On 3 September 2020, the Senate referred the provisions of the following three bills to the Environment and Communications Legislation Committee (the committee) for inquiry and report by 4 November 2020:
Radiocommunications Legislation Amendment (Reform and Modernisation) Bill 2020 (the Reform and Modernisation Bill),
Radiocommunications (Receiver Licence Tax) Amendment Bill 2020 (Receiver Licence Bill), and
Radiocommunications (Transmitter Licence Tax) Amendment Bill 2020 (Transmitter Licence Bill).
The Selection of Bills Committee report outlined reasons for this referral, which included scrutinising the intended operation of the bills on key issues, assessing the substantiveness of some amendments and understanding why certain recommendations of the 2015 Spectrum Review were not addressed in the package of bills and when they will be addressed.
Conduct of the inquiry
The committee advertised the inquiry in the usual manner, on its website, and wrote to a number of organisations inviting submissions.
The committee received eight submissions to this inquiry. The submissions are listed at Appendix 1 of this report and are available on the committee's webpage.
The committee held a public hearing on 12 October 2020. A full list of witnesses who attended the hearing is at Appendix 2 of this report, and the Hansard transcript of evidence is available on the committee's website.
Structure of the report
This report comprises two chapters:
Chapter 1 provides background to and an overview of the bills; and
Chapter 2 considers the issues raised in evidence regarding the Reform and Modernisation Bill's substantive content and sets out the committee view and recommendation.
Background to the Reform and Modernisation Bill
Radiofrequency spectrum is a vital resource which underpins many aspects of Australia's digital economy, such as the operation of fixed and mobile wireless communication networks. However, the technological landscape has changed significantly since the original legislative framework was first introduced in 1992.
Regulatory arrangements for spectrum management must be able to respond to these changes, but also be flexible enough to adapt to future innovation and changing demand for spectrum. The Reform and Modernisation Bill seeks to modernise and update the management of spectrum and radiocommunications in Australia.
The Reform and Modernisation Bill is a product of the government's 2015 Spectrum Review, which was undertaken by the then Department of Communications. The Spectrum Review highlighted the limitations of the current framework and considered reforms to the way spectrum was managed. Following this review, extensive public consultation was undertaken on an exposure draft of proposed reforms in 2017 and in 2020. The current suite of bills before the committee emerged from these processes.
2015 Spectrum Review
In May 2014, the then Minister for Communications, the Hon. Malcolm Turnbull MP, announced a review of Australia's spectrum policy and management framework. The then Department of Communications, in conjunction with the Australian Communications and Media Authority (the ACMA), was tasked with undertaking the review.
The Spectrum Review looked at the changes needed to cope with the increase in demand for spectrum and changes in technology, markets and consumer preferences.
The department undertook extensive consultation during this review and released two discussion papers with: over 80 submissions received; and over 40 meetings conducted with industry, government and community stakeholders—both bilaterally and in focus groups—including a stakeholder workshop with over 100 attendees.
The Spectrum Review reported to the then Minister, the Hon. Malcolm Turnbull MP, in March 2015 and identified substantial deficiencies with the existing legislative framework. The department found that current spectrum management arrangements were slow, rigid and administratively cumbersome.
The review made three recommendations, with the core elements of the recommendations being:
1. replace the current legislative framework with outcomes focussed legislation, that facilitates timely allocations, greater flexibility of use, including through sharing and trading of spectrum, and delivers improved certainty for market participants
2. improve the integrity and consistency of the framework by incorporating the management of broadcasting spectrum and better integrating public sector agencies through the reporting of their spectrum holdings and allowing those agencies to lease, sell or share that spectrum for their own benefit
3. review spectrum pricing arrangements to make these consistent and transparent in order to support efficient use and to facilitate secondary markets.
