Appendix 5 - Regulatory framework
This Appendix outlines some of the major features of the
Australian telecommunications regulatory regime, substantially introduced by
the Commonwealth Government on 1 July
1997. The Committee
addresses below those key elements of the regime that relate to
telecommunications infrastructure, the main thrust of its inquiry.
Regulatory agencies
Role of the Minister
The Minister for Communications, Information Technology and
the Arts has a range of powers under the telecommunications regulatory regime.
The Minister, for example, has the power to:
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determine that certain telecommunications
facilities supplying carriage services to the public be considered network
units (s.29 Telecommunications Act);
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impose licence conditions on individual
carriers, classes of carriers or all carriers (s.63 Telecommunications Act);
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give directions to the ACA in relation to its
functions and the exercise of its powers;
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can direct the ACCC to undertake a public
inquiry in relation to anti-competitive conduct under Part XIB of the Trade
Practices Act or the declaration of services under Part XIC of that Act (s.496
Telecommunications Act);
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may determine price-related terms and conditions
in relation to declared access services (s.152CH, Part XIC, Trade Practices
Act);
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determine pricing principles to give guidance to
the industry. The preferred approach is
to rely, as far as possible, on the broader regulatory regime and ongoing
guidance from the ACCC;
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give ministerial directions to Telstra under s.9
of the Telstra Corporation Act 1991; and
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give directions to carriers in relation to
service standards and consumer safeguards Under the Telecommunications
(Consumer Protection & Services Standards) Act 1999.
Notwithstanding its majority ownership of Telstra the
Government does not have any control of the day-to-day operations of Telstra
which are the responsibility of the board and management of that company.
Australian Consumer and Competition Commission
The 1997 reforms inserted into the Trade Practices Act 1974 specific provisions to deal with
anti-competitive conduct in relation to telecommunications and to establish an
access regime to give competitors access to key infrastructure and
services. Responsibility for
administering these competition provisions was vested with the Australian
Competition and Consumer Commission (ACCC), Australia's
national competition regulator.
The ACCC's powers to regulate anti-competitive conduct
include the collection of information to monitor competition in the
telecommunications industry. To ensure
that competitors understand its intentions, the ACCC has developed guidelines
that it will use in exercising its powers to deal with anti-competitive
conduct. The ACCC reports annually on
competitive safeguards within the telecommunications industry.
A basic requirement of any national telecommunications
network is that users of the network enjoy any-to-any connectivity between
the parts of the network operated by different carriers and service
providers. Satisfying this basic requirement
necessitates ensuring that those owning and controlling key elements of the
network are required to provide interconnection with their competitors
facilities on reasonable terms.
The ACCC has the power to 'declare' services for the
purposes of the telecommunications-specific access regime under the Trade
Practices Act. Once a service has been 'declared'
it is in effect brought within the regulatory net. Carriers and carriage service providers of
declared services are generally required to provide interconnection with, and
access to those services for, any requesting access seeker on reasonable terms
and conditions. Where commercial
negotiations fail to establish agreed terms and conditions for access the ACCC
may set terms and conditions through arbitration.
Services are declared only after the ACCC has conducted a
public inquiry, or on the recommendation of the Telecommunications Access Forum
(TAF) subject to the ACCC being satisfied there has been sufficient
consultation with potential access seekers and consumer representatives. Infrastructure owners of services that are
not declared are under no obligation to provide access to access seekers.
Telecommunications Access Forum
The legislation provides for a Telecommunications Access
Forum (TAF). It is a non-government
industry body in which all carriers and carriage service providers may
participate. The role of the TAF is to
recommend to the ACCC that certain services should be declared and to develop a
Telecommunications Access Code that sets out model terms and conditions for use
in voluntary access undertakings. The
ACCC has designated the Australian Communications Access Forum Inc (ACAF) to be
the TAF. The access Code was approved in
January 1998.
