Commonwealth Numbered Regulations - Explanatory Statements

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BROADCASTING SERVICES (TRANSMITTER ACCESS) REGULATIONS 2001 2001 NO. 249

EXPLANATORY STATEMENT

Statutory Rules 2001 No. 249

Issued by the Authority of the Minister for Communications, Information Technology and the Arts

Broadcasting Services Act 1992

Broadcasting Services (Transmitter Access) Regulations 2001

Section 217 of the Broadcasting Services Act 1992 (the Act) provides for the Governor-General to make regulations under the Act.

Part 5 of Schedule 4 to the Act requires owners and operators of broadcasting transmission towers and designated associated facilities to provide commercial television broadcasters, national television broadcasters or datacasters with access to transmission sites, towers and designated associated facilities for the purpose of providing digital television and datacasting services. Subclause 45A(9) of Part 5 of Schedule 4 to the Act enables regulations to be made to provide for exemptions from the access obligations in subclauses 45A(2) and (4) of Part 5 of Schedule 4.

Subclause 47(3) of Part 5 of Schedule 4 to the Act enables regulations to be made for and in relation to the conduct of an arbitration that relates to the terms and conditions of access to broadcasting transmission towers, their sites and designated associated facilities.

The purpose of the accompanying regulations is to provide owners or operators of designated associated facilities with certain exemptions from their access obligations as outlined in paragraph (a) below and to provide a process for the arbitration of access disputes as outlined in paragraph (b) below.

The regulations:

(a)       enable the owner or operator of a designated associated facility to refuse access where a requirement to provide access would not be reasonable eg where being required to provide access would prevent the access provider or existing customers from obtaining sufficient capacity to meet their reasonably anticipated requirements; and where it would prevent the access provider from meeting their existing contractual obligations (Part 2 of the proposed regulations); and

(b)       provide for a streamlined process in accordance with which the Australian Consumer and Competition Commission (ACCC) is be able to arbitrate disputes relating to terms and conditions of access to broadcasting transmission towers, their sites and designated associated facilities (Part 3 of the proposed regulations).

Details of the accompanying regulations appear in the Attachment. A Regulation Impact Statement is also attached.

The accompanying regulations commenced on gazettal.

ATTACHMENT

DETAILS OF THE REGULATIONS

Part 1 - Preliminary

Regulation 1 - Name of Regulations

Regulation 1 provides that the name of the accompanying regulations is the Broadcasting Services (Transmitter Access) Regulations 2001.

Regulation 2 - Commencement

Regulation 2 provides that the accompanying regulations commence on gazettal.

Regulation 3 - Definitions

Regulation 3 sets out key definitions for the purposes of the proposed regulations. Some key definitions are explained in more detail below.

Access seeker means a person described as an access seeker in clause 45, 45A or 46 of Schedule 4 to the Broadcasting Services Act 1992 (the Act). For the purposes of those clauses of the Act an access seeker is a national broadcaster (the ABC or SBS), a commercial television broadcaster or a datacaster.

Broadcasting transmission tower has the meaning given by clause 2 of Schedule 4 to the Act. That clause provides that a broadcasting transmission tower is a tower, a pole, a mast or a similar structure used to supply a broadcasting service by means of radiocommunications using the broadcasting services bands; or a datacasting service provided under, and in accordance with the conditions of, a datacasting licence.

Business day has the meaning given by clause 43 of Schedule 4 to the Act, which provides that a business day is a day that is not a Saturday, a Sunday or a public holiday in the place concerned.

Designated associated facility has the meaning given by clause 43A of Schedule 4 to the Act, which provides that a designated associated facility is an antenna, a combiner, a feeder system or a facility of a kind specified in the regulations.

Existing customer means a customer of the owner or operator of a designated associated facility that has access to the facility before a particular request for access to that facility is made or has a right to access of that kind before a particular request for access is made.

Giving access has the meaning given by clause 44 of Schedule 4 to the Act. In that clause, 'giving access' to a tower includes replacing the tower with another tower located on the same site and giving access to the replacement tower; 'giving access' to a site on which is situated a tower includes replacing the tower with another tower located on the site; and 'giving access' to a designated associated facility includes replacing the facility with another facility located on the same site and giving access to the replacement facility, or giving access to a service provided by means of the designated associated facility.

Site has the meaning given by clause 43 of Schedule 4 to the Act, which provides that a site is land, or a building on land, or a structure on land.

Telecommunications network has the meaning given by section 7 of the Telecommunications Act 1997, which provides that a telecommunications network is a system, or series of systems, that carries or is capable of carrying, communications by means of guided and/or unguided electromagnetic energy.

Part 2 - Access to designated associated facilities

Regulation 4 - Exemptions from obligation to give access

Subregulation 4(1) provides that the obligations on owners or operators arising from subclause 45A(9) of Schedule 4 to the Act to provide access to designated associated facilities do not apply if the imposition of the obligation would have the effect of:

•       preventing one of their existing customers from obtaining a, sufficient amount of a service to meet their reasonably anticipated requirements, with those requirements to be measured at the time the request for access is made (note that the reasonably anticipated requirements may be greater or less than actual usage at the time the request is made);

•       preventing the owner or operator from being able to meet his or her own reasonably anticipated requirements, as measured at the time the request for access is made (note again that the reasonably anticipated requirements may be greater or less than actual usage at the time of the request);

•       preventing a person who, at the time the request is made, has a right to access either under a contract or a determination made by the ACCC (a 'pre-request right'), from being able to obtain a sufficient level of access to meet his or her actual requirements;

•       depriving a person of a right which he or she possesses under a contract which was in force on 10 May 2000 (a 'protected contractual right').

