Chapter 2
Issues for consideration
2.1
The bill's significant provisions, which are expanded below, are:
- exemptions from disallowance for:
- determinations by the minister under subsection 82(3), concerning
reissuing licences to the same licensees in the public interest (item 4);
- directions by the minister under subsection 294(2), concerning
spectrum access charges (item 10);
- the ACMA will be able to issue class licences in spectrum space
allocated or designated for spectrum licences (coexistence) (items 5 and 7);
- the ACMA will be able to start preparations for reissuing
spectrum licences earlier than the two year time limit which now applies (items
1 and 2).
Exemptions from disallowance
Minister's determinations
concerning reissue of licences (item 4)
2.2
At present the ACMA may reissue a spectrum licence to the previous
licensee without an auction or competitive tender process under certain conditions.
One of the possible conditions is that the licence was used to provide a
service which is the subject of a ministerial determination that reissuing
spectrum licences to the same licensees would be in the public interest (see
paragraph 1.9).[1]
2.3
A determination by the minister under this provision is currently a
disallowable legislative instrument.[2]
2.4
The bill amends this provision so that the minister's determination,
though still a legislative instrument, would not be disallowable.[3]
2.5
The explanatory memorandum justifies this change as follows:
This instrument is being exempted from the disallowance
regime because any delay stemming from a potential disallowance of such a
ministerial determination would severely impact upon the successful conclusion
of licence reissue discussions between the Government and the relevant
incumbent licensees. There would also be adverse follow-on impacts on
commercial and investment certainty for incumbent licensees if reissue
discussions are delayed.[4]
Comment of the Scrutiny of Bills
Committee on item 4
2.6
The Senate Scrutiny of Bills Committee is required to review all bills
in relation to (among other things) whether they inappropriately delegate
legislative powers or insufficiently subject the exercise of legislative power
to parliamentary scrutiny.[5]
2.7
In relation to this proposed exemption from disallowance, the Scrutiny
of Bills Committee commented:
The Committee’s view is that removing parliamentary oversight
is a serious matter and that a comprehensive justification for it should be
provided. In this case, the explanatory memorandum at pages 3 and 18 includes a
detailed outline of the justification for the approach, including that (at page
18):
'This instrument is being exempted
from the disallowance regime because any delay stemming from a potential
disallowance of such a ministerial determination would severely impact upon the
successful conclusion of licence re-issue discussions between the Government
and the relevant incumbent licensees. There would also be adverse follow-on
impacts on commercial and investment certainty for incumbent licencees if
re-issue discussions are delayed.'
The Committee notes this explanation, the fact that
determinations will be published on the Federal Register of Legislative
Instruments and also that the disallowance process provides a timeframe of 15
sitting days within which to give a notice of motion to disallow a legislative
instrument (section 42 of the [Legislative Instruments Act]).
2.8
The Scrutiny of Bills Committee concluded that 'in the circumstances the
Committee leaves to the Senate as a whole the question of whether
exempting any instruments made under section 82(3) is appropriate'.[6]
Minister's directions concerning
spectrum access charges (item 10)
2.9
Under section 294 of the Act, the ACMA may make determinations fixing
spectrum access charges. Under subsection 294(2) the minister may give directions
to the ACMA about the matters dealt with in determinations. A direction by the
minister is currently a disallowable legislative instrument by virtue of
subsection 294(5).
2.10
To avoid doubt, Item 9 of the bill clarifies that a direction by the
minister could cover the amount of the spectrum access charge. The government
has signalled that 'the government will seek a fee that reflects the scarcity
and value of this important public resource.'[7]
2.11
Item 10 of the bill provides that a ministerial direction on spectrum
access charges will no longer be a legislative instrument; thus it will not be
made public and will not be disallowable.
2.12
The explanatory memorandum justifies this change as follows:
It is appropriate that sensitive pricing information
contained in such directions remain confidential until the discussions with
licence holders and licence reissue processes are completed.
