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Purpose of Legislation
Contact Officer and Copyright Details
National Transmission Network Sale Bill
Date Introduced: 25 November 1998
Portfolio: Communications, Information Technology and the
Commencement: On Royal Assent
This Bill, together with the National
Transmission Network Sale (Consequential Amendments) Bill 1998,
puts in place the necessary framework for the sale of Australia's
National Transmission Network (NTN).
On 10 July 1997 the Minister for Communications
and the Arts, and the Acting Minister for Finance, announced the
Government's decision to sell the NTN. The NTN was to be sold
through open tender with a target sale date of mid 1998.(1) The two
Bills facilitating the sale were passed by the House of
Representatives but were not considered by the Senate before
Parliament was prorogued on 31 August 1998.
This current Bill contains minor amendments
recommended by the previous Senate Committee inquiry into the
proposed sale. The amendments extend the access regime to include
ancillary services provided by the ABC and SBS and to cover
community television providers. Ancillary services include, but are
not limited to, services such as closed captioning for the hearing
impaired and teletext services.(2)
The National Transmission Network
The NTN is a nationwide network of broadcasting
transmission facilities, which operates principally to transmit the
radio and television programs of the Australian Broadcasting
Corporation (ABC) and the Special Broadcasting Service (SBS). It
also provides access to network infrastructure for use by
commercial and community broadcasters, numerous radio
communications users, various self-help rebroadcasters,(3) and
volunteer emergency services.
The NTN, one of the world's largest, began
operating in 1923 by transmitting ABC radio programs. In the late
1950s, the network started carrying ABC television programs, and
more recently SBS programs.
It operates transmitters on 547 Commonwealth and
privately owned sites. The Commonwealth owns, leases or holds an
interest in approximately 70 per cent of the total sites, with the
remaining sites owned by commercial broadcasters or other third
party organisations, with most of whom the Commonwealth has access
arrangements ('Reverse Sharing' arrangements).
These sites house approximately 1700 large and
small broadcasting transmitters as at June 1997. Of these,
approximately 1200 are used to transmit national broadcasting
services. The remaining 500 or so are operated by commercial,
community and self help groups.
The National Transmission Authority
Since 1992 the NTN has been operated by the
National Transmission Agency (NTA), which is part of the
Commonwealth Department of Communications, the Information Economy
and the Arts (the Department).
The NTA is a separate cost centre within the
Department responsible for the technical planning, operation and
maintenance of the NTN facilities. The Government provides direct
funding to the NTA for this purpose.
The NTA uses two contractors, Telstra
Corporation (Telstra) and Broadcast Communications Limited (BCL),
to operate and maintain the NTN.
Telstra is contractually responsible for:
- New South Wales/Australian Capital Territory
- Victoria/Tasmania, and
- Western Australia.
BCL is contractually responsible for:
- Queensland, and
- South Australia/Northern Territory.
The term of the five regional contracts is three
years commencing 1 July 1996 with an option for the NTA to extend
for one or more further periods of not less than 12 months each and
in total not more than three years from the expiration of the
contract period (30 June 1999).
Basis of policy
The Government's preferred option is to transfer
the NTN to a new company(s) (NTC) which is to be offered for sale.
NTC will have contracts in place with the ABC and SBS detailing
transmission requirements for existing analog broadcasting and
social policy objectives. The contracts will set out the core
performance obligations and will be enforceable through contractual
The Bill also provides for an access regime
based on the access regime for the telecommunications industry
under Part XIC of the Trade Practices Act 1994 - but
specifically adapted to the NTN context. The access regime seeks to
guard against any imbalance in negotiating power between a NTC and
certain nominated customers (for example, the ABC and SBS). In the
absence of agreement between the parties, the Australian
Competition and Consumer Commission (ACCC) will be called upon to
The Government anticipates that the sale will
enable the national broadcasters(4) to establish a more
commercially based relationship with transmission service
providers, including greater control over service levels and the
planning of new services.
The Explanatory Memorandum attached to
these Bills states that Government agencies, including the Treasury
and the ACCC, and the ABC and the SBS have been consulted and
support the proposed approach. Public consultation on the proposed
sale has not been taken.
In August 1996 the press first reported
Government plans to either privatise the NTN or to outsource its
operations, with Television New Zealand (TVNZ) then emerging as one
of the main contenders to purchase the NTN in the event of a
In March 1997 the Sunday Canberra Times
reported that up to 110 jobs, most of them in Canberra, would be
under threat if the Government decided to privatise the NTN. It was
reported that critics described the sale as:
Shortsighted and ridiculous given that one of
the frontrunners to take over the NTAs role was a New Zealand
The Community and Public Sector Union (CPSU)
also condemned the sale in a media release on 16 July 1997. The
...the sale by open tender will attract interest
from overseas companies through their subsidiary organisations in
Australia such as TVNZ(Aust). Secondly, 120 NTA employees have no
idea at this stage regarding their prospects for securing
employment with the ultimate purchaser.(6)
Note that BCL, which currently operates and
maintains 40 per cent of the NTNs sites, is a division of TVNZ,
which is majority-owned by the New Zealand Government.