Subregulation 4(2) provides that an owner or operator who would otherwise be required to give access under subclauses 45A(2) and (4) of Schedule 4 to the Act is not required to do so if there are reasonable grounds to believe the access seeker would fail to a material extent either to comply with the terms and conditions on which the access provider complies, or is reasonably likely to comply, with the obligation to give access; or the access seeker would fail, in connection with the obligation, to protect the integrity of a telecommunications network or the safety of people working on a telecommunications network or facility or using services supplied by means of a telecommunications network or facility.

Subregulation 4(3) provides examples of grounds for believing that an access seeker would fail to comply with the terms and conditions on which the access provider complies with the obligation to give access.

Part 3 - Arbitration

Division 1 - General

Regulation 5 - Application of Part 3

Regulation 5 provides that Part 3 applies to the conduct of an arbitration by the ACCC that relates to the terms and conditions of access to a broadcasting transmission tower, the site of such a tower, or a designated associated facility situated on, at, in or under such a tower or site.

Regulation 6 - Arbitration

Subregulation 6(1) provides that an arbitration conducted by the ACCC under clause 47 of Schedule 4 to the Act must be conducted as set out in the regulations.

Subregulation 6(2) provides that the parties to an arbitration are the access seeker; the access provider; anyone who the ACCC considers that the determination of the dispute may affect in some way; and anyone who applies in writing to be made a pa rty and who the ACCC accepts has a sufficient interest in the dispute.

Division 2 - Notification of dispute

Regulation 7 - Notification

Subregulations 7(1) and (2) make it clear that if an access seeker and access provider cannot agree on terms and conditions of access either may notify the ACCC in writing of the dispute. Examples of causes of disagreement for the purposes of subregulations 7(1) and (2) include, but are not limited to, the price of access, the method of establishing that price, and whether a previous ACCC determination should be varied (subregulation 7(3)).

Subregulation 7(4) requires the party notifying the ACCC of the existence of the dispute (ie either the access provider or the access seeker) to provide the ACCC with preliminary information relevant to the dispute. The information required includes:

•       the name and address of the person notifying the dispute ('the notifier') or, if the notifier is not an individual, an individual representing the notifier;

•       the notifier's address for the delivery of documents;

•       whether the notifier is the access seeker or the access provider;

•       if the notifier is the access seeker - the name and address of the access provider;

•       if the notifier is the access provider - the name and address of the access seeker;

•       the provision of the Act under which access is sought;

•       a description of the dispute, including:

-       whether the dispute is about varying existing terms and conditions and, if it is, a description of the current terms and conditions;

-       the terms and conditions on which the parties are able to agree; and

-       the terms and conditions on which the parties are unable to agree;

•       a description of any effort that has been made to resolve the dispute;

•       a description of any effort that has been made to appoint an arbitrator and confirmation that that effort has failed; and

•       any other information that the notifier considers relevant eg the name and address of anyone the notifier considers may have an interest in the dispute.

The information required will assist the ACCC in its initial consideration of the relevant issues and help it to determine whether there is anyone else who might wish to become parties to the arbitration. It should be noted, however, that failure to comply with subregulation (4) does not invalidate a notification (subregulation 7(10)).

Subregulations (6) to (9) provide that, once it is given written notification, the ACCC must give written notice of the dispute to:

•       the access seeker, if it was the access seeker who notified the dispute;

•       the access provider, it if was the access provider who notified the dispute;

•       if the ACCC is of the opinion that the resolution of the dispute may involve requiring another person to do something, that person; and

•       any other person the ACCC believes might wish to be party to the arbitration.

Regulation 8 - Withdrawal of notification of dispute

Subregulations 8(1) and (2) provide that notice of a dispute may be withdrawn by the access seeker or the access provider, where they were the person who originally notified the ACCC of the dispute, at any time before the ACCC makes its final determination. In addition, in the case of a dispute which does not relate to the variation of a final determination, the access seeker can withdraw his or her notification after the ACCC issues a draft of its final determination but before it makes its final determination.

Subregulation 8(3) provides that the withdrawal of a notice of dispute must be in writing and contain the name of the person withdrawing the notice, whether he or she is the access provider or the access seeker, a short description of the matter to which the notice relates, and the specific subregulation (8(1) or (2)) under which he or she is withdrawing the notice. The person withdrawing the notice must give a copy of the notice of withdrawal to the access seeker or access provider who is the other party to the dispute (subregulation 8(5)).

The withdrawal takes effect when the ACCC receives the notice (subregulation 8(4)), and the ACCC is then required under subregulation 8(6) to provide a copy of the notice to anyone to whom it gave notice of the dispute under subregulation 7(6) or (7) and any other person to whom paragraph 6(2)(c) or (d) applies ie anyone who the ACCC considers might have been affected by the determination if one had been made; or anyone who has applied to be made a party to the dispute and has either been accepted as such by the ACCC or in relation to whom the ACCC had not yet made a decision at the time of the withdrawal of notification. The person who withdraws notification must give a copy of the withdrawal notice to the access seeker or access provider (subregulation 8(5)). Once notification has been withdrawn, the ACCC cannot make either an interim or a final determination (subregulation 8(7)).

Division 3 - Determination-making process

Division 3 provides for determinations that can be made by the ACCC in arbitration on the terms and conditions of access to towers, sites and designated associated facilities. There are two types of determinations that can be made - interim determinations and final determinations.

An interim determination is a temporary determination which is subject to an objection period. It has a maximum duration of 12 months. The purpose of an interim determination is to provide some immediate certainty as to the rights of the parties. Before publishing an interim determination, the ACCC must publish a draft interim determination. The draft interim determination allows the ACCC to receive submissions and any objections on the interim determination or the making of an interim determination. After receiving these submissions, the ACCC will determine whether it should alter its interim findings and may then publish the interim determination.

A final determination must be made in all arbitrations unless they have been terminated or unless notification has been withdrawn. The ACCC must issue a draft final determination and, receive submissions from the parties regarding this draft before a final determination is issued.

Regulation 9 - Determinations - general

Regulation 9 sets out the general situation in relation to determinations. Subsequent regulations then provide more detail.

