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2010-2011-2012-2013
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TELECOMMUNICATIONS LEGISLATION AMENDMENT (CONSUMER
PROTECTION) BILL 2013
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Broadband, Communications
and the Digital Economy, Senator the Honourable Stephen Conroy)
TELECOMMUNICATIONS LEGISLATION AMENDMENT (CONSUMER
PROTECTION) BILL 2013
OUTLINE
The Telecommunications Legislation Amendment (Consumer Protection) Bill 2013 (the
Bill) makes a number of amendments to telecommunications legislation to strengthen
consumer protections and improve the telecommunications co-regulatory framework.
The measures contained in the Bill have been prepared in response to recommendations
coming out of reviews conducted by the Department of Broadband, Communications
and the Digital Economy (the Department) of:
the Telecommunications Industry Ombudsman (TIO) scheme, provided for in Part
6 of the Telecommunications (Consumer Protection and Service Standards) Act
1999 (Consumer Protection Act); and
the process for registering industry codes (particularly consumer-related industry
codes) under Part 6 of the Telecommunications Act 1997 (Telecommunications
Act).
The amendments to the Consumer Protection Act are intended to improve the operation
of the TIO scheme in a number of areas by:
providing greater clarity about the TIO's role and expected standards of operation
by requiring the TIO scheme to comply with standards determined by the Minister,
following consultation with the TIO and the industry regulator, the Australian
Communications and Media Authority (ACMA); and
requiring periodic public reviews of the TIO scheme conducted by a person or body
independent of the TIO and the telecommunications industry.
The amendments to the Telecommunications Act are intended to streamline and
improve the process for developing and amending industry codes under Part 6 of that
Act by:
enabling industry codes to be varied (rather than being required to be wholly
replaced);
extending the application of the reimbursement scheme for developing
consumer-related industry codes to also apply to varying consumer-related industry
codes; and
requiring code developers to conduct transparent and accountable code
development processes by publishing on their websites:
- draft codes and draft variations; and
- any submissions received from industry participants and members of the public
about the draft code or draft variation.
The Bill also contains amendments to the Do Not Call Register Act 2006 (DNCR Act)
prepared in response to feedback received by the Department from the ACMA about the
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operation of that Act. These amendments are intended to enhance the operational
efficiency of the DNCR Act by clarifying the meaning of `cause' in relation to the party
responsible for making telemarketing calls and sending marketing faxes where third
parties are carrying out the marketing activities.
Part 1 of Schedule 1 to the Bill provides the amendments to the DNCR Act and the
Telecommunications Act.
Part 2 of Schedule 1 to the Bill provides the amendments to the Consumer Protection
Act.
FINANCIAL IMPACT STATEMENT
The Bill makes amendments to the reimbursement scheme in Division 6A of Part 6 of
the Telecommunications Act, which enables industry bodies and associations that
develop consumer-related industry codes to be reimbursed by the ACMA for their costs
in developing those codes. The amendments in the Bill (items 17 to 30) extend the
application of the reimbursement scheme so that industry bodies and associations can
also seek reimbursement of their costs incurred in varying a consumer-related industry
code.
Although the proposed amendments to the current reimbursement scheme may result in
an increase in Commonwealth expenditure, the amount of additional expenditure in a
financial year (being the total amount of costs reimbursed to industry bodies and
associations by the ACMA in relation to variations to consumer-related industry codes)
is directly referable to the additional amount of revenue the Commonwealth will obtain
during the next financial year through an increase in carrier licence charges permitted
by the Telecommunications (Carrier Licence Charges) Act 1997. The Commonwealth's
additional expenditure, through the ACMA, on funding variations to
telecommunications consumer-related industry codes is recouped from
telecommunications carriers through carrier licence charges. For this reason, extending
the application of the reimbursement scheme to also reimburse industry bodies and
associations for their costs in varying consumer-related industry codes (as implemented
by the Bill) is not expected to have a financial impact on Commonwealth revenue or
expenditure.