If the amendment was not made, it would mean that the
direction would, among other things, be published on the Federal Register of
Legislative Instruments (making it public, amongst other things) and be subject
to disallowance, which would have an adverse material impact upon the
Commonwealth’s position in discussions for the issue and reissue of spectrum
licences.
Notwithstanding that the ministerial direction will no longer
be published as a result of the amendment at Item 10, it is the expectation of
the Government, consistent with current practice, that prices paid for licences
would be published by the ACMA after discussions and the ACMA completes its
licence reissue processes. Availability of price information is an important
element in facilitation and encouraging a spectrum secondary market.
Furthermore, instruments of this kind (that is ministerial
directions to persons, Commonwealth Authorities) need not have been
disallowable in the first place, on the basis that they would be a class of
instruments that ordinarily would be exempt under the Legislative Instruments
Act 2003.[8]
2.13
The committee notes that concerns about reducing parliamentary oversight
of the minister's determinations and directions through these amendments were
expressed during debate on the bill in the House of Representatives.[9]
Comment of the Scrutiny of Bills
Committee on item 10
2.14
In relation to this proposed exemption from disallowance, the Scrutiny
of Bills Committee commented:
The justification for this approach at page 4 of the
explanatory memorandum is that:
'The intention of this amendment
is to protect commercially sensitive pricing information relating to the
reissue of 15 year spectrum licences. By giving a written ministerial direction
to the ACMA, under subsection 294(2), which is not a legislative instrument and
not subject to disallowance, it will protect this information during licence
reissue discussions.'
The explanatory memorandum also states at page 4 that
although the direction will not be published the Government intends to continue
its current practice of publishing the prices paid for licences once the
licence re-issue process is complete.
The Committee’s view is that removing parliamentary oversight
is a serious matter and that a comprehensive justification for it should be
provided. In this case the Committee notes that instruments of this kind are a
class of instruments that ordinarily would be exempt from disallowance under
table item 41 of section 44 of the Legislative Instruments Act 2003.
In the circumstances, the Committee makes no further comment
on this item.[10]
Coexistence of class licences and spectrum licences
2.15
'Coexistence' refers to allowing devices and services not owned by the
primary licence holder to operate in a spectrum-licensed band under certain
conditions.
2.16
Developing technologies may allow devices licensed under class licences
to share spectrum using sophisticated methods to avoid interference. This has
potential to greatly increase efficient use of spectrum.[11]
2.17
At present, the ACMA cannot issue class licences in spectrum designated
for spectrum licensing under section 36 of the Act.[12]
The only way of accommodating these new technologies would be under a third
party authorisation by the incumbent spectrum licence holder. However,
according to the explanatory memorandum, 'there
are significant impediments to new operators gaining third party
authorisations':
- technical reasons (inconsistent with the technical framework but
not an actual interference problem);
- commercial reasons: e.g. incumbents blocking technologies
offering competitive services;
-
transaction costs;
- risk aversion by spectrum licensees; and
- in geographic areas or parts of the spectrum where spectrum
licences have not been taken up, the lack of a licensee to provide a third
party authorisation (which leaves the spectrum in question idle).[13]
2.18
The bill removes the prohibition on issuing class licences in spectrum
designated for spectrum licensing on condition that, before issuing a class
licence, the ACMA is satisfied that:
-
issuing the class licence would not result in unacceptable levels
of interference to devices operated, or likely to be operated, under spectrum
licences;[14]
and
- issuing the class licence is in the public interest.[15]
2.19
In response to an April 2009 discussion paper which explored this issue,
coexistence drew mixed reactions from stakeholders: it was generally opposed by
major incumbent licence holders, but supported by some others who anticipated
benefiting from it.[16]
The explanatory memorandum noted that 'the main concern [of opponents] was the
erosion of a primary licence holder's rights as a result of interference from
spectrum sharing technologies.'[17]
2.20
The government points out that 'the legislative prohibition on
coexistence seems unique to Australia':
In many other countries, technologies with a low potential
for interference are provided with licence exempt access to licensed spectrum.
