Cth Passes Telecommunications Bills To Support NBN Rollout

Tuesday 19 May 2020 @ 3.00 p.m. | Legal Research

On 28 November 2019, the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 (Cth) (“the Telecommunications Bill”) and the Telecommunications (Regional Broadband Scheme) Charge Bill 2019 (Cth) (“the Charge Bill”) were introduced into the House of Representatives by Minister for Communications, Cyber Safety and the Arts Paul Fletcher. Both Bills passed through Parliament with amendments on 14 May 2020. The Bills are yet to receive Royal Assent.

The Telecommunications Bill reintroduces amendments contained in the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2018 (Cth) (“the 2018 Telecommunications Bill”) with some additional amendments. Similarly, the Charge Bill reintroduces the taxation measures that were previously contained in the Telecommunications (Regional Broadband Scheme) Charge Bill 2018 (Cth) (“the 2018 Charge Bill”) and includes a new concession. Both the 2018 Telecommunications Bill and the 2018 Charge Bill were introduced in Parliament in 2017, but lapsed at the end of the 45th Parliament.

Together, the bills will implement part of the Government’s response to the Vertigan Review (“the Review”).  Overall, the two bills will propose three major reforms:

  • Amendments to the Telecommunications Act 1997 (Cth) in order to clarify the default structural separation requirement
  • Introduction of a statutory infrastructure provider (“SIP”) framework
  • Introduction of the Regional Broadband Scheme (“the Scheme”)

The Vertigan Review

On 12 December 2013, the then Minister for Communication Malcolm Turnbull announced the Review, an independent cost-benefit analysis of the direct and indirect social and economic consequences that would potentially arise from broadband availability of differing properties. The Review was also to evaluate of the regulatory arrangements for the National Broadband Network (“NBN”), including how its investment and pricing was to be reviewed and regulated. The Review was to be submitted by a panel led by Dr Michael Vertigan AC.

Throughout 2014, the panel released three separate reports detailing their findings. The Review reached seven principal conclusions:

  1. Upgrading the national network can deliver substantial economic benefits
  2. Services must be provided efficiently, given costs to the taxpayers
  3. The NBN will create opportunities for competition
  4. Competition and the interests of long-term users should take precedence over the impact of microeconomic reform
  5. Regulations and legislation must change accordingly to support better competition within the market
  6. Consumers and taxpayers must have clarity and certainty over NBN objectives and provision
  7. Regulatory processes must be streamlined and increase accountability

On December 2014, the Government released its response to the review. In regards to the regulation of the NBN, the Government stated that it would adopt the following overarching policy principles:

  • “Regulation should allow competition at both the retail and wholesale/infrastructure levels.
  • To the greatest extent possible industry players should be treated consistently under the regulatory framework.
  • New high‐speed broadband access networks (which control ‘last mile’ connections to consumers) should be vertically separated.”

Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 (Cth)

Schedule 1 and 2 of the Telecommunications Bill contains several amendments to the superfast network rules to make the default structural separation requirement clearer and more effective as a baseline for the industry. These amendments aim to improve competition as it will:

  • Remove regulation for networks that service small business customers
  • Enable new superfast networks to operate on a separated basis, subject to approval by the Australian Competition and Consumer Commission (“the ACCC”)
  • Enable the ACCC to exempt small start-up networks from separation regulation

Schedule 3 contains amendments in regards to the new SIP regime in order to ensure that all premises in Australia will have access to infrastructure that will support the delivery of superfast broadband services. As part of the regime, the Telecommunications Bill proposes that NBN Co will initially become the default SIP for each area. In regards to SIP connection and supply obligations, the network connected to premises must allow a carriage provider to be able to supply:

  • A peak download speed of at least 25 megabits per second (“Mbps”)
  • A peak upload speed of at least 5 Mbps
  • Services that can be used to make and receive voice calls

Other amendments in the Telecommunications Bill include:

  • The operational arrangements of the Regional Broadband Scheme (Schedule 4)
  • New obligations for NBN Co to improve the public availability of NBN rollout information (Schedule 5)

The Telecommunications (Regional Broadband Scheme) Charge Bill 2019 (Cth)

The Charge Bill will establish the Scheme, which is an ongoing funding arrangement for fixed wireless and satellite infrastructure. The Scheme will require all carriers to contribute funding at $7.10 per month, per chargeable premises. Chargeable premises are premises where a service provider supplies a designated broadband service through a fixed-line that is capable of providing download speeds of 25 Mbps or more.

The monthly charge will be comprised of a base component and an administrative cost component. The base component is to be set at $7.09 for the first year, and will be indexed annually to the consumer price index (“CPI”). The administrative cost component is to be set at $0.01 for the first year, and is to be set for the next four years following at $0.00172, $0.00, $0.0027, and $0.00 respectively. This component will be indexed annually to the CPI following these five years.

The Minister for Communication may change these component charges by a disallowable legislative instrument, however, its sum cannot exceed the maximum capped amount. The cap amount is $7.10 for the first financial year, and indexed annually to CPI in subsequent financial years. The ACCC will review the component charges at least once every five years.

The Charge Bill also seeks to introduce a charge concession period to help smaller carriers during this time of transition and help lessen the burden in paying the charge. For network service providers of recently connected greenfield premises, the first 55,000 premises will be exempt from charges for the first five years. Recently connected greenfield premises will be defined in section 96B of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (Cth), to be inserted when the Telecommunications Bill receives Royal Assent and commences. For all other carriers, the first 25,000 residential and small business chargeable premises are exempt from the charges for the first five years.

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Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 [CTH], second reading and explanatory materials and Committee Report available from TimeBase's LawOne Service

Telecommunications (Regional Broadband Scheme) Charge Bill 2019 [CTH], second reading and explanatory materials and Committee Report available from TimeBase's LawOne Service

NBN policy information (Department of Infrastructure, Transport, Regional Development and Communications, Australian Government)

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