BILLS DIGEST NO. 87, 2014–15              24 March 2015

Telecommunications Legislation Amendment (Deregulation) Bill 2014 [and] Telecommunications (Industry Levy) Bill 2014

Jonathan Chowns
Law and Bills Digest Section 

Date introduced: 22 October 2014

House:  House of Representatives

Portfolio: Communications

Commencement:  Schedules 2, 4, 5, 6, 7, 8 and Part 1 of Schedule 1 to the Telecommunications Legislation Amendment (Deregulation) Bill 2014 commence on the day after Royal Assent. Schedule 3 to that Bill commences 14 days after Royal Assent. Parts 2 to 4 of Schedule 1 to that Bill and Schedule 1 to the Telecommunications (Industry Levy) Amendment Bill 2014 commence on 1 July 2015.

Links: The links to the Bills, their Explanatory Memoranda and second reading speeches can be found on the Bills’ home pages for the Telecommunications Legislation Amendment (Deregulation) Bill 2014 and the Telecommunications (Industry Levy) Amendment Bill 2014, or through the Australian Parliament website.

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

The Bills at a glance

The Government proposes to reduce unnecessary regulation by, in the language of the Explanatory Memorandum, ‘repealing’, ‘relaxing’, ‘streamlining’ and ‘modernising’ several unrelated regulatory schemes. That language would normally signal to the alert reader that a Bill deserves close attention. However, the Telecommunications Legislation Amendment (Deregulation) Bill 2014 (the Deregulation Bill) and the Telecommunications (Industry Levy) Amendment Bill 2014 (the Levy Bill) make few changes of substance and are in the estimation of the author not controversial. In fact, the removal of re-registration requirement for the Do Not Call Register will be seen as a worthwhile initiative by all but telemarketing enthusiasts.

There were originally eight schedules to the Deregulation Bill but now there are seven, each dealing with unrelated subjects. One Schedule (Schedule 5 of the Bill as introduced)[1] was withdrawn by the Government after the Senate had referred the Bills to the Senate Environment and Communications Legislation Committee, largely because of that Schedule.[2] The Schedule would have removed the requirement on telecommunications companies to report on disclosures of customer information that the companies have made to law enforcement agencies and national security agencies. Those amendments were seen at once to be controversial, unlike the rest of the Bills.

The Committee, in the first inquiry, received only four submissions.[3] The Committee recommended that the Bills be passed.[4] The Labor members of the Committee issued a dissenting report, recommending that the Bills be re-considered later in the light of the December 2014 revisions to the Telecommunications Universal Service Management Agency (TUSMA) Agreement between Telstra and the Commonwealth.[5] That was the basis for the second referral.[6]

The Committee reported on the second matter on 19 March 2015, recommending that the Bills be passed.[7] The Committee stated that it ‘does not consider the changes to the TUSMA Agreement have implications for the measures proposed by the Bills. The Committee notes that this position is supported by all of the submissions the committee received’.[8] (Only five submissions were received, four of which were available publicly: from Telstra, Optus, the Department of Communications and TUSMA, the agency whose functions are being transferred to the Department).[9]

As is usual with uncontroversial Bills in this portfolio, the Explanatory Memorandum is detailed and thorough. This digest will explain the main feature of the Bills to point the reader to significant observations of the Committee.

Statement of Compatibility with Human Rights

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.[10]

The Parliamentary Joint Committee on Human Rights commented on the amendments proposed by Schedule 2 of the Deregulation Bill, which would repeal Part 9A of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (Consumer Protection Act), which regulates telephone sex services.[11] The Committee noted that although the Statement of Compatibility contends that Schedule 2 does not engage any human rights:

… as Part 9A was introduced in order to address community concerns that telephone sex services were too easily accessed by children, the deregulation of these services may expose children to a risk of harm currently minimised under Part 9A. Accordingly, the committee considers that the measure engages article 19 of the [Convention on the Rights of the Child] CRC and the obligation to protect children from harm.[12]

Accordingly, the Committee sought the advice of the Minister for Communications as to whether the repeal of Part 9A of the Consumer Protection Act is compatible with the rights of the child.[13]

The Minister’s response to the Committee advised that Part 9A of the Consumer Protection Act no longer contained provisions that were specifically aimed at preventing children from accessing telephone sex services, as these provisions were removed following the introduction of a new Schedule 7 into the Broadcasting Services Act 1992 (BSA),[14] which ‘includes a strong range of measures specifically designed to prevent children from accessing R 18+ content via a range of platforms, including via telephone sex services’.[15] The Minister therefore advised the Committee that the proposed repeal of Part 9A of the Consumer Protection Act was compatible with the rights of the child as the BSA would continue to protect children from adult content.[16]

The Committee thanked the Minister for his response but noted that, as the regulatory regime in Schedule 7 of the BSA was based on industry codes of conduct, it may not provide equivalent protection to Part 9A of the Consumer Protection Act. The Committee therefore sought the Minister’s further advice as to the comparability of the two regimes.[17]

As at the date of writing this Digest, the Minister’s response to the Committee’s request for further advice has not been published.

