinations when considering whether to include a
fixed principles provision in an access determination. The proposed amendment
is consistent with paragraph (c) of recommendation 25 of the Statutory Report.[117]
Items 27 and 28 amend paragraph 152CBAA(5)(h)
and subsection 152CBAA(6) of the CCA to replace the words ‘for a reason
that concerns’ with ‘on the basis of the inclusion or effect of’. The effect of
the amendments is to narrow the reasons upon which the ACCC could reject a SAU
or variation to a SAU containing a fixed principle. It does this by providing
that the ACCC must not reject the SAU on the basis of the inclusion or effect
of the fixed principle in question.
The Explanatory Memorandum states that this change will
ensure that the ACCC must have more certainty about ‘the implications of
accepting fixed principles in the first place’.[118]
Pages 64 to 65 of the Explanatory Memorandum adequately describe other aspects
of the proposed changes.
Position of key interest groups
As noted above, none of the submissions to the Inquiry
directly address the changes proposed by Part 6.
Part 7: providing the NBN Corporation
with greater business flexibility
Currently Part 2 of the NBN Companies Act imposes business
restrictions on the NBN Corporation that are designed to ensure that it is ‘highly
focused on its objectives in its operation and limits its ability to exercise
market power through integration in horizontal markets, or participation in
downstream markets’.[119]
Part 7 of the Bill proposes a number of changes to
the NBN Companies Act that will provide the NBN Corporation with
increased business flexibility. The Government argues that the proposed changes
will ‘not compromise the key purpose of the existing line of business
restrictions.’[120]
Almost all submissions to the Committee Inquiry disagree with part or all of
the changes proposed by Part 7 in relation to increasing the business
flexibility of the NBN Corporation.[121]
Current law—line of business
restrictions
Currently sections 17, 18, 19 and 20 of the NBN Companies
Act prohibit the NBN Corporation from supplying content services,
non-communications services and non-communications goods, and place
restrictions on investment activities respectively.
The proposed changes—line of
business restrictions
Proposed section 22B of the NBN Companies Act,
at item 30 of the Bill, would allow Regulations to specify when the
restrictions imposed by sections 18, 19 and 20 do not apply. Whilst appearing
to allow the Government to effectively by-pass the business line restrictions
imposed by the NBN Companies Act, any such regulations would be subject
to Parliamentary scrutiny and potential disallowance.[122]
The Explanatory Memorandum states that the proposed changes ‘would allow
flexible responses to unanticipated circumstances... without degrading the bright
line conduct rules that the sections establish’.[123]
Item 31 would amend section 19 of the NBN
Companies Act to provide that an NBN Corporation must not supply
non-communications goods to another person unless:
- the
goods are for use in the connection or supply, or prospective supply, of an
eligible service by the NBN Corporation[124]
- the
NBN Corporation:
- did
not obtain the goods for the purpose of supplying the goods[125]
- obtained
the goods for the purpose of supplying the goods in connection with the supply,
or prospective supply, of an eligible service[126]
or
- considers
the goods to be excess to the NBN corporation’s requirements.[127]
The Explanatory Memorandum suggests that ‘these additional
grounds will allow NBN corporations to manage their asset holdings in a more
efficient and financially effective manner’.[128]
The above amendments are largely consistent with
Recommendation 29 of the Panel’s Statutory Report—although the Panel appears to
have focused in its recommendations on sections 17, 18 and 19 of the NBN
Companies Act. In relation to section 20 (investment activities), the Panel
made a number of recommendations contingent on the Government accepting other
recommendations.[129]
Those recommendations are not reflected by the proposed changes contained in
the Bill. However, the changes proposed in relation to section 20 are
consistent with the underlying philosophy and intent of the recommendations
related to sections 18 and 19 of the NBN Companies Act. It is worth
noting that the proposed amendments in relation to sections 18, 19 and 20 have
attracted criticism from relevant interest groups and industry participants, as
discussed below.
