RESTRICTED
GENERAL AGREEMENT S/NGBT/W/3/Add.14
21October 1994
ONTRADE INSERVICES
(94-2152)
Original: English Negotiating Group onBasic Telecommunications
COMMUNICATION FROM AUSTRALIA
Response toQuestionnaire onBasic Telecommunications
Theattached communication iscirculated attherequest ofAustralia toMembers ofthe
Negotiating Group onBasic Telecommunications.S/NGBT/W/3/Add.14
Page2
PART I
Definition andMarket Structure
Definition
1. Australian telecommunications lawdoesnotexplicitly define basic telecommunications (See
answer toquestion 2).
TheTelecommunicationsAct1991definesandusestheconceptofBasicCarriageService(BCS).
TheBCSconcept isafunctional description ofbasic connectivity andcarriage services -asdelivered
totheconsumer -onwhich allcommercial telecommunications services arebuilt. TheActdefines
allservices thatarenotbasic carriage services ashigher levelservices (HLS).
Thecurrent regulatory framework doesnotexclusively reserve anyservices, including BCS,
tothelicensed carriers, Telstra, Optus andVodafone. There arenorestrictions onwhomaysupply
public switched, semi-dedicated anddedicated services, including intelligent network services.
2. Under theTelecommunications Act1991, licensed general carriers (currently Telstra andOptus)
haveexclusive rights toinstall andmaintain reserved linelinksandtobeprimary suppliers ofsatellite
services. Licensed mobile carriers (currently Telstra, Optus andVodafone) haveexclusive rights to
beprimary suppliers ofcellular mobile services.
Areserved linelinkisawire, cable, optical fibre, tube, conduit, waveguide orother medium
forcarrying communications byelectromagnetic energy between distinct places. Places aredistinct
unless theyareonthesame property orarecontiguous properties withthesame principal use.
Exceptions aremade inthecaseofprivate lines fortransport authorities (railways, airports,etc.),
electricity supply authorities, defence organizations, local/regional Government authorities.
Theprovision ofalltypes oftelecommunications services isopen tocompetition. Service
suppliers cancompete withTelstra, Optus (andVodafone inthecaseofmobile services) -andare
subject tominimal regulatory controls provided theycomply withtheterms andconditions oftheService
Providers Class Licence (fordomestic services) andtheInternational Service Providers Class Licence
(forinternational services).
3. No.
Market structure
4. Allareasofthetelecommunications sector areopentocompetition. Until1997, theGovernment
haschosen tolicense twogeneral carriers (toprovide linelinksincluding satellite services) andthree
public mobile telecommunications carriers (tobetheprimary suppliers ofcellular mobile services).
5. Nobasic telecommunications services arereserved tomonopoly orexclusive suppliers in
Australia. Thetwogeneral licensed carriers, Telstra andOptus, havenational licences toinstall and
maintain certain telecommunications facilities -reserved linelinks-andtobetheprimary suppliers
ofsatellite services. Thegeneral carriers alsohavetherighttobetheonlyproviders ofcableTVrelated
infrastructure thatisalsousedforvoice telephony. Thethreelicensed cellular mobile carriers (Telstra,
Optus andVodafone) havetheright, byvirtue oftheirlicences, tobetheprimary suppliers ofcellular
mobile services. Telstra isaGovernment-owned company, subject toAustralian corporations law.
Optus andVodafone areprivately owned companies subject toAustralian corporations law.S/NGBT/W/3/Add.14
Page3
6. Yes.TheGovernment 'spolicy isthatthereshould bestrong Australian ownership participation
inthetelecommunications carriers. Thisdoesnotprevent foreign equity participation. Share holdings
inOptus areheldbyCable andWireless andBellSouth. Vodafone ispresently 100percentforeign
owned butisrequired byitslicence toachieve majority Australian ownership (atleast50percentor
more) by2003.
7. Notapplicable -competition ispermitted.
8. Australia isamember oftheInternational Telecommunications Union (ITU) and,assuch, is
asignatory tothenewITUConstitution andConvention which entered intoforce inJuly1994. These
basic treaties areaugmented bytheInternational Telecommunications Regulations (WATTC
Convention 1988) andtheRadio Regulations towhich Australia isalsoasignatory. TheInternational
Telecommunications Regulations provide fortheestablishment ofagreements covering thetrade of
telecommunications traffic between signatories (Article 1,paragraph 1.5).
Australia isalsoamember ofINTELSAT andINMARSAT, inter-governmental organizations
established bytreaty. These treaty organizations oblige members toconsult withtheOrganization when
theyintend toallow trade incompeting services (Articles XIV(d) and8,respectively).
Bilaterally, Australia isparty totheCloser Economic Relations (CER) trade agreement with
NewZealand which includes theProtocol onTrade inServices (including telecommunications). The
aimsoftheProtocol include theliberalization ofbarriers totrade inservices andtheestablishment
ofaframework oftransparent rules togovern trade inservices between thetwocountries.
PART II
Competition
A. Subsectors
Thefollowing response toPartIIA"Subsectors" applies tothesubsectors (a)to(g)aswell
asthefollowing additional basic services:
- voice/non-voice services using domestic/international private leased circuits
- paging services
- mobile dataservices
- satellite services
- cellular mobile services -including mobile data
- local/long-distance switching
- international switching andother international gateway facilities
N.B: Regulations fortheprovision ofcertain facilities -reserved linelinks, including cable TV
infrastructure usedforvoice telephony interms of(i)policy overview, (ii)modes ofsupply,
(iii)market access, (iv)national treatment and(v)licensing -isdiscussed inourresponse to
PartIIBCategories Question 5"Facilities Based".
Overview
(i) TheAustralian Government haschosen tomaintain atransitional duopoly intheprovision of
specific elements ofnetwork infrastructure until1997toensure thatsustainable network competition
develops before themarket isopened more widely. Theprovision ofreserved linelinks, therightS/NGBT/W/3/Add.14
Page4
tobetheprimary suppliers ofsatellite services andcable TVinfrastructure usedfortelephony (as
discussed inourresponse toPartIQuestion 2)isreserved toTelstra andOptus.
Therighttobetheprimary suppliers ofcellular mobile services including mobile dataservices
isreserved tothethreelicensed cellular mobile carriers, Telstra, Optus andVodafone. However, service
providers arefreetoprovide theseservices (satellite andcellular mobile) competitively provided capacity
isacquired fromalicensed general ormobile carrier. Theregulatory environment hasbeendeveloped
with theintention ofencouraging competition, innovation anddiversity intheprovision of
telecommunications services.
Theprovision ofvoice services, packet switched dataservices, circuit switched dataservices,
facsimile services andprivate leased circuit services arecompletely opentocompetition under Australian
telecommunications law.Persons other thanlicensed general ormobile carriers offering theseservices
mustcomply withtheprovisions oftheService Providers Class Licence fordomestic services andthe
International Service Providers Class Licence forinternational services.
