Bills Digest No. 119  1998-99 Radiocommunications Legislation Amendment Bill 1999


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

Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer and Copyright Details

Passage History

Radiocommunications Legislation Amendment Bill 1999

Date Introduced: 18 February 1999

House: House of Representatives

Portfolio: Communications, Information Technology and the Arts

Commencement: 28 days after the day it receives the Royal Assent

Purpose

The purpose of the Radiocommunications Legislation Amendment Bill 1999 (the Bill) is to make various, and for the most part unrelated, amendments to the Radiocommunications Act 1992, Radiocommunications Taxes Collection Act 1983 and other Acts, following requests for such amendments by the Australian Communications Authority.

Amendments include:

  • providing authority for the Australian Communications Authority to regulate communications with 'space objects'
  • expansion of the terms 'radiocommunications transmitter' and 'radiocommunications receiver' to include reflectors
  • permitting concurrent use of spectrum for broadcasting and radiocommunications
  • encouraging competition by imposing a limit of nil on the amount of spectrum in a specified area that may be used by any one person, and
  • providing that spectrum licensees must be an Australian resident or the income derived must be attributable to a permanent establishment in Australia for tax purposes.

 

Background

1. The Australian Communications Authority

The Australian Communications Authority (ACA) was established on 1 July 1997 under the Australian Communications Authority Act 1997.

The ACA was formed through the merging of the functions and staff of the Spectrum Management Agency and most elements of the Australian Telecommunications Authority.

The ACA is responsible for regulation of the Australian communications industry, and other matters including:

  • reporting to and advising the Minister regarding the communications industry
  • advising, assisting and consulting with the communications industry
  • reporting to and advising the Minister regarding consumer issues
  • consulting with and providing advice and information to the public and conducting public education programs in relation to communications industry matters, and
  • managing Australia's input into the setting of international standards.

The ACA administers functions under the Telecommunications Act 1997, the Radiocommunications Act 1992 and a range of related legislation.

The ACA has general powers to carry out its functions under the Australian Communications Authority Act 1997 and specific powers under the various Acts that it administers.

The ACA's mission is to contribute to the development of dynamic and efficient markets for radiocommunications and telecommunications products and services, in order to maximise benefits to the Australian community.(1)

2. Radiocommunications Act 1992

The object of the Radiocommunications Act 1992 is to provide for the management of the radiofrequency spectrum(2) in order to:

  • maximise the overall public benefit derived from using the radiofrequency spectrum
  • provide a responsive and flexible approach to meeting the needs of users of the spectrum, and
  • provide an efficient, equitable and transparent system of charging for the use of spectrum, taking account of the value of both commercial and non-commercial use of spectrum.

Chapter 2 of the Act provides for radio frequency planning; Chapter 3 provides for licensing radiocommunications under spectrum, apparatus and class licences and for the re-allocation of spectrum; Chapter 4 provides for general regulatory requirements; and Chapter 5 provides for administration and enforcement.

Main Provisions

Schedule 1 - Amendments relating to space objects

1. Parts 1 and 2 - Amendments to the Radiocommunications Act 1992 (the Act) allow the ACA to regulate communications with space objects.

The object of introducing amendments contained in Parts 1 and 2 of the Bill is to give the ACA the authority to regulate communications with space objects beyond those currently described as Australian satellites for the purposes of the Act. (For example, launch vehicles).

This compliments the recent Space Activities Act 1998. As a signatory to the five United Nations space treaties, Australia is obliged to establish a licensing and safety regime for space launches and space objects. It is therefore, important from this perspective, as well as from a commercial point of view to ensure that radiocommunications for space launches and objects communicating with Australia can be protected by the ACA.

1.1 Inclusion of space objects within ACA powers

Not all of the provisions in the Act, which regulate conduct in respect of radiocommunications, are drafted in such a way to exclude the ACA from performing its functions in relation to space objects.(3) However, some of them are restrictive and it would seem sensible to expand outdated references to 'aircraft and vessels' to include space objects.

Accordingly, Items 1 to 15 in Part 1, substitute the words 'vessel, aircraft, space object' for the words 'vessel, aircraft' wherever they previously appeared.

Similarly, Items 19, 31, 32 and 34 in Part 2 substitute the words 'vessel, aircraft or space object' for the words 'vessel or aircraft'.