Position of key interest groups—proposed
changes to line of business restrictions
With the exception of ACCAN and the ASCA, submissions to the
Committee Inquiry oppose the changes proposed by Part 7 of the Bill.[130]
Optus opposes the proposed amendments for a number of
reasons including:
- it
is unclear why the proposed changes are necessary and
- given
the NBN Corporation was established to ‘specifically address a market failure
relating to the provisions of last mile access for high speed broadband
services; it should remain focused on that purpose’.[131]
As a result, Optus recommends that the amendments proposing
to relax the NBN Corporation’s line of business restrictions be removed from
the Bill.[132]
The CCC, whilst stating ‘it is reasonable to clarify that
NBN should be able to dispose of surplus goods’ considers that ‘the lines of
business restrictions were put in place for very important reasons’ and hence
the NBN Corporation ‘should remain strictly focused on the purpose for which it
was created – addressing areas of market failure in wholesale markets’.[133]
Macquarie Telecom makes a similar point:
...the rationale for the line of business restrictions – to
constrain NBN from entering and undermining competitive markets – remains a
keystone element of the regime.[134]
Macquarie Telecom then concludes that ‘further information
about the problem NBN presently faces is necessary before a judgement can be
made about the proposed amendments.’[135]
In summary, the amendments proposed by Part 7 of the
Bill, whilst broadly consistent with the recommendation made by the Panel, have
attracted criticism from relevant interest groups and industry participants.
Current law—authorised anti-competitive
conduct
Currently Division 16 of Part XIB of the CCA
regulates when an NBN Corporation can engage in ‘authorised’ anti‑competitive
conduct that is ‘reasonably necessary to achieve uniform national pricing’.[136]
The types of anti‑competitive conduct that a NBN Corporation can be
authorised to conduct include:
- refusing
to permit interconnection of a facility otherwise than at a ‘listed point of
interconnection’ with one or more facilities of a service provider or utility[137]
- refusing
to supply or offer for supply a designated access service to a service provider
or utility unless that entity agrees to acquire one or more other designated
access services from the NBN Corporation[138]
- engaging
in other conduct that is ‘reasonably necessary to achieve uniform national
pricing of eligible services supplied by the NBN corporation to service
providers and utilities’.[139]
The purpose of allowing the NBN Corporation to engage in
the above anti-competitive conduct is to facilitate ‘uniform national pricing
of an eligible service supplied, or offered to be supplied, by an NBN
corporation’ to service providers and utilities.[140]
Importantly, the CCA provides that uniform national pricing of eligible
services is achieved ‘if, and only if, the price-related
terms and conditions on which the NBN corporation supplies, or offers to
supply, the eligible service to service providers and utilities are the same
throughout Australia’.[141]
The proposed changes—authorised
anti-competitive conduct
In its Market Report, the Panel recommended that:
A policy of price capping for NBN‐type services be
adopted, under which prices continue to be affordable but not necessarily
uniform nationally. This should be accompanied by a gradual move towards
cost‐based wholesale pricing, with directly targeted subsidies used to
address any concerns regarding user affordability that may result from this
change.[142]
The Government Response accepted the above recommendation
and indicated an intention to shift away from uniform national pricing to
wholesale price capping, as recommended by the Panel.[143]
The amendments proposed by the Bill to the CCA reflect that policy.
For example, item 33 of Part 7 of the Bill
amends objects paragraph 151DA(1)(b) of the CCA to change one of the
objects of that section from promoting ‘uniform national pricing’ to promoting
‘access to superfast carriage services by all people in Australia, wherever
they reside or carry on business’. Likewise item 35 repeals paragraph
151DA(2)(e), which requires all refusals by a NBN Corporation to permit
interconnection of particular facilities at particular locations to be
reasonably necessary to achieve uniform national pricing. Similarly, items
38 and 45-48 repeal a number of subsections that refer to national
uniform pricing, to give effect to the shift to a policy of wholesale price
capping.