Theclasslicencesimposeminimalrestrictionswhichareprimarilyintendedtodealwithtechnical
efficiency ofpublic telecommunications networks andtoensure thatrelevant standards aremet. The
International Service Providers Class Licence requires service providers toenrol with(notify) the
regulatoryauthority.TheInternationalServiceProvidersClassLicenceisintendedtopreventthemisuse
ofmarket power oroffshore regulatory status byforeign operators. There arenolicence feesorapproval
process.
Thelicensed general andmobile carriers 'exclusive rights toinstall andmaintain certain facilities
andtobetheprimary suppliers ofsatellite andcellular mobile services arenotconstituted toinhibit
the provision ofany telecommunications service. Competitive safeguards inthe
Telecommunications Act1991ensure thatservice-providers haveguaranteed interconnection andare
abletoaccess thenetwork onterms thataretransparent andnon-discriminatory (seeourresponse to
PartIIIQuestions 18-21 oncompetitive safeguards formore details).
Foreign suppliers canprovide services, subject tocompliance withtheService Providers Class
Licence (fordomestic services) ortheInternational Service Providers Class Licence forinternational
services -there arenorestrictions oncommercial presence offoreign suppliers inthesector forthe
provision ofservices. Australian foreign investment requirements astheyapply tothesector areoutlined
inourresponse toquestion (iii)Market Access.
Modes ofsupply
(ii) Cross-border
Australia considers thatcross-border supply applies toservices suchastelecommunications
termination services whereby aservice provider intheterritory ofonemember delivers orterminates
atelephone calltoaservice provider intheterritory ofanother member. Under Article IoftheGATS
theservice provider receiving thecallissupplying a(termination) service toaservice provider inanother
country.
Australia regulates thecross-border supply ofinternational telecommunications services by
theTelecommunicationsInternationalCodeofPracticeandInternationalServiceProvidersClassLicence.
TheTelecommunications International Code ofPractice onlyapplies tolicensed general carriers
(currently limited toTelstra andOptus). Itisintended toprevent themisuse ofmarket power byservice
suppliers inother countries intheirdealings withAustralian licensed general carriers. TheCode aimsS/NGBT/W/3/Add.14
Page5
toensure thatlicensed general carriers useallreasonable endeavours toprevent misuse ofmarket power
byservice suppliers outside Australia andtoallow agreements between Australian based carriers and
foreign service suppliers tobemade onacommercial basis; inamanner thatpromotes services being
provided atthelowest practicable costtoconsumers; andwhich usethemostefficient andcommercially
viable routing arrangements.
Theprovision ofinternational telecommunications services within Australia byservice suppliers
other thanthelicensed general carriers, Telstra andOptus, isregulated bytheInternational Service
Providers Class Licence. Asupplier ispermitted toprovide allinternational services toorfromany
destination unless AUSTEL, theindependent industry regulator, determines thatitisnotinthepublic
interest. Allinternational services areassumed tobeinthepublic interest unless proven otherwise.
Theprinciple competitive safeguard which AUSTEL would consider inmaking adecision about a
particular service isoccurrence ofanyabuse ofmarket power oroffshore regulatory status byaforeign
service provider insupplying abasic telecommunications service intoAustralia fromanother country.
There isnorequirement thattraffic beterminated byaparticular service supplier.
Australiadoesnotrequireinternationaltelecommunicationsservicesupplierstonegotiateparallel
accounting ratesorhaveanyproportional return oftraffic requirements. Anyservice supplier, for
example resellers andinternational value added network service providers, canestablish correspondent
agreements (accounting rates) fortheexchange ofswitched traffic withforeign carriers.
Consumption abroad: Australia considers thatthismode ofsupply applies toservices such
astheprovision ofmobile telephony toconsumers from outside Australia, home country direct and
callbackservices. Consumption abroad could alsoapply totelecommunications termination services
where thesupplier provided thenational termination service where theservice doesnotinclude the
international transmission.
Therearenorestrictionsonthismodeofsupplyofbasictelecommunicationsservices-(including
country direct andcall-back services) provided theservice iscompatible withtheobjects ofthe
TelecommunicationsInternationalCodeofPracticeortheprovisionsoftheInternationalServiceProviders
Class Licence.
Commercialpresence:Therearenosector-specificrestrictionsonthepresenceofforeignservice
suppliers ofbasic telecommunications services inAustralia. Compliance withAustralian companies
lawandforeign investment policy guidelines isrequired. Atleasttwoofthedirectors ofapublic
company must beordinarily resident inAustralia.
Presence ofnatural persons: There arenosector-specific restrictions onthemovement ofnatural
persons. Executives andsenior managers (intracorporate transferees) maystayforinitial periods of
uptofouryears andspecialists, subject tolabour market testing, foruptotwoyears initial stayand
totalstayofuptofouryears.
Market access
(iii) Therearenorestrictionsontheprovisionofdomesticorinternationaltelecommunicationsservices
provided theservice complies withtheprovisions oftherelevant Class Licence. There arenosector-
specific restrictions onthetypeoflegalentity thatmayprovide basic telecommunications provided
theservice supplier complies withgeneral Australian company law.Inthecaseofforeign-owned service
providers 'compliance withforeign investment policy guidelines isrequired. Service suppliers may
be100percentforeign owned.S/NGBT/W/3/Add.14
Page6
National treatment
(iv) There arenoprovisions which treatforeign service suppliers lessfavourably thandomestic
suppliers fortheprovision ofbasic telecommunications services. Under theTelecommunications Act
1991telecommunications service suppliers (service providers) areguaranteed non-discriminatory access
tocarrier capacity andtransparent terms andconditions. Nodistinction ismade between Australian
andforeign-owned service suppliers.
Australia'sforeigninvestmentpolicyguidelinesapplytoforeign-ownedorcontrolledenterprises
afterestablishment inAustralia.
There arenosector-specific nationality orresidency requirements orrestrictions onownership
oflandorfacilities. Acquisition ofindustrial ornon-residential commercial realestate thatisdirectly
related tothebusiness activities oftheforeign service supplier isnotsubject toprior examination by
theForeign Investment Review Board. However, acquisition ofurban residential realestate issubject
toapproval bytheFIRB.
Licensing
(v) Aclass licensing system isusedforregulating theprovision ofdomestic andinternational
telecommunicationsservices.Thelicensedgeneralandmobilecarriershavetocomplywiththeirlicences
andpaylicence fees. Service providers thatarenotlicensed general ormobile carriers aresimply
required tocomply withaclasslicence forwhich there isnoapproval process orlicence fees. For
international services, suppliers arerequired toenrol with(notify) theindustry regulator AUSTEL
oftheirintention toprovide theservice -approval fortheservice isnotrequired. These licences apply
tomode 3(commercial presence).
Theclasslicencesimposeminimalrestrictionswhichareprimarilyintendedtodealwithtechnical
efficiency ofpublic telecommunications networks andtoensure thatrelevant standards aremet.
B. Categories
Local/long distance/international
1. Australiantelecommunicationslawdoesnotdistinguishbetweenlocalandlong-distanceservices-
bothlocal services andnational long-distance services maybesupplied byanyservice supplier.
