Cases
Regulatory developments
Competition
Industry developments
On 8 August 2007, the Australian Competition and Consumer Commission (ACCC) published the final determination for an access dispute between Telstra and Chime Communications (Chime) over the certain terms of access to the Line Sharing Service (LSS).
The LSS was declared on 30 August 2002 and allows two carriers to provide separate services over a single metallic pair or line. Chime and Telstra have negotiated terms of access to the LSS since 2003. They have remained in dispute over LSS rental charges and the terms on which wholesale ADSL services are migrated to the LSS.
The ACCC has specified that the LSS rental charge be set at $2.50 per service per month. It has stated that the charges and timeframes to migrate in bulk wholesale ADSL services to the LSS be reduced. These charges have been set according to the ACCC’s pricing principles for the LSS made in August 2002 and ruling of the Australian Competition Tribunal in June 2006 that Telstra’s proposed rental charge of $9 per service per month was unreasonable.
The ACCC has also decided that including a contribution to the costs of the line over which the LSS is supplied should not be included in the LSS annual rental charges to apply until 31 December 2007. Despite noting that economic efficiency could be enhanced through this pricing scheme, the ACCC deemed that the inclusion of an appropriate contribution to line costs in LSS rental charges may lead to an over recovery of network costs.
For further information on the ACCC’s final determination and a statement of reasons please visit the ACCC website.
On 24 August 2007, the ACCC published final determinations made in two arbitrations concerning disputes over access to the Line Sharing Service (LSS). The determinations specify certain terms on which Telstra supplies the LSS to Primus Telecommunications and Request Broadband.
The final determinations provide a further indication on what the ACCC stipulates to be reasonable terms of access and pricing for the LSS. The ACCC has specified:
- a LSS rental charge of $2.50 per service per month
- a reduction in connection charges to a LSS, and
- a reduction in the timeframes to migrate in bulk wholesale ADSL services to the LSS.
The charges have been determined according to the Australian Competition Tribunal’s ruling in June 2006 and the longstanding pricing principles implemented in 2002. There are currently six other disputes over access to the LSS before the ACCC for arbitration. For further information on reasonable terms of access to the LSS and the final determination and statement of reasons please visit the ACCC website.
On 28 August 2007, TPG Internet Pty Ltd (TPG) notified the ACCC of an access dispute over the monthly price for which Telstra supplies the Unconditional Local Loop Service (ULLS) to TPG.
The ULLS allows access seekers to support and connect to their own infrastructure for the supply of voice and data services such as services that involve voice over Internet Protocol (VOIP) and Digital Subscriber Line (DSL) technologies.
The ACCC has commenced this arbitration pursuant to Part XIC of the Trade Practices Act 1974.
For further information please visit the ACCC website.
On 3 August 2007, Telstra announced that it commenced proceedings in the Federal Court against Senator Helen Coonan, the Minister for Communications, Information Technology and the Arts, in relation to the Broadband Connect Program.
The government announced in June that OPEL, a joint venture company between Optus and the rural group Elders, had won the bid to rollout the Broadband Connected program. The program involves the construction of a $1.9 billion wholesale WiMAX, ADSL2+ and fibre broadband network across Australia that will provide more affordable broadband services with speeds of up to 20 to 40 times faster than existing services.
OPEL’s new network will be funded through $600 million of government support from the program and a recently announced $358 million of additional funds. OPEL’s own commercial contribution to the network will be $917 million. Telstra has asserted that the initial Broadband Connect Program Guidelines offered up to $600 million of government funding to provide broadband to ‘underserved’ rural and regional areas and that Telstra submitted its proposal according to those guidelines. However, almost $1billion has been granted to OPEL.
Telstra has asked the minister for an explanation as to why it was not given an opportunity to submit a revised proposal that took into account the $1 billion grant. Telstra is seeking orders from the Federal Court compelling the Communications Minister Helen Coonan to provide documents reasoning the decision to provide OPEL with government funding over Telstra’s proposal.
For further information please visit the Telstra website or the Department of Communications, Information Technology and the Arts website.
On 22 August 2007, the Australian Communications and Media Authority (ACMA) commenced the first formal investigation of systematic breaches of the Do Not Call Register Act 2006 (DNCR Act). Under the DNCR Act, it is unlawful to make unsolicited telemarketing calls to a registered number without consent to call.
ACMA will investigate Lifestyle Dynamics following complaints from registered customers who have continued to receive calls from the company. Despite numerous written warnings from ACMA, ACMA has continued to receive consumer complaints about Lifestyle Dynamics’ telemarketing practices.
To promote compliance with the DNCR Act, ACMA has written to 259 businesses that have been the subject of consumer complaints to warn them of their obligations and the penalty provisions under the DNCR Act. Following this warning, 80 per cent of these businesses ceased to be a subject of consumer complaints. Enforcement options of the DNCR Act include issuing formal warnings, seeking enforceable undertakings, issuing infringement notices imposing pecuniary penalties and taking court action where fines in excess of $1 million may be imposed.
ACMA has stated that it will not be releasing any further comment until the investigation into Lifestyle Dynamics is complete.
For further information please visit the ACMA website.
On 6 September 2007, ACMA announced that licensees are permitted to broadcast an additional minute of political advertising during the election period.
ACMA has registered an amended version of the Commercial Television Industry Code of Practice which now specifies that licensees may broadcast an additional minute of political non-programmable matter between 6.00pm and midnight during election periods.
For further information please visit the ACMA website.
On 13 September 2007, the Minister for Communications Information Technology and the Arts, Senator Helen Coonan, announced that the Local Content Levels Investigation Report had been tabled in parliament.
