House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Communications, Information Technology and the Arts, Senator the Hon. Richard Alston)

Notes on clauses

Clause 1 - Short title

Clause 1 provides that the Bill, when enacted, may be cited as the Communications Legislation Amendment Act (No. 1) 2002.

Clause 2 - Commencement

Clause 2 provides that each provision of the Bill (specified in column 1 of the table in clause 2) will commence, or is taken to commence, on the day or at the time specified in column 2 of the table in clause 2. The table in clause 2 provides that sections 1 to 3 and anything not covered elsewhere in the table will commence on the day after the day on which the Bill receives Royal Assent. The table also provides that Schedules 1, 3 and 5 commence on the day after the day on which the Bill receives Royal Assent. The table provides that Schedule 2 will be taken to have commenced on 27 June 2002 (because of the desirability of having these amendments commence at the earliest possible date) and that Schedule 4 will commence on 1 April 2003 (the date on which the appointments of the eligible associate members of the SC-ACA will expire).

Clause 3 - Schedule(s)

Clause 3 provides that the Bill amends each Act as specified in a Schedule to the Bill. There are five Schedules to the Bill. Schedule 1 provides for amendments to the Australian Communications Authority Act 1997. Schedule 2 provides for amendments to the Freedom of Information Act 1982. Schedule 3 provides for amendments to the Radiocommunications Act 1992. Schedule 4 provides for amendments to the Telecommunications Act 1997. Schedule 5 provides for amendments to the Telecommunications (Consumer Protection and Service Standards) Act 1999.

Schedule 1 - Australian Communications Authority Act 1997

Item 1 - After section 54

This item inserts a proposed new section 54A after section 54 of the ACA Act.

Section 54 of the ACA Act allows the ACA to make a written determination defining one or more expressions used in instruments made by the ACA under one or more specified laws of the Commonwealth. Any such written determination is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 (subsection 54(2)). Section 46A of the Acts Interpretation Act provides that section 49A of that Act applies to an instrument that is a disallowable instrument as if the instrument were a regulation under an Act. Section 49A effectively allows a written determination made by the ACA under section 54 to apply, adopt or incorporate (with or without modification) the provisions of any Act or regulations as in force from time to time or any matter contained in any other instrument or writing as in force or existing as the time when the written determination takes effect.

This means that section 49A restricts the ACA, in exercising its power under section 54 of the ACA Act, from applying, adopting or incorporating within a written determination, matters contained in an instrument or other writing that exist from time to time (ie. matters in instruments or other writing made after the date of effect of the written determination).

This causes unnecessary administrative work for the ACA and lacks the flexibility found in section 314A of the Radiocommunications Act 1992 and section 589 of the Telecommunications Act 1997. Both of these sections allow instruments made under the relevant Act to apply, adopt or incorporate any other instrument or writing (made within or outside Australia, with or without a legislative, administrative or other official nature and with or without any legal force or effect) as in force or existing at a particular time or from time to time.

The proposed amendment allows a determination made under subsection 54(1) of the ACA Act to apply, adopt or incorporate such materials, and in such circumstances, as are permitted under both section 314A of the Radiocommunications Act and section 589 of the Telecommunications Act. It provides that a determination made by the ACA under subsection 54(1) of the ACA Act may define an expression used in a specified instrument by applying, adopting or incorporating (with or without modifications) matter contained in any other instrument or writing whatever as in force or existing at a particular time (proposed paragraph 54A(1)(a)) or as in force from time to time (proposed paragraph 54A(1)(b)). An instrument or writing includes an instrument or writing made by any person or body in Australia or elsewhere and whether of a legislative, administrative or official or any other nature and whether or not having any legal force (proposed paragraphs 54A(2)(a) to (c)). Examples of such instruments or writing are regulations, rules or instruments made under a Commonwealth or State or Territory Act; an international technical standard or performance indicator; a written agreement or arrangement or an instrument or writing made unilaterally (proposed paragraphs 54A(2)(d) to (g)). However, the examples given in proposed paragraphs 54A(2)(d) to (g) do not limit the type of instrument or writing that may be applied, adopted or incorporated in a written instrument made under section 54 (proposed subsection 54A(3)).

Proposed subsection 54A(4) provides that proposed subsection 54A(1) has effect despite anything in the Acts Interpretation Act 1901. This is to ensure that the Acts Interpretation Act will not affect the ACA's power to make written determinations made under section 54 in the manner described above.