The ACCC must make a final determination on the access arrangements except where it has terminated an arbitration under regulation 16 or notification of the dispute has been withdrawn under regulation 8. The final determination must be in writing. Subregulation 9(2) provides that a determination may deal with any matter relating to access, including matters that were not the basis for notification of the dispute.

Subregulation 9(3) sets out examples of matters that the ACCC may include in a determination. These include:

•       requiring the access provider to give access;

•       requiring the access seeker to accept and pay for access;

•       specifying the terms and conditions with which the access provider needs to comply to satisfy his or her obligations under clause 45, 45A or 46 of Schedule 4 to the Act;

•       specifying any other terms and conditions under which the access seeker is to be given access;

•       requiring a party to extend or enhance the capability of a broadcasting transmission tower, designated associated facility or site; and

•       specifying the extent to which the determination overrides an earlier determination.

Subregulation 9(4) prohibits the ACCC from making a determination requiring access where access is already required under Part 5 of Schedule 4 to the Act or any other law of the Commonwealth. This provision is intended to reinforce the fact that the ACCC's determination power is an arbitral power (a non-judicial power that is concerned with ascertaining what ought to be, in the opinion of the arbitrator, the rights and liabilities of each party), not a judicial one (that is concerned with ascertaining existing rights and liabilities). The ACCC must also give the parties to the dispute reasons for its determination (subregulation 9(7)).

Before making a final determination, the ACCC must give a draft determination to the parties, stating in the document whether it is a draft interim determination or a draft final determination (subregulation 9(5)). In the event of its being a draft interim determination, the ACCC must issue a written notice specifying a period of time (the 'objection period') which must be at least seven business days from when the draft interim determination is first given to a party, during which the access seeker may object to the making of an interim determination (subregulation 9(6)). (Note: A business day is a day that is not a Saturday, a Sunday or a public holiday in the place concerned - see regulation 3).

Regulation 10 - Interim determination

Interim determinations are intended to encourage access providers to avoid disputes and, where disputes arise, to enable commercial operations to progress on a reasonable basis while a final determination is being prepared. The making of an interim determination neither terminates an arbitration nor relieves the ACCC from its duty to make a final determination (subregulation 10(2)).

The ACCC cannot make an interim determination if, at any time within the objection period, the access seeker gives the ACCC a written notice objecting to the determination (subregulation 10(3)). The objection period is the period specified in a written notice issued by the ACCC at the same time it issues the draft interim determination (see subregulation 9(6)). The ACCC is given flexibility as to the length of the objection period so that it can take into account the requirements of an access seeker, for example, in adequately assessing the implications for him or her of a proposed interim determination. In order to avoid unnecessary delays, subregulation 10(4) provides that the ACCC may make an interim determination within the objection period if the access seeker informs the Commission in writing that he or she has no objection.

Subregulations 10(5) and (6) provide that in making an interim determination the ACCC may take into account matters set out in subregulation 15(1) and any other matters that it thinks are relevant, but it does not have a duty to do so.

Regulation 11 -Duration of interim determination

An interim determination has effect on the date specified within it and remains in force for the period specified in the determination (which cannot be longer than 12 months) unless it is revoked in the meantime. This reflects the transitional nature of an interim determination and the expectation that it will be replaced by a final determination as soon as possible, and certainly within 12 months.

Regulation 12 - Revocation of interim determination

The ACCC may revoke an interim determination and is required to do so if requested to by all the parties to the determination. This may occur, for example, if the parties negotiate an alternative commercial agreement before the final determination is made. If an interim determination is in force and notification of the dispute is withdrawn under regulation 8, the interim determination is taken to have been revoked when the withdrawal occurs. If an interim determination is in force when a final determination takes effect the interim determination is taken to have been revoked when the final determination takes effect.

Regulation 13 - Variation of interim determination

The ACCC may vary an interim determination. Subregulation 13(2) sets out how regulations 14 and 15 apply to the variation of an interim determination. Regulation 14 prohibits the ACCC from making a determination relating to a designated associated facility that would have certain effects, and regulation 15 deals with the matters that the ACCC must take into account in making a final determination. These regulations apply to the variation of an interim determination under regulation 13 in one of two ways, depending on the type of dispute to which the interim determination relates.

In a case where the interim determination that is being varied was made in arbitration of a dispute relating to an earlier final determination of a dispute (the 'eligible dispute') between the access seeker and the access provider, regulations 14 and 15 apply as if.

•       a dispute (the 'notional dispute') arising out of the interim determination had been notified at the time when the eligible dispute was notified; and

•       the notional dispute were a dispute relating to the earlier final determination; and

•       the variation were the making of an interim determination in the terms of the varied interim determination.

The intention of paragraph 13(2)(a) is to ensure that where the interim determination that is being varied was made in arbitration of a dispute relating to an earlier final determination of a dispute, regulations 14 and 15 are applied at the appropriate time that is, when the dispute in relation to the earlier final determination was notified.

In any other case, for example where the interim determination that is being varied was made in relation to an original dispute, regulations 14 and 15 apply to the variation as if.

•       a dispute arising out of the interim determination had been notified when the original dispute was notified; and

•       the variation were the making of an interim determination in the terms of the varied interim determination.

Regulation 14 - Restrictions on determinations about designated associated facilities

Regulation 14 limits the ACCC's power of determination in relation to designated associated facilities. The ACCC must not make an interim or final determination in this context that would:

•       be inconsistent with an exemption mentioned in Part 2 of the regulations (that is, in regulation 4); or

•       result in the access seeker becoming the owner or part owner of any part of a facility without the consent of the owner of the facility; or

•       require a party (other than the access seeker) to contribute to the costs of extending or enhancing the capability of a facility or maintaining extensions to or enhancements of the capability of a facility.

Regulation 15 - Matters that the ACCC must take into account in final determination

Regulation 15 sets out matters that the ACCC must take into account in making a final determination. These matters are..