The Bill will not otherwise have a significant impact on Commonwealth expenditure or
revenue.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act
2011
Telecommunications Legislation Amendment (Consumer Protection) Bill 2013
This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
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Overview of Bill
The Bill makes a number of amendments to telecommunications legislation to
strengthen consumer protections and improve the telecommunications co-regulatory
framework. The main changes include streamlining the process for amending registered
industry codes under the Telecommunications Act and providing greater regulatory
clarity around the TIO's role and expected standards of operation under the Consumer
Protection Act. In part, the proposed amendments to the Telecommunications Act
require the body or association responsible for developing a code to publish material on
its website, including submissions received from individuals (see proposed new
subparagraphs 117(1)(f)(iii) and 119A(1)(f)(iii)).
Human rights implications
This Bill does not engage any of the applicable rights or freedoms. In coming to this
conclusion, consideration was given to the prohibition on interference with privacy and
attacks on reputation (contained in Article 17 of the International Covenant on Civil and
Political Rights). Proposed new subparagraphs 117(1)(f)(iii) and 119A(1)(f)(iii) in the
Bill do not require personal information to be published and the relevant body or
association would be required to comply with its obligations under the Privacy Act
1988.
Conclusion
This Bill is compatible with human rights and freedoms because it does not engage any
of the applicable rights or freedoms.
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ABRREVIATIONS
The following abbreviations are used in this explanatory memorandum:
ACCC: Australian Competition and Consumer Commission
ACMA: Australian Communications and Media Authority
Bill: Telecommunications Legislation Amendment
(Consumer Protection) Bill 2013
Consumer Protection Act: Telecommunications (Consumer Protection and Service
Standards) Act 1999
DNCR Act: Do Not Call Register Act 2006
Minister: Minister for Broadband, Communications and the
Digital Economy
Register or Do Not Call The Do Not Call Register established under the Do Not
Register: Call Register Act 2006
Telecommunications Act: Telecommunications Act 1997
TIO: Telecommunications Industry Ombudsman
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NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides that the Bill, when enacted, may be cited as the Telecommunications
Legislation Amendment (Consumer Protection) Act 2013.
Clause 2 - Commencement
Clause 2 provides for the commencement of the Bill.
Clauses 1 to 3 of the Bill, and any other provisions not covered elsewhere in the table
provided at subclause 2(1), are to commence on the day the Bill receives the Royal
Assent.
Part 1 of Schedule 1 to the Bill is to commence the day after the Bill receives the Royal
Assent.
Part 2 of Schedule 1 to the Bill is to commence on a single day to be fixed by
proclamation. However, if Part 2 of Schedule 1 is not proclaimed to commence within
the period of six months beginning on the day on which the Bill receives the Royal
Assent, then Part 2 of Schedule 1 is to commence on the day after the end of that six
month period.
Part 2 of Schedule 1 to the Bill contains amendments to the Consumer Protection Act.
Delayed commencement of Part 2 is proposed to allow adequate time for a legislative
instrument, provided for by the amendments in Part 2, to be prepared before the
commencement of the amendments to the Consumer Protection Act. Section 128 of the
Consumer Protection Act, as amended, will require the TIO scheme to comply with any
standards determined by the Minister under that section. It is anticipated that this
determination, if made, will commence at the same time as Part 2 of Schedule 1.
Clause 3 - Schedule(s)
Clause 3 provides that each Act specified in a Schedule to the Bill is amended or
repealed as set out in that Schedule and any other item in a Schedule to the Bill has
effect according to its terms. The Bill has one Schedule which contains amendments to
the DNCR Act, the Telecommunications Act and the Consumer Protection Act.
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Schedule 1--Amendments
Part 1 - General Amendments
Do Not Call Register Act 2006
Parts 2 and 2A of the DNCR Act provide rules about making telemarketing calls and
sending marketing faxes - namely rules:
prohibiting the making of unsolicited telemarketing calls, or the sending of
unsolicited marketing faxes, to an Australian number that is registered on the Do
Not Call Register, subject to certain exceptions (see sections 11 and 12B); and
requiring that agreements for the making of telemarketing calls, or the sending of
marketing faxes, must require compliance with the DNCR Act (see sections 12
and 12C).
