Bills Digest No. 136 2004–05
Telecommunications Legislation Amendment (Regular
Reviews and other Measures) Bill 2005
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 & Discussion
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Telecommunications Legislation
Amendment (Regular Reviews and other Measures) Bill
2005
Date
Introduced: 10
March 2005
House: House of Representatives
Portfolio: Communications, Information Technology
and the Arts
Commencement:
On Royal
Assent
The Bill amends the Telstra
Corporation Act 1991, the Telecommunications Act 1997
and the Telecommunications (Consumer Protection and Services
Standards) Act 1999 ( the Consumer Protection Act ). According
to the Explanatory Memorandum, it purports to respond to the
recommendations of the Estens Report relating to:(1)
-
the need for Telstra to maintain a local presence in regional,
rural and remote parts of Australia (hereafter referred to as
regional Australia ); and
-
the establishment of an independent committee to review, no less
than every five years, the adequacy of telecommunications services
in regional Australia.
The matters dealt with in this Bill were previously dealt with
in the Telstra (Transition to full private ownership) Bill
2003 ( the Telstra Sale Bill ). The new Bill deals only with
those matters and not with any other matter in that earlier Bill
including the sale.
The provisions in the Bill are, with only minor exceptions,
identical to those dealing with the same matters in the Telstra
Sale Bill. However, this Bill establishes the review committee
under the Telecommunications (Consumer Protection and Customer
Service) Act 1999 and not under the Telstra Corporation
Act. It is not immediately apparent that this makes any
difference to the operation of the committee.
The Bill gives effect to the
Government s response to the recommendations in Chapters 8 and 9 of
the Regional Telecommunications Inquiry Report of 2002 ( the Estens
Report ).(2) The Estens Inquiry followed the report of
the Telecommunications Service Enquiry of 2000 ( the Besley
Report).(3) Two of the three members of the Besley
Inquiry served on the later Estens Inquiry.
These inquiries were set up to assess the adequacy of
telecommunications services in Australia. The Besley Report noted
that there was a greater degree of concern expressed by rural and
remote Australians about service levels compared with those in
metropolitan areas .(4)
As a consequence of the Besley Report, the Estens Inquiry was
established to inquire into the adequacy of telecommunications
services in regional Australia. It was also to report on the
arrangements that should be put in place to ensure the adequacy of
such services. Amongst other matters, the Inquiry panel was to
advise the Minister on;
5. The ongoing commitment of Telstra to a local
presence (such as Telstra Country Wide) in regional, rural and
remote Australia.
6. The most effective means by which the
Government can ensure that people in regional, rural and remote
Australia can share reasonably equitably - in terms of availability
and cost - with residents in metropolitan Australia in the benefits
of future advances in telecommunications services resulting from
competition and new technologies. (5)
On 6 November 2002, panel provided its report to the Minister.
It included the following recommendations;
RECOMMENDATION 8.1
Telstra should be required to maintain an ongoing
local presence in regional, rural and remote Australia. The
requirement should only apply to Telstra consistent with its status
as the primary universal service provider. The requirement should
not be unduly prescriptive or burdensome, and should be broadly
compatible with Telstra s commercial interests.
RECOMMENDATION 8.2
Telstra should be required to develop and publish
a local presence plan to set out the range of activities and
strategies it would deploy in regional Australia to address the
Government s broad objectives. Telstra would be required to
regularly report on its achievements against the plan and to
demonstrate to the Government, and to regional communities, that it
was providing an effective and beneficial local presence.
RECOMMENDATION 9.1
The Government should put in place a process to
regularly review telecommunications services in regional, rural and
remote Australia, and to assess whether important new service
advancements are being delivered equitably in those areas.
The review process should be linked to a strategic
plan for regional telecommunications, and underpinned by ongoing
arrangements that provide a high degree of certainty that
Government funds will be made available to support service
improvements in regional, rural and remote Australia, where they
will not be delivered commercially within a reasonable
timeframe.
RECOMMENDATION 9.2
-
Establishing a structure for future reviews of regional, rural
and remote telecommunications services should:
-
provide certainty for regional, rural and remote
communities;
-
ensure that reviews are independent from executive government;
note this is not ensured
-
allow for flexible and appropriate policy responses to meet the
range of needs in regional, rural and remote Australia; and
-
promote competition and commercial service delivery as the most
effective and sustainable service outcome.
RECOMMENDATION 9.3
The scope of regular reviews of regional, rural
and remote telecommunications services should be flexible, but
there should be a core focus on assessing whether important new
telecommunications services are available equitably across
Australia.
RECOMMENDATION 9.4
Future governments should be legally obliged to
respond publicly to the recommendations of future reviews, and to
justify responses that are not in accord with review
recommendations.
RECOMMENDATION 9.5
The Government should provide funding for future
service improvements in regional, rural and remote Australia,
rather than imposing financial obligations on industry.
RECOMMENDATION 9.6
The Government should ensure that regular reviews
of regional telecommunications services are supported by
organisational arrangements that provide a strong focus on
monitoring and assessing regional, rural and remote service levels.