•       the legitimate business interests of the parties, and the parties' investment in facilities used in giving access to a tower, designated associated facility or site which is the subject of the arbitration;

•       the interests of all persons who have been given access to the tower, designated associated facility or site which is the subject of the arbitration;

•       the direct costs of giving access to the tower, designated associated facility or site which is the subject of the arbitration;

•       the operational and technical requirements for the safe and reliable operation of the tower, designated associated facility or site which is the subject of the arbitration or another facility located at the same place;

•       the economically efficient operation of a tower, designated associated facility or site which is the subject of the arbitration;

•       the value to a party of any extension of property, or enhancement of capability, to be paid for by another person;

•       whether the final determination will promote the objects set out in paragraphs 3(1)(a), (aa), (b) and (ba) of the Act. These are:

-       to promote the availability to audiences throughout Australia of a diverse range of radio and television services offering entertainment, education and information;

-       to promote the availability to audiences and users throughout Australia of a diverse range of datacasting services;

-       to provide a regulatory environment that will facilitate the development of a broadcasting industry in Australia that is efficient, competitive and responsive to audience needs; and

-       to provide a regulatory environment that will facilitate the development of a datacasting industry in Australia that is efficient, competitive and responsive to audience and user needs.

Subregulation 15(2) enables the ACCC to take into account any other matters it considers relevant.

Regulation 16 - Termination of arbitration

Regulation 16 provides for the termination of an arbitration by the ACCC. It may do so if it considers that the notification of the dispute was vexatious, its subject matter trivial, misconceived or lacking in substance, or where it considers an existing arrangement is satisfactory. The ACCC may also terminate a dispute if it relates to a dispute about an existing determination and the ACCC thinks there is no sufficient reason why the existing determination should not continue to have effect in its present form.

Paragraph 16(1)(c) provides that the ACCC may also terminate an arbitration if it considers that a party has not engaged in negotiations in relation to the dispute in good faith.

Division 4 - Directions about negotiations

Regulation 17 - Direction to engage in negotiations

The ACCC may give a current or former party to a dispute a written direction requiring him or her to do, or refrain from doing, a particular thing (which must be specified) if it considers that such a direction would facilitate negotiations (subregulation 17(1)). In deciding whether to give such a direction, the ACCC must have regard to any guidelines the ACCC has prepared under subsection 152CT(6) of the Trade Practices Act 1974 and any other matters it considers relevant (subregulation 17(2)). (There are currently no guidelines issued under subsection 152CT(6).)

Subregulation 17(3) makes contravention of a direction under subregulation 17(1) an offence. The penalty for the offence is 10 penalty units. Under section 4AA of the Crimes Act 1914 a penalty unit is $110, so the penalty under subregulation 17(3) is $1,100.

Subregulation 17(4) provides a list of examples of the types of directions which might be issued. It is not intended that Regulation 17 enable the ACCC to direct a party as to the outcomes it wishes to see from commercial negotiations; rather, this directions power is intended to remove obstacles which might impede negotiations proceeding in good faith, such as information asymmetries or unreasonable conditions imposed by a party on its participation in negotiations.

Subregulation 17(5) provides that an attempt by a party to impose as a condition of his or her participation in negotiations a requirement that the other party not disclose to the ACCC information or the contents of documents provided in the course of negotiations is taken to be an unreasonable procedural condition for the purposes of paragraph 17(4)(c).

Division 5 - Arbitration procedure

Regulation 18 - Constitution of ACCC for conduct of arbitration

Subregulation 18(1) provides that when it is conducting an arbitration under these regulations, the ACCC is to be constituted by one or more members nominated in writing by the Chairperson of the ACCC. Because there is value in Commissioners being able to draw on their past experience in relation to a matter, and to avoid doubt, subregulation 18(2) provides that a Commissioner is not disqualified from hearing a dispute merely because he or she has previously been involved with that or a related matter.

Regulation 19 - Member of ACCC presiding at an arbitration

Regulation 19 provides that the Chairperson of the ACCC will normally preside at an arbitration. If he or she is not a member of the ACCC as constituted for the purposes of a particular arbitration under the regulations, he or she must nominate another ACCC member to preside.

Regulation 20 - Reconstitution of ACCC: single member

Regulation 20 provides that if a single member constitutes the ACCC for the purposes of a particular arbitration and that person stops being a member of the ACCC or is otherwise unavailable for the arbitration, the Chairperson of the ACCC must direct that one other member shall constitute the ACCC for the purposes of finishing the arbitration. Paragraph 20(3)(b) makes it clear that the ACCC as constituted by a direction made under subregulation 20(2) may have regard to any record of proceedings of the arbitration as previously constituted.

Regulation 21 - Reconstitution of ACCC: more than 1 member

Regulation 21 provides that if a member of the ACCC as constituted for a particular arbitration stops being a member of the ACCC or is otherwise unavailable for the arbitration, the Chairperson of the ACCC must either direct that the remaining member or members of the ACCC shall constitute the ACCC for the purposes of finishing the arbitration or direct one or more other members of the ACCC to join the remaining members to finish the arbitration. As with subregulation 20(3), paragraph 21(3)(b) provides that the ACCC as constituted by a direction made under subregulation 21(2) may have regard to any record of proceedings of the arbitration as previously constituted.

Regulation 22 - Determination of questions

Regulation 22 provides that a question before the ACCC is to be resolved according to the opinion of a majority of members of the ACCC or, in the event of an even division of opinion, according to the opinion of the member presiding.

Regulation 23 - Particular powers of ACCC

Subregulation 23(1) sets out particular powers of the ACCC for the purpose of arbitrating an access dispute. It may:

•       conduct a hearing;

•       give a direction during, or for the purposes of, a hearing;

•       hear and determine disputes in the absence of someone summoned or served notice to appear;

•       sit at and adjourn to any place and adjourn to any time;

•       refer matters to an expert and accept his or her report as evidence; and

•       give all such directions and do all things necessary for the speedy hearing and determination of the dispute.