Items 18, 24, 29 and 33 in Part 2 insert references to 'foreign space objects' and delete references to non-Australian satellites and substitute references to 'foreign space objects'.

1.2 Definition of 'space object' - potentially inadequate

Part 2 inserts definitions of certain terms, including 'Australian space object', 'foreign space object' and 'space object' into the Act.

Item 20 inserts the pivotal definition of 'space object' into section 5 of the Act and defines it to mean:

'an object (whether artificial or natural) that is beyond, has been beyond or is intended to go beyond the major portion of the Earth's atmosphere, or any part of such an object, even if the part is intended to go only some of the way towards leaving the major portion of the Earth's atmosphere'.

The words 'beyond the major portion of the Earth's atmosphere' are not defined. It is possible that this definition may be insufficient to adequately identify objects that the ACA seeks to control.

The atmosphere is made up of the Exosphere, Ionosphere, Stratosphere and Troposphere. The Exosphere is the upper layer and at 900 kilometres above the Earth's surface has no clear outer boundary. Its lower boundary, at an altitude of approximately 600 kilometres is almost equally vague. The Ionosphere stretches approximately 50 kilometres to 600 kilometres in altitude. The Stratosphere is a remarkably stable layer between 50 kilometres and 15 kilometres above the surface. The Troposphere is the narrowest of all the atmospheric layers and extends up to 15 kilometres at the Equator but only 8 kilometres at the poles.(4)

What therefore does the definition of 'space object' intend to cover? Are objects beyond the major portion of the Earth's atmosphere when they are at an altitude of 500 kilometres (approximately just over half way above the surface of the Earth)? Or perhaps are they referring in some way to the density of the atmosphere?

Is it intended therefore, that they will be beyond the major portion of the Earth's atmosphere when they leave the Troposphere?

The Explanatory Memorandum provides an example of stratospheric balloons as a class of objects, which fall within the broad definition of space object.(5) This indicates that objects in the Stratosphere are contemplated to be beyond the major portion of the Earth's atmosphere. It could be argued, however, that the proposed definition would not catch objects that are so close to Earth.

The definition of 'space object' may require some refinement in order to clarify its intended scope of application. Depending on what the exact intention is, it may be that substituting the word 'Troposphere' for 'atmosphere' or introducing a kilometre measure of altitude beyond which objects are regulated, would assist in interpreting the definition with greater certainty.

1.3 ACA determinations about space objects

Despite the definition of 'space object' the ACA may make a written determination that a particular object is not a space object for the purposes of the Act.(6)

Such a determination is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901. This means that the determination must be notified in the Commonwealth Gazette, tabled in Parliament and be subject to parliamentary disallowance.

2. Part 3 - Consequential amendments of other Acts

The development allowance is a special tax deduction (under section 82AAAA to 82AQ of the Income Tax Assessment Act 1936) of 10 per cent of the amount of capital expenditure incurred on the acquisition or construction of new units of eligible property for use in carrying out certain large scale projects registered under the Development Allowance Authority Act 1992.

Pursuant to Items 35 to 40 of Part 3 references in both these Acts to 'Australian satellite' or 'satellite' are repealed, to be substituted with the words 'space object' and 'Australian space object' which will have the same meaning as in the Radiocommunications Act 1992.

Schedule 2 - Other amendments

1. Further amendments to the Radiocommunications Act 1992

1.1 Expansion of the defined terms 'radiocommunications transmitter' and 'radiocommunications receiver'

Item 1 inserts new subsection 7(2) that seeks to expand the definition of 'radiocommunications transmitter' to include anything artificial or natural that is used for the purpose of radiocommunication by means of reflection of radio emissions that the ACA determines in writing to be a radiocommunications transmitter.

Thus the ACA will be able to licence the use of natural features such as mountains as radiocommunications transmitters. This will enable companies that use reflectors to enhance radiocommunications to seek the protection of the Act in relation to any interference that may occur at any reflector it uses.

Item 2 inserts new subsection 7(3) that similarly expands the definition of 'radiocommunications receiver'.

