Bills Digest No. 45 2000-01 Telecommunications Legislation Amendment Bill 2000


Numerical Index | Alphabetical Index

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

Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details

Passage History

Telecommunications Legislation Amendment Bill 2000

Date Introduced: 30 August 2000

House: Senate

Portfolio: Communications Information Technology and the Arts

Commencement: Royal Assent

Purpose

To amend the Telecommunications Act 1997 and the Australian Communications Authority Act 1997 to give clearer powers to the Australian Communications Authority (ACA) and the Australian Competition and Consumer Commission (ACCC) to direct and manage electronic addressing, particularly Internet addressing. These powers will only be used if industry self-regulation is not effective.

Background

Domain Names(1)

domain name locates an organisation or other entity on the Internet. Every computer connected to the Internet has its own unique numerical address (an Internet Protocol or IP address). The domain name system (DNS) is the way that Internet domain names are located and translated into IP addresses. When a URL(2), for example http://www.aph.gov.au, is typed into a browser, the browser makes a request to a 'nameserver' - to find out the numerical Internet address of the computer that matches the URL typed into the browser.

Top level domains may be divided into generic and country code. Generic domains include .com, .org and .net. Country code domains include .au and .nz. Country code domains were created to be used by each individual country as they deemed necessary.(3) Second level domains include com.au and gov.au. Third level domains include telstra.com.au and aph.gov.au.

Initially the entire .au namespace (Internet domains that end in .au) was administered by a Melbourne University Employee, Robert Elz. Mr Elz has a delegation from the Internet Assigned Numbers Authority (IANA). IANA is a university-based body which was funded by the US Government. Its functions have been transferred to the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN is a non-profit corporation that was formed to assume responsibility for, amongst other things, domain name system management.(4)

In October 1996, Melbourne IT was issued with a five year non-exclusive sub-delegation by Mr Elz to administer the .com.au domain.

Melbourne IT is the only register of .com.au domain names. It is also one of only five globally accredited registrars of generic top level domain names such .com .org and .net. Melbourne IT received this accreditation from ICANN. The Commonwealth Office of Government Online undertakes the administration of the .gov.au sub-domain.(5)

The following table gives an indication of the breakdown of domain names in Australia.

.au domain space

Number of registrations

%

com.au

110,482

81.1

net.au

13,462

9.9

edu.au

4,640

3.4

org.au

4,359

3.2

gov.au

1,699

1.2

Other

1,548

1.2

Source Melbourne IT as at Oct 1999(6)

While the administration of second level domain names is not exclusive there is currently only one sub-delegate in any second level domain.

Self-Regulatory Developments

On behalf of the Commonwealth, the National Office of the Information Economy (NOIE) has agreed to facilitate the development of a self-regulatory regime and oversee the transfer of the delegation from Mr Elz to a broadly based industry body. The actual transfer of the delegation will need to be performed by ICANN.

In April 1999 auDA (.au Domain Administration), a non-profit company, was established with the goal of becoming the industry self-regulatory body administering the .au namespace. All administrators of second level domain names are represented on auDA.

auDA has established two key advisory panels to examine the system of domain name registration in the .au namespace. The Name Policy Advisory Panel is reviewing domain name eligibility and name allocation policies for .au second level domains. This process is due to be completed by early 2001. The Competition Model Advisory Panel is determining the model for the introduction of competition in the provision of domain name services in the .au namespace. The panel is due to report in mid 2001.(7) NOIE is providing secretariat support to both panels.

In November 1999 Mr Elz assigned to auDA the full authority to manage the .com.au namespace.(8) auDA and Melbourne IT signed an agreement in July 2000 under which Melbourne IT agreed to provide auDA with $659,000 in 2000-01 to support its work. For its part auDA undertook not to license additional registrars until the development of auDA's competition model.(9)

As noted above the transfer of delegation from Mr Elz to auDA would need to be performed by ICANN. The most expeditious way to facilitate this transfer is if auDA receives the endorsement of the Commonwealth Government. Before receiving this endorsement, auDA will be required to demonstrate that it meets the objectives set out by Government, namely that the new self-regulatory regime will:

  • operate as a fully self-funding and not-for-profit organisation;
  • be inclusive of, and accountable to, members of the Internet community including both the supply and demand sides;
  • adopt open, transparent and consultative processes;
  • aim to enhance benefits to Internet users through the promotion of competition, fair trading and provisions for consumer protection and support;
  • establish appropriate dispute resolution mechanisms; and
  • represent Australian Internet industry interests in the Internet domain name system at national and international fora.(10)

