Chapter 1Introduction
1.1On 8 February 2024, the Senate referred the provisions of the Telecommunications Legislation Amendment (Enhancing Consumer Safeguards and Other Measures) Bill 2023 (the bill) to the Environment and Communications Legislation Committee (the committee) for inquiry and report by 14 March 2024. On the 14 March 2024, the committee presented a progress report requesting an extension until 18 March 2024.
1.2The bill seeks to amend the Telecommunications Act 1997 (the Tel Act), the Telecommunications (Consumer Protection and Service Standards) Act 1999 (theTCPSS Act) and the Competition and Consumer Act 2010 (CCA) to refine the operation of the statutory infrastructure provider (SIP) regime.
1.3The bill would also make technical and other amendments to legislation to improve the operation of telecommunications regulation outside the SIP regime, including changes that enhance the enforcement and reporting powers of the Australian Communications and Media Authority (the ACMA) and the Australian Competition and Consumer Commission (ACCC).
Context of the bill
1.4This section provides an overview of the regulatory settings that the bill is seeking to update and briefly outlines the SIP regime at the core of the proposed changes in the bill.
Current regulatory framework
1.5The Tel Act is the primary mechanism regulating the communications sector at the federal level. It came into effect in July 1997, aiming to protect the long-term interests of end users of carriage services and ensure accessible and affordable telecommunications services for Australians.
1.6In addition, the TCPSS Act and the CCA further legislate competition and consumer protection safeguards in the telecommunications environment. Most notably, the TCPSS Act establishes a Universal Service Obligation across Australia's telecommunications sector, which ensures everyone has access to landline telephones and payphones regardless of where they live or work.
1.7On 11 December 2014, the then Australian Government released its policy paper Telecommunications Regulatory and Structural Reform in response to the 53 recommendations made by the Vertigan panel's Independent Cost‐Benefit Analysis and Review of Regulation. The regulatory framework set out in the paper led to the introduction of the Telecommunications Legislation Amendment (Competition and Consumer) Act 2020 [TLACC Act], which established the SIP regime in Australia.
The statutory infrastructure provider regime
1.8The SIP regime is set out in Part 19 of the Tel Act and commenced on 1 July 2020. It aims to ensure that all premises in Australia have access to infrastructure that supports the delivery of superfast broadband services. Under the regime, NBNCo Limited (NBN Co) is the default SIP for Australia. However, the SIP regime provides for alternative carriers to become SIPs 'for areas where they have installed fixed networks, such as in new developments or, in more limited cases, where they are the major fixed network provider in the area'.
1.9SIPs have an obligation to connect premises in their service areas to their telecommunications networks, and supply wholesale services. The wholesale services must allow the retail provider to supply broadband services with peak download and upload speeds of at least 25/5 megabits per second. On fixed-line and fixed-wireless networks, the wholesale services SIPs supply must also be able to support voice services.
1.10The ACMA is responsible for enforcing SIP obligations and monitoring compliance. It can do so using a range of enforcement mechanisms, including formal warnings, infringement notices, and remedial directions.
Improving the statutory infrastructure provider regime
1.11During 2022, the Department of Infrastructure, Transport, Regional Development, Communications and the Arts (the department) consulted key stakeholders on the performance of the SIP regime. The department identified several areas where the regime could be fine-tuned to provide greater certainty for consumers, industry and the ACMA. These included:
addressing uncertainty over the full operational extent of any SIP standards or rules, including whether they can require SIPs to pay compensation to customers if they do not meet a standard or rule;
providing a more robust approach to deal with situations where SIPs may exit service areas with very little notice to NBN Co or consumers; and
extending the SIP regime to carriage service providers (CSPs) who control a private network in new developments, or are an associate of the controller, or where the CSP has entered a contractual relationship with the person responsible for the development.
1.12To address these various issues, the department released an exposure draft of the bill in August 2022. The department then invited public submissions and directly consulted with SIPs, consumer and industry representatives, as well as the ACMA and ACCC. Following feedback from stakeholders, the department amended the exposure draft to better target the private network clauses and fine tune other provisions in the bill.
Overview of the bill
1.13The bill would amend the Tel Act, TCPSS Act, and CCA to deliver improved safeguards for Australian consumers accessing broadband and voice services. The bill is comprised of five schedules, with the bulk of the proposed changes contained in Schedule 1, which sets out key measures to refine and improve the existing SIP regime.
Schedule 1 – Changes to the statutory infrastructure provider regime
1.14The bill would make several changes to refine the processes for determining service areas, how they are described, varied and revoked, and how any Ministerial standards, rules and benchmarks would operate. The key proposed changes would also:
bring private networks for new developments under the SIP regime;
remove NBN Co's SIP obligations for areas where other SIPs have submitted 'anticipatory notices' once premises are built and occupied;
remove an exemption for 'declared' services;
provide stricter rules for the exit of SIPs from a service area;
clarify that SIP standards, rules and benchmarks can cover service pricing;
require SIPs to pay compensation if they contravene a standard or rule;
clarify the ability of the Telecommunications Industry Ombudsman to handle complaints involving the connection of services by SIPs; and
give Ministerial benchmarks priority over the ACCC's or SIPs' terms and conditions.