The Australian Communications Authority would be an appropriate
body to undertake this function. (6)
Section 63 of the Telecommunications Act 1997
empowers the Minister to impose conditions on carrier licences. The
conditions in Telstra s carrier licence are found in the
Carrier Licence Conditions (Telstra Corporation Limited)
Determination 1997.(7) The Telstra licence
conditions do not expressly include a requirement to maintain a
local presence in regional Australia.
The Bill does not impose any obligations on Telstra to maintain
a local presence in regional Australia. Nor does it require the
Minister to include any such condition in Telstra s carrier
licence.
Rather, it provides that, in relation to any condition in
Telstra s carrier licence requiring it to maintain a local presence
in regional Australia, which is included by the Minister under
section 63, the condition may make provision for, or in relation
to, a matter by empowering the Minister or the ACA to make
decisions of an administrative character. (8) This could
include, for instance, a provision requiring the ACA or the
Minister to approve a draft local presence plan setting out how
Telstra will fulfil its obligations to maintain a local presence in
regional Australia.
The Explanatory Memorandum envisages that the Minister will
include a licence condition requiring Telstra to have a local
presence plan. This is aimed at ensuring the continuation and
further development of Telstra endeavours in [regional Australia[
through promoting
-
Decentralised management and decision-making within Telstra;
-
Representation for regional and rural interests within Telstra s
executive management structure;
-
effective direct customer servicing and support for regional
Australia;
-
effective concentration and application of resources in
regional, rural and remote Australia, including additional
specialist staff who can address specific needs of rural
customers;
-
effective coordination of effort in all service areas, and focus
of responsibility for managing projects and service tasks;
-
effective information to regional, rural and remote customers;
and
-
support through Telstra activities for broader regional
community development. (9)
The Bill provides for the establishment of the Regional
Telecommunications Independent Review Committee ( RTIRC ). Members
of the Committee must have a knowledge of, or experience in,
matters affecting regional Australia and/or telecommunications. The
Chair and the majority of members of the committee must not be
officers of Telstra, a Telstra subsidiary or certain officers of
the Commonwealth. Members are appointed by written instrument for a
specified term. The written instrument is not a legislative
instrument under the Legislative Instruments Act
2003(10) and is therefore not required to be subject to
parliamentary scrutiny.
The role of the RTIRC is to conduct reviews of the adequacy of
telecommunications services in regional Australia. The reviews must
be conducted no less frequently than every five years. The RTIRC
must report to the Minister who must table the report in Parliament
within 15 days of receiving it. The Minister must, as soon as
practical, prepare as statement setting out the Government s
response to the report and table it within 6 months of receiving
the report.
The Bill closely follows the recommendations in Chapter 8 and 9
of the Estens Report. It does not, however, include a response to
recommendation 9.5 above. That is, it does not deal with funding
for telecommunications services for regional services. The
Government has, however, accepted in principle this recommendation
and the principle that non-commercial service improvements in
regional Australia should be provided transparently by Government,
and should aim to promote competition and minimise market
distortions. (11)
The RTIRC is not given any express powers by the Bill.
There is almost no guidance given in the Bill about the way in
which the adequacy of telecommunications services is to be
measured. All that is said in this regard is that
In determining the adequacy of those services, the
RTIRC must have regard to whether people in regional, rural and
remote parts of Australia have equitable access to
telecommunications services that are (a) significant to people in
those parts of Australia; and (b) currently available in one or
more urban parts of Australia. (12)
Further, the RTIRC must have regard to any policies of the
Government notified to the RTIRC by the
Minister.(13)
The Estens Report conceived of adequacy as meaning fit for
purpose .(14) This, the Report says, means that
telecommunications services;.
-
are provided in a timely way;
-
are of good quality and function well;
-
are generally reliable; and
-
are priced in a way that enables broad access and take-up by
regional, rural and remote consumers.(15)
Further it addressed the issue of the assessment of
adequacy. The Report noted that the complexity of the
services being offered does not lend itself to easy measurement and
that a flexible approach was preferable. While some indicia of
adequacy are mentioned in the report at page 19, these have not
been included in the Bill.
The approach taken in the Bill with regard to the assessment of
adequacy can be contrasted with the more prescriptive
approaches taken in the Consumer Protection Act in relation to, for
instance, the Universal Service Obligation, the National Relay
Service and the Customer Service Guarantee.
In recommendation 9.2 the Estens Committee noted that
-
Establishing a structure for future reviews of regional, rural
and remote telecommunications services should:
-
provide certainty for regional, rural and remote
communities;
-
ensure that reviews are independent from executive
government;
-
allow for flexible and appropriate policy responses to meet the
range of needs in regional, rural and remote Australia; and
-
promote competition and commercial service delivery as the most
effective and sustainable service outcome. (16)
It is not clear whether this is merely commentary on the earlier
recommendation or a prescription for the manner in which the
reviews are to operate. For instance, In any case, it is not
immediately apparent that the Bill will lead to these outcomes. For
instance, the objective of certainty (in point 1) would seem to sit
in opposition to the object of flexibility (in point 3).