Schedule 2 - Freedom of Information Act 1982

Item 1 - Subsection 4(1)

Item 1 inserts a definition of "exempt Internet-content document" (for the purposes of Items 3 to 5) to mean either:

•

any document which contains information (as defined in Schedule 5 of the BSA) which (i) has been copied from the Internet and (ii) was offensive Internet content when it was accessible on the Internet; or

•

a document which sets out how to access, or is likely to facilitate access to, offensive Internet content (eg, by setting out the name of an Internet site, an IP address, a URL, a password or the name of a newsgroup).

"Offensive Internet content" is defined in Item 2.

In the definition of "exempt Internet-content document", the use of the verb "copied" is intended to cover the creation, by whatever means, of any "document" which replicates the content of an Internet site. For example, a page of text or an image which has been downloaded from an Internet site to the hard disc of a computer is copied for these purposes. In the FOI Act, the term "document" includes information which has been stored or recorded electronically (see the definition in subsection 4(1) of the FOI Act).

Item 2 - Subsection 4(1)

Item 2 inserts a definition of "offensive Internet content" (for the purposes of Item 1) to mean Internet content which is either "prohibited content" or "potential prohibited content" within the meaning of Schedule 5 to the BSA. Prohibited content is defined in clause 10 of Schedule 5 to the BSA as either:

•

Internet content hosted in Australia which has been classified by the Classification Board as RC or X; or

•

Internet content hosted in Australia which has been classified by the Classification Board as R and is not subject to a restricted access system; or

•

Internet content hosted outside Australia which has been classified by the Classification Board as RC or X.

Potential prohibited content is defined in clause 11 of Schedule 5 to the BSA as Internet content which has not been classified by the Classification Board but, if it were, there would be a substantial likelihood that the Internet content would be prohibited content.

The inter-related definitions in items 1 and 2 have the effect of defining the scope of the exemptions in Items 3, 4 and 5.

Item 3 - Division 1 of Part II of Schedule 2 (before the item relating to the Australian Broadcasting Corporation)

Division 1 of Part II of Schedule 2 to the FOI Act lists agencies which are exempt from the operation of the Act in respect of particular classes of documents by virtue of subsection 7(2) of the Act. Item 3 inserts in that list the ABA in respect of exempt Internet-content documents (as defined in Item 1) concerning the exercise of a power under Schedule 5 to the BSA. This addition will have the effect of exempting the ABA from the operation of the FOI Act in relation to those specific documents. Such documents are likely to contain either the offensive content which is the subject of a complaint to the ABA or information which would enable, or would be likely to enable, a person to gain access to that offensive content on the Internet. If the ABA were to be obliged to disclose such information under the FOI Act, its statutory function of regulating on-line content would be largely frustrated. This is because, once documents are released under the FOI Act, their subsequent use and dissemination cannot be controlled.

Item 4 - Division 1 of Part II of Schedule 2 (before the item relating to Comcare)

Item 4 adds the Classification Board and the Classification Review Board to Division 1 of Part II of Schedule 2 to the FOI Act. For the reasons outlined in Item 3 above, this will have the effect of exempting the two agencies from the operation of the FOI Act in respect of exempt Internet-content documents. The Classification Board is involved in the Internet content regulatory process through its function of classifying content and the Classification Review Board may be involved through its function of reviewing classification decisions. The exemption is required because either agency may hold exempt Internet-content documents which could be the subject of an FOI request.

Item 5 - Divisions 1 of Part II of Schedule 2 (before the item relating to the Reserve Bank of Australia)

Item 5 adds the Office of Film and Literature Classification to Division 1 of Part II of Schedule 2 to the FOI Act, which will have the effect of exempting it from the operation of the FOI Act in respect of exempt Internet-content documents. The exemption is required because, as the agency which provides support services to the Classification and the Classification Review Boards, the Office of Film and Literature Classification may hold exempt Internet-content documents which could be the subject of an FOI request.

Schedule 3 - Radiocommunications Act 1992

Item 1 - Paragraph 3(b)

This item repeals paragraph 3(b) of the Radcom Act and replaces it with proposed new paragraph 3(b).

The Radcom Act provides for the planning and management of the use of the radiofrequency spectrum. Section 3 sets out the objects of the Radcom Act.

The proposed amendment clarifies the objects section of the Radcom Act to expressly provide that making adequate spectrum available for defence, national security, law enforcement and emergency services is an object of the Radcom Act (proposed subparagraph 3(b)(i)). The proposed amendment also acknowledges the importance of making adequate spectrum available for use by other public and community services (proposed subparagraph 3(b)(ii)).

