Commonwealth Numbered Regulations - Explanatory Statements

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TELECOMMUNICATIONS (CARRIER LICENCE FEES) REGULATIONS (AMENDMENT) 1995 NO. 219

Statutory Rules 1995 No. 219

Issued by the Authority of the Minister for Communications and the Arts

Telecommunications (Carrier Licence Fees) Act 1991

Telecommunications (Carrier Licence Fees) Regulations (Amendment)

Section 8 of the Telecommunications (Carrier Licence Fees) Act 1991 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act, prescribing all matters:

(a)       required or permitted by the Act to be prescribed; or

(b)       necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Section 4 of the Act provides that the holder of a general telecommunications licence or a public mobile licence must pay to the Commonwealth, by way of tax in respect of the licence, on each 1 July that occurs while the licence is in effect or within 12 months after it ceases to be in effect, a fee of an amount determined in accordance with the regulations as in force immediately before that 1 July.

Paragraph 5(1)(b) of the Act provides that without limiting section 4, regulations made for the purposes of that section may prescribe a procedure in accordance with which the amount of a fee is to be determined.

Section 6 of the Act provides that the total of the fees that become payable under the Act on 1 July in a financial year must not exceed the sum of:

(a)       all amounts appropriated, in respect of the immediately preceding financial year, for the purposes of the Australian Telecommunications Authority (AUSTEL); and

(b)       an amount determined, under the regulations, to be the proportion of the Commonwealth's contribution to the total budget of the International Telecommunication Union (ITU) for the calendar year in which that 1 July occurs that is attributable to matters relating to telecommunication standardisation.

Section 6 was recently amended by the Telecommunications (Carrier Licence Fees) Amendment Act 1995 to incorporate the telecommunication standardisation component of Australia's contribution to the ITU into the fees payable by telecommunications carriers. This amending Act provides that the amendment made to section 6 applies in respect only of fees payable on 1 July 1995 or on 1 July of each succeeding year in respect of a general telecommunications licence or a public mobile licence.

The purpose of the accompanying Regulations is to provide for a mechanism to enable the telecommunication standardisation component of Australia's contribution to the ITU to be recovered through carrier licence fees payable by telecommunications carriers from 1 July 1995.

The ITU is a United Nations specialised agency which is concerned with international cooperation in the use of telecommunications and the radio frequency spectrum. It establishes treaty agreements and recommended world standards for telecommunications and radiocommunications (including satellite) services. Its work is organised into three sectors, namely, telecommunication standardisation, radiocommunications and telecommunications development. Australia's ITU contribution is made on a calendar year basis.

Details of the accompanying Regulations are as follows.

Regulation 1: Commencement

Regulation 1 provides that the accompanying Regulations commence on 30 June 1995. This will ensure that the accompanying Regulations are in force before 1 July 1995 to allow the telecommunication standardisation component of Australia's contribution to the International Telecommunication Union (ITU) to be recovered through carrier licence fees payable by telecommunications carriers from 1 July 1995.

Regulation 2: Amendment

Regulation 2 provides that the Telecommunications (Carrier Licence Fees) Regulations are amended as set out in the accompanying Regulations.

Regulation 3: Regulation 2 (interpretation)

Regulation 3 inserts a definition of 'ITU component' into the interpretation provisions of the accompanying Regulations, 'ITU component' is defined, in relation to a carrier licence fee that is payable under the Act in a calendar year, to mean the amount determined under regulation 4. As a result of regulation 4, the ITU component will be 24 per cent of the Commonwealth's contribution to the total budget of the ITU. That component is attributable to matters relating to telecommunication standardisation.

Regulation 4: Regulation 3 (Amount of licence fee)

Regulation 3 of the existing Regulations provides a mechanism for calculating how the annual amount of carrier licence fees is to be calculated. The purpose of regulation 4 of the accompanying Regulations is to amend existing regulation 3 to provide for the inclusion of the ITU component in carrier licence fees.