Furthermore, the creation of a committee by legislation, albeit it
with restrictions on membership, does not guarantee independence
(point 2). One factor that militates against this is that committee
members are appointed by the Minister without parliamentary
scrutiny.
The National Farmers Federation has indicated that the measures
included in the Bill are inadequate in certain respects. First, it
is concerned that the reviews must take place no less often than
every five years. It would prefer the reviews to be more frequent
and suggests that they be held, at the most, every three years.
This, it is said, would reflect the rate at which
telecommunications is changing. This is consistent with the Estens
Report which suggests that three-yearly reviews would be
appropriate.(17) In fact, the Government indicated
approval of this timing.(18) Further, the NFF is
concerned that the objectives of the reviews not
clear.(19)
Schedule 1 Amendments
The Telecommunications Act 1977 regulates entities such
as carriers and service providers. A carrier's licence is subject
to conditions.
Item 1 inserts a new section
66 into the Telecommunications Act 1977 to
empower the Minister or the Australian Communications Authority to
make decisions of an administrative character in connection with
any carrier's licence conditions that may be imposed on
Telstra to ensure that Telstra retains a local presence in
regional, rural and remote parts of Australia. These administrative
decisions could cover such matters as draft local presence
plans.
Item 2 inserts a
definition of the Regional Telecommunications Independent Review
Committee (RTIRC) in the Act. The RTIRC will be established by a
new section 158R (see Item 6).
The RTIRC will conduct regular independent reviews of the adequacy
of telecommunications services in regional, rural and remote parts
of Australia.
Item 2,3,4 and 5
insert new definitions relevant to the establishment of the
Regional Telecommunications Review Committee.
Item 6 inserts a
new Part 9B Independent reviews of regional
telecommunications into the Act (as new sections
158P to 158ZD). A proposed Regional Telecommunications
Independent Review Committee (RTIRC) will review the adequacy of
telecommunications services in regional, rural and remote parts of
Australia. The reports of the RTIRC will be tabled in Parliament.
The RTIRC will comprise a Chair and at least two other members,
appointed by the Minister on a part-time membership basis. The
RTIRC may be assisted in the performance of its functions by the
Australian Communications Authority (ACA), the Australian
Competition and Consumer Commission and the portfolio
Department.
Item 7 makes minor consequential amendments to
this Act.
Items 8 makes minor consequential amendments to
the Telecommunications Act 1997 to change the name of the
regulator from ACA to ACMA.
Item 9 to 11 make minor consequential amendments
to the Telecommunications (Consumer Protection and Service
Standards) Act 1999 to change the name of the regulator from
ACA to ACMA.
The recommendations in chapter 8 and 9 the Estens Report have
generally been followed, but, it would seem, without any further
policy refinement.
Parliament may want to consider what safeguards could be
included to ensure the independence of the committee including
whether appointment to the Committee should be scrutinised by
Parliament.
-
Parliament might also want to consider whether;
-
reviews should be conducted more frequently
-
the principles for the imposition of any condition on Telstra to
maintain a local presence should be set out or whether such
conditions should themselves be set out in the legislation
-
there needs to be greater transparency in the process of the
reviews. For instance, by the inclusion of a requirement that
public submissions be available on a website, that transcripts of
any hearings be made and made available, and
-
the legislation should be more prescriptive about the matters to
be addressed in determining the adequacy of services.
1. Explanatory Memorandum,
Telecommunications Legislation Amendment (Regular Reviews and other
Measures) Bill 2005.
2. Regional Telecommunications
Inquiry, Connecting Regional Australia (Estens
D., Chairman), Department of Communications, Information Technology
and the Arts, Canberra, 2002.
http://www.telinquiry.gov.au/rti-report.html
3. Telecommunications Services
Inquiry, Connecting Australia (Besley M.A., Chairman)
Department of Communications, Information Technology and the Arts,
Canberra, 2000: http://www.telinquiry.gov.au/final_report.html
4. Estens, op cit., page ix,
(executive summary).
5. ibid., page 4 (Terms of
Reference).
6. ibid., pp xxvi xxviii
(Executive Summary).
7.
http://scaleplus.law.gov.au/html/instruments/0/30/0/2003101601.htm.
8. Schedule 1, Part 1, Item 1,
(new s 66).
9. note 1, pp 5 6.
10. Item 1(9), Part 1, Schedule 1, Legislative Instruments
Regulations 2004.
11. Government s response to the recommendations of the
Regional Telecommunications Services Inquiry,
http://www.dcita.gov.au/tel/regional,_rural_and_remote_communications/telecommunication_inquiry_-_government_response/the_governments_response_to_the_recommendations_of_the_regional_telecommunications_inquiry
12. Subsection 158(2).
13. Subsection 158P(5).
14. Estens, op. cit., p 19.
15. ibid.
16. Note 6
17. Estens, op. cit., p 233.
18. Senator Nick Minchin, Senate Debates, 30 September
2003, page 17270. http://www.aph.gov.au/hansard/senate/dailys/ds301003.pdf,
19.
http://www.abc.net.au/pm/content/2005/s1320724.htm.
Jonathan Chowns
17 March 2005
Bills Digest Service
Information and Research Services
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