Pros and cons
The Government maintains that the sale of the
network will provide both the Commonwealth and the national
broadcasters with a range of benefits. These benefits may be
summarised as follows:
- the decision removes the Commonwealth from an activity, which
can be undertaken by the private sector
- proceeds gained from the sale will be used to further reduce
the level of public debt interest payments, and
- the national broadcasters will be able to establish a more
commercially based relationship with transmission service
providers, and will have greater control over service levels and
the planning of new services. (7)
Law firm Gilbert and Tobin have identified a
number of legal challenges surrounding the sale of the NTN: They
- review of site tenure interests for over 550 sales, including
exotic forms of State Crown grants
- negotiation and settlement of transmission services contracts
for the ABC and SBS before sale. The more complex issues around
which these negotiations have revolved include performance and
coverage standards and specifications
- negotiation of contracts between the Government and the ABC and
SBS respectively. These deal with the vexed issue of the funding to
be provided to the ABC and SBS for transmission services
- the nature of the access regime based on the access regime
under the Telecommunications Act but specifically adapted
to the NTN context
- unusual environmental issues (eg protection of biodiversity)
which have arisen, and
- novel as well as mainstream native title and heritage questions
have had to be reviewed and resolved in the process of vendor due
The Bill consists of seven Parts. Part
1 contains the commencement and definition provisions.
Part 2 - Sale of the National Transmission Network
Clause 7 allows the Minister to
determine that any identified network facility, which is a fixture
on non-Commonwealth land, is deemed to be severed from the land and
vests in the Commonwealth. Without this provision, a landowner upon
whose land a transmission facility is situated could arguably claim
ownership of such a facility through the common law rules
concerning affixation of things to land.
Clause 9 is the operative
provision, which provides for the vesting of assets and liabilities
(including rights and obligations under contracts), in the new
As is usually the case, the vesting which occurs
under clause 9 is free of any stamp duty or other
tax which would otherwise be payable (clause 10).
The stamp duty exemption does not extend to the duty payable on the
ultimate transfer of shares in the NTC to the purchaser.
Part 3 - Access to Services
Part 3 applies, with some
modifications, the access regime established for telecommunications
to broadcasting services. The access regime for telecommunications
is set out in Part XIC of the Trade Practices Act 1974
Part XIC of the TPA provides for the declaration
by the ACCC of 'declared services'. Carriers who provide declared
services are required to comply with certain 'standard access
obligations' in relation to those services. The terms and
conditions on which those standard access obligations are provided
is a matter of negotiation between the parties. Part XIC of the TPA
provides a number of solutions where the parties cannot reach
agreement on terms and conditions.
Part 4 - Restrictions on transfer of assets
Clause 18 requires the NTC (or
its successor) to obtain the Minister's approval before
transferring any asset originally used by the NTA. This provision
is intended to maintain core performance obligations and to test
the financial or commercial viability of any proposed
Part 5 - Transmitter licences
At present, the Commonwealth, in its capacity as
provider of transmission services, holds the national broadcasting
service (NBS) licence under section 100 of the
Radiocommunications Act 1992. The National
Transmission Network Sale (Consequential Amendments) Bill 1998
amends section 100 to provide that an NBS licence may only be held
by the ABC, SBS or the Commonwealth, rather than the NTC.
Clause 19 is a transitional
provision, which allows for transmitter licences currently held by
the Commonwealth to be transferred to the national
Part 6 - Powers and immunities of NTC or declared
This part authorises a NTC or a declared
successor to carry out maintenance on facilities similarly to other
participants in the communications industry.
Part 7 - Miscellaneous
Clause 22 allows the Minister
to declare a person to be a declared successor to the NTC.
Clause 24 provides the
Commonwealth, a NTC or a declared successor with immunity from
certain State/Territory laws in respect of construction and
maintenance of transmission sites.
The remaining provisions of this part are
administrative in nature.
- Arthur Anderson Corporate Finance were contracted as business
advisers for the sale process. Sydney law firm Gilbert and Tobin
were engaged to provide legal advice.
- The reference to 'analog' in the definitions section of the
Bill is intended to make it clear that the access right for
ancillary services is limited to services embedded in an analog
broadcasting signal even though the signal for the secondary
communications service or services may be in a digital form.
- Under the Broadcasting Services Act 1992 certain
members of the public are permitted to re-transmit free-to-air
broadcasts if they live in remote areas and areas of poor
reception. For the purposes of this Digest, they are called
- ABC and SBS.
- Brewster, Deborah., 'Privatisation, contractors loom for ABC
transmission authority', The Australian, 15 August, 1996,
- O'Loughlin, Sally., 'Union condemns sale of National
Transmission Agency', Media Release, 16 July 1997.
- The Department of Communications, the Information Economy and
the Arts web site at: http://www.dca.gov.au, under the
heading 'Sale of the National Transmission Network'.
- Gilbert and Tobin web site at:
4 December 1998
Bills Digest Service
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