This Bill is designed to improve the capacity of the Government, through the ACA and the ACCC to take responsibility for the management of 'electronic messaging' - which includes the domain name registration - in the event that self-regulation is not working effectively. In his second reading speech the Minister described the Bill as a 'backstop provision' in case serious problems arise.(11)

What the Bill will not do

Contrary to press reports, the Bill will not deal with the practice known as
cyber-squatting.(12) Cyber-squatting involves reserving an Internet domain name for the purpose of selling it later to a company or person that wants to use it. In the .com namespace well-known companies or their products are often reserved by cyber-squatters in the hope of extracting a premium for the name from an established company. The practice is less common in the .com.au namespace because in order to register a .com.au name the applicant must be a registered Australian commercial entity and the Internet name must be derived from the applicant's business name. Trademark or trade practices legislation may provide some redress but it may be cheaper and quicker to purchase the name from the cyber-squatter.(13)

This Bill will not address this issue. As noted above, the Government will require auDA to develop adequate dispute resolution procedures to deal with this problem.

In addition, the Bill will not allow the Government, through the ACA to unilaterally assume control of the .au namespace. The international governing body -ICANN - must be involved in transferring authority.(14)

The Explanatory Memorandum acknowledges this point observing that in instructing the ACA to provide for the management of electronic addressing the Minister would, where necessary, operate in concert with the governing body transferring authority over that form of electronic addressing to the ACA.(15)

Main Provisions

The Role of the ACA and ACCC

Determinations

Division 3 of Part 22 of the Telecommunications Act 1997 provides for the regulation of 'electronic addressing' by the Australian Communications Authority and the Australian Competition and Consumer Commission. This term is not defined in the legislation.

Currently, subsection 474(1) provides that the ACA may by notice in the Gazette determine that a specified person or association is the 'declared manager of electronic addressing' in relation to a specified kind of listed carriage service (for example the Internet).(16)

Subsection 474(3) provides that the ACA must not make a determination unless:

  • it is directed to do so by the ACCC; or
  • the ACA is of the opinion that the person or association is not managing electronic addressing in accordance with generally accepted principles and standards.

Item 1 inserts a new subsection 474(1) allowing the ACA to determine a 'declared manager of electronic addressing' in relation to a specified kind of electronic addressing and a specified kind of listed carriage service.

The Explanatory Memorandum notes that this will allow declarations of different parties to be simultaneously in effect, reflecting those parties' different functions and responsibilities.(17)

Item 2 amends the circumstances in which the ACA is empowered to make a determination. Under proposed subparagraph 474(3)(b) the ACA may issue a determination if the person or association is not managing electronic addressing to the ACA's satisfaction. As noted above, currently the ACA must be of the opinion that a person or association is not managing electronic addressing in accordance with 'generally accepted principles and standards'. The new paragraph is designed to bring more certainty to the use of the ACA's reserve powers.

The Explanatory Memorandum provides the following examples of situations where the ACA may not be satisfied:

  • non-compliance with material standards; or
  • mismanagement which threatens the stability or integrity of the system.(18)

Subsection 474(6) provides that the ACCC may not direct the ACA to issue a determination unless the direction is likely to have a bearing on competition. Item 3 broadens the scope of the subsection allowing the ACCC to direct the ACA in the interests of consumer protection.

Directions

Section 475 empowers the ACA to give directions to a declared manager of electronic addressing. Similarly to the amendment proposed by item 1, item 4 amends subsection 475(1) to allow the ACA to make distinctions in its directions between particular kinds of electronic addressing and particular kinds of listed carriage services.

The ACA may only issue directions under subsection 475(1) if, in the ACA's opinion, the electronic addressing is of public importance. Subsection 475(3) provides that in addressing this question the ACA must have regard to the extent to which the addressing is of significant social and/or economic importance to service providers or end-users of carriage services. Item 5 amends this section, the ACA will no longer be required to consider the importance of the particular kind of electronic addressing service to individual groups but rather to the public in general.

According to the Explanatory Memorandum, in determining whether a direction is of general importance the ACA may have regard to:

  • the degree to which a particular kind of electronic addressing is used in the general community or in commerce;
  • the purpose or range of purposes for which a particular kind of electronic addressing is used; and
  • the significance of particular addresses to the business or individuals to which they may be assigned.(19)

Under section 476 the ACCC may give directions to a declared manager of electronic addressing. Item 6 inserts similar amendments to item 4 and will allow the ACCC to make distinctions in its directions between particular kinds of electronic addressing and particular kinds of listed carriage services.