Telecommunications Legislation Amendment (Deregulation) Bill 2014

Schedule 1 – transfers functions of TUSMA to Department and abolishes TUSMA

Schedule 1 to the Deregulation Bill abolishes the Telecommunications Universal Service Management Agency (TUSMA).

TUSMA was established by the previous Government to manage arrangements for the delivery of the universal service obligation (USO).[18] The USO is the obligation, originally a statutory one on Telstra, to provide all people in Australia with reasonable access to payphones and a standard telephone service (loosely speaking, landlines).[19] Under the new arrangements, the USO is delivered under contracts between Telstra and the Commonwealth, which are managed by TUSMA. These arrangements complemented those between the company established by the Commonwealth to build and operate the National Broadband Network, NBN Co Ltd, and Telstra.[20]

Under this Bill, the USO continues to be funded by an industry levy and a contribution from the Commonwealth.

The new arrangements do little more than abolish TUSMA and move its functions, including the management of contracts and the assessment, collection and recovery of the industry levy to the Department of Communications. This is effected by amendments made by both Bills; the changes made to the levy arrangements in the Telecommunications (Industry Levy) Act 2012 are set out in the separate Levy Bill only because they concern a tax which, under the Constitution, must be dealt with in a separate Bill.[21]

The Government claims that the changes will reduce the industry levy by $1 million per year but be cost neutral to the Commonwealth.[22]

As already mentioned, these changes were the subject of the second referral to the Committee after new contracts were executed between Telstra and TUSMA.

Schedule 2 – repeals regulation of telephone sex service

Schedule 2 repeals the regulation of telephone sex services.

A ‘telephone sex service’ is a commercial service where a voice call is made using a standard telephone service (loosely, landline), in such a manner that ‘it would be concluded that a majority of persons who call the service are likely to do so with the sole or principal object of deriving sexual gratification from the call’ (section 158J of the Consumer Protection Act).[23]

The rules were introduced by the Howard Government to address community concern at the time that telephone sex services were too easily accessed by children.[24]

The Explanatory Memorandum coyly refers to reason for the ‘noticeable decline in complaints recently’ being that ‘due to technological advances, most of these services are now accessed online and via mobile applications, which are regulated through other legislation. Accordingly, Part 9A is now considered redundant and is proposed to be repealed’.[25]

As set out above, the Parliamentary Joint Committee on Human Rights has raised concerns that this Schedule may impact on the rights of the child.[26]

Schedule 3 – extends registration on the Do Not Call register indefinitely

The Do Not Call register is established under the Do Not Call Register Act 2006.[27] People can register to opt out of receiving telemarketing calls and faxes. However, ‘public interest organisations’ like registered charities, political parties and educational institutions can still call numbers listed on the register. This is unchanged under these Bills.

Telemarketers must ‘wash’ their calling lists against the register and remove numbers that appear there. For this they pay a fee.

At the beginning, registrations lasted for three years because the register would become out-of-date over time.[28] Re-registration operated to keep the register fairly accurate. Inaccuracies would arise, for instance, where a person registered their telephone number but then relinquished it when they moved to another location. After a time, the number would be reallocated, perhaps to a person who is not opposed to receiving telemarketing calls and does not want to be on the register. After three years, the number would fall off the register, enabling the number to receive telemarketing calls.

The Gillard Government amended the Do Not Call Register Act to allow the registration period to be extended by legislative instrument.[29] Legislative instruments were subsequently made to extend the registration period to six years,[30] and then eight years, following improvements in the systems and procedures for maintaining the currency of the register.[31]

Numbers registered under current arrangements will begin to fall off the register from 31 May 2015, meaning that some people will have to re-register to avoid calls from telemarketers, if the Bill does not take effect by then. Over ten million people are currently on the register.[32]

As the previous Government did, this Government considered several options to address the need for frequent re-registration.[33] It concluded that the systems and procedures for maintaining the currency of the register are mature enough to justify indefinite registration. In doing so, it has weighed the benefits to people of not having to re-register every eight years against the diminishing risk that some numbers will remain on the register even after they have been allocated to people who are not concerned about receiving telemarketing calls. It considers that risk to be acceptable.