(Response toA.Subsectors covers thiscategory ofservice interms of(i)policy overview, (ii)modes
ofsupply, (iii)market access, (iv)national treatment and(v)licensing.)
2. No-anysupplier canprovide local, long-distance andinternational services (Response to
A.Subsectors covers thiscategory ofservice interms of(i)policy overview, (ii)modes ofsupply,
(iii)market access, (iv)national treatment and(v)licensing.)
Wire-based
Anysupplier canprovide wire-based services (butnottheunderlying reserved linelinks).
(Response toA.Subsectors covers thiscategory ofservice interms of(i)policy overview, (ii)modes
ofsupply, (iii)market access, (iv)national treatment and(v)licensing.) Theregulatory provisions
applying totheprovision oflinelinksinterms of(i)policy overview, (ii)modes ofsupply, (iii)market
access, (iv)national treatment and(v)licensing isdiscussed atPartIIB,question 5"Facilities based"
which follows.S/NGBT/W/3/Add.14
Page7
Radio-based
Anysupplier canprovide radio-based services, butthelicensed general carriers (Telstra and
Optus) havetherighttobetheprimary suppliers ofsatellite services.
Thelicensed mobile carriers Telstra, Optus andVodafone havetheright tobetheprimary
suppliers ofcellular mobile services including mobile dataservices. Theservice providers 'classlicence
doesrestrict theuseofradio-based networks when itisinterconnected withthepublic switched
telecommunications network.
Service providers arefreetocompete intheprovision ofsatellite orcellular mobile services
provided capacity isacquired from alicensed general ormobile carrier.
Theprovision ofothermobile services suchasPACTS iscompletely opentocompetition under
theprovisions ofthePACTS Class Licence. (Ourearlier response atPartIIA.Subsectors covers
thiscategory forservices interms of(i)policy overview, (ii)modes ofsupply, (iii)market access,
(iv)national treatment and(v)licensing.)
Resale basis
3. International resale ispermitted withconnections tothepublic network atoneendorbothends.
Enrolment andcompliance withtheInternational Service Providers Class Licence isrequired. Resellers
canprovide public switched services andhavearrangements forexchange oftraffic withforeign carriers.
Thisincludes resale ofswitched voice capacity.
(Ourearlier response atPartIIA.Subsectors covers thiscategory ofservice interms of(i)
policy overview, (ii)modes ofsupply, (iii)market access, (iv)national treatment and(v)licensing.)
4. Resale ofprivate leased circuit capacity ispermitted provided theservice complies withthe
Service Providers Class Licence fordomestic services andtheInternational Service Providers Class
Licence forinternational services.
(OurearlierresponseatPartIIA.Subsectorscoversthiscategoryofserviceintermsof(i)policy
overview, (ii)modes ofsupply, (iii)market access, (iv)national treatment and(v)licensing.)
Facilities-based
5. Seeresponse below under (i)Overview.
Overview
(i) TheAustralian Government haschosen toopentheservices market tocompetition. However,
theprovision oflinelinksbetween distinct places including theprovision ofcable TVinfrastructure
usedforvoice telephony isreserved tothelicensed general carriers.
Thefacilities reservations andallowed exceptions aredescribed inourresponse toPartI
Question 2.
Thelicensed general carriers havetheexclusive righttoinstall andmaintain linelinksbetween
Australia andaplace outside Australia. Thisincludes international cables andinternational satellite
links. There arenorestrictions ontheprovision ofother network facilities suchasswitching.S/NGBT/W/3/Add.14
Page8
Foreignshare-holdinginprivatelyownedlicensedcarriersispermitted.However,itisAustralian
Government policy thatOptus (alicensed general andmobile carrier) remain atleast51percent
Australian owned -asdefined bytheForeign Acquisitions andTakeovers Act1975. Vodafone,
Australia 'sthirdlicensed mobile carrier (presently 100percentforeign owned) isrequired toachieve
majority Australian ownership (atleast51percent), by2003.
Modes ofsupply
(ii) Crossborder:Australiadoesnotconsiderthatcross-bordersupplygenerallyappliestofacilities-
based service provision, astheinstallation andmaintenance offacilities implies acommercial presence.
Consumption abroad: Forfacilities thiscould relate, forexample, totheability ofconsumers
ofothermemberstousetheirownGSMcellularorAMPSmobilehandsetsorhand-heldportablesatellite
equipment inAustralia.
Theuseofmobile telephone handsets byforeign consumers inAustralia ispermitted. Access
toalocalnetwork through alocalservice provider isneeded. Itistheresponsibility ofthelocalservice
provider toensure appropriate standards aremetandtohavearoaming agreement withtherelevant
foreign service provider.
Commercial presence: Commercial presence applies tothose service providers installing and
maintaining facilities intheterritory ofAustralia.
Asmentioned earlier thelicensed general carriers, Telstra andOptus, haverights toinstall
andmaintain linelinks. There arenorestrictions onother facilities suchasswitching.
Thelicensed general carriers (Telstra andOptus) andlicensed mobile carriers (Telstra, Optus
andVodafone) haveadditional rights compared toother service providers inrelation tolandaccess,
rights ofwayandtheapplication ofState andlocalplanning andenvironmental laws.
Presence ofnatural persons: Nosector-specific restrictions apply. Seeearlier comments on
presence ofnatural persons onpage4.
Market access
(iii) Asoutlined above, entry totheAustralian market fortheprovision oflinelinksisgenerally
limited tothetwolicensed general carriers Telstra andOptus and,inthecaseoftherighttobethe
primary suppliers ofcellular mobile services, thethree licensed mobile carriers, Telstra, Optus and
Vodafone until1997. There isnospecific restriction onthetypeofcorporate entity thatcanobtain
ageneral ormobile carrier licence. There isscope forforeign equity participation intheprivate sector
licensed carriers, Optus andVodafone. ItisGovernment policy thatOptus maintain majority Australian
ownership (atleast51percent) andVodafone (presently 100percentforeign owned) isrequired to
achieve majority Australian ownership (atleast51percent) by2003.
National treatment
(iv) There arenolimitations applied toordiscriminatory treatment imposed ongeneral ormobile
carriers which haveaforeign equity share holding. Access andinterconnection rights aremandated
forallgeneral andmobile licensed carriers. Carriers dohave more favourable access and
interconnections rights offacilities thandoservice providers. Nosector-specific restrictions apply
toownership oflandorbuildings. Seecomments under National Treatment page6onacquisition
ofrealestate.S/NGBT/W/3/Add.14
Page9
Licensing
(v) Licences arerequired forthissubsector inAustralia.
- Theinstallation andmaintenance oflinelinksisreserved toentities holding ageneral
carrier licence. TheGovernment hasagreed nottoissue anymore licences until1
July1997. Thecurrent licensees arerequired tomeetconditions setoutindeclarations
bytheMinister under sections 64and65oftheAct.