Subdivision B of Division 2 of Part 3 of the NBN
Companies Act sets out the circumstances and method by which Commonwealth
ownership of the NBN Corporation ceases. Part of that process is a declaration
by the Minister that the NBN should be treated as built and fully operational.[144]
Proposed section 151DC provides that Division 16 of Part XIB of the CCA
will cease to have effect when the Minister makes a declaration under the NBN
Corporations Act that the NBN should be treated as built and fully
operational. In regards to this provision, the Government notes:
The cessation arrangements reflects the Government’s approach
that the authorisations enabled under this Division 16 should only be in place
during the construction phase of the NBN. This is because, as noted above, the
authorisations are intended to provide certainty during the build phase to
enable NBN Co to construct its network as planned in the most cost-effective
and efficient manner.[145]
Position of key interest groups—proposed
changes to authorised anti-competitive conduct
None of the submissions to the Inquiry directly addressed
the proposed amendments contained in Division 3 Part 7 of the
Bill that deal with authorised anti-competitive conduct.
Part 8: definition of declared service
and interaction with other agreements
The stated aim of Part 8 of the Bill is to clarify that
facilities access services supplied under the commercially negotiated agreements
between NBN Corporation, Telstra and Optus:
- are
not declared services to the extent that they are supplied under those
agreements and
- will
continue to operate if those services are declared, until those specific
agreements expire.[146]
Current law
Currently section 152BE of the CCA defines an ‘access
agreement’ in a manner that includes commercially negotiated agreements between
an access seeker and carriage service provider who supplies, or proposes to
supply, a declared service. Section 152BCC then provides that access agreements
prevail over access determinations, to the extent of any inconsistences between
them in relation to the parties to the relevant access agreement dealing with
the relevant declared service.
The proposed changes
Proposed subsection 152AQA(1), at item 50 of
the Bill, provides that certain agreements or arrangements to access facilities
that would be a declared service are not affected by the declaration of those
facilities if the specified agreement or arrangement is in place prior to ACCC
declaration of those facilities. The types of agreements include:
- a
contract to which a determination made under subsection 577BA(9) of the Telecommunications
Act applies
- the
contract entered into between the NBN Corporation and Optus Networks Pty
Limited on 23 June 2011 and restated on 14 December 2014 or
- where
the relevant service is being supplied by a NBN Corporation as part of an
arrangement between a NBN Corporation and another carrier.[147]
In relation to a contract to which a determination made
under subsection 577BA(9) of the Telecommunications Act applies, the
Explanatory Memorandum notes that there has been one such determination: the Telecommunications
(Agreements for Compliance with Structural Separation Undertaking)
Determination 2014 (the Determination).[148]
The Determination applies to six contracts, arrangements or undertakings between
Telstra and the NBN Corporation.[149]
The Explanatory Memorandum notes that the intended purpose of proposed
section 151AQA is to:
...capture the commercial agreements made between
Telstra and NBN Co, and Optus and NBN Co. The proposed paragraphs will ensure
that these agreements, which are designed to facilitate the roll-out of the
NBN, will continue to operate in accordance with their existing negotiated
terms and conditions, even if the ACCC later declares one or more of the
facilities access services which are supplied as part of the agreements. This
protection applies for the life of the agreements, thereby giving certainty to
the parties concerned on the matters covered. Therefore the exemption in
section 152AQA grandfathers the commercial terms in the agreements between
Telstra and NBN Co, and Optus and NBN Co... Proposed paragraph 152AQA(1)(c)
is intended to capture any arrangement between an NBN corporation and another
carrier (such as a commercial contract made under access granted in Schedule 1
to the Telecommunications Act). This will provide certainty to NBN Co
and industry in relation to existing agreements (that are not those agreements
set out in 152AQA(1)(a) or 152AQA(1)(b)), and avoids any confusion that might
arise as a result of the application of a competing access regime.[150]
Position of key interest groups
In its submission to the Committee Inquiry, the CCC suggests
that proposed section 152AQA ‘duplicates existing provisions’ and
therefore ‘represents yet another amendment that appears to be entirely
unnecessary’ and would therefore ‘be adding complexity to the CCA for no
purpose’.[151]
The Bill largely reflects an attempt to give effect to a
number of the Panel’s recommendations. However, some of the amendments proposed
appear to go further than strictly necessary to give effect to the related
recommendation. The Bill, in its current form, has been criticised by a variety
of industry and interest groups. As such, it appears likely to be the subject
of significant scrutiny and debate as it passes through Parliament.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, pp. 1–2, accessed 23 December 2015.