For interested readers, the systems and procedures—or ‘cleansing mechanisms’—proposed are described at page 24 of the Revised Explanatory Memorandum.[34]

Schedule 4 – removes requirement to register e-marketing industry codes

Part 6 of the Telecommunications Act 1997 provides for the registration of codes concerning the operation of sections of the industry.[35] Registration is by the Australian Communications and Media Authority (ACMA).

The provisions regulating ‘e-marketing’ codes were added in 2003.[36] Broadly speaking, e-marketing is the use of ‘commercial electronic messages’ to market, advertise or promote goods, services, land, business or investment opportunities by a person who is not the supplier of those things (section 109A, Telecommunications Act ).

In 2005, the Australian eMarketing Code of Practice was registered by the ACMA.[37] The Code was de-registered in 2014.[38]

The Government considers it unlikely that any new e-Marketing codes will be developed in the future: the Spam Act 2003 adequately addresses the range of problems associated with unsolicited commercial electronic messages and is sufficiently flexible to enable the ACMA to address a broad range of issues.[39]

Schedule 5 – amends record-keeping requirements

As discussed above, Schedule 5 of the Deregulation Bill was withdrawn by Government.

Schedule 6 – removes the requirement to provide a pre-selection service

Broadly speaking, pre-selection allows a person to have a main service (that is, line rental and local calls) with one provider while allowing the person to select another service provider for some other calls like long distance, international and fixed to mobile calls where, for instance, they are provided on more attractive terms.[40]

The customer can pre-select the alternative provider for those calls generally or could dial a prefix to select that other provider on a call by call basis.

When the telecommunications market was being opened to competition, one of the early initiatives was a requirement that pre-selection be permitted.

The Bill proposes to relax the requirement to provide pre-selection, which is at current section 349 of the Telecommunications Act. Two reasons have been identified. First the retail telecommunications market has matured and there are a multitude of service providers and retail products now available on attractive terms. This has reduced the use of pre-selection by customers.[41]

Secondly, the scope of the obligation on service providers has become more onerous due to changes in technology. Pre-selection generally applies to standard telephone services. In the early days, this generally means landlines on the old copper line based Public Switched Telephone Network (PSTN). These days, because of changes in the statutory definition of standard telephone services, other technologies are in use. For some of these, pre-selection functionality is not available and non-trivial to implement.[42]

The amendments will maintain pre-selection where it is provided already on legacy networks but will provide flexibility to maintain or remove the requirement in other situations.

Schedule 7 – allows publication of certain notices on a website rather than in Gazette

Part 6 of the Consumer Protection Act establishes the Telecommunications Industry Ombudsman (TIO).[43]

Certain telecommunications providers must join the TIO scheme, which provides for the adjudication of some kinds of disputes between providers and customers.

The Bill amends Part 6 of the Consumer Protection Act to allow the publication of certain existing kinds of notices and declarations on the Department’s website rather than in the Gazette.

Schedule 8 – makes minor changes to the operation of the Customer Service Guarantee

Part 5 of the Consumer Protection Act provides for the Customer Service Guarantee, which establishes maximum time frames within which certain services must be installed or repaired (performance standards). A failure to meet the performance standards renders the service provider liable to damages (section 116 of the Consumer Protection Act).

The current provisions in section 117A of the Consumer Protection Act require the service provider to assess whether damages are likely to be payable and to notify the customer of its decision to accept or not accept liability.

The amendment removes the obligation to notify the customer when the service provider accepts the liability but leaves it in place where the provider decides not to accept liability.

The amendment is relatively trivial but removes a small burden on service providers while putting customers at no disadvantage.

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

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[1].              Telecommunications Legislation Amendment (Deregulation) Bill 2014 (First reading), accessed 23 March 2015

[2].              Senate Selection of Bills Committee, Report No. 14 of 2014, The Senate, Canberra, 30 October 2014, Appendix 8, accessed 23 March 2015.

[3].              Senate Environment and Communications Legislation Committee, Inquiry into the Telecommunications Legislation Amendment (Deregulation) Bill 2014 and Telecommunications (Industry Levy) Amendment Bill 2014 [Provisions], Inquiry homepage, accessed 20 March 2015.