 

1.2 Permitting more effective use of the spectrum, including concurrent use of the spectrum for broadcasting and radiocommunications

The Minister may, in accordance with the spectrum plan and under section 31 of the Act, designate a part of the spectrum as being primarily for broadcasting purposes and refer it to the Australian Broadcasting Authority (ABA) for planning under the Broadcasting Services Act 1992.

Items 3 and 4 insert new subsections 31(2) - (7) and 32(2) which will permit the ACA and the ABA to make a written agreement allowing licences to be issued in the broadcasting bands. This will make more efficient use of the radiofrequency spectrum by allowing concurrent use of the spectrum for broadcasting and radiocommunications services. Concurrent use is not possible under the Broadcasting Services Act 1992.

Such agreements must be consistent with the spectrum plan and can be revoked by the ABA after consultation with the ACA and affected licensees if the ABA considers that the agreement is preventing it from properly performing its planning functions under the Broadcasting Services Act 1992. (New subsection 31(4)).

New subsection 32(2) ensures that the ACA may prepare a frequency band plan in the spectrum designated as primarily for broadcasting purposes, but only in relation to that part of the spectrum to which an ACA and ABA agreement applies.

The Minister may designate a specified part of the spectrum to be allocated by issuing spectrum licences. Currently, however, he may not make such a designation for that spectrum allocated for broadcasting purposes. New subsection 36(5) amends this so that he may make such a designation for spectrum covered by an agreement under new subsection 31(2). This means licences allocated by the ACA pursuant to an agreement with the ABA may be spectrum licences.

Item 10 repeals current section 100(2) and inserts new section 100(2) which ensures that the ACA may issue apparatus licences in broadcasting service bands if there is an agreement under new subsection 31(2) between the ACA and ABA.

1.3 Amendments to encourage competition in the industry by imposing a limit of nil on the amount of spectrum in a specified area that may be used by any one person

Section 60 deals with the procedures for allocating spectrum licences.

Subsection 60(5) states that those procedures may impose limits on the spectrum in a specified area that may be used by any one person. The word 'limits' does not usually connotate 'nil' and therefore Items 6 and 7 insert new subsections 60(6A) and 60(8) to ensure that the ACA may allocate a nil amount of spectrum in a specified area to certain persons.

This will mean that where spectrum bands are auctioned as one lot (as they must be sometimes for technical reasons) the ACA will be able to effectively impose a 'bar' on certain persons, which will allow new entrants to enter the market.

1.4 Spectrum licensees must be an Australian resident or the income derived must be attributable to a permanent establishment in Australia for tax purposes

Item 8 inserts new section 69A into the Act. This will impose conditions about residency and attribution of income to ensure that income, profits or gains from operating radiocommunications devices under a spectrum licence or from authorising others to do so will be taxable in Australia.

The requirements apply to licensees or to persons authorised by a licensee of a spectrum licence to operate radiocommunications devices under the licence.

1.5 Unrealistic statements concerning unacceptable levels of interference required in certificates removed

Section 100 of the Act deals with the issue of apparatus licences. In deciding whether to issue an apparatus licence the ACA must have regard to all matters that it considers relevant including regard to a frequency assignment certificate (issued pursuant to section 100(4A)). A frequency assignment certificate is issued by a person accredited under the Act and currently must state that the operation of the apparatus will not 'cause an unacceptable level of interference to the operation of radiocommunications'.

Section 145 confers upon the ACA the power to register or refuse to register radiocommunications transmitters for operation under spectrum licences. The ACA may require, prior to registration, the presentation of a certificate, issued by an accredited person stating that the operation of a device under the licence will not 'cause an unacceptable level of interference to the operation of other radiocommunications devices'.

Apparently it is impossible, for technical reasons, for an accredited person to make the assertions required under subsections 100(4A) and 145(3) with certainty.

Therefore Item 11 amends subsection 100(4A) to require an accredited person to state that the operation of the apparatus will 'satisfy any conditions that are required to be satisfied, in relation to the issue of such certificate, under a determination made under section 266A.'

Item 16 similarly amends subsection 145(3).

It should be noted that subsection 100(4B) will be repealed. The subsection permits the ACA to determine what are unacceptable levels of interference for the purposes of subsection 100(4A). One must presume that the conditions to be imposed for the issue of certificates under section 266A will overcome the current difficulties, which are obviously experienced by the ACA and accredited persons alike.