Schedule 2 – Deployment of optical fibre
1.15Schedule 2 of the bill would amend Part 20A of the Tel Act to give the ACMA the power to issue remedial notices to developers who do not install functional fibre-ready facilities (such as pit and pipe) in proximity to developments. Atpresent, the ACMA has limited enforcement powers if it becomes aware of non-compliance with the provisions of Part 20A.
1.16The proposed amendments would allow the ACMA to 'issue a remedial notice if it reasonably believes that a person is contravening, has contravened, or is likely to contravene a designated civil penalty provision under Part 20A'. Theremedial notice may also 'require the person to remedy the contravention, prevent the likely contravention from occurring, or remedy the things or operations causing the contravention or likely contravention'.
Schedule 3 – Disclosure of information
1.17Schedule 3 of the bill would amend Part 7A of the Australian Communications and Media Authority Act 2005 to enhance the ACMA's ability to identify carriers and CSPs in public reports regarding their performance on certain customer service issues and require it to share information with the department on request. Currently, the ACMA can only 'publish reports that identify the performance of individual providers where the relevant providers have provided consent or if the information is publicly available'.
1.18The Explanatory Memorandum (EM) notes that these current requirements place significant constraints on the utility of the ACMA's reports in promoting improved provider performance through clear accountability. The proposed change would help facilitate the ACMA's 'capacity to shine a light on providers who are not meeting customer expectations or performance indicators'.
Schedule 4 – Primary universal service providers
1.19Schedule 4 of the bill would amend the universal service regime in Division 2 of Part 2 of the TCPSS Act to allow the Minister to determine service areas that relate to a primary universal service provider. According to the EM, this would provide 'scope to designate a new provider for an area, for example, should this be required in the event the Australian telecommunications regulatory framework is extended to Norfolk Island'.
Schedule 5 – Technical amendments
1.20Schedule 5 would make several technical amendments to correct provisions in the Tel Act and TCPSS Act. According to the department, these changes would 'implement the original policy intent of the amendments to the Tel Act enacted by the [TLACC Act]'.
Financial implications
1.21The EM noted that the bill would have no financial impact on the Australian Government Budget.
Consideration by other parliamentary committees
1.22When examining a bill or draft bill, the committee considers any relevant comments published by the Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) and the Parliamentary Joint Committee on Human Rights (Human Rights Committee).
Scrutiny Committee consideration
1.23In its Scrutiny Digest 1 of 2024, the Scrutiny Committee raised concerns that the bill's proposed amendments to the Tel Act would enable delegated legislation to modify the operation of primary legislation. The Scrutiny Committee noted that such clauses 'impact on the level of parliamentary scrutiny and may subvert the appropriate relationship between the Parliament and the Executive'.
1.24Accordingly, the Scrutiny Committee requested the Minister's advice as to why it is necessary and appropriate to allow delegated legislation made under proposed subsections 360HB(4), 360HB(5), 360J(3), 360J(4), 360KB(2) and 360KB(4) to modify the operation of the Tel Act. It also called for a sound justification to be included in the bill's EM for the use of any clauses that allow this type of modification to the operation of primary legislation.
1.25The Minister responded by providing further information as to the operation of the proposed provisions in support of the necessity of providing for instruments to modify the operation of the Tel Act. The Minister noted that the proposed powers were important to enable the SIP regime to function effectively and allow for changing market conditions.
1.26In response, the Scrutiny Committee reiterated its concerns that it does 'not generally accept a desire for flexibility alone to be a sufficient justification for allowing delegated legislation to modify the operation of primary legislation'. Itnoted that while changing market conditions explain the need for the Minister to adjust the operation of these provisions, it 'does not explain why Parliament should accept its enactments to be modified without oversight'.
1.27Consequently, the Scrutiny Committee requested further advice as to whether the bill's EM can be amended to include the justifications for the appropriateness of the proposed subsections, and to ensure that legislative instruments made under the subsections are limited to a duration of five years.
Human rights compatibility
1.28The Human Rights Committee did not comment on the bill. However, the statement of compatibility with human rights contained in the EM concluded that the bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Conduct of the committee's inquiry
1.29The committee advertised the inquiry on its website and invited relevant stakeholders to provide submissions by 19 February 2024.
1.30The committee received six submissions which are listed at Appendix 1 and are available on the committee's website. The committee also received answers to questions on notice which are also available on the committee's website. Thecommittee agreed to conduct the inquiry on the written evidence and did not hold a public hearing.
Structure of the report
1.31This report comprises two chapters. This chapter provides background information and outlines the key elements of the bill. Chapter 2 examines the key issues raised by submitters and sets out the committee's view and recommendation.
Acknowledgements
1.32The committee thanks those individuals and organisations who contributed to the inquiry by preparing written submissions and providing answers to questions on notice.