[4].              Senate Environment and Communications Legislation Committee, Telecommunications Legislation Amendment (Deregulation) Bill 2014 [Provisions] and Telecommunications (Industry Levy) Amendment Bill 2014 [Provisions], The Senate, Canberra, 9 February 2015, accessed 23 March 2015.

[5].              Ibid., p. 11.

[6].              Australia, Senate, Journals, 76, 10 February 2015, accessed 23 March 2015.

[7].              Senate Environment and Communications Legislation Committee, Telecommunications Legislation Amendment (Deregulation) Bill 2014 and Telecommunications (Industry Levy) Amendment Bill 2014, The Senate, Canberra, 20 March 2015, accessed 24 March 2015.

[8].              Ibid.

[9].              Senate Environment and Communications Legislation Committee, Inquiry into Telecommunications Legislation (Deregulation) Bill 2014 and Telecommunications (Industry Levy) Bill 2014, Submissions, accessed 20 March 2015.

[10].              The Statement of Compatibility with Human Rights can be found at page pages 4 to 14 of the Explanatory Memorandum to the Bills.

[11].              Telecommunications (Consumer Protection and Service Standards) Act 1999, accessed 23 March 2015.

[12].              Parliamentary Joint Committee on Human Rights, Sixteenth report of the 44th Parliament, The Senate, Canberra, 25 November 2014, p. 24, accessed 23 March 2015.

[13].              Ibid.

[14].              Broadcasting Services Act 1992, accessed 23 March 2015.

[15].              Parliamentary Joint Committee on Human Rights, Eighteenth report of the 44th Parliament, The Senate, Canberra, 10 February 2015, p. 104, accessed 23 March 2015.

[16].              Ibid., pp. 104–105.

[17].              Ibid., p. 105.

[18].              Telecommunications Universal Service Management Agency Act 2012, accessed 23 March 2015.

[19].              Telecommunications Universal Service Management Agency (TUSMA), ‘Access to telephones and payphones’, TUSMA website, accessed 23 March 2015.

[20].              NBNCo, ‘About NBN Co’, accessed 23 March 2015.

[21].              Telecommunications (Industry Levy) Act 2012, accessed 23 March 2015.

[22].              Revised Explanatory Memorandum, Telecommunications Legislation Amendment (Deregulation) Bill 2014 and Telecommunications (Industry Levy) Amendment Bill 2014, p. 3, accessed 23 March 2015.

[23].              Telecommunications (Consumer Protection and Service Standards) Act 1999, accessed 23 March 2015.

[24].              See the Explanatory Memorandum to the Bill which introduced Part 9A into the Consumer Protection Act: Explanatory Memorandum, Communications Legislation Amendment (Content Services) Bill 2007, accessed 23 March 2015.

[25].              Revised Explanatory Memorandum, op. cit., p. 101.

[26].              Parliamentary Joint Committee on Human Rights, op. cit.

[27].              Do Not Call Register Act 2006, accessed 23 March 2015.

[28].              Section 17 of the Do Not Call Register Act 2006 (as made), accessed 23 March 2015.

[29].              Items 42 and 42A of Schedule 1 of the Do Not Call Register Legislation Amendment Act 2010, accessed 23 March 2015.

[30].              Do Not Call Register (Duration of Registration) Specification (No. 1) 2010 (as made), accessed 23 March 2015.

[31].              Do Not Call Register (Duration of Registration) Specification (No. 1) 2010, accessed 23 March 2015.

[32].              Australian Communications and Media Authority (ACMA), Do Not Call Register tops 10 million!, media release, 5 February 2015, accessed 23 March 2015.

[33].              See the Regulation Impact Statement at pages 14 to 39 of the Revised Explanatory Memorandum to the Bills.

[34].              Revised Explanatory Memorandum, op. cit.

[35].              Telecommunications Act 1997, accessed 23 March 2015.

[36].              Spam (Consequential Amendments) Act 2003, 23 March 2015.

[37].              Australian Communications and Media Authority (ACMA), Australian eMarketing Code of Practice, March 2005, accessed March 2015.

[38].              Australian Communications and Media Authority (ACMA), ‘Australian eMarketing Code of Practice - Code deregistration’, ACMA website, accessed 23 March 2015.

[39].              Spam Act 2003, accessed 23 March 2015.

[40].              Department of Communications (DoC), ‘Pre-selection’, DoC website, accessed 23 March 2015.

[41].              Revised Explanatory Memorandum, op. cit., pp. 106–108.

[42].              Ibid.

[43].              Telecommunications Industry Ombudsman website, accessed 23 March 2015.