It is expected that there will be widespread adoption of the new technologies
in an extensive range of devices developed overseas, including in consumer
goods that will be readily available in Australia, which makes an efficient
method of authorisation an important issue. It is important that the Australian
framework adapt to changes going forward so that Australia will not be left
behind in adopting these important future technologies.[18]
2.21
The government has undertaken that 'implementation of coexistence will
be subject to the development by the ACMA of regulatory provisions that ensure
that interference concerns are fully addressed. This will be done in
consultation with industry.'[19]
2.22
Statutory safeguards for spectrum licensees would include:
- mandatory consultation of affected spectrum licensees in relation
to a proposed class licence that uses spectrum licence frequencies;[20]
-
the class licence would be a disallowable legislative instrument
(as class licences are at present).[21]
2.23
The amendment would not affect current licences. It would only apply to
reissued or newly issued spectrum licences.[22]
Timing to prepare for reissue of spectrum licences
2.24
At present the ACMA may start its preparations to reissue a spectrum
licence (for example, releasing information and inviting expressions of
interest) no more than two years before the date of reissue.[23]
2.25
The bill removes the two year time limit.[24]
According to the explanatory memorandum:
This amendment is intended to maximise the flexibility
afforded to the ACMA regarding the commencement of licence reissue processes.
In addition, this amendment will help reduce uncertainty for incumbent
licensees close to licence expiry and encourage continued investment by
incumbents in existing network services currently provided under these
licences.[25]
Committee comment
Exemptions from disallowance
2.26
As a general proposition the committee does not support provisions that
reduce the Parliament's oversight of ministerial discretions.
2.27
In relation to item 4 (exempting minister's determinations concerning
reissue of licences to the same licensees from disallowance), the committee
notes the concerns of the Senate Scrutiny of Bills Committee. The committee
accepts the government's explanation that the changes are necessary to provide
more certainty for licensees, and to protect the Commonwealth's position in
commercial negotiations with licensees, but also agrees that it should be left
to the Senate as a whole to decide whether this exemption is appropriate.
2.28
The committee further notes the minister's commitment, when considering
public interest determinations under subsection 82(3), to have regard to the
five public interest criteria which emerged from the 2009 consultation (see
paragraphs 1.12, 1.13).[26]
The committee also notes that the Minister, when exercising his discretion
under subsection 82(3), will not necessarily be limited to the five public
interest criteria already identified.[27]
2.29
To provide industry with greater certainty, the committee recommends
that the government should publish more detailed advice for industry on these
and any other public interest criteria which the minister expects to consider
when using his power under subsection 82(3).
Recommendation 1
2.30
The committee recommends that government should publish more detailed
advice for industry on the public interest criteria noted in the explanatory
memorandum of the bill, and any other public interest criteria which the
minister may consider when using his power under subsection 82(3).
2.31
In relation to item 10 (exempting ministerial directions concerning
spectrum access charges from disallowance), the committee notes that the
Scrutiny of Bills Committee has accepted the government's explanations. The
committee notes the government's undertaking that pricing information would be
published after the ACMA has completed its licence reissue processes. The
committee agrees that the 'availability of price information is an important
element in facilitation and encouraging a spectrum secondary market'.[28]
However, the release of this sensitive information during negotiations could
genuinely hamper efforts to achieve an appropriate rate of return to the
community.
Coexistence of class licences and
spectrum licences
2.32
The committee notes the concerns of some stakeholders in submissions to
the government's April 2009 discussion paper, and the government's comments in
reply.
2.33
The provision will allow coexistence in future subject to suitable
safeguards. It does not imply that the ACMA will allow coexistence in any
particular case or by any particular time. If the technologies that allow safe
coexistence are immature,[29]
then the committee expects that the ACMA will take this into account in
considering applications or setting conditions. The committee encourages the
ACMA to approach coexistence in a technically conservative manner to ensure
that the concerns of major incumbents about possible interference are fully
addressed.
Timing to prepare for reissue of
spectrum licences
2.34
This part of the bill has the committee's support.
Recommendation 2
2.35
The committee recommends that the bill be passed.
Senator Doug Cameron
Chair
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