More specifically, subsection 11(1) of the DNCR Act provides that a person must not
make, or cause to be made, an unsolicited telemarketing call to an Australian number
registered on the Do Not Call Register. Subsection 11(9) extends the meaning of `cause'
to ensure a person (the first person) remains responsible for the telemarketing calls,
even if they have made arrangements for another party to provide the actual
telemarketing services. Section 12 prohibits the first person from entering into a
contract with another party to undertake telemarketing calls where the contract contains
no express provision that requires the other party to comply with the DNCR Act.
Similar provisions apply in relation to the sending of unsolicited marketing faxes under
sections 12B and 12C of the DNCR Act.
Subsections 11(1), 12(1), 12B(1) and 12C(1) of the DNCR Act are civil penalty
provisions.
Under the DNCR Act, the ACMA is responsible for instituting proceedings for the
recovery of any pecuniary penalties payable for contravention of a civil penalty
provision. In some instances, the ACMA has encountered difficulty in establishing
evidentiary links between the first person and the other party providing the
telemarketing and/or fax marketing services. This has commonly arisen because
agreements between the parties relate to the sale and/or marketing of the first person's
goods or services without any specific reference to the means by which the goods or
services are to be sold and/or marketed.
The proposed amendments to the DNCR Act will capture instances where unsolicited
telemarketing calls are likely to be made, or unsolicited marketing faxes are likely to be
sent, in fulfilment of a contract, arrangement or understanding, rather than as a result of
an undertaking to specifically do so under a contract (or the like).
Item 1 - Section 4
Item 1 inserts a proposed definition of `give effect to' in section 4 of the DNCR Act
which, in relation to a contract, arrangement or understanding, is taken to include doing
an act or thing in pursuance of, or in accordance with, the contract, arrangement or
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understanding. These words are currently used in paragraphs 11(9)(c) and 12B(10)(c) of
the DNCR Act and will also be used in new paragraphs 12(1)(a) and 12C(1)(a) and
amended paragraphs 12(1)(c) and 12C(1)(c) (see items 3, 4, 6 and 7, below). The
proposed definition correlates with the definition of `give effect to' used in the
Competition and Consumer Act 2010.
Inserting this definition standardises the use of the term across Part 2 and Part 2A of the
DNCR Act and makes clear that `giving effect to a contract, arrangement or
understanding' is intended to have a broad meaning.
Item 2 - Paragraph 11(9)(b)
Item 2 repeals paragraph 11(9)(b) of the DNCR Act. Repealing this paragraph makes it
clear that there is no requirement for a contract, arrangement or understanding to
expressly provide for the making of telemarketing calls before the first person will be
taken to have `caused' a telemarketing call to be made.
Item 3 - Paragraph 12(1)(a)
Item 4 - Paragraph 12(1)(c)
Section 12 of the DNCR Act mandates that agreements for the making of telemarketing
calls must require the telemarketer to comply with the DNCR Act. Together, items 3
and 4 alter the test for when a person (the first person) is prohibited from entering into a
contract, arrangement or understanding with another person in relation to the making of
telemarketing calls.
Item 3 repeals paragraph 12(1)(a) of the DNCR Act and substitutes a new paragraph.
This amendment will operate similarly to the proposed amendment to paragraph
11(9)(a) (see item 2, above) and make it clear that there is no requirement that a
contract, arrangement or understanding expressly provides for the making of
telemarketing calls before subsection 12(1) of the DNCR Act will apply. Instead, under
proposed new paragraph 12(1)(a) it will be sufficient if there is a reasonable likelihood
that the other person will give effect to the contract, arrangement or understanding by
making telemarketing calls (or causing the employees or agents of the other person to
make the calls).
Item 4 removes the reference in paragraph 12(1)(c) of the DNCR Act to the making of
telemarketing calls being `covered by' the contract, arrangement or undertaking and
replaces it with a requirement that the calls be `made in order to give effect to' the
contract, arrangement or undertaking. This amendment is intended to similarly make it
clear that a contract, arrangement or understanding need not specifically refer to making
telemarketing calls before the obligation in subsection 12(1) of the DNCR Act applies.
