Australian telecoms licensing - An overview

Telecoms licensing in Australia

Dr Martyn TaylorPartner

March 2014

Overview

1. Australian telecoms licensing – an overview

2. When is a carrier licence required in Australia?

3. Application of regulation to fixed networks

4. Application of regulation to wireless/mobile networks

5. Obtaining a carrier licence

6. Carrier licence conditions and powers

7. Carriage service providers

8. Regulation of customer equipment and cabling

9. Case study: wireless network in a shopping centre

10. Australian National Broadband Network

11. Greenfields housing estates

Telecoms licensing in Australia2

Dr Martyn TaylorPartner+61 45 777 [email protected]

mailto:[email protected]

Australian telecoms licensing – an overview


• The Australian model for telecoms licensing is one of the least complex telecoms licensing models by global standards.

• Australia applies regulation to three types of entities:

• Under the Australian regime, only a carrier is required to apply for and hold a telecommunications licence, known as a “carrier licence”.

• Regulation automatically applies if the relevant entity meets the relevant statutory definitions of a carriage service provider (CSP) or content service provider. A licence is not required for a CSP or content service provider.

• If wireless or mobile services are involved, radiocommunications licences may also be required as well as telecommunications licences.

Australian terminology Role of entity Level of regulation

“Carrier” Infrastructure ownership High

“Carriage service provider” Carriage of communications Moderate

“Content service provider” Delivery of content Low

When is a carrier licence required in Australia?


• The policy behind carrier licensing is to apply the heaviest regulation to the owners of certain telecommunications infrastructure in order to promote competition and address various public interest issues.

• A “carrier licence” is required by an entity if it owns a “network unit” that is used to supply carriage services “to the public”.

• There are no limits to the number of carrier licences that may be issued. As at February 2014, there were 202 active carrier licences in Australia.

• There are two circumstances where a requirement to hold a carrier licence can be avoided:

• First, if one of the exemptions from carrier licensing applies. Some electricity distribution companies have obtained exemptions for monitoring, for example.

• Second, if an existing holder of a carrier licence obtains a declaration from the ACMA that it is the ‘nominated carrier’ in relation to the relevant network unit.

• A “nominated carrier declaration” is a unique feature of the Australian regime and, in effect, permits an infrastructure owner to contract with an existing licensed carrier for that carrier to assume statutory obligations on its behalf.

Application of regulation to fixed networks


• The concept of a “network unit” is used to identify the particular types of telecoms infrastructure that is subject to regulation.

• The Telecommunications Act 1997 (Cth) identifies four key types of basic telecoms network infrastructure that require a carrier licence, each is a “network unit”:

• A single line link (e.g. optical fibre, copper cable) connecting distinct places (e.g. different properties) in Australia, and having a length of greater than 500 metres.

• Multiple line links connecting distinct places in Australia and having an aggregate length of greater than 5 km.

• Designated radiocommunications facilities (see next slide)

• Facilities specified in a Ministerial determination.

• The concept of “distinct places in Australia” in essence refers to different properties. Contiguous properties owned by the same person are treated as the same property. However, leases within a property are treated as different properties.

• Various nuances apply in relation to the manner in which these concepts are applied.

Application of regulation to wireless/mobile networks


• Wireless/mobile networks are subject to both telecommunications licensing and radiocommunications licensing.

• The concept of a “designated radiocommunications facility” is used to apply telecommunications licensing to mobile and wireless networks. The definition applies to the following network equipment:

• a base station for the supply of public mobile telecommunications services

• a base station that is part of a terrestrial radcoms customer access network;

• a fixed radcoms link that is double-ended interconnected;

• a satellite-based facility; and

• a radcoms transmitter or receiver of a kind specified in a Ministerial determination.

• Again, there are various nuances in relation to the application of these concepts.

• A radiocommunications licence may also be required in the form of an apparatus licence, class licence or spectrum licence. (Not covered in this slide pack)

Obtaining a carrier licence


• Carriers must be individually licensed by the ACMA. Initially, ACMA may issue a trial certificate for a network unit for the purpose of trailing the technical and commercial viability of services. The certificate exempts the owner from the obligation to hold a carrier licence for up to 6 months.

• Subsequently, the owner of the network unit must apply to ACMA by completing the relevant application forms.

• Legislative requirements for granting a carrier licence include the payment of an application fee, currently set at AUD 2,076.

• A decision is usually made by ACMA within 20 business days.

• Carriers who earn AUD $25 million or more in eligible revenue during a relevant 12 month period are required to pay a telecommunications industry levy (pro rated across the industry) and an annual carrier licence charge (currently $1.18 per $1,000 of revenue).

• Unless exempted by ACMA, a carrier must also join the Telecommunications Industry Ombudsman (TIO) scheme.

Carrier licence conditions and powers


• A carrier licence is granted with a range of conditions, essentially involving the imposition of various forms of regulation on the carrier.