The purpose of the proposed amendment is to address concerns of defence, national security, law enforcement and emergency services agencies regarding adequate and assured future access to appropriate segments of the radiofrequency spectrum. The Radcom Act already contains general provisions regarding use of spectrum by operational agencies. The proposed amendment will strengthen the existing provisions by providing an express acknowledgment of the importance of adequate access to radiofrequency spectrum by these agencies.

Item 2 - After paragraph 27(1)(b)

The Radcom Act provides for the planning and management of the use of the radiofrequency spectrum. This is achieved through the preparation of a radiofrequency spectrum plan and frequency band plans (spectrum and band plans - see Part 2.1 of the Radcom Act) and a structured licensing framework. Licences are issued against the plans, authorising the operation of radiocommunications devices (see Part 3.3 of the Radcom Act). The ACA administers the Radcom Act.

Law enforcement bodies use licensed radiocommunications equipment to covertly gather evidence in major criminal and security investigations. Covert surveillance devices are usually operated under warrants issued by State and Territory courts for use, installation and maintenance of equipment. However, for evidentiary value, they must also be properly authorised under the Radcom Act. Law enforcement bodies are now experiencing difficulties caused by the restricted term of the apparatus licences available for the use of some covert surveillance devices as the Radcom Act no longer reflects advances in technology.

Legislative arrangements under the Radcom Act generally preclude the licensing of devices that do not conform to the spectrum plan and band plans (see, for example, sections 104, 108(2)). Covert surveillance devices often do not meet this requirement as the devices are typically sourced from overseas countries where spectrum and band planning differ from Australia. The ACA considers that there is no particular spectrum management reason why covert surveillance devices could not be exempt from this requirement as the operation of these devices is meant to be undetectable and so would not cause interference to other spectrum users. However, for the purposes of efficiently managing spectrum use, the ACA would still expect to license the lawful use of these devices.

Section 27 of the Radcom Act enables regulations to be made to exempt acts or omissions of members of a class of persons referred to in subsection 27(1) of the Act from all or any of:

•

Part 3.1 (which prohibits unlicensed radiocommunications, except in emergency situations, and allows for civil proceedings to be taken in some circumstances);

•

Part 4.1 (which provides for the technical regulation of equipment that uses, or is affected by, radio emissions);

•

Part 4.2 (which provides for offences relating to radio emission, including offences relating to interference with radiocommunications); or

•

specified provisions of those Parts.

In particular, section 27 permits regulations to be made exempting defence, security, fire fighting and ambulance personnel and police officers from normal compliance requirements. Although these powers are intended to operate only in exceptional circumstances, and are yet to be employed, it is appropriate that the provision be broadened to allow persons performing a function or duty in relation to bodies involved in the investigation of crime or corruption to be able to be exempted from normal compliance requirements to provide the same level of flexibility that currently exists for more traditional 'police forces'. It is also proposed that exemption by regulation will be replaced with exemption by determination in writing by the ACA (which will be a disallowable instrument). The ability of the ACA to make an exemption determination will ensure that the ACA has the ability to act quickly where the circumstances require it, which is of particular importance in the context of the investigations conducted by law enforcement bodies.

This item amends subsection 27(1) to include a person performing a function or duty in relation to a range of specified bodies involved in the investigation of crime or corruption. Such an amendment is appropriate because, although these bodies may have police officers on staff, technical surveillance operations may be carried out by non-police personnel. The following specific law enforcement and anti-corruption bodies are to be specifically included in subsection 27(1):

•

Proposed paragraph (ba) specifies the following specific anti-corruption bodies:

(i)

the Independent Commission Against Corruption constituted by the Independent Commission Against Corruption Act 1988 (NSW); and

(ii)

the Western Australian Anti-Corruption Commission established by the Anti-Corruption Commission Act 1988 (WA).

•

Proposed paragraph (bb) specifies the following bodies:

(i)

the New South Wales Crime Commission constituted by the New South Wales Crime Commission Act 1985 (NSW); and

(ii)

the Crime and Misconduct Commission established by the Crime and Misconduct Act 2001 (Qld).

•

Proposed paragraph (bc) specifies the National Crime Authority established by the National Crime Authority Act 1984 (Cth).

•

Proposed paragraph (bd) specifies the New South Wales Police Integrity Commission constituted by the Police Integrity Commission Act 1996 (NSW).

In addition, it is proposed to allow the ACA to specify, by written determination, a body that performs functions related to the investigation, prevention or prosecution of serious crime or corruption for the purposes of paragraph 27(1)(be). Proposed subsection 27(3) provides that a determination under proposed paragraph (be) will be a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901. A determination made by the ACA under proposed paragraph (be) will therefore be required to be published in the Commonwealth Gazette, tabled in both Houses of Parliament and will be subject to Parliamentary disallowance.