Item 5 - Paragraph 12B(10)(b)
Item 6 - Paragraph 12C(1)(a)
Item 7 - Paragraph 12C(1)(c)
The amendments proposed in items 5, 6 and 7 in relation to sections 12B and 12C are
the same amendments as those discussed in relation to sections 11 and 12 (see items 2
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to 4, above) except that sections 12B and 12C relate to the sending of marketing faxes,
rather than the making of telemarketing calls.
Telecommunications Act 1997
Part 6 of the Telecommunications Act sets out the arrangements for industry codes and
industry standards and, in part, enables bodies or associations representing industry
sections (code developers) to develop codes and register them with the ACMA.
Items 8 to 30 of the Bill amend Part 6 in relation to industry codes to:
require code developers to publish on their websites:
- draft codes intended to be registered under Part 6; and
- any submissions received from participants in the industry section or members
of the public in relation to the draft code;
enable industry codes registered under Part 6 to be varied (rather than being
required to be wholly replaced) following a process similar to that for developing
industry codes, but limited to the provisions of the code affected by the variation;
and
extend the application of the reimbursement scheme in Division 6A of Part 6 for
developing consumer-related industry codes to also apply to varying
consumer-related industry codes.
Item 8 - Subparagraph 117(1)(e)(i)
Item 9 - At the end of paragraph 117(1)(e)
Item 10 - Subparagraph 117(1)(f)(i)
Item 11 - At the end of paragraph 117(1)(f)
Items 8 to 11 amend section 117 of the Telecommunications Act, which sets out the
requirements for registering an industry code under Part 6 of that Act.
Paragraph 117(1)(e) sets out the matters of which the ACMA needs to be satisfied, in
relation to a code developer's consultation with industry participants on a draft of the
code, before the code can be registered under Part 6.
Item 8 amends subparagraph 117(1)(e)(i) to specify that the code developer must
publish a draft of the code on its website, in relation to consulting with industry
participants on the draft code.
Item 9 adds a new subparagraph 117(1)(e)(iii) to require the code developer to publish
on its website any submissions received from industry participants about the draft code
during the submission period specified by the code developer.
The new requirements proposed in items 8 and 9 are intended to improve transparency
and accountability in relation to the development of a code.
Paragraph 117(1)(f) of the Telecommunications Act sets out the matters of which the
ACMA needs to be satisfied, in relation to a code developer's public consultation on a
draft of the code, before the code can be registered under Part 6.
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Items 10 and 11 provide for an amendment to subparagraph 117(1)(f)(i) and the
addition of a new subparagraph 117(1)(f)(iii) similar to those described in relation to
items 8 and 9 above, namely to require the code developer to publish both a draft of the
code on its website, as well as any submissions received from members of the public
about the draft code during the submission period specified by the code developer.
Item 12 - After section 119
Item 12 inserts a new section 119A into Part 6 of the Telecommunications Act that sets
out the requirements for varying a registered industry code.
Proposed section 119A is intended to provide code developers with a more streamlined
process for making changes to industry codes registered under Part 6 of the
Telecommunications Act and, in so doing, enable code developers to be more
responsive to emerging issues. This is to be achieved principally by:
enabling codes to be varied, rather than being required to be wholly replaced (as is
currently provided for in section 120 of the Telecommunications Act);
only requiring the ACMA to consider the provisions of the code affected by the
variation (see proposed paragraph 119A(1)(d));
requiring a code developer to consult with required stakeholders only in relation to
the variation to the code (see proposed paragraphs 119A(1)(e) to 119A(1)(k)); and
waiving the requirement for a code developer to consult with industry and members
of the public if the draft variation is minor in nature.
Under proposed section 119A, the body or association that developed a code registered
under Part 6 is able to submit a draft variation of the code to the ACMA for approval.
The ACMA is required to approve the draft variation if the ACMA is satisfied that:
disregarding any provisions of the code that are not affected (directly or indirectly)
by the variation, the code (as proposed to be varied) provides appropriate
community safeguards or deals with the matters in an appropriate way, depending
on the nature of the matters;
the body or association has published the draft variation on its website, invited
participants in the relevant industry section to make submissions within a period of
at least 30 days (see proposed subsection 119A(4)), considered any such
submissions received and published those submissions on its website;
the body or association has published the draft variation on its website, invited
members of the public to make submissions within a period of at least 30 days (see
proposed subsection 119A(4)), considered any such submissions received and
published those submissions on its website;
the ACCC has been consulted about the development of the draft variation;
the TIO has been consulted about the development of the draft variation (except
where the code (as proposed to be varied) deals with telemarketing or fax
marketing matters);
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at least one consumer representative body or association has been consulted about
the development of the draft variation; and
where the draft variation relates to privacy issues, the Information Commissioner
has been consulted about the development of the draft variation and the ACMA
believes the Information Commissioner is satisfied with the draft variation.