- Theprovision ofpublic mobile telecommunications services arereserved toentities
holding apublic mobile licence. TheGovernment hasagreed nottoissue anymore
licences until1July1997. Licence feesaredetermined byAUSTEL onacostrecovery
basis, inproportion tothetimed traffic ofallcarriers (general licensed ormobile).
- Allother services areprovided under aclasslicence system explained atA(i),above.
General carrier licence holders havetopayfeesannually.
Public/non-public supply
Ourearlier response atPartIIA.Subsectors covers thesupply ofbothpublic andnon-public
basic telecommunications services interms of(i)policy overview, (ii)modes ofsupply, (iii)market
access, (iv)national treatment and(v)licensing.
Ourresponse atPartIIB,question 5"Facilities" covers theprovision offacilities usedinprivate
networks interms of(i)policy overview, (ii)modes ofsupply, (iii)market access, (iv)national treatment
and(v)licensing.
6. Generally, no.However, there isadistinction intheprovision ofradio communications and
international services. Where radio communications orinternational linksaresourced from entities
other thanageneral licensed carrier theycanonlybeusedfortheir ownuse(notforsale) when
connected tothePSTN atbothends, orifforresale theycanonlybeconnected tothePSTN atone
end.
7. Thedominant licensed general andmobile carrier, Telstra, isrequired tomake available all
BasicCarriageServices(withtheexceptionofthosespecifiedatquestion8),interconnectandthestandard
telephone service onanon-discriminatory basis tothepublic generally.
Theprovision ofthestandard telephone service isincluded aspartofTelstra 'suniversal service
obligation, asistheprovision ofpublic pay-phones.
Thepublic provision ofservices other thanthestandard telephone service isacommercial
decision tobemade bybasic telecommunications service suppliers. Asstated atA(i)the
Telecommunications Act1991 contains competitive safeguards which ensure thatservice providers
haveguaranteed interconnection andareabletoaccess thenetwork onterms thataretransparent and
non-discriminatory.
8. Thefollowing types ofbasic telecommunications arepermitted tobesupplied onanon-public
basis inaccordance withanexemption contained inthetelecommunications regulations:
- abasic carriage service provided foracommunication thatdoesnotoriginate from
aplace inAustralia andwhose destination isnotaplace inAustralia;S/NGBT/W/3/Add.14
Page10
- abasic carriage service provided aspartofatrialofwhich AUSTEL hasbeengiven
prior notice, which isforthepurpose ofestablishing thetechnical orcommercial
feasibility ofproviding aservice andwhich istobeconducted inonlypartofAustralia
foralimited duration; and
- basic carriage services forwhich aninternational accounting rateapplies andthatis
supplied toarecognized operator ofapublic telecommunications network inacountry
outside Australia.
9. Telecommunicationsservicesuppliersthatarenotlicensedgeneralormobilecarriersareobliged
tocomply withthegeneral terms andconditions oftherelevant classlicence. Theclasslicences impose
minimal restrictions which areprimarily intended todealwith technical efficiency ofpublic
telecommunications networks andtoensure thatrelevant standards aremet. Noother obligations are
imposed.
Incontrast, thelicensed general andmobile carriers currently Telstra, Optus andVodafone
haveanumber ofspecific obligations/responsibilities assetoutintheTelecommunications Act1991,
related instruments andtheirlicences. These relate to:
- contributions topayforuniversal service
- continued access tountimed localcallsviathestandard telephone service
- prompt identification andrepair offaults
- provision ofaccurate callcharging
- network rollout obligations
- network modernization obligations
- provision ofoperator anddirectory services
- obligations toprovide services forcertain categories ofusers
- provision ofnetwork traffic andplanning information toother carriers for
interconnection andnetwork development purposes
- billing information
- provision ofequal access technologies
- access tosupplementary services andinfrastructure
- industry development plans interconnection andtariffing obligations andanumber of
other obligations
- requirement tocooperate withlawenforcement organizations
- theprovision ofanindustry ombudsman
10. Seeresponse toPartII,question 6.
11. Anyservice provider mayinstall andoperate pay-phones inAustralia.
However ageneral licensed carrier mayberequired tosupply, install ormaintain apublic
pay-phone under Australia 'sUniversal Service Obligation regulations. Asstated atquestion 7,Telstra
currently holds theuniversal service obligation tosupply, install andmaintain pay-phones toensure
thattheyarereasonably accessible toallAustralians onanequitable basis.
Theprice charged forpay-phones operated under theUniversal Service Obligations mustbe
notified toandmaybedisallowed bytheGovernment. Thepricecharged forother public pay-phones
isnotsubject toanyprice limitations.
Charges forinterconnection ofpay-phone suppliers aredetermined inaccordance withtheBasic
Carriage Services tariff charges.S/NGBT/W/3/Add.14
Page11
PART III
Regulatory Issues
Relationship between regulatory andoperational functions
1. While basic telecommunications suppliers andother interested persons areconsulted inthe
process ofpolicy formulation, theAustralian Government issolely responsible forthemaking of
regulatory policy inrelation totelecommunications.
Enforcementofregulationsistheresponsibilityoftheindependenttelecommunicationsregulator,
theAustralian Telecommunications Authority (AUSTEL).
BasictelecommunicationssuppliersareconsultedbyAUSTELintheprocessofstandardssetting.
However, AUSTEL hasstatutory responsibility forthesetting andenforcement oftelecommunications
technical standards.
2. Yes. AUSTEL isresponsible fortheformulation andenforcement oftelecommunications
technical standards.
3. ThenationalAustralianGovernmenthassoleresponsibilityundertheConstitutionforthemaking
oflawsregulating telecommunications.
Suppliers canresolve questions anddisputes withtheregulatory authority, AUSTEL.
AUSTELhasthepowertoarbitratechargesforinterconnectionbetweengenerallicensedcarriers.
Telecommunications suppliers mayaskAUSTEL toreconsider various decisions, particularly
inrelation tocustomer equipment andcustomer cabling.
Suppliers canalsoapply totheAdministrative Appeals Tribunal ofdecisions forreview of
decisions byAUSTEL.
ReviewofAUSTELdecisionsbytheFederalCourtmayalsobesoughtundertheAdministrative
Decisions (Judicial Review) Act1977.
Frequency allotment orassignment
4. Frequency allocations aremade inaccordance withtheInternational Telecommunication Union
(ITU)RegulationRegion3allocations.AustralianallocationsarepublishedintheRadiocommunications
Australian Spectrum Plan.
Frequencies areassigned bytheSpectrum Management Agency inaccordance withthelicensing
arrangements setoutintheRadiocommunications Act1992. Thesystem oflicences thatapplies to
radiocommunications useinAustralia involves:
(a) apparatus licences, under which aradiocommunications device maybeoperated ata
specified location andfrequency;
(b) classlicences, under which anyperson mayoperate radiocommunications devices that
arecovered bytheterms ofthelicence;S/NGBT/W/3/Add.14
Page12
(c) spectrum licences, under which theuseofaparticular frequency band within a
geographic areaisauthorized.