[2]. Department
of Communications and the Arts, ‘Terms
of reference for the NBN panel of experts’, Department of Communications
and the Arts website, 12 December 2013, accessed 3 February 2016.
[3]. Dr
M Vertigan AC, A Deans, Prof H Ergas and Mr T Shaw PSM (Vertigan Panel), Independent
cost‐benefit analysis of broadband and review of regulation: statutory
review under section 152EOA of the Competition and Consumer Act 2010, (Statutory
Report) report prepared for the Minister of Communications, Department of
Communications, Canberra, June 2014;
Vertigan Panel, Independent
cost‐benefit analysis of broadband and review of regulation: volume I –
national broadband network market and regulatory report, (Market
Report) report prepared for the Minister of Communications, Canberra, August
2014, both accessed 3 February 2016.
[4]. Vertigan
Panel, Statutory Report, op. cit.
[5]. Vertigan
Panel, Market Report, op. cit., recommendations 8 and 15.
[6]. Department
of Communications, Telecommunications
regulatory and structural reform (Government Response), Department of
Communications, December 2014, accessed 3 February 2016.
[7]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, p. 19.
[8]. Ibid.
[9]. Ibid.,
p. 20.
[10]. Ibid.
[11]. Macquarie
Telecom, Submission
to the Senate Environment and Communications Legislation Committee, Inquiry
into the provisions of the Telecommunications Legislation Amendment (Access
Regime and NBN Companies) Bill 2015, September 2015, p. 1, accessed 17 February 2016.
[12]. Competitive
Carriers’ Coalition (CCC), Submission
to the Senate Environment and Communications Legislation Committee, Inquiry
into the provisions of the Telecommunications Legislation Amendment (Access
Regime and NBN Companies) Bill 2015, p. 2, accessed 17 February 2016.
[13]. Senate
Standing Committee on Environment and Communications, ‘Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015’, Parliament of Australia
website, accessed 17 February 2016.
[14]. Senate
Standing Committee on Environment and Communications, Telecommunications
Legislation Amendment (Access Regime and NBN Companies) Bill 2015 [Provisions],
The Senate, Canberra, 22 February 2016, p.24, accessed 26 February 2016.
[15]. Ibid.,
pp. 25–31.
[16]. Ibid.,
p. 31.
[17]. Ibid.,
p. 25.
[18]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 1 2016, The Senate, Canberra, 3 February 2016, pp. 46–47,
accessed 26 February 2016.
[19]. Senate
Standing Committee on Environment and Communications, Telecommunications
Legislation Amendment (Access Regime and NBN Companies) Bill 2015 [Provisions],
op. cit., pp. 27-31.
[20]. J
Clare (Shadow Minister for Communications), Malcolm’s
mates release another dodgy report, media release, 1 October 2014,
accessed 4 February 2016.
[21]. Optus,
Submission
to the Senate Environment and Communications Legislation Committee, Inquiry
into the provisions of the Telecommunications Legislation Amendment (Access
Regime and NBN Companies) Bill 2015, December 2015, accessed 3 February
2016.
