Bills Digest No. 177   1997-98 Telecommunications (Carrier Licence Charges) Amendment Bill 1998


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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.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Contact Officer & Copyright Details

Passage History

Date Introduced: 1 April 1998

House: House of Representatives

Portfolio: Communications, the Information Economy and the Arts

Commencement: Royal Assent

Purpose

To provide for the imposition of a charge on telecommunication carriers to recover costs incurred by the Commonwealth in regulating industry development plans.

Background

The Telecommunications (Carrier Licence Charges) Act 1997 (the Principal Act) imposes a fee on applications for carrier licences and an annual charge on carrier licences.

Section 7 of the Principal Act imposes a charge when an application is made for a carrier licence. The amount of charge is calculated in accordance with a determination made by the Australian Communications Authority. The maximum charge which may be imposed is $100 000.

Section 12 imposes an annual charge on carrier licences that are in force at the beginning of a financial year. The charge is payable by the licence holder (section 13). The amount of the charge is calculated in accordance with a determination made by the Australian Communications Authority.

There is no limit on the amount of the annual licence charge except that section 15 provides that the total of charges imposed on licences must not exceed the sum of the amounts which represent the proportion of the:

  •  Australian Communications Authority costs, for the preceding financial year, that are attributable to its telecommunications functions and powers
  •  Australian Competition and Consumer Commissions costs, for the preceding financial year, that are attributable to its telecommunications functions and powers, and
  •  Commonwealths contribution to the budget of the International Telecommunications Union for the calendar year in which the beginning of the financial year occurs that is to be recovered from carriers.

The principal effect of the amendments proposed by the Bill is to provide for the imposition of a charge on telecommunication carries to recover costs incurred by the Department of Industry, Science and Tourism (DIST) in administering Part 2 of Schedule 1 of the Telecommunications Act 1997.

The rationale given by the government in the Second Reading Speech to the Bill for the proposed amendments is:

... the licence charge payable by telecommunications carriers does not recover costs incurred by DIST.

Part 2 of Schedule 1 of the Telecommunications Act 1997 deals with industry development plans. A carrier must have a current industry plan. That plan must be given to the Minister for Industry, Science and Tourism. The industry development plan is a plan for the development in Australia, in connection with the carrier's business as a carrier, of industries involved in the manufacture, development or supply of facilities and research and development relating to those industries. The plan must include relevant details of the carrier's strategic commercial relationships, research and development activities, involvement in industry and export facilitation. A summary of the plan must be made available to the public. Within 90 days of the end of each financial year, a carrier must give the Minister for Industry, Science and Tourism a report setting out the details of progress made by the carrier in implementing the plan during that year and make a summary of that report available to the public.

It is estimated by the Government in the Explanatory Memorandum to the Bill that the proposed amendments will enable the recovery of an estimated $600 000 per annum.

It is acknowledged by the Government, on page four of the Explanatory Memorandum, that the cost of the Bill to industry will be passed on to consumers.

The Government states on page four of the Explanatory Memorandum that:

  • As the turnover of telecommunications carriers is about $25 billion, the levy of about $600 000 will have no noticeable impact on the prices faced by consumers, suppliers or carriers.

The above statement is unsupported, and it may be expected that carriers, particularly full private carriers, will over time attempt to recover the charge.

Main Provisions

Item 1 of Schedule 1 inserts a new paragraph 15(1)(e) in the Principal Act which includes in the annual carrier licence charge an amount, determined by the Minister for Industry, Science and Tourism, to be the Commonwealth's costs for the preceding financial year in administering Part 2 of Schedule 1 of the Telecommunications Act 1997.

Contact Officer and Copyright Details

Ian Ireland
8 April 1998
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

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 1328-8091
Commonwealth of Australia 1998

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1998.



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