Item 3 - Subsection 27(2)

This item repeals existing subsection 27(2) and replaces it with proposed new subsection 27(2). Proposed new subsection 27(2) allows the ACA to make a written determination that acts or omissions by members of a class of persons to whom section 27 applies are exempt from all or any of Parts 3.1, 4.1 and 4.2 of the Radcom Act and/or exempt from any specified provisions of those parts. The proposed amendment provides that an exemption may be of general or limited application.

Proposed subsection 27(3) provides that a determination made under paragraph (1)(be) or proposed subsection 27(2) will be a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

Proposed subsection 27(4) provides a definition of "serious crime" for the purposes of subparagraph 27(1)(be)(i). "Serious crime" is defined as conduct, if engaged in within, or in connection with, Australia, would constitute an offence against the law of Commonwealth, a State or a Territory punishable by imprisonment for a period exceeding 12 months.

Item 4 - At the end of subsection 104(1)

This item adds a proposed additional paragraph at the end of subsection 104(1). Proposed paragraph 104(1)(c) will enable the ACA to issue an apparatus licence to a body covered by paragraphs 27(1)(b) to (be) to authorise the operation of specified radiocommunications devices, or radiocommunications devices of a specified kind, for the purpose of investigations or operations conducted by one of the bodies.

Section 104 of the Radcom Act enables the ACA to issue short-term apparatus licences that are inconsistent with the spectrum plan or any relevant frequency band plan to allow the flexibility to deal with major public events. These licences have a maximum term of 30 days (subsection 104(2)) and may be renewed on one occasion only (subsection 104(3)).

The proposed amendment allows the ACA to issue standard-term apparatus licences that are inconsistent with the spectrum plan or any relevant frequency band plan. It is proposed that the ACA should be able to issue licences for radiocommunications devices (as defined in subsection 7(1) of the Radcom Act) that are used for investigations or operations by law enforcement bodies, subject to certain conditions being met. Paragraph 107(1)(g) would enable the ACA to make such licences subject to conditions specified in the licence. Such conditions might be aimed at ensuring that the licensee uses the specified device in a lawful manner and in a way that avoids interference to other radiocommunications licensees.

It is proposed that the issue of such licences should not be subject to the restrictions in subsections 104(1), (2) and (3) of the Act. Currently, subsection 104(2) provides that a licence issued under subsection 104(1) must not be issued for more than 30 days. Subsection 104(3) provides that a licence issued under subsection 104(1) must not be renewed under section 130 of the Radcom Act more than once. The proposed amendment will allow such licences to be issued for more than 30 days and renewed more than once as a covert surveillance operation may extend over more than 60 days.

It is proposed that the ACA will record details of apparatus licences issued for covert surveillance devices in a confidential part of the Register of Radiocommunications Licences as permitted by section 152 of the Radcom Act.

Item 5 - Subsections 104(2) and (3)

This item replaces the references to "The licence" with reference to "An apparatus licence of a kind mentioned in paragraph (1)(a) or (b)" in subsections 104(2) and (3).

Currently, subsection 104(2) provides that a licence issued under subsection 104(1) must not be issued for more than 30 days. Subsection 104(3) provides that a licence issued under subsection 104(1) must not be renewed under section 130 of the Radcom Act more than once.

Since investigations that are conducted by law enforcement bodies may often last longer than 60 days, it is inappropriate that such restrictions should apply to a licence issued to a law enforcement body under proposed paragraph 104(1)(c). The effect of the proposed amendment will be that a licence issued under paragraph 104(1)(c) will not be limited to 30 days in duration and to renewal only once.

Item 6 - Subsection 105(2)

This item repeals existing subsection 105(2) and replaces it with proposed new subsection 105(2). Subsection 105(1) of the Act currently provides that, subject to subsection 105(2), the ACA must not issue an apparatus licence that authorises the operation of radiocommunications devices at frequencies that are within a part of the spectrum that is designated by the Minister under section 36 to be allocated by issuing spectrum licences. Subsection 105(2) provides that the ACA may issue such an apparatus licence if it is satisfied that the special circumstances of the particular case justify the issuing of the licence.

Proposed subsection 105(2) expands the circumstances in which the ACA may issue an apparatus licence in spectrum that is converted to the market system. Under proposed subsection 105(2), the ACA may issue such an apparatus licence if it is satisfied that the special circumstances of the particular case justify the issue of the licence, or to a body covered by paragraphs 27(1)(b) to (be) for the purpose of investigations or operations conducted by the body.

