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.
CONTENTS
Trade Practices Amendment (Telecommunications) Bill
1996
Date Introduced: 5 December 1996
House: House of Representatives
Portfolio: Communications and the Arts
Commencement: The Act commences on the day on
which it receives the Royal Assent.
This Bill is a part of a package of Bills, the purpose of which
is to implement a new regulatory framework for the
telecommunications industry.Most significantly this Bill amends the
Trade Practices Act 1974 by inserting 2 new parts.Part
XIB:
- defines anti-competitive conduct and, subject to certain
exemptions, prohibits that conduct
- requires carriers and carriage service providers to file tariff
information and keep certain prescribed records.
Part XIC:
- creates an access regime in respect of certain declared
services
- imposes a set of standard access obligations including a
requirement to supply declared services and provide interconnection
of facilities
- facilitates the creation of a telecommunications access
code
- provides for the giving of access undertakings by carrier and
carriage service providers
- provides a mechanism for resolving disputes about access.
Refer to the Background contained in the Digest of the
Telecommunications Bill 1996.
The substance of the Act is contained in the Schedule.The
Schedule has 15 items.
Items 1 to 5 and 7 to 15
The only matter of sufficient significance to note is that it is
made clear that Part XIB (see below) applies to the Crown in right
of the states and territories, so far as they carry on
business.
Item 6
This item amends the Trade Practices Act 1974 by the
addition of Parts XIB and XIC to that Act.
Part XIB - The Telecommunications Industry:
Anti-competitive Conduct and Record Keeping Rules
This Part consists of 12 divisions.
Division 1 - Introduction
This Division contains the definitions.Proposed new
section 151AH is significant to the extent that it sets
out the circumstances in which a substantial degree of market power
is attributed to carriers and carriage service providers where a
related body corporate (or an aggregation of them) has a
substantial degree of power in a telecommunications market.
Division 2 - Anti-competitive Conduct
A carrier or carriage service provider is taken to engage in
anti-competitive conduct where (proposed new section
151AJ):
- it has a substantial degree of power in a telecommunications
market and it takes advantage of that power with the effect or
likely effect of substantially lessening competition in that or any
other telecommunications market, or
- it engages in conduct that relates to a telecommunications
network and that conduct contravenes section 45 (contracts,
arrangements or understandings that restrict dealings or affect
competition), section 45B (the giving of covenants which may
substantially lessen competition), section 46 (the misuse of
substantial market power), section 47 (exclusive dealing) or
section 48 (resale price maintenance) of the Trade Practices
Act 1974.
A carrier or carriage service provider must not engage in
anti-competitive conduct.That prohibition is known as the
'competition rule' (proposed new section
151AK).
Division 3 - Competition Notices and Exemption Orders
Competition Notices
Proposed new section 151AL allows the ACA to
issue a notice stating that a specified carrier or carriage service
provider has contravened or is contravening the competition rule
and setting out details of the contravention.That notice is called
a "competition notice".
A competition notice is prima facie evidence of the matters in
the notice in any proceedings under Part XIB (proposed new
section 151AN).
The ACCC must formulate guidelines in respect of the issue of
competition notices and it must have regard to those guidelines
when deciding whether to issue a notice (proposed new
section 151AP).
Exemption Orders
Proposed new section 151AS allows a person to
apply to the ACCC for an order exempting specified conduct from the
scope ofthe definition of anti-competitive conduct.The ACCC must
publicise the receipt of such an application in such manner as it
thinks fit (proposed new section 151AW).
The ACCC may refuse to consider an application for an exemption
order if it has already received an application under Division 1 of
Part VII (i.e. an application for authorisation to engage in
certain anti-competitive conduct) or a notice under section 93
(i.e. a notice of intention to engage in certain conduct)
(proposed new sections 151AX and
151AY).
Before making an exemption order, the ACCC must give the
applicant and any other person whom the ACCC considered interested
a reasonable opportunity to make submissions (proposed new
section 151BB).
Before making an order, the ACCC must be satisfied that:
- the conduct will result in a benefit to the public and that
benefit outweighs the detriment to the public resulting from any
lessening of competition, or
- the conduct is not anti-competitive conduct.
When determining whether it is satisfied as to these matter, the
ACCC may consider:
- the extent to which the conduct relates to the supply of goods
or services on favourable terms to a financially disadvantaged
individual, an individual disadvantaged on health grounds, a
non-profit community organisation or charitable organisation, an
educational institution or health facility
- the extent to which the conduct relates to the supply of goods
or services on favourable terms for community, charitable or
educational purposes or the promotion of health or safety
- the need to supply any universal service obligation
- the extent to which the conduct is likely to prevent or reduce
environmental degradation
- the extent to which the conduct contributes to technical
innovation by Australian industry (proposed new section
151BC).