5. Frequencies areassigned under thelicensing arrangements setoutintheRadiocommunications
Act1992. Nodistinction ismade under thatActonthebasisofwhether radiocommunications licensees
areforeign-based ornot.Allradiocommunications licensees arerequired tocomply withtheconditions
ofthelicence andthegeneral lawsofAustralia, including lawsidentified inother sections ofthis
questionnaire.
Numbering andidentification codes
6. AUSTEL hastheresponsibility formanaging numbering oftelecommunications services and
developing aplanforthenumbering oftelecommunications services inAustralia. AUSTEL has
developed anational numbering planthatsetsoutnumber allocation.
AUSTEL 'sNational Numbering Planisdesigned to:
- promote andenhance consumer interests;
- promote competition andinnovation intelecommunications services; and
- promote efficient useofnumbers.
AUSTEL hasalsodeveloped procedures forallocating numbers based onthese principles.
There aretwobroad categories ofallocation defined byAUSTEL: primary andsecondary number
allocations. Primary allocations arethose number allocations made byAUSTEL toservice providers
fortheprovision oftelecommunications services. Secondary allocations arethose made byservice
providers totheircustomers.
Requests forprimary allocations ofaroutine nature (ieallocations thatarefullyconsistent
withthepolicies ofthenational numbering plan)aremade directly byAUSTEL following theprinciples
oftheNational Numbering Plan.
Requests forallocations ofanon-routine nature (iethose thathave significant potential
consequences forconsumers, competition ornumbering efficiency andthose requests thatdepart from
thepolicies setoutinthenumbering plan) aresubject toconsideration bytheNumbering Advisory
Committee (NAC), which ismade upofrepresentatives from industry andconsumer groups. The
NAC provides advice toAUSTEL.
AUSTEL hasnotestablished rigidrulesandcriteria forsecondary allocations. However, it
monitors closely theallocations thataremade toensure thattheyareconsistent withtheNational
Numbering Plan.
7. Yes. Allsuppliers areallocated numbers according totheprinciples setdown intheNational
Numbering Plandeveloped byAUSTEL.
Standards andtypeapproval
8. AUSTEL hasmandatory standards forcustomer equipment andcustomer cabling. These cover:
- safety
- analogue telephonesS/NGBT/W/3/Add.14
Page13
- customer switching systems
- cellular mobile telephones (both AMPS andGSM)
- CT2-CAI cordless telephones
- satellite terminals
- KuBand service (using carrier satellite)
- LBand mobile service (using carrier satellite)
- LBand mobile service (using INMARSAT-M)
- ISDN (Primary Access andBasic RateAccess)
- analogue video leased line
- Token Ring, Ethernet LAN leased line
- 2.048 MBit/s, 8.448 MBit/s, 34.368 MBit/s &139.264 MBit/s leased line
- Telex
- private telecommunications network performance (when connected toa
telecommunications network operated byacarrier)
cabling, andcabling installation standards.
Inaddition, AUSTEL requires customer equipment tohaveadefined levelofelectromagnetic
interference performance, against aStandards Australia Standard (AS3548 based onCISPR 22).
9. Yes,toallparts ofthisquestion.
Consistent withGATT requirements, AUSTEL hasa60daypublic exposure period during
which interested persons maymake representations concerning theproposed standard. Copies ofthe
proposed standard areavailable, atamodest charge, from Standards Australia.
Alsoinaccordance withtherequirements oftheGATT Agreement onTechnical Barriers to
Trade, copies ofproposed standards areadvised toGATT signatory countries through theAustralian
Department ofForeign Affairs andTrade.
Theprivatesectorparticipatesinthedevelopmentofstandardsthroughpeaktelecommunications
organisations, carriers andusergroups whose representatives aremembers ofAUSTEL 'sStandards
Advisory Committee. These organisations, aswellasothers suchasconsultants withrelevant interests,
supply technical experts toserve onthetechnical Working Groups thatdevelop thestandards.
10. Customer Equipment (CE)requires typeapproval. CEisdeemed tobeallequipment connected,
orintended tobeconnected, bymeans offixedlineorradio toatelecommunications network operated
byacarrier, whether directly connected orthrough other equipment. There aresome exemptions from
theregulation which apply tocertain equipment connected byradio means.
AUSTEL accredits testhouses toperform testing against itstechnical standards. Testreports
from thissource areaccepted forcompliance assessment purposes andforpermit issue. AUSTEL
hasalsoaccredited thetesting laboratories ofsomesuppliers ofterminal equipment forselftestpurposes.
Testreports from suchlaboratories arealsoacceptable forcompliance assessment purposes.
Computers andsome other types ofequipment, suchasdataterminals, havebeencovered by
blanket permits. These types ofequipment arenotsubject toindividual permits aslongastheycomply
withAUSTEL 'sbasicsafety standards. Thisexception ismade asitisconsidered thatsuchequipment
isnotusually intended tobeconnected toacarrier 'stelecommunications network. Theapproach here
istoapply aformof"class" exemption based ontheassumption thatsuppliers comply withrequirements
unless thecontrary isdemonstrated.S/NGBT/W/3/Add.14
Page14
Australiaalsoparticipatesinaformofmutualrecognitionarrangementwherebyalimitednumber
ofAsia-Pacific nations accept AUSTEL permitted equipment forconnection totheirnetworks without
further authorisation, oraccept atestreport from anAUSTEL accredited testhouse.
Australia iscurrently negotiating Mutual Recognition Arrangements withtheEuropean Union.
Inthecaseofequipment intended forconnection inAustralia, these arrangements willallow for
certificationbyaEuropeanConformityAssessmentBody(CAB)(knowledgeableinAustralianmandatory
standards andsuitably accredited) toensure thatequipment meets AUSTEL technical standards. Under
theArrangements,theCABwouldissueanAUSTELsuppliedpermitnumbertothesupplierofcompliant
equipment. Thenormal AUSTEL permit feeswillapply.
Equipment attachment
11. Allterminal equipment connected to,orintended tobeconnected to,atelecommunications
network operated byacarrier musthaveanAUSTEL Permit thatitmeets relevant AUSTEL technical
standards. AUSTEL canexempt certain classes ofcustomer equipment from thepermit process.
12. Telecommunications service suppliers mayusetheir ownswitches. Ifthese switches are
connected toageneral licensed carrier 'sfacilities theymust haveanAUSTEL Permit establishing
compliance withrelevant AUSTEL technical standards.
13. Yes. Service providers arerequired toallow theattachment ofcustomer equipment aslong
astheCEhasanAUSTEL authorisation orPermit establishing compliance withtechnical standards.
Interconnection
14. Interconnection isregulated under theTelecommunications Act1991which provides general
andmobile carriers withequal access rights toeachothers facilities andservices. Aspartofthese
arrangements, AUSTEL canparticipate innegotiations between these entities about interconnection
orcanarbitrate areas ofdispute.