Item 7 amends subsection 476(2)(b) to permit the ACCC to make a direction if it will have a bearing on consumer protection as well as competition.

Item 8 amends subsection 476(3) in a similar way to item 5. In determining whether an electronic addressing system is of public importance the ACCC must, under the Bill, have regard to whether the addressing is of significant social and/or economic importance to the public in general.

Schedule 2

Section 8 of the Australian Communications Authority Act 1997 sets out the ACA's additional functions. Item 2 amends section 8 to allow the ACA to:

  • prepare for the management of electronic addressing of a specified nature if the Minister issues a written instruction; and
  • provide for the management of specified kinds of electronic addressing.

Item 3 amends section 8 to provide that a Ministerial instruction to prepare to manage electronic addressing is a disallowable instrument. A decision to revoke an order to prepare to manage electronic addressing is also disallowable.

In recognition that the ACCC and the ACA have interests in electronic addressing proposed section 12A provides that ACA must consult with ACCC before preparing to manage or actually managing electronic addressing or carrying out an act that would have a significant effect on consumer protection.

Section 53 allows the ACA to fix charges in order to recoup its costs. Proposed subsection 53(2A) amends section 53 to allow the ACA to recover costs incurred in preparing to manage or managing electronic addressing. The amount charged must be an amount that has been agreed with a person or worked out under an agreement with the person. The subsection has been drafted so as to ensure that the charge is not held to be a tax for the purposes of the Constitution. Section 55 of the Constitution provides that a law imposing taxation can only deal with the imposition of taxation. If a law thought to impose a fee for services in truth imposes a tax, everything else in the law not dealing with the imposition of the tax will be invalid.(20) In this case, as charges can only be imposed on the basis of an agreement, the charges lack the element of compulsion that is a key characteristic of taxation.

It may be argued that the voluntary nature of the charge may make it difficult for the ACA to recover its costs in some circumstances.

Endnotes

  1. Much of this material on the Domain Names is drawn from whatis.com -a web based I.T .encyclopaedia http://www.whatis.com/.
  2. URL stands for Uniform Resource Locator. It is the address of a file or directory (resource) accessible on the Internet.
  3. See Internet Assigned Numbers Authority http://www.iana.org/domain-names.htm
  4. For more information on ICANN see http://www.icann.org/
  5. For information on other second level domains see http://www.auda.org.au/domains.html
  6. Source Melbourne IT, Prospectus, October 1999. http://www.melbourneit.com.au/ver2/html/investrelations/share_holder_publications/p1.pdf
  7. More information on the work of these panels can be found on the auDA website http://www.auda.org.au/.
  8. Mr Elz retains authority over other .au sub-domains. A copy of this delegation in relation to .com.au namespace may be found on the auDA website http://www.auda.org.au/docs/letter-com.au.html.
  9. The Hon. Richard Alston, 'Melbourne IT monopoly claims incorrect', Media Release, 12 July 2000 http://www.dcita.gov.au/cgi-bin/trap.pl?path=5121.
  10. The Hon. Richard Alston, 'auDA/Melbourne IT Licence Agreement', Media Release, 12 July 2000. http://www.dcita.gov.au/cgi-bin/trap.pl?path=5119.
  11. Telecommunications Legislation Amendment Bill 2000, Second Reading Speech, Senate, Hansard, 30 August 2000, p. 15547.
  12. Michelle Gilchrist, 'Alston acts to evict net squatters', The Australian, 30 August 2000.
  13. See also Chad de Souza, 'Specific Remedies for Cybersquatting Part 1', Internet Law Bulletin, Vol 3, No.4, July 2000.
  14. David Keegal, Submission to Senate Environment, Communications, Information Technology and Arts Legislation Committee, 15 September 2000, p 2.
  15. Explanatory Memorandum, p. 8.
  16. A listed carriage service is defined by sections 7 and 16 of the Telecommunications Act 1997 as a service for carrying communications, by means of guided or unguided electromagnetic energy, between a point in Australia and one or more other points in Australia or elsewhere. Explanatory Memorandum p. 7.
  17. Explanatory Memorandum, p. 5.
  18. ibid., p. 5.
  19. ibid., p. 6/7.
  20. George Witynski, 'Canadian Airlines- Taxation and Fees for Services', Unpublished Conference Papers, 2000 Constitutional Law Forum, Canberra.

Contact Officer and Copyright Details

Mark Tapley
28 September 2000
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 2000


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Published by the Department of the Parliamentary Library, 2000.

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