Division 4 - Tariff Filing
The ACCC may direct a carrier or carriage service provider, who
has a substantial degree of power in a telecommunications market,
to provide it with specified information about:
- charges for goods and services specified in the direction
- new charges, variations of charges and cessation of charges for
goods and services specified in the direction, at least 7 days
before and at such period after the imposition, variation or
cessation as is specified in the direction.
Such a direction is called a 'tariff filing direction'
(proposed new section 151BK).
If the ACCC gives a tariff filing direction to a person, it must
give the person a notice setting out the reasons for the direction
(proposed new section 151BM).
The ACCC is empowered to make publicly available information
given to it as a result of the issue of a tariff filing direction
where it is satisfied that:
- the disclosure would result in a benefit to the public,
and
- that benefit would outweigh the detriment constituted by any
lessening of competition as a result of the disclosure and any
substantial prejudice to the commercial interests of persons that
would occur as a result of the disclosure.
The ACCC must notify the provider of the information that it
intends to make the information publicly available
(proposed new section 151BQ).The provider of the
information is entitled to apply for a review of the decision to
disclose the information.The application is made to the Australian
Competition Tribunal under proposed new section
151CI.
Division 5 - Record-keeping Rules
The ACCC may make rules (know as 'record keeping rules')
requiring one or more specified carriers or carriage service
providers to keep records containing information relevant to
(proposed new section 151BU):
- ascertaining whether there has been compliance with the
competition rules and tariff filing directions
- the performance of a function or exercise of a power by the
ACCC under Part XIB or Part XIC (dealing with access - see
below)
- the performance of a function or exercise of a power by the
ACCC under certain provisions of the Telecommunications
Act 1996 and the Telstra Corporation Act 1991.
Division 6 - Enforcement of the Competition Rule, Tariff Filing
Directions and Record-keeping Rules
Proposed new section 151BX provides that if the
Federal Court is satisfied that a person has contravened the
competition rule, a tariff filing direction or a record-keeping
rule (or has attempted to do so or has been involved in a
contravention) the Court may impose a pecuniary penalty of up
to:
- in the case of a corporation,
a) for contravention of the competition rule, the sum of $10
million plus $1 million for each day the contravention
continued
b) for contravention of a tariff filing direction, $10 million
for each contravention
c) for contravention of a record-keeping rule, $250,000 for each
contravention.
- in the case of an individual,
a) for contravention of a record-keeping rule, $50,000 for each
contravention
b) for contravention of the competition rule or a tariff filing
direction, $500,000 for each contravention.
A person (i.e. corporation or individual) is not liable for more
than 1 pecuniary penalty in respect of the same conduct.
The ACCC may commence proceedings for the recovery of a
pecuniary penalty referred to above, however, proceedings for
recovery of a penalty for contravention of a competition rule
cannot be commenced unless a competition notice was in force in
respect of the conduct at the time it occurred (proposed
new section 151BY).
Proposed new section 151CA empowers the Federal
Court to grant an injunction where it is satisfied a person has
engaged or is proposing to engage in a contravention of the
competition rule, a tariff filing direction or a record-keeping
rule (or has attempted to do so, or has aided or abetted etc.).
Where a competition notice is in force and a person suffers loss
or damage by conduct of another person which is dealt with in the
notice the first person may recover the amount of that loss or
damage from the other person.Such an action must be commenced
within 3 years after the date on which the cause of action accrued
(proposed new section 151CC).
Division 7 - Disclosure of Documents by Commission
This is an administrative provision obliging the ACCC to provide
copies of documents in relation to exemption orders (see above) and
proceedings under Division 6, on request to certain persons
(Proposed new section 151CG).
Division 8 - Treatment of Partnerships
Proposed new section 151CH makes 2 minor
changes to this provisions of the Part in respect of their
application to partnerships, i.e. the partnership is treated as
comprised of individual persons.
Division 9 - Review of Decisions
Decisions to refuse applications for or revoke exemption orders
and decisions to publicly disclose information received as a result
of a tariff filing direction are subject to review by the
Australian Competition Tribunal (ACT) (proposed new section
151CI).
Applications for review in respect of exemption orders must be
made within 21 days of the decision.Applications for review in
respect of the public disclosure of tariff information must be made
within 7 days of the decision.