TheMinister forCommunications andtheArtsmaydetermine principles togovern charging
fornetwork interconnection between thelicensed general andmobile carriers. TheMinister has
determinedsuchprinciples,andthesearesetoutintheTelecommunications(InterconnectionandRelated
Charging Principles) Determination No1of1991. Allaccess agreements forinterconnection containing
access charges payable byanewlicensed general ormobile carrier toanexisting suchcarrier must
comply withthecharging principles. Thecharging principles specify initial charges (based ondirectly
attributable incremental cost)toapply, andprovide thatothercharges should cover thecostsnecessarily
incurred byanexisting carrier. Allrelevant direct costs aretobecovered, aswellasacommercial
return totheexisting carrier onrelevant assets directly used.
Thecharging principles provide amechanism forinitial charges tobereviewed. Reviews may
betriggered byanindicator oflossofmarket dominance, oravailability ofcarrier pre-selection by
customers. Subsequent charges arecommercially negotiated.
There aresafeguards toprovide service providers (other thanlicensed general ormobile carriers) with
access tothecarriers networks.
15. Thenetwork suppliers thatholdageneral ormobile carrier licence arerequired toprovide
othernetworksuppliersthatarealsolicensedgeneralormobilecarrierswithaccesstotelecommunication
services andfacilities. Thisisnotrestricted tojustthebasic telecommunications network orservices.
There aresome safeguards toprovide access toservice providers.S/NGBT/W/3/Add.14
Page15
16. Yes.Interconnection between leased circuits andpublic datanetworks ispermitted.
17. Thepricing ofinterconnection between carriers holding ageneral ormobile licence isregulated
bytheTelecommunications (Interconnection andRelated Charging Principles) Determination No.1
which setsouttheinitial charges andtheprinciples forthecharges. Theprinciples require thecharges
tocover costsnecessarily incurred asaresult ofinterconnecting andofusing thenetwork oftheother
carrier.
Charges thatarenotspecified intheabove Determination arecommercially negotiated between
thelicensed carriers inaccordance withthecharging principles. Agreed charges havetobesubmitted
forAUSTEL todetermine thattheyareinaccordance withthecharging principles.
Theregulated orinitially determined interconnection charges between licensed carriers are
inthepublic domain, however, commercially agreed charges areconsidered confidential andalthough
registered withAUSTEL, arenotavailable tothepublic.
Apart fromtheinitially determined charges which havebeenavailable toalllicensed general
andmobile carriers, other charges arenegotiated between thelicensed carriers. Charges relating to
theinterconnection ofservice providers withthelicensed general andmobile carriers aresetoutin
"filed" tariffs andareavailable tothose whorequest access tothese services.
Australian service providers canhavedifferent prices forinterconnection withforeign service
providers. Thepricing ofinterconnection between anAustralian licensed general carrier andaforeign
service provider isnegotiated. AUSTEL hascertain powers toregulate theactivities oftheAustralian
carrier inthisregard under theconditions oftheInternational Code ofPractice. These conditions
areminimal andcover suchareas asrequiring theAustralian carrier toprovide information ontariffs
andagreements withforeign service providers ifsorequested byAUSTEL. Inthecaseofsuchrequests,
AUSTEL istoexercise dueregard tothecommercial confidentiality oftheinformation.
Thesituationissimilarfornon-licensedgeneralormobilecarrierssupplyinginternationalservices
which mayalsonegotiate pricing forinterconnection withforeign service providers. These service
providers mustenrol withAUSTEL andadhere tothegeneral conditions oftheInternational Service
Providers Class Licence.
Competitive safeguards
18. Safeguards areavailable under bothgeneral trade practices andindustry-specific legislation.
Under theTrade Practices Act1974, itisanoffence tomisuse market power (s.46); andengage
inexclusive dealing (s.47); orunconscionable conduct (s.51AA) ;ormisleading ordeceptive conduct
(s.52).
There arealsoanumber ofspecific safeguards against anti-competitive conduct under the
Telecommunications Act1991.
AUSTEL 'sFunction ofPromoting Competition
Section37oftheTelecommunicationsActgivesAUSTELthefunctionofpromotingcompetition
inthetelecommunications industry, within theestablished regulatory framework, andforthepurposes
of:S/NGBT/W/3/Add.14
Page16
- protecting competitors orpotential competitors fromgeneral licensed carrier practices
thataredamaging tocompetition;
- facilitating theentry ofnewsuppliers intotelecommunications markets
- promoting competition among general licensed carriers
- protecting general licensed carriers from misuse ofmarket power byother general
licensed carriers
- arbitrating general licensed carrier disputes
- receiving andinvestigating complaints about anti-competitive market practices
- referring matters tothegeneral industry regulator, theTrade Practices Commission.
Interconnection AndRelated Charging Principles
Inrelation tolicensed general andmobile network carriers, legislation requires thateachsuch
carrier enable other licensed general andmobile carriers toaccess itsnetwork. Such access istobe
provided onanon-discriminatory basis, andonreasonable terms andconditions. Provision isalso
made bywayofsupplementary access conditions foraccess toessential facilities andother services,
suchasbilling anddirectory information.
Aspreviously stated, theMinister forCommunications andtheArtsmaydetermine principles
togovern charging fornetwork interconnection between thelicensed general andmobile carriers.
TheMinister hasdetermined such principles, andthese aresetoutintheTelecommunications
(Interconnection andRelated Charging Principles) Determination No1of1991. Allaccess agreements
forinterconnection containing access charges payable byanewlicensed general ormobile carrier to
anexisting suchcarrier must comply withthecharging principles. Thecharging principles specify
initial charges (based ondirectly attributable incremental cost)toapply, andprovide thatother charges
should cover thecosts necessarily incurred byanexisting carrier. Allrelevant direct costs aretobe
covered, aswellasacommercial return totheexisting carrier onrelevant assets directly used.
Thecharging principles provide amechanism forinitial charges tobereviewed. Reviews may
betriggered byanindicator oflossofmarket dominance, oravailability ofcarrier pre-selection by
customers. Subsequent charges arecommercially negotiated.
AUSTEL hasthepower toarbitrate charges forinterconnection under s.154 ofthe
Telecommunications Act.
With regard tointerconnection between licensed general ormobile carriers andother service
providers, there aresafeguards toprovide access toservice providers. Forinstance, under s.234 of
theTelecommunications Act,dominant licensed general ormobile carriers arerequired (with some
exceptions) toconnect aservice provider wishing toprovide aneligible service. Where alicensed
general ormobile carrier failstoprovide suchaccess theaggrieved service provider mayapply tothe
Federal Court forrelief.
Australian-basedlicensedgeneralandmobilecarriersandotherserviceprovidersinterconnecting
withforeign service providers aresubject tothegeneral conditions oftheInternational Code ofPractice
andtheInternational Service Providers Class Licence.