In response to the recommendations from the Spectrum Review, consultation on an initial draft bill was undertaken in 2017. In 2019, following consideration of stakeholder views received in response to this consultation, the government announced that instead of proceeding with a repeal and full re-write of the Radiocommunications Act 1992 (the Act), it would progress with a set of targeted amendments that addressed areas of priority to bring reforms sooner, while reducing the transitional burden for industry and stakeholders.
In his second reading speech, the Minister for Communications, Cyber Safety and the Arts, the Hon. Paul Fletcher MP (the Minister), said:
When I became minister, I considered the outcomes of this consultation process and I listened to the concerns of stakeholders around the costs of transition to a new act to regulate spectrum. I concluded that the best way to achieve effective reform was through a series of targeted amendments.
Following the October 2019 announcement, the government committed to progressing a set of targeted amendments to update and streamline the Act.
Exposure draft of the Radiocommunications Legislation Amendment (Reform and Modernisation) Bill 2020
On 24 June 2020, the Department of Infrastructure, Transport, Regional Development and Communications (the department) released an exposure draft of the Radiocommunications Legislation Amendment (Reform and Modernisation) Bill 2020 (exposure draft bill) for public consultation, with consultation formally closing on 17 July 2020.
Submissions received as part of the public consultation process were supportive of the decision to pursue targeted amendments instead of a rewrite of the Act. Stakeholders were particularly supportive of the provisions of the exposure draft bill that aimed to improve flexibility, and decision-making and enforcement for the ACMA.
Submissions provided suggestions for how the exposure draft bill could be amended to improve functionality and proposed additional reforms for the government to consider as part of the new bill. In response to the feedback received from submissions, the government implemented a number of changes to the exposure draft bill and provided further clarification on the operation of the Reform and Modernisation Bill in the explanatory materials.
Key changes included in the final drafting of the Reform and Modernisation Bill were:
implementation of limitations on the ACMA's power to unilaterally vary the renewal statements of spectrum licences;
extension of the Defence related exemptions under the Act; and
further consideration of comments around guidance from the ACMA on how it will exercise its powers in the implementation of the reforms.
According to the Minister, the amendments in the current Reform and Modernisation Bill are in line with the original recommendations of the Spectrum Review and take into account the feedback received from stakeholders from the exposure draft consultation process.
Overview of the bills
Reform and Modernisation Bill
The purpose of the Reform and Modernisation Bill is to amend the Act to implement recommendations of the 2015 Spectrum Review and to reform and modernise the legislative framework for spectrum management. The Reform and Modernisation Bill seeks to improve current processes for allocating and re-allocating spectrum, as well as licensing and licence renewal arrangements.
The Explanatory Memorandum states that the Reform and Modernisation Bill is designed to add flexibility to the legislative framework and improve processes, helping the framework remain fit for purpose in a rapidly changing environment. The Hon. Paul Fletcher MP in his second reading speech stated that:
…[t]he amendments will clarify the object of the act and streamline spectrum allocation and reallocation processes. They will remove unnecessary prescription and legislative barriers, add flexibility and more clearly delineate the roles of the minister and the regulator in spectrum allocation processes.
The Reform and Modernisation Bill seeks to:
amend the object of the Act;
provide for the minister to issue ministerial policy statements, which the ACMA must have regard to in exercising its spectrum management;
require the ACMA to publish an annual work program covering a minimum five-year period;
streamline spectrum allocation and re-allocation processes;
extend maximum licence terms for apparatus and spectrum licences, confer certain powers on the ACMA to make equipment rules that prescribe standards of equipment and impose obligations or prohibitions in relation to equipment;
make amendments contingent on the commencement of the Federal Circuit and Family Court of Australia Act 2020;
expand the ACMA's accreditation, compliance and enforcement, and information-gathering powers;
make miscellaneous amendments in relation to the ACMA's powers to grant exemptions from penalty provisions, exemptions for Defence related activities, and the ACMA's ability to use computer assisted decision making;
extend the maximum duration of spectrum and apparatus licences;
amend the Australian Communications and Media Authority Act 2005 in relation to annual reporting requirements;
amend the Radiocommunications Act 1991 and four other acts to repeal the datacasting transmitter licence framework;
amend the Radiocommunications Act 1992 and Australian Communications and Media Authority Act 2005 to repeal redundant provisions in relation to public inquiries; and
amend the Telecommunications Act 1997, the Trans Tasman Mutual Recognition Act 1997, the Telecommunications (Interception and Access) Act 1979, the Broadcasting Services Act 1992, the Competition and Consumer Act 2010 and the Income Tax Assessment Act 1997 to make consequential or minor amendments.