Division 10 - Reviews of Competitive Safeguards within the
Telecommunications Industry
Each financial year the ACCC must review and report to the
Minister on competitive safeguards within the telecommunications
industry.The Minister must cause a copy of the report to be laid
before each House of Parliament within 15 sitting days of the House
after receiving the report (proposed new section
151CL).
Division 11 - Monitoring of Telecommunications Charges Paid by
Consumers
The ACCC must monitor and report to the Minister each financial
year on charges paid by consumers for listed carriage services (as
defined by the Telecommunications Act 1996) and goods and
services for use with listed carriage services (proposed
new section 151CM).
Division 12 - Review of Operation of this Part
The Minister must cause a review of the operation of this Part
to be made before 1 July 2000.Copies of the report must be laid
before each House of Parliament within 15 sitting days after the
completion of the preparation of the report (proposed new
section 151CN).
In conducting the review, consideration must be given to the
question of whether any or all of the provisions of this Part
should be repealed or amended.
Part XIC - Telecommunications Access Regime
This Part consists of 11 divisions.
Division 1 - Introduction
The object of the Part is to promote the long-term interests of
end-users of carriage services or of services provided by means of
carriage services (proposed new section 152AB).In
determining whether a thing promotes the long-term interests of
end-users regard must be had to only the following
objectives:
- promoting competition in markets for listed services
- achieving any-to-any connectivity (i.e. the ability of each
end-user to communicate with another end-user who is supplied with
the same or similar service, whether or not the end-users are
connected to the same telecommunications network)
- encouraging the economically efficient use of, and the
economically efficient investment in, the infrastructure by which
listed services are supplied.
'Access' refers to access by a service provider in order that
the service provider can provide carriage services and/or content
services (proposed new section 152AF).
The ACCC may declare a specified body or association to be the
Telecommunications Access Forum (TAF)
provided:
- the membership of the body or association is open to all
carriers and carriage service providers
- the body or association is capable of generating
recommendations relating to declared services and a draft
telecommunications access code
- the body or association has a written constitution.
Division 2 - Declared Services
The ACCC may declare that a specified service is a 'declared
service' if:
- the declaration is in accordance with a recommendation of the
TAF, and
- the ACCC is satisfied that the TAF has given access seekers and
consumers a reasonable opportunity to comment on the proposal to
make the recommendation,
or,
- the ACCC has held a public inquiry (and prepared a report about
the inquiry which was published no more than 180 days before the
making of the declaration) about the proposal to make the
declaration, and
- the ACCC is satisfied that the making of the declaration will
promote the long-term interests of end-users of carriage services
or of services provided by means of carriage services
(proposed new section 152AL).
The ACCC may hold a public inquiry on its own initiative or if
requested to do so by a person (proposed new section
152AM).
Division 3 - Standard Access Obligations
Proposed new section 152AR sets out the
'standard access obligations'.It provides that a carrier or
carriage service provider who supplies a declared service is an
'access provider'.A declared service which is supplied by a carrier
or carriage service provider is an 'active declared service'.
What are the Standard Access Obligations?
- If requested to do so by a service provider, an access provider
must supply an active declared service.An access provider is
relieved from that obligation if complying with it would result
in:
1) preventing the access provider or a service provider who
already has access to the declared service from obtaining a
sufficient amount of service to meet its anticipated
requirements
2) preventing a person from obtaining a sufficient level of
access to the declared service to be able to meet the person's
requirements
3) depriving any person of a protected contractual right (i.e. a
right under a contract in force at the beginning of 13 September
1996).
- Access providers must permit the interconnection of their
facilities with the facilities of the service provider for the
purpose of enabling the service provider to be supplied with the
active declared services.
- Access providers must provide billing information to the
service provider in connection the supply of the active declared
services.The timing and manner and form in which that information
is given must be in accordance with the regulations.
The ACCC has the power to make both class and individual
exemptions for carriers and carriage service providers in respect
of the obligations under proposed new section
152AR (proposed new sections 152AS and
152AT).An exemption must not be made unless the
ACCC is satisfied that the making of the exemption will promote the
long-term interests of end-users of carriage services.If the making
of the exemption is likely to have a material effect on the
interests of a person, then it must first publish the proposal and
consider submissions.
A person whose interests are affected by a decision in respect
of an individual exemption may apply for review of the decision by
the Australian Competition Tribunal.
Carriers and carriage service providers must comply with the
obligations imposed by this Part on such terms and conditions as
are agreed and failing agreement:
- the terms and conditions of any access undertaking (see below)
given by the carrier or carriage service provider where the
undertaking specifies terms and conditions in relation to the
matter
- otherwise, on such terms and conditions as are determined by
the ACCC as arbitrator (proposed new section
152AY).