Subregulation 23(2) enables the ACCC to give an oral or written order to a person not to divulge or communicate, without the ACCC's permission, specified information which was given to the person during the course of an arbitration.

Subregulation 23(3) makes it an offence to contravene a direction given by the ACCC under paragraph 23(1)(b) or (g) or an order under subregulation 23(2). The penalties for the offence are 30 penalty units ($3,300) for a natural person and 150 penalty units ($16,500) for a company.

Regulation 24 - Hearing to be in private

Regulation 24 provides that hearings of an arbitration are to be held in private unless the parties agree to public hearings. The presiding member of the ACCC may give written directions as to the persons who may be present at a private hearing, having regard to the wishes of the parties and the need for commercial confidentiality.

Regulation 25 - Right to representation

Regulation 25 allows parties to the dispute to either appear in person at an arbitration hearing or be represented by someone else.

Regulation 26 - Procedure of ACCC

Regulation 26 provides that the ACCC is not bound by the rules of evidence when hearing an access dispute and may require that evidence or argument be presented in writing and may decide those matters on which it will require oral evidence or argument. Hearings should be conducted as speedily as a proper consideration of the dispute allows and may be conducted by telephone, closed circuit television or any other means of communication. The ACCC may also determine the length of time reasonably necessary for the parties to fairly and adequately present their cases and may require that the cases be presented within that length of time.

Regulation 27 - Power to take evidence on oath or affirmation

Regulation 27 sets out the powers of the ACCC regarding the taking of evidence when conducting a hearing into an access dispute. They include the power to take evidence on oath or affirmation and the power to summon a person to appear before the ACCC to give evidence and produce documents. The powers may only be exercised for the purposes of arbitrating a dispute.

Regulation 28 - Failing to attend as a witness

Regulation 28 makes it an offence for a summonsed witness not to attend as required by the summons unless the witness has a reasonable excuse for not doing so or has been excused or released by the ACCC. The penalties for the offence are 30 penalty units ($3,300) for a natural person and 150 penalty units ($16,500) for a company.

Regulation 29 - Failing to answer questions etc

Regulation 29 makes it an offence for a witness, in the absence of reasonable excuse, to refuse or fail to:

•       be sworn or make an affirmation;

•       answer ACCC questions; or,

•       produce documents required by a summons.

The penalties for the offence are 30 penalty units ($3,300) for a natural person and 150 penalty units ($16,500) for a company.

An individual can refuse to answer a question or produce a document on the ground that the answer or production of the document may tend to incriminate him or her, or expose him or her to a pecuniary penalty (subregulation 29(2)).

Regulation 30 - False or misleading evidence

Regulation 30 provides that it is an offence for a person to knowingly give evidence that is false or misleading in a material particular. The penalties for the offence are 50 penalty units ($5,500) for a natural person and 250 penalty units ($27,500) for a company.

Regulation 31 - False or misleading document

Regulation 31 makes it an offence for a person complying with a summons under regulation 27 to produce a document that, to the knowledge of the person, is false or misleading in a material particular, unless it is accompanied by a statement detailing the false or misleading nature of the document. The penalties for the offence are 50 penalty units ($5,500) for a natural person and 250 penalty units ($27,500) for a company.

Regulation 32 - Intimidation etc

Regulation 32 establishes as an offence intimidation of witnesses (or proposed witnesses) and persons who produce (or who propose to produce) documents to the ACCC for the purposes of an arbitration. The penalties for the offence are 50 penalty units ($5,500) for a natural person and 250 penalty units ($27,500) for a company.

Regulation 33 - Disturbing an arbitration hearing etc

Regulation 33 provides that it is an offence for a person, in relation to an arbitration of an access dispute, to insult or disturb a member of the ACCC, interrupt an arbitration hearing, use insulting language towards a member of the ACCC or create a disturbance or take part in the creation or continuation of a disturbance in a place where the ACCC is holding an arbitration hearing. The penalties for the offence are 30 penalty units ($3,300) for a natural person and 150 penalty units ($16,500) for a company.

Regulation 34 - Party may request ACCC to treat material as confidential

Regulation 34 sets out procedures for protecting the commercial confidentiality of documents. On receiving a request from a party that part of a document be treated as confidential, the ACCC must inform the other parties to the dispute of the request, and of the general nature of the confidential matters, and ask whether they object to the ACCC complying with that request. If so, the party must give reasons and the ACCC may decide not to give the other party or parties a copy of so much of the document as the ACCC thinks should not be so given.

Regulation 35 - Parties to pay costs of an arbitration

Regulation 35 provides that the ACCC may charge the parties to an arbitration its costs in conducting that arbitration and apportion the charge between the parties.

REGULATION IMPACT STATEMENT

BROADCASTING SERVICES (TRANSMITTER ACCESS) REGULATIONS 2001

Background

The Broadcasting Services (Transmitter Access) Regulations 2001 (the Regulations) have been developed under clauses 45A(9) and 47(3) of Part 5 of Schedule 4 to the Broadcasting Services Act 1992 (BSA). Part 5 of the BSA establishes a transmitter access regime for the provision of digital services by commercial and national television broadcasters and datacasters. It requires the owners and operators of broadcasting transmission towers, their sites and 'designated associated facilities' ('access providers') to provide commercial or national (ABC or SBS) television broadcasters or datacasters ('access seekers') with access to those sites, towers and designated associated facilities, for the purpose of providing digital television and datacasting services.

Clauses 45 and 46 impose obligations on the owner or operator of a broadcasting transmission tower to provide:

(a)       commercial television broadcasting licensees and the national broadcasters with access to the tower, and the site of the tower, for the sole purpose of installing or maintaining a transmitter and associated facilities for use in transmitting the broadcasters' broadcasting services in digital mode; and

(b)       a datacaster with access to the tower, and the site of the tower, for the sole purpose of installing or maintaining a transmitter and associated facilities for use in providing datacasting services in digital mode.