[22]. Telstra
Corporation Ltd (Telstra), Submission
to the Senate Environment and Communications Legislation Committee, Inquiry
into the provisions of the Telecommunications Legislation Amendment (Access
Regime and NBN Companies) Bill 2015, December 2015, accessed
3 February 2016.
[23]. Macquarie
Telecom, Attachment
to Submission to the Senate Environment and Communications Legislation
Committee, Inquiry into the provisions of the Telecommunications Legislation
Amendment (Access Regime and NBN Companies) Bill 2015, September 2015,
accessed 17 February 2016.
[24]. Australian
Communications Consumer Action Network (ACCAN), Submission
to the Senate Environment and Communications Legislation Committee, Inquiry
into the provisions of the Telecommunications Legislation Amendment (Access
Regime and NBN Companies) Bill 2015, December 2015, accessed 3 February
2016.
[25]. Australian
Smart Communities Association (ASCA), Submission
to the Senate Environment and Communications Legislation Committee, Inquiry
into the provisions of the Telecommunications Legislation Amendment (Access
Regime and NBN Companies) Bill 2015, December 2015, accessed 3 February
2016.
[26]. CCC,
Submission,
op. cit.
[27]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, op. cit., p. 8.
[28]. The
Statement of Compatibility with Human Rights can be found at page 9 of the Explanatory
Memorandum to the Bill.
[29]. Parliamentary
Joint Committee on Human Rights, Thirty-third
report of the 44th Parliament, February 2016, p. 2, accessed 3 February
2016.
[30]. Telecommunications Act
1997, Schedule 1, clause 38; Thomson Reuters, Media and Internet Law
and Practice, (at 22 December 2015), Telecommunications, Telecommunications
Act, ’30: Obligations’ [30.1300].
[31]. Telecommunications
Act 1997, section 7 (definition of facility), Schedule 1, subclause 17(3)
and clause 31 (definitions of eligible underground facility and
telecommunications transmission tower).
[32]. Telecommunications
Act 1997, Schedule 1, subclause 17(2).
[33]. Telecommunications
Act 1997, Schedule 1, subclause 17(3).
[34]. Ibid.
[35]. Ibid.,
subclauses 18(1) and (3).
[36]. Ibid.,
clauses 19, 28 and 37.
[37]. Competition and Consumer
Act 2010, subsections 152AL(3), (3B) and (8A), section 152BCG.
[38]. Competition and Consumer
Act 2010, section 152CBA.
[39]. Ibid.,
subsection 152AY(2), sections 152AXB and 152CJA.
[40]. Ibid.,
section 152BD.
[41]. Competition
and Consumer Act 2010, section 152AY.
[42]. Telecommunications
Act 1997, Schedule 1, clauses 19, 28.
[43]. Competition
and Consumer Act 2010, sections 152CH and 152CI.
[44]. Vertigan
Panel, Statutory
Report, op. cit., pp. 19-20.
[45]. Ibid.,
p. 20.
[46]. Ibid.,
recommendation 1.
[47]. Ibid.,
p. 20.
[48]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, op. cit., p. 53.
[49]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, op. cit., p. 53.
[50]. Competitive
Carriers' Coalition (CCC) and Optus, Joint
Submission to the Senate Environment and Communications Legislation
Committee, Inquiry into the provisions of the Telecommunications Legislation
Amendment (Access Regime and NBN Companies) Bill 2015, December 2015, p. 3;
Optus, Submission,
op. cit., p. 2, both accessed 3 February 2016.
[51]. Competition
and Consumer Act 2010, sections 152AR and 152AXB.
[52]. Vertigan
Panel, Statutory
Report, op. cit., pp. 27–28.
[53]. Ibid.,
p. 28, recommendation 5.
[54]. Ibid.
[55]. Proposed
paragraphs 152AR(5A)(d) and 152AXB(5A)(b).
[56]. Proposed
paragraphs 152AR(5A)(e) and 152AXB(5A)(c).