Carrier licences are subject to a condition that the carrier
must comply with any standard access obligations that are
applicable to the carrier (proposed new section
152AZ).
If the Federal Court is satisfied that a carrier or carriage
service provider has contravened any of the standard access
obligations, the Court may make an order directing compliance
and/or requiring the payment of compensation.
Division 4 - Telecommunications Access Code
TAF Telecommunications Access Code
The TAF may submit a draft Telecommunication Access Code to the
ACCC for approval.The code must set out model terms and conditions
relating to compliance with the standard access obligations that
are capable of being adopted by access undertakings
(proposed new sections 152BC, 152BD and
152BE).
Before approving a draft TAF Telecommunications Access Code the
ACCC must:
a) the TAF has consulted with consumers and persons likely to
become access seekers in relation to declared services covered by
the code
b) the code is consistent with the standard access
obligations
c) if any part of the code deals with pricing, the code is
consistent with any Ministerial pricing determination, and
d) each set of model terms and conditions is reasonable
(proposed new section 152BF)
- invite and consider public submissions (proposed new
section 152BH), and
- consult with the Australian Communications Authority
(proposed new section 152BI).
An approved code is know as an 'approved TAF telecommunications
access code'.
ACCC Telecommunications Access Code
If a TAF Telecommunications Access Code is in force at any time
and the ACCC becomes dissatisfied with the code, the ACCC may
request the TAF to vary the code or to submit a fresh draft code.If
the TAF fails to comply with the request or the variation or fresh
code are not satisfactory, the ACCC may revoke the current code and
make a new one.
Similarly, if no approved TAF telecommunications access code is
in force at a particular time, the ACCC may give notice to the TAF
requesting it to submit a draft TAF telecommunications access
code.If the TAF does not comply with the request or the draft code
is not satisfactory, the ACCC may make a telecommunications access
code (proposed new section 152BJ).
A code made by the ACCC is known as an "ACCC telecommunications
access code".
Division 5 - Access Undertakings
An 'access undertaking' is a written undertaking given by a
carrier or carriage service provider to the ACCC under which the
carrier or provider undertakes to comply with the terms and
conditions specified in the undertaking in relation to the
applicable standard access obligations.
The terms and conditions of the undertaking may be specified in
the undertaking or may be specified by adopting a set of model
terms and conditions set out in the approved TAF telecommunications
access code.
Where an undertaking adopts a model set of terms and conditions
set out in an approved TAF telecommunications access code, the ACCC
must accept the undertaking.Where the undertaking does not adopt a
set of model terms and conditions set out in an approved TAF
telecommunications access code, the ACCC may accept or reject the
access undertaking.The ACCC must reject the undertaking unless:
- the ACCC has published the undertaking and invited and
considered submissions
- the ACCC is satisfied that the undertaking is consistent with
the standard access obligations applicable to the carrier or
provider
- if the undertaking deals with pricing, it is consistent with
any Ministerial pricing determination
- the ACCC is satisfied the terms and conditions of the
undertaking are reasonable, and
- the expiry time of the undertaking is within 3 years of it
coming in operation (proposed new section
152BV).
A decision by the ACCC to accept or reject an access undertaking
(or a variation of an access undertaking) is subject to review by
the Australian Competition Tribunal on the application of a person
whose interests are affected by the decision (proposed new
section 152CE).
The ACCC or any person whose interests are affected may apply to
the Federal Court if it thinks that a carrier or provider has
breached an access undertaking.The Federal Court may make an order
directing compliance and/or directing the carrier or provider to
compensate any person who has suffered loss or damage as a result
of the breach (proposed new section 152CD).
Division 6 - Ministerial Pricing Determinations
The Minister may make a written determination (called a
"Ministerial pricing determination") setting out principles dealing
with price-related terms and conditions relating to the standard
access obligations (proposed new section
152CH).
Division 7 - Relationship between this Part and Part IIIA
Part IIIA of the Trade Practices Act 1974 deals with
access to services.At least to a certain extent Part XIC is a
specific 'version' of that access regime as it applies to
telecommunications.
Section 44S of the Trade Practices Act 1974 provides
that if a third party and service provider are unable to agree on
an aspect of access to a declared service, either party may notify
the ACCC that an access dispute exists.The dispute is then
arbitrated by the ACCC.
Proposed new section 152CK of the Bill provides
that a notification must not be given under section 44S if the
dispute relates to an aspect of a declared service within the
meaning of this Part.