Accounting Separation
There isnorequirement forservice providers other thanlicensed general andmobile carriers
toprovide details ofaccounting separations.S/NGBT/W/3/Add.14
Page17
Alllicensed general andmobile carriers (including Telstra) arerequired under the
Telecommunications Acttoundertake detailed andtransparent accounting separation oftheirvarious
business activities, toenable identification ofcross-subsidisation from lesscompetitive tomore
competitive activities. General licensed carriers arerequired tokeeptheiraccounts inconformity with
aChart ofAccounts andCostAllocation Manual (COACAM) developed byAUSTEL under s.80of
theTelecommunications Act.COACAM requires carriers toreport financial dataoneachof26separate
broad product lines. Access, local, trunk, mobile, value-added andinternational services areamong
theactivities thatneedtobeseparately identified.
Transparency InTariffing
Aswithaccounting separation, service providers otherthanlicensed general andmobile carriers
arenotbound byanyrules concerning transparency intariffing.
Alllicensed general andmobile carriers mustpublish theirtariffs forbasic carriage services.
Thedominantcarriermustchargestrictlyinaccordancewiththesetariffs,whereasnon-dominantcarriers
maycharge less(butnotmore) thanthepublished tariff.
Prohibition OnPrice Discrimination
Alicensed general ormobile carrier thatisinaposition todominate atelecommunications
market (a"dominant" carrier) isnotallowed todiscriminate between persons whoacquire services
inthatmarket. Discrimination isdefined interms ofcharges fortheservices ortheterms andconditions
onwhich theyaresupplied. AUSTEL hasthediscretion toapprove discrimination thatisbroadly
cost-based, inthecommunity interest orinthenature ofanewproduct trial. Italsohaspower to
disallow, inrespect ofadominant carrier, tariffs orprovisions oftariffs thatmaterially andadversely
affect thedevelopment and/or maintenance ofcommercially sustainable competition inamarket, or
arelikely todoso.
Licensed general ormobile carriers arenotallowed todiscriminate, inthesupply ofbasic
carriage services, against resellers ofbasiccarriage services, suppliers ofhigher levelservices, ortheir
customers.
Adominant carrier cannot favour itself when using itsownbasic carriage service tosupply
ahigher levelservice orwhen using abasic carriage service thatithasbeendirected to"unbundle"
andsupply.
19. Yes,Australia 'sregulations distinguish between dominant andnon-dominant suppliers butonly
inthecaseofgeneral andmobile licensed carriers.
Asnoted inanswer toquestion 22,some oftheconstraints ontariffing andpricediscrimination
apply onlytoacarrier that"isinaposition todominate" atelecommunications market. Under s.28
oftheTelecommunications Act,alicensed general ormobile carrier istaken tobeinaposition to
dominate amarket ifthecarrier could betaken tobeinaposition todominate thatmarket under s.50
oftheTrade Practices Act1974 prior toitsamendment in1992. Prior toitsamendment, s.50did
notdefine "inaposition todominate". However themeaning canbedetermined byreference tothe
relevant caselaw.
Yes,therearesafeguards concerning service providers whohavemonopoly ordominant control
ofaccess tocertain market ornetwork segments. Seeheadings on"transparency intariffing" and
"prohibition onprice discrimination" inanswer toquestion 18.S/NGBT/W/3/Add.14
Page18
20. There isnotelecommunications-specific anti-trust policy. Telecommunications suppliers are
subject toanindustry-wide antitrust policy.
Under theTrade Practices Act1974, corporations mustnotdirectly orindirectly acquire shares
inthecapital ofabody corporate oracquire anyshares ofaperson iftheacquisition would havethe
effect, orbelikely tohavetheeffect, ofsubstantially lessening competition inamarket. Similarly,
aperson mustnotdirectly orindirectly acquire shares inthecapital ofacorporation; oracquire any
assets ofacorporation ifthatwould havethesame effect.
Indeterminingwhethertheacquisitionwouldhavesucharesult,theTradePracticesCommission
must takethefollowing matters intoaccount:
- theactual andpotential levelofimport competition inthemarket
- theheight ofbarriers toentry tothemarket
- thelevelofconcentration inthemarket
- thedegree ofcountervailing power inthemarket
- thelikelihood thattheacquisition would result intheacquirer being abletosignificantly
andsustainably increase prices orprofit margins
- theextent towhich substitutes areavailable inthemarket orarelikely tobeavailable
inthemarket
- thedynamic characteristics ofthemarket, including growth, innovation andproduct
differentiation
- thelikelihood thatanacquisition would result intheremoval from themarket ofa
vigorous andeffective competitor
- thenature andextent ofvertical integration inthemarket.
21. Basic telecommunications suppliers arenotprohibited fromengaging inthemanufacture and
supply oftelecommunications equipment. However, inthecaseofgeneral ormobile licensed carriers,
accounting separation oftheirmanufacturing andother activities ensure thatcross-subsidisation that
maybeanti-competitive canbeidentified.
Pricing-related measures
22. TheGovernment doesnothavearolesetting charges except inthattheMinister mayinitially
determine theinterconnect charges between general licensed andmobile carriers. Tariffs, access charges
andaccounting ratesarenotsetbyGovernment. However, theGovernment hasestablished atariffing
regulatory framework forthethree licensed carriers, particularly forthedominant carrier, toprevent
discriminatory andanti-competitive tariffing. Thisdoesnotapply toother service providers.
Thethree general andmobile licensed carriers (butnotother service providers) arerequired
to"file" (orlodge) theirproposed tariffs withAUSTEL andarenotpermitted tocharge more than
the"filed" tariff. Adominant carrier must charge inaccordance withits"filed" tariffs. AUSTEL
hasthepower todisallow tariffs ofadominant carrier thatareanti-competitive.
TheGovernment hasalsoimposed specific price capsonTelstra foritsmainservices. These
controls aimtoensure thatefficiency gains fromcompetition arepassed ontoconsumers through falls
inthereal(inflation adjusted) priceofservices. Thepricecapsalsominimise theimpact onresidential
users of"rebalancing".
Theexisting price caparrangements require theprices (inrevenue weighted terms) for
predetermined "baskets" ofservices tofall,onaverage andovertheduration ofthearrangements,
bythe"Consumer Price Index minus X".Thatis,theymustfallinrealterms byapre-set factor ("X").S/NGBT/W/3/Add.14
Page19
Thecurrent arrangements, which endon30June1995andwhich arecurrently under review, require
theaverage price ofTelstra 'smain services tofall,inrealterms, by5.5% ayear.
Access charges, suchasrental ofahandset, mustalsobe"filed" withAUSTEL andaresubject
toprice caps.
Inaccordance withanexemption which covers thetermination ofinternational services,
accounting rates arenotrequired tobe"filed" withAUSTEL noraretheysubject toprice caps.
Accounting rates arenegotiated between service providers under theterms oftheInternational
Telecommunications Regulations (WATTC). Theonlycondition relating toaccounting ratesisthat
holders ofanInternational Service Providers Class Licence mayberequired toprovide information
onthese ratestoAUSTEL.
Nospecific pricing requirements havebeenplaced onservice providers thatarenotgeneral
ormobile licensed carriers. However when setting prices, general andmobile licensed carriers and
other service providers arerequired tocomply withtheTelecommunications Act1991 andwithall
general Australian commercial andtrade practices laws.