[57]. Proposed
paragraphs 152AR(5A)(a) and proposed subsection 152AXB(5A).
[58]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, op. cit., p. 56.
[59]. Ibid.,
p. 55.
[60]. Ibid.,
p. 56.
[61]. Optus,
Submission,
op. cit., p. 2.
[62]. Competition
and Consumer Act 2010, sections 152ARA, 151ARB, 152AXD and 152CJA.
[63]. Vertigan
Panel, Market
Report, op. cit., recommendation 15, p. 29.
[64]. Proposed
paragraph 152F(1)(a).
[65]. Proposed
paragraph 152F(1)(b).
[66]. Proposed
paragraph 152F(1)(c) and proposed subsection 152F(3).
[67]. Proposed
paragraph 152F(1)(c).
[68]. Proposed
paragraph 152F(1)(d).
[69]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, op. cit., p. 4.
[70]. Ibid.
[71]. Optus,
Submission,
op. cit., p. 6; CCC and Optus, Joint
Submission, op. cit., pp. 1–3; ACCAN, Submission,
op. cit., p. 2; CCC, Submission,
op. cit., p. 4; Macquarie Telecom, Attachment
to Submission, op. cit., pp. 1–3.
[72]. Optus,
Submission,
op. cit., p. 6.
[73]. Ibid.
[74]. Ibid.,
p. 7.
[75]. ACCAN,
Submission,
op. cit., p. 2.
[76]. Ibid.
[77]. CCC,
Submission,
op. cit., p. 4.
[78]. Ibid.
[79]. Ibid.
[80]. Macquarie
Telecom, Attachment
to Submission, op. cit., p. 2.
[81]. Ibid.
[82]. Ibid.,
p. 3.
[83]. CCC
and Optus, Joint
Submission, op. cit., p. 2.
[84]. Vertigan
Panel, Statutory
Report, op. cit., pp. 55 and 62.
[85]. Competition
and Consumer Act 2010, paragraphs 152BCA(1)(a) and 152BDAA(1)(a).
[86]. Competition
and Consumer Act 2010, paragraphs 152BCA(1)(b) and 152BDAA(1)(b).
[87]. Competition
and Consumer Act 2010, paragraphs 152BCA(1)(c) and 152BDAA(1)(c).
[88]. Proposed
subsection 152BCA(2B).
[89]. Proposed
subsection 152BCA(2A).
[90]. Competition
and Consumer Act 2010, section 152BDAA. The Panel did not recommend an
amendment to the CCA in this regard.
[91]. Vertigan
Panel, Statutory
Report, op. cit., recommendation 20; proposed sections 152BCGAA
and 152BDAB.
[92]. Optus,
Submission,
op. cit., pp. 3–4; CCC and Optus, Joint
Submission, op. cit., pp. 2–3; ACCAN, Submission,
op. cit., pp. 1–2; CCC, Submission,
op. cit., p. 5; Macquarie Telecom, Attachment
to Submission, op. cit., p. 3.
[93]. Optus,
Submission,
op. cit., p. 3.
[94]. Ibid.
[95]. Ibid.,
p. 4.
[96]. ACCAN,
Submission,
op. cit., p. 2.
[97]. Ibid.
[98]. CCC,
Submission,
op. cit., p. 5.
[99]. Macquarie
Telecom, Attachment
to Submission, op. cit., p. 3.
[100]. CCC
and Optus, Joint
Submission, op. cit., pp. 2–3.
[101]. Proposed
subsection 152CBDA(2A).
[102]. Proposed
subsection 152CBDA(2B).
[103]. Proposed
paragraph 152CBDA(2A)(b) and proposed subparagraph (3)(b)(ii).
[104]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, page 6.
[105]. Optus,
Submission,
op. cit., pp. 4–6; CCC and Optus, Joint
Submission, op. cit., pp. 2–3; ACCAN, Submission,
op. cit., pp. 1–2; CCC, Submission,
op. cit., pp. 5–6; Macquarie Telecom, Attachment
to Submission, op. cit., pp. 3–4.