Section 44ZZA allows the ACCC to accept undertakings from
providers as to the terms and conditions on which they are prepared
to provide access to services.Proposed new section
152CK provides that the ACCC must not accept such an
undertaking when it relates to a declared service within the
meaning of this Part.
If an undertaking under section 44ZZA is in operation in
relation to a particular service and that service becomes a
declared services, the undertaking ceases to be in operation to the
extent to which it sets out terms and conditions relating to the
provision of access to one or more services providers.
Division 8 - Resolution of Disputes about Access
Notification of Access Disputes
If:
- a declared services is supplied by a carrier or carriage
service provider, and
- one or more standard access obligations apply in relation to
the declared service, and
- the access seeker is unable to agree with the carrier or
carriage service provider about the terms and conditions on which
the carrier or provider is to comply with those obligations or they
are unable to agree about one or more aspects of access to the
declared service,
then either party may notify the ACCC that an access dispute
exists (proposed new section 152CM).
Arbitration of Access Disputes
Proposed new section 152CP obliges the ACCC to make a
determination on access (unless the ACCC terminates the
arbitration).
When making a determination, the ACCC must take into
account:
- whether the determination will promote the long-term interests
of end-users of carriage services
- the legitimate business interests of the carrier or provider
and the carrier or provider's investment in facilities used to
supply the declared services
- the interest of all persons who have rights to use the declared
service
- the direct costs of providing access to the declared
service
- the economically efficient operation of a carriage service, a
telecommunications network or a facility, and
- any other matters the ACCC thinks are relevant
(proposed new section 152CR).
The ACCC has the power to terminate an arbitration if, amongst
other things, it thinks the notification of the dispute was
vexatious, the subject matter is trivial or a party to the
arbitration has not engaged in negotiations in good faith
(proposed new section 152CS).
If the ACCC suspects a person has not engaged in negotiations in
good faith, it may direct the person to do or refrain from doing a
specified thing relating to the conduct of the negotiations
(proposed new section 152CT).Ifa person
contravenes such a direction, the Federal Court may order the
payment of a pecuniary penalty as the Court determines to be
appropriate (maximum $250,000 for a corporation per contravention -
$50,000 for an individual per contravention) (proposed new
section 152CU).The ACCC is empowered to institute
proceedings for the recovery of a pecuniary penalty.
Procedure in Arbitrations
For the purposes of an arbitration, the ACCC is to be
constituted by 2 or more members of the ACCC (as nominated by the
Chairperson) (proposed new section 152CV).
The arbitration is to be held in private (proposed new
section 152CZ).
The parties may appear in person or be represented by someone
else (proposed new section 152DA).
In an arbitration hearing, the ACCC is not bound by the rules of
evidence (proposed new section 152DB).
A determination has effect 21 days after it is made.
Review of Determinations
A party to a determination can apply to the Australian
Competition Tribunal for review of a determination
(proposed new section 152DO).The application must
be made within 21 days of the determination being made.
A party to a determination can appeal to the Federal Court on a
question of law from a decision of the Australian Competition
Tribunal (proposed new section 152DQ).
The fact that an appeal is instituted to the Federal Court does
not affect the operation of the decision of the Tribunal.However,
the Court may make any order staying or otherwise affecting the
decision (proposed new section 152DR).
Enforcement of Determinations
If the Federal Court is satisfied that a party has engaged or
proposes to engage in conduct in contravention of a determination,
it may make an order granting an injunction or requiring the
payment of compensation.
Division 9 - Registered Agreements for Access to Declared
Services
Proposed new section 152ED provides for
registration of agreements for access to declared services.The
consequence of registration is that a party to the agreement may
enforce it under Division 8 as if it were a determination of the
ACCC under proposed section 152CP.
Division 10 - Hindering Access to Declared Services
Carrier, carriage service providers and persons to whom declared
services are provided must not prevent or hinder access by a
service provider to declared services (proposed new section
152EF).If the Federal Court is satisfied that a person has
engaged or proposes to engage in conduct in contravention of that
prohibition, it may make an order granting an injunction or
requiring the payment of compensation (proposed new section
152EG).
Division 11 - Miscellaneous
This Part contains clarifying provisions in respect of
partnerships and conduct by directors, servants and agents.
Lee Jones
5 February 1997
Bills Digest Service
Information and Research Services
This Digest does not have any official legal status. Other
sources should be consulted to determine whether the Bill has been
enacted and, if so, whether the subsequent Act reflects further
amendments.
IRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of
the public.
ISSN 1323-9031
© Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library,
1997.
This page was prepared by the Parliamentary Library,
Commonwealth of Australia
Last updated: 10 April 1997
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