The amendment is proposed on the basis that the ACA should not be restricted by considering special circumstances in deciding whether to issue a licence under section 105(1) to a law enforcement body covered by paragraphs 27(1)(b) to (be).

Item 7 - After paragraph 153P(2)(d)

Part 3.6 of the Radcom Act (sections 153A to 153P) provides for the allocation of encumbered spectrum. Section 153P applies where a spectrum re-allocation declaration (made under section 153B) is in force in relation to a particular part or parts of the spectrum. During the re-allocation period, the ACA is restricted from issuing an apparatus licence that authorises the operation of radiocommunications devices at frequencies that are within the part or those parts of the spectrum subject to the re-allocation declaration or within the area or areas specified in the declaration (paragraphs 153P(2)(a) and (b)). However, paragraphs 153P(2)(c) to (e) allow the ACA to issue an apparatus licence where the licence is issued under section 153M (re-allocation by issuing apparatus licences); or the licence is issued by way of a renewal of an apparatus licence; or where the ACA is satisfied that the special circumstances of the particular case justify the issuing of the licence.

The proposed paragraph will include in the exceptions to the restriction under subsection 153P(2) the case where the licence is issued to a body covered by paragraphs 27(1)(b) to (be) for the purposes of investigations or operations conducted by the body. The proposed amendment will ensure that the ACA will not be restricted from issuing an apparatus licence under subsection 105(2).

Item 8 - Subsection 153P(3)

Subsection 153P(3) provides that after the end of the re-allocation period, the ACA must not issue an apparatus licence that authorises the operation of radiocommunications devices at frequencies that are within the part or those parts of the spectrum subject to a re-allocation declaration or within the area or areas specified in the declaration unless the ACA is satisfied that the special circumstances of the particular case justify the issuing of a licence.

The proposed amendment will provide a further exception to this restriction in the case where a licence is issued to a body covered by paragraphs 27(1)(b) to (be) for the purposes of investigations or operations conducted by the body.

Similarly to the proposed amendment in Item 7, the proposed amendment will ensure that the ACA will not be restricted from issuing an apparatus licence under subsection 105(2).

Schedule 4 - Telecommunications Act 1997

Item 1 - Clause 40 of Schedule 3

This item repeals Clause 40 of Schedule 3 to the Telecommunications Act.

Clause 40 of Schedule 3 provides that the functions and powers conferred on the ACA under Part 1 of Schedule 3 are to be exercised by the Chairman of the ACA and eligible associate members of the ACA (known as the "specially-constituted ACA" or SC-ACA).

The SC-ACA's primary role is to consider carriers' applications for telecommunications facilities installation permits under Schedule 3 to the Telecommunications Act. If awarded, facilities installation permits give carriers immunity from State and Territory laws for the purpose of installing telecommunications facilities of national significance.

In its four years of operation, the SC-ACA has not considered any applications for facility installation permits under clause 21 of Schedule 3. Instead, carriers have utilised other avenues, such as negotiations and court proceedings, to progress potentially contentious installations. It is therefore proposed to abolish the SC-ACA.

The SC-ACA comprises six people with environmental, heritage and town planning expertise. The committee members were appointed as eligible associate members in 1998 for five-year terms. The six eligible associate members' appointments will be allowed to continue until their expiry date on 1 April 2003. Consequently, the proposed amendment would commence on that date (see clause 2). Any residual responsibilities of the SC-ACA will be undertaken by the ACA itself.

Abolishing the SC-ACA will improve the efficiency of the ACA's administrative responsibilities.

Subsection 5 - Telecommunications (Consumer Protection and Service Standards) Act 1999

Item 1 - Section 94

This item inserts a definition of "participating person" in section 94 of the CPSS Act to provide that this term has the meaning provided by proposed section 94A (see item 2). This is a consequential amendment as a result of proposed section 94A.

Item 2 - At the end of Division 1 of Part 3

This item inserts proposed section 94A into Part 3 of the CPSS Act. Part 3 of the CPSS Act makes provision for the National Relay Service (NRS). The NRS is a service that provides people who are deaf or hearing or speech impaired with access to a standard telephone service on terms, and in circumstances, that are comparable to those on which other Australians have access to a standard telephone service. The cost of the NRS service is funded through the NRS levy.