Receiver Licence Tax Bill
As a consequence of the amendments proposed in the Reform and Modernisation Bill, the Receiver Licence Bill seeks to align some of the arrangements for the payments licensees make for the value of the spectrum they use under their licences. The amendments in the Receiver Licence Bill would enable the ACMA to determine whether, for a specified class of licences with longer than 12 months duration, the receiver licence tax would be imposed on the issue of the licence for the full period the licence is in force, or whether it should be paid in annual instalments.
Currently, the Radiocommunications (Receiver Licence Tax) Act 1983 provides the licensees with the choice of when the tax is imposed.
As noted in his second reading speech, the Hon. Paul Fletcher MP said these amendments to payment arrangements 'will only apply to licences issued after commencement, and will not make changes to how the amount of tax that licensees pay for their licence will be calculated'.
Transmitter Licence Tax Bill
Currently for transmitter licences, payments of tax are made under the provisions of the Radiocommunications (Transmitter Licence Tax) Act 1983. Where a transmitter licence has a term greater than 12 months, the licensee is able to choose whether to pay the applicable tax on the issue of the licence, or in annual instalments over the term of the licence.
As with the Receiver Licence Bill, the amendments in the Transmitter Licence Bill would enable to ACMA to determine when the tax is imposed and would only apply to licences issued after commencement.
Consideration by other committees
Scrutiny of Bills Committee
The Senate Standing Committee for the Scrutiny of Bills (the Scrutiny Committee) commented on several elements of the Reform and Modernisation Bill.
Delegated legislation not subject to disallowance – ministerial policy statements
The Scrutiny Committee raised concern that a ministerial policy statement is a notifiable instrument rather than legislative instrument. The Scrutiny Committee noted concerns over the lack of parliamentary scrutiny as:
…notifiable instruments are not subject to the tabling, disallowance, sunsetting or consultation requirements applying to legislative instruments. As such, there is no parliamentary scrutiny of a notifiable instrument.
The Scrutiny Committee also stated that the Explanatory Memorandum did not provide a sound justification for the use of a notifiable instrument and sought the Minister's advice as to whether the Reform and Modernisation Bill could be amended to provide that a ministerial policy statement be a legislative instrument.
Other concerns raised by the Scrutiny Committee
The Scrutiny Committee noted other concerns with the Reform and Modernisation Bill, including provisions that would:
allow the ACMA to rely on computer programs when exercising its powers;
leave details of proposed equipment rules to delegated legislation; and
allow broad delegation of investigatory powers, administrative powers and legislative power.
In raising these matters, the Scrutiny Committee sought the Minister's advice on several aspects of the Reform and Modernisation Bill.
Parliamentary Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights (the Human Rights Committee) noted that the Reform and Modernisation Bill would confer on the ACMA the power to make rules prescribing standards of radiocommunications equipment and to impose obligations and prohibitions on equipment, including by establishing penalties for non-compliance.
The Human Rights Committee further highlighted that some of the proposed civil penalties in the Reform and Modernisation Bill may engage criminal process rights, if those civil penalties are more properly to be regarded as criminal penalties for the purposes of human rights law. If this were the case, the Human Rights Committee noted that the civil penalty provisions in question must be shown to be consistent with the criminal process guarantees.
In raising these matters, the Human Rights Committee sought the Minister's advice for further information in order to conduct a full assessment of the potential limitation on criminal process rights.