1.6 ACA administrative burden eased by allowing delegation of the issue of certificates of proficiency.

Item 13 inserts new section 122A that allows the ACA to delegate its power in section 121 to issue certificates of proficiency. Such certificates state that the holder of the certificate is taken to be a qualified operator in relation to a specified class of transmitter licence.

A delegate is precluded from making a final decision in refusing to issue a certificate of proficiency by new subsection 122A(2).

This appears to be a little curious, delegating the power to issue a certificate but not delegating the power to refuse to issue a certificate.

1.7 Renewal up to 60 days after the date of expiry of apparatus licence will take effect on the date of expiry

Items 14 and 15 amend subsections 129(1) and 130(4) to permit a licensee of an apparatus licence to apply for a renewal of licence for a period commencing 6 months before it is due to expire and ending 60 days after it expires. Further, the new licence will come into force immediately after the expiration of the licence that it replaces.

1.8 Conditions relating to accredited persons

The ACA may, under section 263, accredit a person to issue certain certificates for the purposes of the Act, for example a frequency assignment certificate, mentioned in point 1.5 above.

It is apparently considered that sections 263 and 266 (accreditation principles) are not framed so as to permit the ACA to include a condition in relation to accreditation that a person is required to maintain professional indemnity insurance for a reasonable period after the issue of a certificate. The reasoning is that subsection 263(2A) provides that conditions are limited to the issuing of a certificate. Item 17 inserts new subsection 263(2B) that provides that a condition may relate to matters existing, arising at, before or after the time when a certificate is issued.

It should be noted that current section 263(3) states that in deciding whether to give a person an accreditation, the ACA must apply the principles in section 266 which, amongst other things, state that the principles must provide for the qualifications 'and other requirements required' before a person can be given that kind of accreditation. It may have been possible to resolve the problem of professional indemnity insurance by utilising the accreditation principles.

1.9 Fees may be imposed by bodies performing functions under the Act

Item 21 inserts new section 298A that permits the ACA to determine that certain bodies or organisations may charge fees for performing functions under the Act.

The types of bodies that may charge fees are those approved by the ACA to conduct examinations in relation to certificates of proficiency, recognised testing authorities and certification bodies for the purposes of labelling of devices.

Any such fee must not be such as to amount to taxation.(7)

1.10 Penalties payable in lieu of prosecution

Section 314 enables a person who is alleged to have committed certain offences to pay the Commonwealth, as an alternative to prosecution, a penalty of an amount worked out in accordance with section 315.

Item 23 repeals existing section 315 and replaces it with a simplified new section 315, which determines the amount of penalty payable in respect of an offence in accordance with the table contained therein.

The penalties for individuals are considerably less than for companies.

In addition, a lower penalty applies in relation to a device covered by a class licence. This is on the basis that because the person using the device has not applied for a licence to use the device and is not required to hold a licence, they may be less likely to be fully aware of the conditions imposed on the device than persons operating devices covered by other licences.

2. Radiocommunications Taxes Collection Act 1983

Currently the Radiocommunications Taxes Collection Act 1983 provides that licence tax instalments are due on the anniversary of the date of issue of a licence, not the date the licence commenced.

This means the tax does not relate to the particular period the licence was actually used. The amendments proposed will ensure the taxes relate to the licence period (the period between commencement and expiry) and allow the timing of instalments to be varied to suit individual circumstances.

The amendments will prevent persons operating licences in the period between the expiration of the old licence and commencement of the new licence without paying fees.

Items 24, 25 and 26 omit the words 'issue of an instrument' and substitute 'day on which an instrument came into force' in subsections 7(2), 7(3) and 7(4). This will give effect to the intention that taxes relate to the period of the licence.

It is also worth recalling the amendment mentioned at point 1.7, which states that a new licence will come into force immediately after the expiration of the licence that it replaces. This should also assist in closing the tax loop-hole.

 

Schedule 3 - Application of Amendments

1. Income tax treatment of spectrum licences

The amendments made to insert new section 69A into the Act, which imposes conditions about residency and attribution of income, apply in relation to the issue of licences on or after 11 March 1998.

The Treasurer issued a press release on 11 March 1998 setting out measures to ensure that Australia can assert taxing rights over income from the use of spectrum licences, where a non-resident owns the licence.