The CPSS Act sets out the method of calculating a person's NRS levy for a quarter. Section 99 of the CPSS Act provides that the NRS levy is payable by each person who:

•

is a participating person for the last eligible revenue period that ends before the start of the quarter (as defined in section 94); and

•

is covered by the most recent levy assessment (as defined in section 101C) made before the start of the quarter.

Currently, a "participating person" for an eligible revenue period is a person who was a carrier at any time during the eligible revenue period (section 20A of the CPSS Act). A person's "eligible revenue" for an eligible revenue period is determined having regard to the Telecommunications Universal Service Obligation (Eligible Revenue) Regulations 1998, which is deemed to be a determination of eligible revenue by the ACA (section 20B of the CPSS Act). "Eligible revenue period" is defined by section 20C of the CPSS Act, and in the context of section 99 refers to the last whole financial year or any other period determined in writing by the Minister. To date the Minister has made no such determination.

The purpose of the amendments contained in items 1, 3, 5, 6, 8 and 9 in this Schedule is to align the time that a person's liability to pay a NRS levy contribution arises to when the liability is assessed and payable. The proposed amendment inserts a definition of "participating person" for the purposes of Part 3 of the Act to reflect the proposed alignment. The definition will provide that a person is a participating person for a quarter if the person was a carrier at any time during the quarter or the Minister makes a written determination that carriage service providers are participating persons for the quarter and the person was a carriage service provider at any time during that quarter (proposed subsection 94A(1)).

Proposed subsection 94A(2) provides that a person is not a participating person for a quarter if the person's gross telecommunications revenue for the eligible revenue period to which the most recent eligible revenue assessment relates is less than the amount determined in writing by the Minister or if the person is of a kind exempt from proposed section 94A by virtue of a written determination by the Minister. A person's gross telecommunications revenue for an eligible period has the meaning given by the determination made by the Minister for the purposes of paragraph 94A(2)(a) (proposed subsection 94A(4)).

Written determinations made by the Minister for the purposes of paragraphs 94A(1)(b), (2)(a) or (b) will be disallowable instruments for the purpose of section 46A of the Acts Interpretation Act 1901 (proposed subsection 94(3)).

Item 3 - Section 99

This item repeals section 99 and replaces it with proposed section 99. The effect of proposed section 99 is that the NRS levy will be payable by each person who is a participating person for the quarter and who is covered by the most recent eligible revenue assessment made before the start of the quarter.

In combination with the proposed definition of "participating person" in item 2, the proposed amendment aligns the time a person's liability to pay a NRS levy contribution arises to when the liability is assessed and payable. This will have the effect that a person's liability to pay an NRS levy contribution will be dependent on the person's operations during the financial year and the quarter in which the levy is due and payable.

Item 4 - After subsection 100(2)

This item inserts proposed subsections 100(2A) and 100(2B) after subsection 100(2) of the CPSS Act.

Section 100 of the CPSS Act sets out the method for calculating the NRS levy for a quarter (as defined in section 94), and the method for calculating a taxpayer's NRS levy contribution amount for a quarter. The NRS Levy Imposition Act 1998 imposes levy at the rate of 100% on NRS contribution amounts calculated under section 100 of the CPSS Act. The formula in subsection 100(2) of the CPSS Act for calculating each taxpayer's NRS contribution amount is based on the taxpayer's eligible revenue and the total eligible revenue of all taxpayers.

Part 2 of the CPSS Act provides for the Universal Service Regime and requires carriers to pay a share of the Universal Service Obligation (USO) levy. Section 20R in Part 2 of the CPSS Act sets out the formula for calculating a participating person's USO levy liability. Subsection 20R(3) provides that the Minister may modify this formula by written determination. Subsection 20R(4) provides that a determination under subsection 20R(3) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

Proposed subsection 100(2A) would provide for the same flexibility for calculating a person's NRS levy liability as is found in section 20R of the CPSS Act, in relation to the USO levy, by allowing the Minister to modify the formula in subsection 100(2) by written determination. Consistent with the terms of subsection 20R(4), any determination made by the Minister which modifies the formula will be a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 (proposed subsection 100(2B)).

Item 5 - Subsection 100(3) (definition of eligible revenue)

Subsection 100(3) of the CPSS Act provides that eligible revenue for a taxpayer for a quarter means the taxpayer's eligible revenue as shown in the most recent levy assessment made before the start of the quarter. Section 101C provides that the most recent levy assessment means the assessment most recently made by the ACA under section 193 of the Telecommunications Act 1997 (prior to the commencement of item 15 of Schedule 4 to the Telecommunications Legislation Amendment Act 1999); under section 64 of the CPSS Act (prior to the commencement of Schedule 1 of the Telecommunications (Consumer Protection and Service Standards) Amendment Act (No. 2) 2000) or under section 20U of the CPSS Act.

