Communications Update July 2007
29 August 2007Contents
Cases
Legislation
- Telecommunications Legislation Amendment protects Communication Fund
- Telecommunications (Interception and Access) Amendment Bill 2007
- Communications Legislation Amendment (Information Sharing and Datacasting) Bill 2007
Regulatory developments
- The ACMA registers new codes of practice for subscription television, radio services and open narrowcast radio services
- Rules governing customer transfer arrangements amended to benefit telecommunication consumers
- The ACMA registers new Calling Number Display Code
Competition
- ACCC rejects Optus undertakings for mobile terminating access service
- ACCC issues accounting separation report for March quarter 2007
- ACMA approves Macquarie Media Group’s proposed acquisition of Southern Cross Broadcasting and ACCC to conduct competition assessment
Industry developments
- The ACMA and ACCC issue a joint report on communications infrastructure and services availability
- Protection zones declared for submarine telecommunications cables off New South Wales coast
Cases
ACCC institutes proceedings in Federal Court against EDirect Pty Ltd for misleading telemarketing calls
On 25 July 2007 the Australian Competition and Consumer Commission (ACCC) announced that it instituted proceedings in the Federal Court in Darwin, against EDirect Pty Ltd trading as VIPtel Mobile (EDirect) in relation to alleged misleading telemarketing calls for mobile phone packages. EDirect has telemarketed mobile phone packages offering service plans utilising the Optus GSM network since January 2006.
In the proceedings, the ACCC has alleges that EDirect contravened of section 52 of the Trade Practices Act 1974 (Act) by telemarketing mobile phone packages into areas where there was no relevant network coverage whilst failing to advise prospective customers of the lack of coverage. In addition, EDirect they allegedly provided misleading information regarding the costs and services to customers and breached section 58 of the Act by accepting payment from customers in circumstances where EDirect was unable to supply the service.
Furthermore, the ACCC alleges that EDirect represented on the VIPtel website that it provided Australia wide network coverage when this was not the case.
EDirect’s directors have also been joined to the proceedings in relation the coverage representations and acceptance of payment.
The ACCC is seeking:
- declarations that EDirect contravened the Act
- declarations that the directors aided, abetted, counselled or procured and/or were knowingly concerned in the conduct of EDirect in relation to the coverage representations and acceptance of payment
- injunctions restraining EDirect and the directors from engaging in the same or similar conduct
- orders that EDirect implement a TPA compliance program
- a community service order for an educational broadcast on nominated indigenous radio stations, and
- costs.
The ACCC was notified of EDirect’s alleged conduct by the Northern Territory Office of Consumer and Business Affairs who had received complaints through its Money Business Program on Elcho Island. The matter has been listed for a directions hearing on 29 August 2007 before Justice Mansfield.
For further information on please visit the ACCC website.
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Legislation
Telecommunications Legislation Amendment protects Communication Fund
On 21 June 2007, the Minister for Communications, Information Technology and the Arts Senator Helen Coonan announced that she had introduced legislation designed to protect the capital in the $2 billion Communications Fund.
The Telecommunications Legislation Amendment (Protecting Services for Rural and Regional Australia into the Future) Bill 2007 ensures that the $2 billion principal of the Communications Fund is maintained as a perpetual fund, with only earnings on investments available for expenditure.
The Fund’s purpose is to provide an income stream to fund infrastructure for regional, rural or remote telecommunications such as broadband provision, additional mobile telephone towers and backhaul fibre capabilities.
The Fund enables the Commonwealth Government to implement responses to recommendations made by the Regional Telecommunications Independent Review Committee relating to the adequacy of telecommunication services in regional, rural or remote areas.
For further information on the Communications Fund please visit Senator Coonan's website.
Telecommunications (Interception and Access) Amendment Bill 2007
On 19 July 2007, the Office of the Privacy Commissioner published its submission to the Senate Legal and Constitutional Affairs Committee regarding the Telecommunications (Interception and Access) Amendment Bill 2007 (Cth).