Similar to the current arrangements in subsection 120(2) of the Telecommunications
Act, where a draft variation is of a minor nature, the requirements for consultation with
industry participants and the public in paragraphs 119A(1)(e) and (f) will not apply to
the code variation approval process. This will further streamline the approval process
for varying the code in the event of minor changes.
The reduced consultation requirements for making minor changes to registered codes
have been included in proposed section 119A to replace the current arrangements
(contained in subsection 120(2) of the Telecommunications Act) for making minor
changes to industry codes (see item 15, below) when replacing a registered code.
Proposed subsection 119A(3) provides that if the ACMA approves a draft variation of a
code, the code is varied accordingly.
Item 13 - Subsection 120(1)
Item 14 - Subsection 120(1)
Item 15 - Subsection 120(2)
Section 120 of the Telecommunications Act currently requires changes to an industry
code to be made by replacing the code. The proposed amendments in items 13 to 15 to
section 120 of the Telecommunications Act are a consequence of the introduction of the
code variation approval process in proposed section 119A (see item 12, above).
Item 13 is consequential to the repeal of subsection 120(2) of the Telecommunications
Act by item 15 of the Bill.
Item 14 amends subsection 120(1) of the Telecommunications Act to effectively
provide code developers with the discretion whether to seek replacement or variation of
a code.
Item 15 repeals subsection 120(2) of the Telecommunications Act, as proposed section
119A will provide for reduced consultation in relation to making minor changes to
registered industry codes (see item 12, above).
Item 16 - Paragraph 136(1)(a)
Paragraph 136(1)(a) of the Telecommunications Act requires the ACMA to maintain a
register of all industry codes required to be registered under Part 6. Item 16 amends this
paragraph to require the ACMA to maintain the register to include all industry codes as
they `are in force from time to time'. This amendment makes clear that the ACMA must
update the register when an industry code registered under Part 6 of the
Telecommunications Act is varied (see proposed subsection 119A(3)).
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Division 6A of Part 6 of the Telecommunications Act - amended reimbursement scheme
Division 6A of Part 6 of the Telecommunications Act provides a scheme under which
an industry body or association may seek reimbursement from the ACMA of certain
costs incurred by the body or association in developing consumer-related industry
codes.
Items 17 to 30 amend Division 6A to extend the application of the reimbursement
scheme for developing consumer-related industry codes to also apply to varying
consumer-related industry codes.
Item 17 - Division 6A of Part 6 (heading)
Item 18 - Section 136A (heading)
Item 19 - Subsection 136A(1)
Item 20 - Subsection 136A(1)
Item 21 - Subparagraph 136A(2)(c)(i)
Item 22 - Section 136B (heading)
Item 23 - Before subsection 136B(1)
Item 24 - Subsection 136B(1)
Items 17 to 24 make various consequential amendments to the Division 6A heading and
sections 136A and 136B so that those provisions will refer to both developing and
varying consumer-related industry codes.
Item 25 - After subsection 136B(2)
Item 25 inserts proposed new subsections 136B(2A) and 136B(2B).
Proposed subsections 136B(2A) and 136B(2B) largely mirror existing subsections
136B(1) and 136B(2), respectively. Subsection 136B(2A) sets out the matters of which
the ACMA must be satisfied before making a declaration that a body or association is
eligible for the reimbursement of its refundable costs in varying a consumer-related
industry code. Proposed subsection 136B(2B) provides that it is only when the ACMA
is satisfied of the matters listed in subsection 136B(2A) that it may make a declaration.
Item 25 also inserts a new subheading for the general provisions contained in
subsections 136B(3) and 136B(4).