Section 20U of the CPSS Act requires the ACA to make a written assessment in relation to the Universal Service Obligation levy for a claim period. This assessment, among other things, is based on a participating person's levy debit, calculated under section 20R of the CPSS Act. The formula for calculating a participating person's levy debit is found in subsection 20R(2) of the CPSS Act. This formula is based on the levy contribution factor that is worked out under section 20H of the CPSS Act. Subsection 20H(1) states that after the ACA has assessed the eligible revenue of participating persons for an eligible revenue period the ACA must work out a levy contribution factor for the period for each of those persons. Section 20F of the CPSS Act requires the ACA to make a written assessment of each participating person's eligible revenue for an eligible revenue period.

A levy assessment under section 20U is made some time after the assessment of eligible revenue for an eligible revenue period under section 20F. In order to allow the most recent eligible revenue assessment to be used in calculating NRS levy contributions, rather than the eligible revenue assessment used in the most recent levy assessment made under section 20U, the proposed amendment changes references to the 'most recent levy assessment' in section 99 of the CPSS Act to refer instead to the 'most recent eligible revenue assessment'.

Item 6 - Subsection 100(3) (definition of eligible revenue, note)

This item omits reference to "levy" and replaces it with reference to "eligible revenue" as a consequence of the proposed amendment in Item 5.

Item 7 - After section 100

This item inserts an additional section after section 100 of the CPSS Act. Proposed subsection 100A(1) provides that the ACA may vary a taxpayers' NRS contribution amount for a quarter by making such alterations and additions as it thinks necessary, even if the NRS contribution amount has been paid. Proposed subsection 100A(2) allows the ACA to refund an overpayment where there has been an overpayment of NRS levy.

In relation to the USO levy, subsection 20W(1) of the CPSS Act allows the ACA to vary an assessment made under Part 2 by making such alterations and additions as it thinks necessary, even if credits or levy has been paid in respect of an assessment. Section 20ZE of the CPSS Act requires any overpayment of the USO levy to be refunded.

The proposed amendment includes provisions similar to those in subsection 20W(1) and section 20ZE in Part 3 of the Act to allow the ACA to vary an assessment of a person's NRS levy contribution, by making such alterations and additions as it thinks necessary, even if a levy has already been paid by a person. The proposed amendment also provides that if there is an overpayment of a levy, the overpayment is to be refunded. This will allow flexibility in the administration of the NRS levy similar to that which exists in relation to the USO levy, and will allow any errors in calculation or collection of the NRS levy to be corrected by the ACA.

Item 8 - Section 101C

This item omits reference to "levy" and replaces it with reference to "eligible revenue" as a consequence of the proposed amendment in Item 5.

Item 9 - Paragraph 101C(c)

This item omits reference to "20U" and replaces it with reference to "20F". The purpose of the proposed amendment is to allow the most recent eligible revenue assessment to be used in calculating carriers' NRS levy contributions (see section 20F), rather than the eligible revenue assessment used in the most recent levy assessment made under section 20U (see discussion at Item 5 above).

Item 10 - At the end of section 125

This item inserts proposed subsection 125(5) and 125(6) at the end of section 125 of the CPSS Act. Proposed subsection 125(5) provides that a revocation or variation of a section 115 standard must be in writing. Proposed subsection 125(6) provides that any such instrument of revocation or variation would be a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 (AIA).

Section 115 of the CPSS Act provides that the ACA may make, by written instrument, performance standards to be complied with by carriage service providers with respect to customer service.

Subsection 115(3) provides that the ACA must not make a standard under section 115 unless the Minister has directed it to do so under section 124 of the CPSS Act. Subsection 115(6) provides that a standard made under section 115 is a disallowable instrument for the purposes of section 46A the AIA.

Section 125 applies to a standard made under section 115. Subsection 125(2) provides that if the Minister revokes a direction under section 124 that required the ACA to make a standard under section 115, the ACA must revoke the section 115 standard that is in force because of the direction. Subsection 125(3) provides that if the Minister varies a direction, the ACA must either:

•

vary the section 115 standard that is in force because of the direction so that the standard complies with the varied direction; or

•

revoke the section 115 standard and determine a new section 115 standard that so complies.

Subsection 125(4) provides that if a section 115 standard is in force because of a direction under section 124:

•

the ACA may vary the standard on its own initiative, but only in such a way that the varied standard still complies with the direction; and

•

the ACA may, on its own initiative, revoke the standard and determine a new section 115 standard that so complies.