The submission includes the following suggestions for consideration by the committee:
- providing guidelines to certify offices when they are considering the higher level of authorisation required for access to prospective information
- that the Bill include provisions to place positive obligations on law enforcement agencies to destroy irrelevant material containing personal information collected through voluntary disclosure, and
- that there may be a role for the Inspector General of Intelligence and Security in assisting exempt agencies to develop and implement standards for handling personal information.
For further information and access to the submission please visit the website for the Office of the Privacy Commissioner.
Communications Legislation Amendment (Information Sharing and Datacasting) Bill 2007
On 24 July 2007 the Office of the Privacy Commissioner (office) published its submission to the Senate Environment, Communications, Information Technology and the Arts Committee regarding the Communications Legislation Amendment (Information Sharing and Datacasting) Bill 2007 (Bill).
The purpose of the Bill is to authorise the ACMA to disclose certain information, described as ‘authorised disclosure information’, collected by the ACMA in connection with the performance of its functions or the exercise of its powers a range of legislation, including in-confidence information.
The submission notes that privacy protections should be balanced against investigation and enforcement activities and recommends that standards be implemented for the handling of such personal information.
The office has made the following recommendations for consideration by the committee:
- that reference to the definition of personal information and compliance with the Privacy Act should appear within the Bill, and
- consideration should be given to expressly excluding personal information from authorised disclosure information.
For further information and to access a copy of the submission please visit the website for the Office of the Privacy Commissioner.
Regulatory developments
The ACMA registers new codes of practice for subscription television, radio services and open narrowcast radio services
On 27 June 2007, the Australian Communications and Media Authority (ACMA) announced that it registered new codes of practice for subscription broadcasting television, subscription narrowcasting television, subscription narrowcasting radio and open narrowcasting radio services.
Pursuant to the Broadcasting Services Act 1992, the industry must review and develop their codes of practice in consultation with the ACMA. During 2006–07, the Australian Subscription Television and Radio Association (ASTRA) reviewed the codes for subscription broadcasting and narrowcasting television, open narrowcasting television and subscription narrowcasting radio services. In addition the Australian Narrowcast Radio Association (ANRA) reviewed the code for open narrowcasting radio services.
During September and October 2006 the draft codes were open for public consultation. In response to public comment, the codes have been amended by ASTRA and ANRA to extend the grounds for vilification to include transgender status and HIV/AIDS status.
The new subscription broadcasting and narrowcasting television codes take into account new classification guidelines that came in to effect in May 2005 and the subscription broadcasting television code now requires that advertisements must comply with the Australian Association of National Advertisers Code for Advertising to Children and the Australian Association of National Advertisers Food and Beverages Advertising and Marketing and Communications Code.
The issue of food and beverage advertising to children is currently undergoing a comprehensive examination by the ACMA in its review of the Children’s Television Standards.
For further information and access to the ASTRA Codes of Practice please visit the ACMA website.
Rules governing customer transfer arrangements amended to benefit telecommunication consumers
On 11 July 2007, the ACMA announced that it registered the ACIF C546: 2007 Customer Transfer Industry Code that provides stronger protection for consumers against the unauthorised transfer of their telephone services from one provider to another.
The new Customer Transfer Code is a revision of a code registered in 2001. It strengthens rules to ensure that the transfer of a customer only occurs after authorisation through appropriate means and with the customers’ informed consent.
The code was developed by the Communication Alliance to minimise the likelihood of unauthorised transfers. The code is enforceable by ACMA.
Under the new rules, service providers must implement appropriate verification procedures and take steps to confirm, document and notify the customer of the transfer.
For further information on the Customer Transfer Industry Code please visit the ACMA website.
The ACMA registers new Calling Number Display Code
On 11 July 2007, the ACMA announced that it registered a code of practice developed by the Australian Communications Industry Forum (now the Communications Alliance) that enables consumers to preserve their privacy when using telecommunications services.
The Calling Number Display Code (Code) allows suppliers greater flexibility in the means of blocking or enabling calling number display information. The Code maintains the ability for customers to either block or display their calling number information.