Australian Communications Authority
The Australian Communications Authority (ACA) is responsible
for administering a range of technical and service standard issues relating to
telecommunications, as well as managing the radiofrequency spectrum. The ACA licenses telecommunications carriers
and reports to the Minister for Communications, Information Technology and the
Arts on the performance of carriers and service providers. The ACA works closely with the Australian
Communications Industry Forum encouraging industry to develop voluntary codes of
practice and technical standards where they are in the public interest and do
not impose undue financial and administrative burdens on industry
participants. Industry codes may be
registered by the ACA, which then enables the ACA to require an industry
participant to comply with the Code.
The ACA administers the universal service obligation (USO)
and customer service guarantee (CSG), provisions of the Act. The ACA has the capacity to enhance service
standard arrangements should self-regulation fail, including the ability to set
mandatory customer service standards.
The ACA also administers the national numbering plan.
The ACA represents Australia's
communications interests abroad through participation in the work of
international organisations, such as the International Telecommunication Union,
for technical standardisation and coordination of services between countries.
Australian Communications Industry Forum
The Australian Communications Industry Forum (ACIF) was
established in May 1997 as a peak industry body to facilitate and manage
telecommunications self-regulation.
ACIF's main role is to develop and administer industry technical and
operating arrangements that promote both the long-term interests of end-users
and the efficiency and international competitiveness of the Australian
communications industry. Its primary
functions include development of industry codes of practice for registration by
the ACA and the timely production of technical standards, specifications, plans
and guidelines that the industry and community need.
Customer Service Standard Protections
The Telecommunications Act 1997 and the Telecommunications
(Consumer Protection & Services Standards) Act 1999 strengthened existing
obligations and placed new obligations on the telecommunications industry with
regard to service standards. These
telecommunications specific safeguards are in addition to general safeguards
conferred under the Trade Practices Act, general fair trading legislation and
customer rights under contract law. The safeguards
extend to a range of measures aimed at ensuring that customers are provided
with a reasonable and reliable standard of service.
Three of the telecommunications specific safeguards relate
to the reliability of the network; the Customer Service Guarantee, the Network
Reliability Framework and priority assistance.
Other protections include the Telecommunications Industry Ombudsman
scheme, the USO, the Internet Assistance Program, price controls on various Telstra
services, the requirement for untimed local calls; access to emergency call
services; caller number display; and itemised billing.
The Customer Service Guarantee (CSG) is intended to protect
residential and small business customers from poor telephone service. The CSG Standard specifies timeframes for the
connection of specified services, the repair of faults and the attendance of
appointments by service providers.
Customers are entitled to compensation if these timeframes are not met.
The requirements for connection a service vary depending
upon where the customer is located and the proximity to available
infrastructure and capacity. Where there
is no connection in place and the customer is close to available infrastructure
and capacity the connection must be made within:
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5 working days in an urban area;
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10 working days in a major rural area; or
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15 working days in a minor rural or remote area.
A fault which has been
reported must be repaired by the end of the:
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next
working day in urban areas and for some faults in rural and remote areas;
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second
working day in rural areas; and
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third
working day in remote areas.
Phone companies are not required to meet CSG timeframes if
natural disasters or extreme weather conditions cause mass disruptions of
services, or where a phone company makes a reasonable offer of an interim or
alternative service.
A Fact Sheet prepared by the ACA on the Customer Service
Guarantee can be accessed through its web site at http://www.aca.gov.au
Priority Assistance
In February 2002 Sam
Boulding, a child living in north-eastern Victoria,
suffered a severe asthma attack and died.
During this emergency his family were unable to call for assistance
using either of the telephone services provided to the family home because of
the latest of a series of faults on those services. Although the inquest subsequently found that
there was no evidence that a reliable telephone service would have altered the
outcome, this incident raised considerable public concern about the reliability
of telephone services and Telstras fault management system. As a result Telstra revised its procedures
and the Government took action to ensure that priority was given to the needs
of customers who are affected by life-threatening medical conditions.