It is not clear from section 125 whether a revocation or variation of a section 115 standard under section 125 is a disallowable instrument. The original standard made under section 115 is a disallowable instrument (subsection 115(6)). If the CPSS Act relied only on the inherent power to vary or revoke that instrument, as provided for by section 33(3) of the AIA, then any variation or revocation would also be made pursuant to the power to be implied from section 115 and would similarly be a disallowable instrument. In this instance, it appears that subsection 33(3) of the AIA cannot operate because of the express provision made in section 125 about the circumstances in which a standard can be varied and revoked. However, it is also arguable that even though a revocation or variation will always be made under paragraph 125(3)(a) or 125(4)(a) as the case may be, rather than under subsection 115(1) and subsection 33(3) of the AIA, the instrument made under section 125 is still a standard which is subject to subsection 115(6).

The proposed amendment therefore clarifies this situation by providing that a revocation or variation of a section 115 standard is a disallowable instrument. This approach is consistent with directions made under section 124 and standards made under section 115 being disallowable instruments (subsections 124(4) and 115(6)).

Item 11 - After subsection 128(4)

This item inserts proposed subsection 128(4A) after subsection 128(4). The proposed amendment provides that an end-user of a carriage service is not liable to pay any fee or charge (however described) to the provider of the carriage service in respect of a complaint made to the TIO by the end-user about the carriage service.

Part 6 of the CPSS Act makes provision for the TIO scheme. The TIO is an industry-funded scheme, deriving its income from members who are charged fees for complaint resolution services provided by the TIO to members and end-users of carriage services. A member is only charged complaint handling fees if the TIO receives a complaint from one of the member's customers. The funding system acts as an incentive for members to keep TIO investigations to a minimum.

Section 128 of the CPSS Act provides for membership of the TIO scheme, sets out the powers the TIO scheme must provide for, provides examples of the types of complaints the TIO may investigate and specifies those complaints that the TIO is prohibited from investigating.

Subsection 128(4) of the CPSS Act states that the TIO scheme must provide for the TIO to investigate, make determination and give directions relating to complaints about carriage services by end-users of those services.

The TIO's mission statement is "Providing free, independent, just, informal and speedy resolution of complaints".

One of the six principles (accessibility) outlined in Benchmarks for Industry-Based Customer Dispute Resolution Schemes (Department of Industry, Science and Tourism, August 1997) is that a scheme make itself readily available to customers by promoting knowledge of its existence, be easy to use and have no cost barriers.

The TIO has brought to the attention of the Minister for Communications, Information Technology and the Arts a practice of some members of the TIO scheme of charging their customers fees in respect of complaints that the customers make to the TIO. These fees are usually commensurate with the complaint handling cost charged by the TIO to those members.

This practice undermines the TIO's mission to provide free dispute resolution services to consumers and is inconsistent with the principle of Accessibility outlined in Benchmarks for Industry-Based Customer Dispute Resolution Schemes. The practice also undermines the Government's election commitment, outlined in 'Telecommunications for the 21st Century', to maintain the TIO as a free and speedy means of pursuing grievances with telecommunications service providers.

Some TIO members who have engaged in this practice have argued that because the charges relate to disputes they do not relate to carriage services and therefore are not within the TIO's jurisdiction (having regard to the terms of subsection 128(4)).

The proposed amendment to section 128 therefore explicitly states that the TIO dispute resolution services are free to end-users.

Item 12 - Paragraph 128(6)(a)

This item inserts after the word "tariff" in paragraph 128(6)(a) the words "charged for the supply of carriage services". Paragraph 128(6)(a) states that the TIO scheme must not provide for investigations into the levels at which tariffs are set.

The purpose of the proposed amendment is to address arguments raised by some TIO members that the TIO does not have the jurisdiction to investigate complaints about the practice of charging end-users because of the operation of paragraph 128(6)(a).

The proposed amendment therefore amends section 128 to clarify that the TIO is only precluded from investigating complaints about the level at which tariffs are set with respect to tariffs that are imposed for the supply of carriage services. That is, that the TIO scheme may provide for the TIO to investigate the level at which tariffs are set for services other than carriage services, by members of the TIO scheme. This would enable the TIO to investigate complaints, for example, in relation to charges being made by a TIO member to end-users for the complaint handling cost charged by the TIO and early contract termination fees for mobile phone services.

Item 13 - Application

This item provides that the amendments made by items 2 to 9 in this Schedule apply in respect of each levy quarter that begins on or after the date of commencement of this Schedule.