2. Amendments relating to the issue of licences

The amendments made by Items 11, 12, 14 and 15 (refer Schedule 2, points 1.5 and 1.7 above) apply in relation to the issue of licences after those items commence.

3. Civil penalties

The amendments made by Items 24 and 23 of Schedule 2 (refer Schedule 2, point 1.10 above) apply in relation to all offences (whether committed before or after the sections commence) in respect of which no penalty had been imposed at the time of commencement.

4. Time tax becomes payable

The amendments made by Items 24, 25 and 26 of Schedule 2 (refer Schedule 2, point 2 above) apply in relation to tax in respect of a licence if both the relevant anniversary of the issue of the licence and the corresponding anniversary of the instrument coming into force occurs 28 days after the day on which the Bill receives Royal Assent.

 

Concluding Comments

1. Definition of 'space object' may require some clarification

Please refer to commentary for Schedule 1, point 1.2 above, for information in relation to the potential problems with the definition of 'space object'.

Endnotes

  1. Australian Communications Authority, Annual Report 1997-98, p 2.

  2. 'Spectrum' is defined in section 5 of the Radiocommunications Act 1992 to mean the range of frequencies within which radiocommunications are capable of being made.

  3. Part 4.2 of the Radiocommunications Act 1992 specifies offences relating to radio emission. It contains 10 sections, which basically prohibit certain conduct that is considered to be unacceptable.
  • Penalties are imposed in situations where a transmitter is used in a way likely to interfere with radiocommunications where the interference is likely to prejudice the safe operation of an aircraft or vessel. (Section 192) Satellites and other space objects would be excluded from the definition of 'aircraft or vessel'.

  • It is an offence to interfere with radiocommunications if it is likely to endanger the safety of another person or cause substantial loss or damage. (Section 194) Satellites and other space objects would be caught by this provision without amendment because the definition of radiocommunications in section 6 includes radio emission or reception of radio emission for the purpose of communicating information between persons and persons, persons and things or things and things.

4. Philip's Atlas of the World, George Philip Limited, Fourth Edition, 1994, p 12.

5. The Explanatory Memorandum to the Bill (at page 17) provides an example of stratospheric balloons as a
class of objects which fall within the broad definition of space object but may be inappropriate to regulate as a space object. This is because the International telecommunications Union has determined that stratospheric
balloon services should be considered to be fixed services.

6. Refer Endnote 5.

7. The Constitution contains a number of restrictions on the federal government's powers to levy and collect income tax. One of these restrictions, in section 55 of the Constitution provides that laws 'imposing taxation shall deal only with the imposition of taxation and any provision therein dealing with any other matter shall be of no effect. 'It is for this reason that the fees charged by the approved bodies could not amount to a tax, because if they were they would have to be imposed under cover of a separate Act.

If the charges may be seen as a payment demanded as a contribution to revenue irrespective of any illegality or legality in the circumstances upon which liability depends it is possible it may be better described as a tax. The Explanatory Memorandum ( at page 29) indicates that a fee, which recovers the direct and indirect costs of providing a service, will not amount to taxation. If a body is engaged in performing functions under the Act for
profit making purposes it is likely it may seek to recover more than its costs. At page 12 the Explanatory Memorandum indicates that bodies would compete with each other and so the market would set the prices.

Part 4.2 of the Radiocommunications Act 1992 specifies offences relating to radio emission. It contains 10 sections, which basically prohibit certain conduct that is considered to be unacceptable.

Penalties are imposed in situations where a transmitter is used in a way likely to interfere with radiocommunications where the interference is likely to prejudice the safe operation of an aircraft or vessel. (Section 192) Satellites and other space objects would be excluded from the definition of 'aircraft or vessel'.

It is an offence to interfere with radiocommunications if it is likely to endanger the safety of another person or cause substantial loss or damage. (Section 194) Satellites and other space objects would be caught by this provision without amendment because the definition of radiocommunications in section 6 includes radio emission or reception of radio emission for the purpose of communicating information between persons and persons, persons and things or things and things.

Contact Officer and Copyright Details

Lesley Lang
25 February 1999
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.

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ISSN 1328-8091
© Commonwealth of Australia 1999

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Published by the Department of the Parliamentary Library, 1999.

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