Existing subregulation 3(1) provides that, subject to regulation 3, the amount of carrier licence fees is the sum of:

(a)       $500,000 (or, if a licence is not held for the whole of a financial year, a proportional fee); and

(b)       an amount calculated using a formula which takes account of the total of all amounts appropriated for the purposes of AUSTEL in the relevant financial year (the 'RFY appropriation'), less expenditure on public inquiries conducted by AUSTEL which do not relate to the regulation of carriers and less amounts received from carriers and other sources ('excluded money'), multiplied by a particular carrier's share of telecommunications traffic in the relevant financial year.

If the amount calculated under subregulation 3(1) is a negative amount, the licence fee is nil.

Subregulation 4.1 of the accompanying Regulations requires the ITU component to be added after the equation '(RFY appropriation-excluded money)' in existing subregulation 3(1) and then multiplied by a particular carrier's share of telecommunications traffic in the year.

In relation to a fee payable under the Act on 1 July 1995, the RFY appropriation will be the total AUSTEL appropriation for the 199311994 financial year and the carrier's traffic share will also be calculated for that financial year. It takes several months after the end of the financial year before all the data is available to enable AUSTEL to calculate a carrier's traffic share.

Existing subregulation 3(2) provides that, subject to subregulation (3), if the total of the amounts calculated under subregulation (1) in relation to each carrier is greater than the total of all amounts appropriated for the purposes of AUSTEL in the financial year that ends on 30 June in the calendar year (the 'PY appropriation'), the amount of carrier licence fees is the sum of:

(a)       $500,000 (or, if a licence is not held for the whole of a financial year, a proportional fee); and ,

(b)       an amount calculated using a formula which subtracts from the PY appropriation the amount of fees received by AUSTEL with respect to carrier licences in force at any time during the financial year ending 30 June in the calendar year in which a fee is payable under the Act ('received fees') multiplied by a particular carrier's share of telecommunications traffic in the relevant financial year.

Subregulations 4.2 and 4.3 of the accompanying Regulations require the ITU component to be added after the first reference to 'PY appropriation' in existing subregulation 3(2) and after the equation '(PY appropriation received fees)' in existing subregulation 3(2) which equation is then multiplied by a particular carrier's share of telecommunications traffic in the relevant financial year.

In relation to a fee payable under the Act on 1 July 1995, the PY appropriation will be the total AUSTEL appropriation for the 199411995 financial year but the carrier's traffic share will be calculated for the 199311994 financial year.

Existing subregulation 3(3) provides that in spite of subregulations (1) and (2) if, for the purpose of calculating a fee under the Regulations, the amount of the received fees is greater than the amount of the PY appropriation, the amount of the fee to be paid by each carrier is an amount calculated by multiplying the PY appropriation by the carrier's traffic share.

Subregulations 4.4 and 4.5 require the ITU component to be added after the first and second references to 'PY appropriation' in existing subregulation 3(3).

For the purposes of subregulation 3(3), in relation to a fee payable under the Act on 1 July 1995, the PY appropriation will be the total AUSTEL appropriation for the 199411995 financial year but the carrier's traffic share will be calculated for the 199311994 financial year.

Regulation 5: New regulation 4: Limit on annual fees - proportion of Commonwealth's contribution to ITU budget

Section 6 of the Act provides that the total of the carrier licence fees that become payable under the Act on 1 July in a financial year must not exceed the sum of:

(a)       all amounts appropriated, in respect of the immediately preceding financial year, for the purposes of the Australian Telecommunications Authority (AUSTEL); and

(b)       an amount determined, under the regulations, to be the proportion of the Commonwealth's contribution to the total budget of the International Telecommunication Union (ITU) for the calendar year in which that 1 July occurs that is attributable to matters relating to telecommunication standardisation.

Regulation 5 of the accompanying Regulations inserts a new regulation 4 which provides that, for the purposes of paragraph 6(b) of the Act, the amount will be 24 per cent of the Commonwealth's contribution to the total budget of the ITU. That amount is attributable to matters relating to telecommunication standardisation.