23. TheGovernment onlyrequires licensed general andmobile carriers (nototherservice providers)
tosubmit theirproposed tariffs forapproval. Tariffs forinternational services areexempted fromthis
requirement.
Generally when alicensed general ormobile carrier submits atariff toAUSTEL, AUSTEL
hastwoworking daystoscrutinise thetariff andcanrefuse toallow thetariff ifitincludes provisions
which provide forthegeneral licensed carrier todiscriminate between service providers unless the
discrimination iscostbased. Atariffsubmitted byadominant carrier mustalsonotbeanti-competitive.
AUSTEL has15working daystoexamine dominant carrier tariffs.
Thelicensed general andmobile carriers arerequired toprovide regular financial accounts
toAUSTEL which separate outparticular product groups intheaccounts. Accounting separation
provides transparency ofthecoststructures ofthoseproducts which areprovided incompetitive markets
from those provided onalesscompetitive basis. Thisprovides AUSTEL withamechanism for
encouraging improved carrier performance andforidentifying cross subsidisation.
24. Service providers other thangeneral andmobile licensed carriers arenotsubject toany
telecommunications-specific restrictions inrelation totheprinciple ofnon-discriminatory pricing. They
arehowever covered bytheTrade Practices Act1974asarethelicensed general andmobile carriers.
TheActforbids certain types ofdiscrimination where itisconsidered tobeofsuchmagnitude oris
ofsucharecurring orsystemic character thatitislikely tohavetheeffect ofsubstantially lessening
competition inamarket.
Licensed general andmobile carriers arenotpermitted todiscriminate between service providers
andcannot priceservices differently depending ontheusetowhich theyareput.Inaddition, adominant
suchcarrier isnotpermitted todiscriminate between anyacquirer oftelecommunications services.
Inalimited number ofspecified circumstances, AUSTEL may, however, decide thatdiscrimination
byaparticular licensed carrier should bepermitted. Themain instance ofthiswould bewhere the
discrimination could bejustified onthebasisofthedifferent costsborne bythecarrier thatareassociated
withproviding theservice. Highly targeted volume discounts aretherefore allowable iftheyreflect
relevant costs.S/NGBT/W/3/Add.14
Page20
Accounting ratesaredetermined according toagreements made under paragraph 1.5ofthe
International Telecommunications Regulations (WATTC). Hence Australian regulations concerning
price discrimination cannot beapplied.
Thelicensed general andmobile carriers arespecifically exempted fromlawsprohibiting price
discrimination forinternational services suchastermination services (accounting rates).
TheInternational Code ofPractice which applies todomestic licensed carriers states that'a
carrier mustuseallreasonable endeavours toprevent amisuse ofmarket power byan[international
telecommunications] operator '.Inrelation toaccounting ratesorreturn telecommunications traffic,
AUSTEL hasthepower, under theconditions oftheInternational Service Providers Class Licence,
torequire adomestic licensed carrier thathasentered intoanagreement with aninternational
telecommunications operator toprovide information inaform andatatimespecified byAUSTEL.
Suchinformation mayinclude details oftariffs, agreements withforeign carriers orforeign domestic
carriers, financial accounts, commercial relationships withforeign carriers orforeign domestic carriers,
traffic statistics orcustomer connection statistics. Insuchcircumstances, AUSTEL must havedue
regard tothecommercial confidentiality ofinformation.
Service providers other thangeneral ormobile licensed carriers canalsonegotiate "accounting
rates" forexchange oftraffic. However todosotheymust enrol withAUSTEL andabide bythe
conditions oftheInternational Service Providers Class Licence.
25. No.Thisform ofcollusion isprohibited under Australian laws.
26. Thelicensedgeneralandmobilecarrierscansettheirownprices(includingtariffs,accesscharges
andaccounting rates) withcompetition exerting downward pressure toencourage costbased pricing.
Theregulatory framework encourages costorientated pricing where competition isinsufficient.
Licensed carriers arerequired toprovide details ofthecostmethodology usedforcompiling thefinancial
accounts toAUSTEL. Themethodology generally usedtodetermine pricing isthatoflongrun
incremental cost. When examining predatory pricing, AUSTEL isprepared toaccept fullydistributed
costinformation from thelicensed general ormobile carrier todetermine whether theprices canbe
justified onacostbasis.
Nospecific pricing requirements havebeenplaced onservice providers other thanthelicensed
general andmobile carriers.
27. Therules arethesame forthepricing ofnewservices astheyareforexisting services.
Rights ofwayfortheconstruction ofinfrastructure
28. Yes.
Licensed general andmobile carriers havespecific rights concerning landaccess which are
specified intheTelecommunications Act. These rights donotextend toother service providers.
Licensed general andmobile carriers havealsobeengranted exemptions fromState/Territory andLocal
Government environmental lawsandplanning regulations. Intheirplace, theFederal Government
hasforwardedaTelecommunicationsNationalCode.Licensedgeneralandmobilecarriersmustconform
withtheprovisions oftheCode inbuilding theirinfrastructure.
29. Yes.S/NGBT/W/3/Add.14
Page21
Newtelecommunications services
30. Anytelecommunicationsservice(includinganewtelecommunicationsservice)whichisprovided
byalicensed general ormobile carrier andisa"basic carriage service" needs tobetariffed with
AUSTEL before itcanbesupplied tothepublic. AUSTEL generally hastwobusiness daystoscrutinise
newtariffs andcanrefuse toallow atariffifitincludes provisions which provide forthegeneral licensed
carriers todiscriminate between service providers unless thediscrimination iscostbased. AUSTEL
has15business dayswithin which itmustdisallow newtariffs ofadominant carrier ifitisoftheopinion
thatthetariff would materially andadversely affect thedevelopment and/or themaintenance of
commercially sustainable competition. There isnolegislative requirement for"higher levelservices"
provided bylicensed general ormobile carriers tobetariffed withAUSTEL, butthere areadvantages
tosuchcarriers thatdoso.
Alltelecommunications suppliers (licensed general andpublic mobile carriers orproviders
ofeligible services under anAUSTEL classlicence) arerequired toconsult withlawenforcement and
national security agencies about their plans todevelop oruse"new technology" intheir
telecommunications activities. Licensed general andpublic mobile carriers arealsorequired notto
operate anetwork thatcannotbeintercepted bylawenforcement andsecurity agencies under the
Telecommunications (Interception) Act1979, unless authorised bytheMinister forCommunications
andtheArtsafterconsulting withtheAttorney-General.
Inanswer tothesecond partofthequestion, tariffed basic carriage services maybesupplied
during theperiod within which AUSTEL maydisallow thetariff.
Supply ofnewuninterceptible telecommunications services bylicensed general andmobile
carriers isnotpermitted untilanauthorisation hasbeenissued. Thisdoesnotapply toother service
providers.
31. There arenoservices reservations under thetelecommunications legislation. Anyservice (basic
carriage service orhigher level service) maybeoffered byanyperson, asthere arenorestrictions
onresale oftelecommunications services.