[106]. Optus,
Submission,
op. cit., p. 5.
[107]. Ibid.,
p. 6.
[108]. Ibid.
[109]. ACCAN,
Submission,
op. cit., p. 2.
[110]. CCC,
Submission,
op. cit., p. 5.
[111]. Ibid.,
p. 6.
[112]. Macquarie
Telecom, Attachment
to Submission, op. cit., pp. 3-4.
[113]. Competition
and Consumer Act 2010, subsections 152BCD(1) and 152CBAA(1).
[114]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, op. cit., p. 64.
[115]. Competition
and Consumer Act 2010, subsections 152BCD(2) and 152CBAA(3).
[116]. Ibid.,
subsections 152BCD(3) and 152CBAA(3).
[117]. Vertigan
Panel, Statutory
Report, op. cit., recommendation 25, p. 72.
[118]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN Companies)
Bill 2015, p. 65.
[119]. Ibid.,
p. 7.
[120]. Ibid.
[121]. Telstra,
Submission,
op. cit., pp. 4–7 Optus, Submission,
op. cit., pp. 4–6; CCC and Optus, Joint
Submission, op. cit., pp. 2–3; ACCAN, Submission,
op. cit., pp. 1–2; CCC, Submission,
op. cit., pp. 5–6; Macquarie Telecom, Attachment
to Submission, op. cit., pp. 3–4.
[122]. National Broadband
Network Companies Act 2011, section 101; Legislative Instruments
Act 2003, sections 38–42.
[123]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, op. cit., p. 7.
[124]. Proposed
paragraph 19(a).
[125]. Proposed
paragraph 19(b)
[126]. Proposed
subparagraph 19(c)(i).
[127]. Proposed
subparagraph 19(c)(ii).
[128]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, p. 66.
[129]. Vertigan
Panel, Statutory
Report, op. cit., recommendations 32 and 33.
[130]. Optus,
Submission,
op. cit., pp. 4–6; CCC and Optus, Joint
Submission, op. cit., pp. 2–3; ACCAN, Submission,
op. cit., pp. 1–2; CCC, Submission,
op. cit., pp. 5–6; Macquarie Telecom, Attachment
to Submission, op. cit., pp. 3–4.
[131]. Optus,
Submission,
op. cit., p. 7.
[132]. Ibid.,
p. 7.
[133]. CCC,
Submission,
op. cit., p. 6.
[134]. Macquarie
Telecom, Attachment
to Submission, op. cit., p. 4.
[135]. Ibid.,
p. 4.
[136]. Competition
and Consumer Act 2010, paragraphs 151DA(1)(b), (2)(e), and (3)(c).
[137]. Ibid.,
subsection 151DA(2); section 151DB (the ACCC must prepare a list of points of
interconnection).
[138]. Ibid.,
subsection 151DA(3).
[139]. Ibid.,
subsection 151DA(4).
[140]. Competition
and Consumer Act 2010, paragraph 151DA(1)(b) and subsection 151DA(5).
[141]. Competition
and Consumer Act 2010, subsection 151DA(5).
[142]. Vertigan
Panel, Market
Report, op. cit., recommendation 8, p. 28,
[143]. Government
Response, op. cit., p. 11.
[144]. National
Broadband Network Companies Act 2011, section 48.
[145]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, op. cit., p. 69.
[146]. Ibid.,
p. 8.
[147]. Proposed
subsection 152AQA(1).
[148]. Explanatory
Memorandum, Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015, op. cit., p. 70; Telecommunications
(Agreements for Compliance with Structural Separation Undertaking)
Determination 2014, accessed 17 February 2016.
[149]. Ibid.,
p. 71.
[150]. Ibid.,
p. 71.
[151]. CCC,
Submission,
op. cit., pp. 6–7.
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