The Code aims to regulate:
- the manner in which calling number display enabling or blocking is offered to customers by suppliers
- charges which may apply in relation to enabling or blocking the display of calling number display to the called party, and
- steps that must be taken in order to ensure the public is aware of calling line identification and calling number display privacy implications.
Providers that are using new voice over technology that are unable to block calling number display are now required to inform customers of this limitation before reaching any agreement for the supply of services.
For further information on the code please visit the ACMA website.
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Competition
ACCC rejects Optus undertakings for mobile terminating access service
On 21 June 2007, the Australian Competition and Consumer Commission (ACCC) announced its draft decision to reject the access undertakings submitted by Optus in February 2007 in relation to Optus’ mobile terminating access service (MTAS).
The MTAS is a wholesale input used by providers (either fixed line or mobile) that allows customers to call mobile phone users connected to another network. When a call is initiated, the carrier of the customer making the call pays the receiver’s carrier for the MTAS.
The Optus 2007 undertaking outlines certain terms and conditions upon which Optus undertakes to supply its domestic GSM terminating access service (DGTAS) for the period 1 July 2007 to 31 December 2007. Optus indicated that 12 cents per minute was an appropriate price for the supply of MTAS.
The ACCC rejected the Optus 2007 undertaking because the price terms and conditions are not reasonable. It ruled that Optus’ proposed price was likely to significantly overstate the efficient costs of providing the service in Australia.
On 21 June 2007 the ACCC issued the Draft MTAS Pricing Principles Determination relevant for 1 July 2007 to 31 December 2008 that proposes a price for the MTAS of nine cents per minute. The ACCC noted that lower MTAS prices benefit consumers and business by reducing fixed to mobile rates.
For further information on the draft decision of the Optus 2007 undertaking please visit the ACCC website.
ACCC issues accounting separation report for March quarter 2007
On 17 July 2007, the ACCC issued its fifteenth imputation testing and non-price terms and conditions report for the quarter ending March 31 2007.
The report presents an imputation analysis comparing the retail price charged by Telstra with the prices of the three core access services: the local carriage services, the PSTN originating and terminating access service, and the unconditioned local loop services (ULLS). The analysis identifies whether the margins are sufficient to allow efficient firms to compete against Telstra in the retail market.
The report was developed pursuant to the accounting separation regime that aims to address competition concerns arising from the level of vertical integration between Telstra’s wholesale and retail services.
The report indicates that during the March 2007 quarter, the imputed margins for fixed-voice services and for services over the ULLS have increased.
In addition, the report compares Telstra’s customer service levels for wholesale and retail fixed line telephony and ADSL customers highlighting that there was no material discrimination reported during the March 2007 quarter.
For further information please visit the ACCC website.
ACMA approves Macquarie Media Group’s proposed acquisition of Southern Cross Broadcasting and ACCC to conduct competition assessment
On 21 July 2007, the ACMA announced that it approved applications by Macquarie Media Group (MMG) relating to its proposed acquisition of Southern Cross Broadcasting (Australia) Limited. Concurrently, the ACCC has announced that it will conduct a competition assessment in relation to whether the acquisition is likely to substantially lessen competition in breach of the Trade Practices Act 1974.
MMG and certain related bodies corporate, and their directors, applied to the ACMA for prior approval of temporary breaches of certain control rules under the Broadcasting Services Act 1992 and approval of a transaction that would otherwise result in breaches of the new media diversity rules.
Without ACMA’s approval, MMG’s proposed acquisition would have the following implications:
- breaches of the statutory control rules in relation to commercial radio licence areas in Tasmania, Darwin and the combined Brisbane and Nambour area
- an unacceptable media diversity situation in nine commercial licence areas (Atherton, Burnie, Charters Towers, Devonport, Emerald, Kingaroy, Mt Isa, Warragul and Young), and
- a reduction in points in three additional commercial radio licence areas where an unacceptable media diversity situation already exists (Queenstown, Roma and Scottsdale).