Item 26 - Section 136C (heading)
Item 27 - Subsection 136C(1) (heading)
Items 26 and 27 make consequential amendments to headings in section 136C.
Item 28 - After subsection 136C(3)
Item 28 inserts proposed new subsections 136C(3A), 136C(3B) and 136C(3C).
Proposed subsections 136C(3A), 136C(3B) and 136C(3C) largely mirror existing
subsections 136C(1), 136C(2) and 136C(3), respectively. Subsection 136C(3A) sets out
the conditions that must be met before the ACMA can give a written notice to an
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industry body or association determining that the body or association is entitled to be
paid a specified amount as reimbursement for its costs in varying a consumer-related
industry code.
Proposed subsection 136C(3B) provides that the specified amount the ACMA must pay
the industry body or association is either the total of the costs that were incurred by the
body or association in varying the consumer-related industry code, or the estimate of the
total of the refundable costs that the body or association gave to the ACMA along with
its application (subparagraph 136A(2)(c)(i) as amended) - whichever is lower.
Proposed subsection 136C(3C) provides that the ACMA must pay the specified amount
to the industry body or association within 30 days after the day on which the body or
association was notified by the ACMA of its entitlement to be refunded under proposed
subsection 136C(3A).
Item 28 also inserts a new subheading for the appropriation provision contained in
subsection 136C(4).
Item 29 - Subsection 136E(1)
Item 30 - Subsection 136E(1)
Items 29 and 30 make consequential amendments to subsection 136E(1).
Part 2 - Other Amendments
Telecommunications (Consumer Protection and Service Standards) Act 1999
Section 128 of the Consumer Protection Act requires each carrier and eligible carrier
service provider to enter into a scheme providing for the TIO. The scheme provides for
the TIO to investigate, make determinations and give directions relating to complaints
about carriage services by end-users of those services.
On 4 May 2012, the Minister announced the release of the Reform of the
Telecommunications Industry Ombudsman report (the TIO Report). A key
recommendation of the TIO Report was for legislative amendments to be made to
provide greater regulatory clarity around the TIO's role and its expected standards of
operation. In particular, the report recommended that a set of framework principles
should be legislatively established for the operation of the TIO scheme, based on the
Benchmarks for Industry-based Customer Dispute Resolution Schemes (originally
released by the Minister for Customs and Consumer Affairs in August 1997). Currently,
the TIO scheme is not required to comply with any regulatory-based standards.
The TIO Report also recommended the introduction of periodic mandatory, independent
and public reviews of the TIO scheme.
Items 31 and 32 amend Part 6 of the Consumer Protection Act to introduce these
measures.
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Item 31 - At the end of section 128
Item 31 inserts proposed new subsections 128(8) to 128(11) into section 128 of the
Consumer Protection Act to provide the Minister with the discretion to determine
standards with which the TIO must comply, by way of a legislative instrument. If the
Minister decides to exercise the power to make a legislative instrument under new
subsection 128(9), he or she must have regard to the matters set out in new subsection
128(10), which are derived from the Benchmarks for Industry-based Customer Dispute
Resolution Schemes. Further, before making a determination under new subsection
128(9), the Minister must consult with the TIO and the ACMA (proposed subsection
128(11)).
The intent of this amendment is to enable the Minister to establish a set of framework
principles to underpin the TIO's operations that are both consistent with best practice
for other external dispute resolution schemes and relevant to the telecommunications
industry. The Minister may update the standards from time to time to take into account
developments in best practice for external dispute resolution schemes.
Item 32 - At the end of Part 6
Item 32 inserts proposed new section 133A into the Consumer Protection Act, which
provides for periodic reviews of the TIO scheme.
Proposed section 133A sets out requirements for reviews of the TIO scheme, including:
the timing of reviews - the first review is to be completed within 3 years after the
commencement of this section and thereafter every 5 years;
reviews are to be conducted by a person or body independent of the TIO and the
telecommunications industry;
reviews must provide for public consultation, as well as consultation with the TIO
and the ACMA;
reports of the reviews must be provided to the Minister and published on the TIO's
website; and
the TIO must respond to any review recommendations within 6 months of receiving
a report, provide a copy of the response to the Minister, and publish the response on
the TIO's website.
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