Provided reasonable notice is given that access is required, owners or operators of broadcasting transmission towers and their sites must comply with these obligations unless there is in force a written certificate issued by the Australian Broadcasting Authority (ABA) stating that, in its opinion, compliance is not technically feasible.

Clause 43A of Schedule 4 to the BSA defines the term "designated associated facility" to mean an antenna, a combiner, a feeder system or a facility of a kind specified by regulations. Regulations have not been made to date extending the meaning of 'designated associated facilities' further.

Clauses 45A(2) and (4) of Schedule 4 to the BSA require the owner or operator of a designated associated facility to give access to the facility if requested to do so by an access seeker. Clauses 45A(3) and (5) provide that the owner or operator of a designated associated facility is not required to provide access to the facility unless:

(a)       access is provided for the sole purpose of enabling the access seeker to use the facility, or a service provided by the facility, wholly or principally in connection with the provision of the transmission of the access seeker's television broadcasting service or datacasting service in digital mode; and

(b)       the access seeker gives the owner or operator reasonable notice.

Clause 45A(6) provides that the owner or operator of a designated associated facility is not required to comply with the access obligations in clauses 45A(2) and (4) if the ABA has certified in writing, having had regard to a number of specified matters, that compliance is not technically feasible. Clause 45A(9) enables regulations to provide for exemptions from the access obligations in clauses 45A(2) and (4). Part 2 of the accompanying regulations is made under clause 45A(9) of Schedule 4 to the BSA.

Clauses 47(1)-(2) require the owner or operator of a broadcasting transmission tower or designated associated facility to comply with the access obligations in clauses 45(1) or (3) (access to towers), 45A(2) or (4) (access to designated associated facilities) and 46(1) or (3) (access to sites) on such terms and conditions as are agreed between the owner or operator and access seeker or, failing agreement, as are determined by an arbitrator appointed by the parties. Provision is made in clauses 47(1) to (2) for the ACCC to be the arbitrator if the parties fail to agree on the appointment of an arbitrator. Clause 47(3) enables regulations to be made for, and in relation to, the conduct of arbitration. Part 2 of the accompanying regulations is made under clause 45A(9) of Schedule 4 to the BSA.

Problem

The regulations contain three elements which will have a direct effect on business and whose regulatory impact is therefore required to be assessed in this document.

Exemptions (Part 2 of the Regulations)

As noted above, clause 45A(9) of Schedule 4 to the BSA allows for regulations to be made exempting owners and operators of specified facilities ('designated associated facilities') situated on, at, in or under towers or their sites that are used, or can be used, to provide television or datacasting services in digital mode, from their obligation to provide access seekers (national and commercial broadcasters and datacasters) with access to their facility for the sole purpose of providing digital television broadcasting or datacasting services.

The BSA's digital television access regime that was introduced in 1998 was modelled on the access regime in the Telecommunications Act 1997 (the TA) for telecommunications transmission towers. This was considered appropriate at the time as the TA sought, in a similar vein to that which was proposed for the broadcasting regime, to promote the provision of new services and ensure that infrastructure access (ie access to transmission towers and their sites) did not become a barrier or impediment to market entry, and thus to service provision. The technical requirements, planning approvals and costs involved in establishing new broadcasting or telecommunications transmission towers lead to service providers placing greater emphasis on gaining access to existing infrastructure on commercial terms and conditions.

Both markets are characterised by one or two parties controlling a large percentage of the established transmission infrastructure and this has led to the parties entering into reverse sharing arrangements to complement their site holdings. The telecommunications transmitter access regime promotes access to infrastructure through the establishment of certain core access obligations and provides a mechanism for terms and conditions of access to be determined by a private arbitrator or the ACCC if the parties cannot come to an agreement.

The digital television access regime was subsequently amended in 2000 to ensure that access seekers had a right of access to designated associated facilities for the purpose of providing their digital services. These amendments recognised the fact that digital service providers required access to a wider range of facilities than simply transmission towers and sites that they could not reasonably be expected to duplicate (either on economic, technical, timing or infrastructure efficiency grounds) and followed broadcaster claims that access to towers, in particular, would be ineffective without access to relevant antennae, combiners or associated feeder systems.

The terms and conditions on which the owners or operators of designated associated facilities comply with this access obligation are subject to agreement or, where the parties are unable to agree, arbitration by either a private arbitrator or the ACCC.

The technical or design nature of designated associated facilities is such that a digital service provider, in seeking access to the facility, is most likely to be actually requiring access to a service that is being provided by means of the facility. For example, physical access to a combiner will be ineffective unless the service provider's VHF digital service is combined correctly with all other service provider digital VHF signals and delivered to the transmission tower's VHF antenna.

If regulations are not made under clause 45A(9) of Schedule 4 to the BSA, the only means by which an owner or operator of a designated associated facility could deny an access seeker access would be if: (a) they could prove they were not given reasonable notice by the access seeker that access was required (clause 45A(5)(b)); or (b) the ABA has certified that it is not technically feasible for them to provide the sought access to the facility (clause 45A(6)). This would leave holders of existing rights of access, particularly those whose rights had not been wholly exercised, with no specific protection against the competing claims of other access seekers.

Arbitration (Part 3 of the Regulations)

As noted above, clause 47 of Part 5 of Schedule 4 to the BSA sets out the process for determining the terms and conditions of access to broadcasting transmission towers, their sites and designated associated facilities. Under that process, the terms and conditions of access are to be agreed between the access seeker and access provider. Where the parties cannot reach agreement, the terms and conditions are to be determined by either an arbitrator appointed by the parties or the ACCC if they are unable to agree on the appointment of an arbitrator.