The media reforms introduced in October 2006 will be amended to introduce new rules to ensure that regional commercial radio licensees broadcast three hours of material of local significance. A lower content obligation will be implemented for small, remote, racing and section 40 broadcasters.
Broadcasters operating under licences issued under section 40 of the Broadcasting Services Act 1992 will have a local content requirement of 30 minutes. Remote and racing radio broadcasters have a daily requirement of five minutes but only as an interim measure until legislative amendments are passed to exempt those broadcasters from complying with the licence condition.
The amendments are pursuant to the Local Content Levels Investigation Report conducted by ACMA. It includes the following recommendations:
- that the previously legislated 4.5 hours would significantly impact on the profitability of regional radio broadcasters
- that the definition of ‘material of local significance’ should be interpreted broadly
- that compliance be spread across five days in the week and that a six-week non-compliance period be introduced.
Further, Senator Coonan is seeking the Governor General’s agreement to extend the period that the quota must be broadcasted to 5am to 8pm.
The general obligation to broadcast local content will take effect from 1 January 2008.
For further information on the local content obligations please visit Senator Coonan's website or the ACMA website.
On 21 August 2007, the Australian Competition and Consumer Commission (ACCC) issued a draft declaration decision that the regulation of the Line Sharing Service (LSS) will continue on a national basis until 31 July 2009.
The LSS allows two carriers to provide separate services over a single metallic pair or line. The decision by the ACCC to extend the LSS declaration will benefit consumers as it aims to promote competition in broadband markets by creating a wider range of broadband service providers and stimulating a more competitive service price offering.
For further information please visit the ACCC website.
On 6 August 2007, the Australian Competition and Consumer Commission (ACCC) issued the annual report on telecommunications market indicators for the period 2005-06. The market indicator report contains information regarding revenue, usage and market share information for fixed line (voice and data) services and mobile telephony voice services on the five largest service providers; Telstra, Optus, Primus, AAPT and Vodafone.
The market indicator report shows that during 2005-06:
- the earnings from retail services by the five major providers reached $18.1 billion
- increased internet and mobile services have contributed to growth in retail services while also counteracting decreases in fixed line revenues
- the market shares of the five service providers remained relatively stable with Telstra and Optus earning around 60 per cent and 28 per cent respectively of reported retail revenues, and
- Telstra earned approximately 75 per cent of reported revenues and had the strongest market share in fixed line services.
The market indicator report only provides information on the five main carriers and thus doesn’t provide a comprehensive overview of market shares and competition in the entire market.
For further information on the telecommunications market indicator report, please visit theACCC website.
On 24 August 2007, ACMA released the Reality Television Review (Review). The Review was released pursuant to a direction from the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan to investigate whether the Commercial Television Industry Code of Practice (Code) reflected community standards and provided appropriate community safeguards with respect to reality television programming in the free-to-air commercial television sector.
ACMA has recommended:
- that provisions be included in the Code to prohibit broadcasting of material that presents participants in reality television programmes in a highly demeaning or exploitative manner
- the enhancement of existing complaint handling procedures by promoting broadcasters to accept complaints via email and report more closely with ACMA in relation to the type and volume of complaints received, and
- to clarify the limit of material permitted at the MA classification level and to seek voluntary undertakings from broadcasters planning to broadcast potential MA classified programs in order to monitor broadcasting and allow streamlined investigations of any issues arising from that program.
For further information regarding the Reality Television Review please visit Senator Coonan's website.
On 30 June 2007, the European Union Roaming Regulation was enforced across all 27 Member States to reduce roaming charges on public mobile networks within the European community by up to 70 per cent.
The EU Regulation imposes a ‘Eurotarriff’ to set a maximum limit for calls made and received when abroad. Operators are expected to set prices below this cap and it is anticipated that price caps will be further reduced in 2008 and 2009.
The ‘Eurotarriff’ will apply automatically to all consumers from 30 September 2007. Under the EU Regulation operators are required to keep their customers informed about roaming prices.
The EU Regulation will be in force for three years and will be closely monitored by the European Commission and other national regulators. The European Commission will review the EU Regulation in 18 months to determine whether it will be extended and whether SMS and data roaming charges will also be capped.
For further information on the EU Roaming Regulation please visit the European Commission website.
On 2 September 2007, the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, launched the $189 million NetAlert – Protecting Australians Online program developed by the Federal Government. The program has been developed as a multi-faceted initiative that includes education, tough regulation and policing to maximise internet use while also minimising its potential harm specifically to children.
The program includes the following initiatives:
- $85 million National Filter Scheme that provides access to free internet filtering technology through personal computer or ISP-based filtering and for public libraries
- increased law enforcement and prosecution including $43.5 million of funding over four years for the Australian Federal Police to combat online child sex exploitation
- increased regulation by providing ACMA with an additional $7.1 million to investigate illegal or inappropriate online content and to expand the ACMA blacklist of websites hosted overseas which carry illegal content, and
- the development of a helpline and website to provide internet safety advice and information on access to free filters and how they work.
As a part of NetAlert ACMA, in conjunction with the National Association for Prevention of Child Abuse and Neglect (NAPCAN) and law enforcement agencies throughout Australia, has launched the Cybersmart Detectives program. On 6 September 2007 school children Australia wide participated in this practical program that uses the internet and a variety of interactive scenarios to teach internet safety messages especially those relating to the use of internet chat rooms.
For further information on NetAlert please visit Senator Coonan's website. Further information on Cybersmart Detectives is available on the ACMA website.
More information
For information regarding possible implications for your business, contact a member of the Technology & Communications team.