Pursuant to the Broadcasting Services Act 1992, the ACMA is entitled to approve some transactions and prospective breaches before they occur where it is satisfied that necessary actions will be taken to remedy the relevant breaches within an appropriate time.
In support of its application, MMG offered the ACMA enforceable undertakings. The ACMA has determined that the undertakings provide sufficient remedial actions to ensure that the breaches cease within the 12 month period allowed by the ACMA.
Mr Graeme Samuel, the ACCC Chairman, has stated that although the ACMA’s assessment of the proposal has concluded, the ACCC has an independent role to assess the impact that the proposal will have on competition under the Trade Practices Act 1974. The ACCC will be reviewing the effects of the proposed acquisition in locations that involve any aggregation of assets.
The review is expected to commence shortly and be finalised by mid-September 2007.
For further information on the ACMA’s approval of the acquisition and the relevant undertakings offered by MMG please visit the ACMA website.
Further information on the competition assessment is available on the ACCC website.
Industry developments
The ACMA and ACCC issue a joint report on communications infrastructure and services availability
On 26 June 2007, the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC) issued a joint report titled Communications Infrastructure and Services Availability in Australia 2006–07 that discusses the availability of broadband, fixed voice, mobile voice, mobile data and broadcasting infrastructure and services.
Both the ACMA chairman, Mr Chris Chapman, and the ACCC Chairman, Mr Graeme Samuel, see the report as an important step in future reporting for the communications market.
The report was compiled using expertise and data from both agencies in conjunction with publicly available sources including Australian Bureau of Statistics data, listed company reports, news items and media releases.
The report identifies the following key findings:
- there are 19 Internet Service Providers providing broadband services via DSLAM deployments in exchanges across Australia
- there has been growth in the availability of ADSL services, with an additional 323 exchanges enabled between 30 June 2006 and 31 January 2007
- growth in the availability of ADSL2+ services, with 412 exchanges providing ADSL2+ services
- internet connections with download speeds of 1.5Mbit/s or greater increased to 1.56 million
- there are increased mobile data rates available with all four mobile carriers upgrading their 3G networks to the High Speed Downlink Packet Access protocol, and
- increased interest in provision of voice services using Voice over Internet Protocol (VOIP).
The report aims to assist the ACMA to review the adequacy of telecommunications services in regional, rural and remote Australia in its input to the Regional Telecommunications Independent Review Committee which is to be convened in 2008.
For further information and access to the report please visit the ACCC website.
Protection zones declared for submarine telecommunications cables off New South Wales coast
On 25 July 2007, the ACMA declared protection zones around two submarine telecommunications cables off the coast of Sydney, New South Wales. The protection zones take effect on 1 October 2007.
The two protection zones are:
- the Northern Sydney Protection zone which extends from Narrabeen beach to 40 nautical miles offshore, covering northern branches of the Australia Japan Cable and Southern Cross Cable, and
- the Southern Sydney Protection Zone extending from Tamarama and Clovelly beaches and extending 30 nautical miles offshore, covering the southern branches of the Australian Japan Cable and Southern Cross Cable.
Activities that could damage the cables are restricted or prohibited within the protection zones. Breaches of the legislation are subject to significant criminal penalties including imprisonment for up to 10 years.
According to Chris Chapman, ACMA chairman, protection of these cables is fundamental to the Australian economy as ‘submarine cables carry about 99 per cent of Australia’s international voice and data traffic and in the past, breakage or damage has had serious consequences for Australian businesses conducting international transactions.’
The Australia Japan Cable and the Southern Cross Cable are regarded as vital to national interest as they are high capacity cables linking Australia to global communications systems.
Under the Telecommunications and Other Legislation Amendment (Protection of Submarine Cables and Other Measures) Act 2005, ACMA is responsible for declaring protection zones over cables of ‘national significance’ and issuing permits to install submarine cables in Australian waters (both in and out of protection zones).
For further information about the protection zones and the prohibited or restricted activities please visit the ACMA website.
For more information please contact any one of our partners in our Communications, Media & Technology team.