Issues over which access disputes may arise include, but are not limited to, the price, or the method of establishing the price, at which access is to be provided; and whether a previous determination should be varied. Were no regulations to be made under clause 47(3) there would be no generic process set down for the proper conduct of arbitrations of disputes over those and other issues.

Cost Recovery (Regulation 35)

The BSA does not specifically provide for the ACCC to recover from the parties to an arbitration conducted under the BSA the costs of that arbitration. Failure to provide for cost recovery in these regulations would be inconsistent with the Government's user-pays principles and could lead to parties using the ACCC's arbitration services as a cost saving measure in preference to those of a commercial arbitrator and to the lodging of spurious claims.

Objectives

Exemptions

The objective is to limit the obligation on owners or operators of designated associated facilities to provide access in circumstances where to do so would impinge upon the reasonably anticipated requirements of existing customers and the owners and operators themselves; and the actual requirements of persons with rights which predate the request for access, and rights under a contract that was in force on 10 May 2000.

Arbitration

The objective is to ensure that the ACCC adopts a consistent approach to arbitrations on the terms and conditions of access which is fair to all parties and which is well known to industry participants.

Cost Recovery

The objective is to enable the ACCC to recover its costs in the determination of disputes under Schedule 4 of the BSA and to ensure that the recovery of costs is fair and equitable.

Options

Exemptions

The options are:

(a) take no specific action; or

(b) make regulations.

Option (a) would leave the owners and operators of designated associated facilities in the position of only being able to refuse access to access seekers on the very limited grounds set out in the BSA (ie. lack of reasonable notice or ABA certification that access is not technically feasible). By protecting the rights of existing customers and others (see above), option (b) is more equitable in relation to parties with legitimate expectations of being granted access, and helps to provide commercial certainty in the transmission services market.

Arbitration

The options are:

(a) take no specific action; or

(b) make regulations.

Option (a) would involve reliance on market processes in conjunction with existing law. It is possible the ACCC would have regard to the processes outlined in the Telecommunications (Arbitration) Regulations 1997 but it would not be bound to do so. As indicated above, this could lead to industry uncertainty. Option (b) provides the required certainty.

Cost Recovery

The options are:

(a) take no specific action; and

(b) make regulations.

If no action is taken in relation to making provision for the ACCC to charge parties to recover the costs of an arbitration that it conducts under the BSA, these costs will be borne, ultimately, by the taxpayer rather than the users of the ACCC's services.

Impact Analysis

Exemptions

Option (a) would unfairly impact on persons with existing rights of access, whether those rights have accrued as a result of them having a current contract with the owner or operator of a designated associated facility or pre-request or protected contractual rights of access; and on owners and operators of designated associated facilities, by unreasonably limiting the circumstances in which they could refuse to provide access.

Those likely to be adversely affected by option (b) are access seekers with no existing rights. It should also be remembered that those who are unsuccessful in obtaining access due to the existence of these regulations may be operating in more than one part of the transmission market and that they, too, may have legitimate existing claims to access in that context which are protected by option (b).

One of the potential costs of option (b) is the cost to the access seeker who, denied access to one designated associated facility, is forced to look for an alternative tower or, if practicable, install their own combiner and antenna or alternative infrastructure arrangement. That situation will only occur, however, in circumstances where the ostensibly available capacity is in fact already committed, as outlined above. It is not clear, either, that the access seeker's second preference will always be inferior, either through greater cost or reduced capacity or convenience; in some cases a directly substitutable site may be available at little or no additional cost.

Option (b) may lead to delays in the rollout of digital services in areas where all available capacity has been contractually committed. However, based on its knowledge of the transmission market and the broadcasting industry generally, the Department of Communications, Information Technology and the Arts (the Department) believes delays, if any, caused by the adoption of option (b) will not be significant and will be outweighed by the benefits of the commercial certainty gained by protecting existing business arrangements.

Arbitration

As a general proposition, it is probably the case that option (a) would favour access providers and option (b) access seekers but this will not invariably be the case. For example, where an access seeker objects to one of the terms and conditions set down for access - the price, for instance - and, having failed to reach a commercial agreement with the access provider, takes its case to the ACCC for arbitration, it is entirely possible that the ACCC will confirm that the access provider's original offer was reasonable.

Option (a) would also impact on the ACCC in that it would retain its obligations to arbitrate under the BSA but. would be left with no process to, follow and little context within which to operate. Option (b) remedies these deficits. It also ensures that the ACCC will adopt a consistent approach in relation to the matters to which it has regard when determining disputes, and therefore delivers transparency and certainty to industry.

By providing the whole mechanism by which arbitrations about transmission access issues are to be assessed, option (b) provides a way of testing the pricing structure prevailing at any given time in the transmission market, thereby effectively compelling access providers to be able to justify their prices. Given the fact that the transmission market is characterised by monopoly infrastructure owners, option (b) should prove to be a valuable tool in discouraging monopoly pricing.

The issue of the costs to the ACCC of running an arbitration arises in relation to option (b). If, however, the ACCC is permitted to recover its costs as set out in Regulation 35, the financial impact should be reduced to a manageable level (see below).

It is also possible that option (b) may encourage parties to approach the ACCC rather than exhaust their commercial options within a direct negotiation process and therefore obtain a speedier outcome. However, in the light of its knowledge of the industry and its understanding of the practical application of Part XIC of the Trade Practices Act - on which the regulations have, to a large extent, been based - the Department believes the likelihood of this happening is low. Any such likelihood must, in any case, be balanced against the possibility that in some cases the arbitration process will act as a circuit-breaker, particularly in relation to prolonged and seemingly intractable disputes. It is also possible that, by making it clear that there is an avenue for an access seeker to follow if commercial negotiations fail, the regulations may provide access seekers with leverage during negotiations which might otherwise founder.