Under a
carrier licence condition introduced by the Government, Telstra is required to
develop and maintain an effective priority assistance service. As the primary universal service provider,
Telstra is also required to make priority assistance available to all eligible
customers on request. Priority
assistance is available to customers where a member of the household:
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has a diagnosed life-threatening medical
condition; and
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there is a high risk that the condition could
rapidly deteriorate to be life-threatening ;and
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access to a telephone would assist to remedy the
life-threatening situation.
Telstra is required to ensure that a priority customer is
given the highest level of service that is available. This includes:
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a 24-hour maximum timeframe for service
connection and fault repair in metropolitan and rural areas and a 48-hour
timeframe in remote areas;
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an interim service if a priority service cannot
be connected or repaired within these timeframes;
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an enhanced fault repair service for recurring
and multiple faults; and
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specialised credit management processes to
ensure that the customer always has access to the emergency call service and
Telstra customer service.
Network Reliability Framework
The Network Reliability Framework (NRF) commenced in January
2003. The NRF requires Telstra to
maintain minimum levels of network reliability.
Under the NRF a telephone service cannot experience more than three
faults in 60 days or more than 4 faults in a year. Telstra is legally required to report
regularly to the industry regulator, the Australian Communications Authority
(ACA), on faults on its network at a number of levels, ranging from region
based reports to reports on individual phone services. Where reasonable fault levels are exceeded
Telstra is required to investigate and, where appropriate, take remedial action. The ACA monitors remedial action taken at an
individual level and may issue directions requiring Telstra to undertake
remedial action at a regional level.
In evidence to the Committee Telstra stated that since the
commencement of the NRF it had maintained an average service availability of
greater than 99 per cent across all service measures.[446]
Universal Service Obligation
In remote and sparsely populated areas of Australia
the provision of telephone services may not be commercially viable, because the
costs of supplying the service may exceed the revenues earned from supplying
the service at similar prices to those charged in urban areas. The Universal Service Obligation (USO) is intended
to ensure that standard telephone services, payphones and prescribed carriage
services are reasonably accessible to all Australians on an equitable basis,
wherever they reside or carry on business.
The Universal Service Obligation (USO) is enshrined in Part
2 of the Telecommunications (Consumer
Protection and Service Standards) Act 1999. It requires that services be
provided by the Universal Service Provider, currently Telstra, who is then
compensated through the Universal Service Levy which is imposed on all
carriers. Telstra is required to supply
a telephone service to places of residence and businesses upon request. The service is subject to normal commercial
charges and to Government price caps where these apply. The obligation includes the provision of a
suitable handset where requested by the customer and comparable services must
also be provided for people with disabilities.
Part 3 of the Act extends this type of protection to the
provision of data services under the Digital Data Service Obligation
(DDSO). The DDSO requires Telstra to
provide access to a digital data service equivalent to 64 kbps to 96% of the
Australian population. This requirement
is normally satisfied through the provision of ISDN services.
The needs of the remaining 4% of the population are met
through the Special Digital Data Service Obligation (SDDSO). This requires a designated provider to supply
customers who cannot receive ISDN with access to an approximately equivalent
service, normally via a one-way satellite service. A subsidy is available to help the subscriber
meet the cost of equipment and installation.
Telstra and Hotkey are the Special DDSO providers.
Internet Assistance Program
The Internet Assistance Program (IAP) was established
following the Telecommunications Services Inquiry. That inquiry found that a small but
significant number of customers, particularly in rural and remote areas, were
either unable to access the internet or experienced slow speeds. The Program was established as a three year
joint initiative between the Commonwealth Government and Telstra which
commenced on 2 July 2001.
The IAP was intended to help Internet users obtain a
reasonable speed from their dial-up Internet service. The program is primarily aimed at helping
Internet users obtain an equivalent data speed of 19.2 kbps and offers dial-up
users access to a free online help and technical support service.
Telecommunications Industry Ombudsman
The Telecommunications
Industry Ombudsman (TIO) provides a free, independent investigation service for
residential and small business customers who have been unable to resolve
certain complaints directly with their telecommunications carrier, service
provider or Internet service provider