Cost Recovery

Option (a) benefits the parties responsible for incurring the costs of an arbitration in that it leaves them in a position where they are not required to contribute towards those costs. This would clearly have an impact on the ACCC's financial position and could, as a result, affect the manner in which it conducts the arbitration. Option (b) enables the ACCC's costs in conducting arbitrations to be apportioned on a user-pays basis. While it is possible that costs may be passed on to customers of the parties to an arbitration, option (b) is clearly the more equitable of the two, with the ultimate beneficiary being the Australian taxpayer.

Consultation

Lengthy and thorough consultations have taken place in relation to the development of the regulations. Industry views were first sought in July 2000, when the Department wrote to the organisations listed below, updating them on the legislative structure of the transmitter access regime in Schedule 4 of the BSA and seeking their comments on whether there was a need to make regulations under clauses 43A(d) and 45A(9) of that Schedule and, if so, their possible scope. The Department also sought comment on the scope and form of regulations it proposed to make under clause 47(3) of Schedule 4 (see above for an outline of the content of those clauses). The organisations consulted were:

•       ntl (a broadcasting services transmission provider);

•       WIN Television Network Pty Ltd (a commercial broadcasting service provider);

•       Prime Television Limited (a. commercial broadcasting service provider);

•       Electricity Supply Association of Australia Ltd (a peak body representing the interests of electricity suppliers);

•       Australian Communications Industry Forum (a telecommunications industry body);

•       Special Broadcasting Service (SBS) (a national broadcaster);

•       Australian Broadcasting Corporation (ABC) (a. national broadcaster);

•       Telstra Corporation Limited (a communications provider);

•       TX Australia Pty Limited (a. broadcasting transmission services provider);

•       Crown Castle Australia Pty Ltd (a potential transmission services provider); and

•       Federation of Australian Commercial Television Stations (FACTS) (the peak body representing commercial television broadcasters).

This first round of public consultations on the three possible regulations yielded a total of seven industry responses from the ABC, ntl, SBS, Telstra, TX Australia, Crown Castle and WIN Television. Some of the respondents chose to confine their comments to particular regulations, as opposed to offering their views on the three types of foreshadowed regulations.

In addition, some submissions proposed a different (or even opposing) approach in relation to particular regulations to that suggested in others. For example, certain broadcasters argued for significant extensions to the definition of 'designated associated facilities', as provided for under clause 43A(d) of Schedule 4 to the BSA, while a broadcasting transmission service provider argued that there should be no extension.

At the same time as the first round of industry consultations was taking place, the Department also consulted the ACCC. The ACCC commented on the Department's proposal to model the regulations on the Telecommunications (Arbitration) Regulations 1997 and recommended that a more appropriate basis for the regulations would be Part XIC (in particular Division 8) of the Trade Practices Act. Part XIC provides, among other things, for arbitration by the, ACCC of disputes about access to telecommunications carriage services that are declared services under the telecommunications access regime set out in that Part. While broadly similar to the telecommunications regulations, these provisions are more streamlined, having been amended in 1999 to minimise the effects on competition of delays in the arbitration process by reducing the potential for delays and increasing incentives for parties to reach commercial agreement.

In May 2001 the Department issued an exposure draft of the regulations and again circulated them to the stakeholders listed above. In accordance with the ACCC's recommendations, Part XIC was used where relevant as the model for the regulations, although some. elements of the. telecommunications regulations remain. As no compelling case had been made for regulating to extend the definition of "designated associated facilities" that issue was put on hold, with the understanding that the issue would be revisited at a later date if necessary.

The Department received responses to the exposure draft from the ABC, ntl, Telstra, TX Australia, SBS, and Crown Castle. The ACCC also provided comments. Some respondents said only that they were satisfied with the content of the proposed regulations or that they had no further comment to make. Others put forward proposals for changes of wording and suggested some qualification to the draft regulations. These comments were looked at on their merits and the Department instructed the Office of Legislative Drafting to incorporate those that it believed warranted incorporation.

The more substantive industry comments on the exposure draft that have not, for various reasons, been addressed in the regulations in their final form, were:

•       it should have contained an expanded definition of 'designated associated facilities' (one party);

•       the ABA may be a more appropriate arbiter than the ACCC (one party);

•       the proposed regulations should be reviewed in the light of the Productivity Commission's recommendations on telecommunications competition regulation (one party);

•       provision should be made for the access seeker to appeal to the ACCC a decision of an owner or operator of a designated associated facility to refuse access to that facility under Regulation 4 (one party); and

•       provision should be made for merits review of ACCC decisions as is provided for in Part XIC of the Trade Practices Act 1972 (one party).

In relation to the third dot point, the Department has decided to await the Government's formal response to the Productivity Commission recommendations before considering the issues raised by the Commission in the context of these regulations. The Final Report of the Commission is due for release on 23 September 2001. We are, however, aware that the Government has already introduced legislative amendments in the Trade Practices Amendment (Telecommunications) Bill 2001 aimed at addressing some of the recommendations contained in the Commission's Draft Report of March 2001. In the interim, the Department proposes to monitor developments in this area and look toward amending the regulations (should that prove appropriate) if problems emerge in the operation of the transmitter access regime. The Department believes that it would be unwise to delay the making of regulations as there is industry concern that they be finalised as expeditiously as possible.

Conclusion and recommended option

Exemptions

Option (b), the making of regulations, is the preferred option to ensure that the requirements of owners and operators, their existing customers, and parties with preexisting rights are not impinged upon.

Arbitration

Option (b), the making of regulations, is the preferred option for ensuring that the ACCC adopts a consistent approach in arbitrating disputes.

Cost Recovery

Option (b), the making of regulations, is the preferred approach in order to ensure that the ACCC is able to recover its costs in arbitrating disputes and that the apportionment of those costs is fair and equitable.

Implementation and Review

As the Department has indicated to industry, the regulations will be reviewed in the light of practical industry experience, and in the light of any changes in the industry environment, and amendments made where necessary. As indicated above, account will also be taken of any amendments to the telecommunications access regime which are made as a result of the Productivity Commission's recommendations about competition in that market.


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