• The level of regulation is detailed and hence is not summarised in these slides. One example is a requirement to comply with the telecommunications access regime and related obligations concerning access to telecommunications facilities.

• Most of the conditions are statutory conditions that apply to all carrier licensees, although the Minister does have the power to impose specific conditions in relation to a particular licence (as occurs in relation to Telstra).

• The holder of a carrier licence can also use statutory carrier access powers to obtain access to land and buildings for the purposes of installing telecoms access infrastructure. These power can be used to circumvent the usual State and local environmental planning requirements in certain circumstances.

• Specific obligations also apply under various network codes and standards, including obligations relating to the deployment of mobile network base stations.

Carriage service providers


• A CSP is person that supplies a “carriage service” to the public using the network unit of a licensed carrier.

• CSPs can include organisations that resell time on a carrier network for phone calls, provide access to the internet (Internet Service Providers) or provide telephone services over the internet (VoIP service providers).

• CSPs are not required to obtain a licence from ACMA to supply a carriage service to the public, rather they must comply with various legislation and service provider rules.

• The service provider rules comprise a basket of regulation that is intended to protect consumers and the public interest in the supply of telephony services. The regulation is higher where “standard telephone services” are supplied.

• Regulation applies, for example, to numbering (including charges and number portability), preselection, interception, protection of communications, calling line identification, interception, emergency call services, disaster management, law enforcement, disability services, billing and operator/directory assistance.

Regulation of customer equipment and cabling


• ACMA regulates equipment used on the customer side of the telecoms network boundary (customer equipment and customer cabling).

• It is mandatory for certain customer equipment and cabling to comply with specified industry-developed technical standards and be labelled with a compliance label (i.e., the A-Tick compliance mark).

• If equipment is compliant with the relevant technical standards, it can be connected to a network without the consent of the network or facility manager.

• If the equipment is not compliant with the relevant technical standards, the written consent of network or facility manager is required for the connection to occur.

• Connection of non-compliant equipment to a telecoms network without the written consent of the network or facility manager gives rise to an offence.

• Mobile network customer equipment must also comply with radiocommunications standards, including compliance labelling (i.e., the C-Tick compliance mark).

Case study: wireless network in a shopping centre


Scenario: The owner of a shopping centre wishes to provide free Wi-Fi services to all persons within a shopping centre.

• There are two types of licensing: radiocommunications and telecommunications.

• Most wireless local area networks (WLANs) operate radiocommunications equipment under class licences. If the WLAN is within the requirements of the class licence, it is not necessary to apply for any further radiocommunications licence.

• Radiocommunications equipment used for a WLAN is generally a ‘designated radcoms facility’, although there are a range of potential exceptions that may apply.

• A carrier licence would not be required if the WLAN were for the sole purpose of supplying carriage services on a non-commercial basis (e.g., at no charge).

• Wireless networks in airport lounges, hotels, shopping centres and Internet cafes probably would not normally require a carrier licence because the wireless service is provided in a single place.

Conclusion: A wireless network in a shopping mall is unlikely to require a carrier licence or a radiocommunications licence.

Australian National Broadband Network


• Following the recent change in Government, the arrangements for the Australian National Broadband Network are currently under review. Under the previous policy, NBN Co would provide 93% of premises with broadband and phone using fibre to the home. The remaining 7% would be provided using fixed wireless and satellite.

• In NBN fibre areas, NBN Co would provide a free standard installation of a premises connection device (PCD) on the outside wall of each dwelling while the network is being rolled out, and a Network Termination Device (NTD) inside each dwelling once a service is ordered through a retail service provider.

• In areas serviced by fixed wireless, NBN Co would conduct a radio signal survey to ensure that each premises is able to receive a good quality fixed wireless service. NBN Co would then mount an outdoor Antenna on the roof of the premises and install an NTD to an interior wall, with a cable running between them.

• In areas serviced by satellite, NBN Co would mail each eligible premises with a registration ID and an information pack. The selected service provider would organise the installation of network equipment at each premises. A satellite dish on the outside of a dwelling would be connected to the NTD inside the premises.

Greenfields housing estates


• Under the National Broadband Network arrangements, NBN Co is the provider of last resort for fibre new housing estates of over 100 premises. The fibre would be deployed in the new estate at no charge to the developer.

• The developer is responsible for providing the duct infrastructure (pits and pipes) to meet NBN requirements, including conduits and pipes for the deployment of fibre. The developer is required to enter into a Master Developer Agreement and transfer ownership of the duct infrastructure to NBN Co.

• The developer is free to select an alternative fibre provider, but is then potentially liable for the costs of deploying the fibre (depending on the arrangement with the alternative fibre provider).

• The provision of fibre by NBN Co has experienced significant delays, so we understand developers have sometimes used alternative fibre providers notwithstanding the additional cost involved.

• For new housing estates of under 100 premises, Telstra remains as the provider of last resort and could deploy either fibre or copper in those estates.

14 Telecoms licensing in Australia

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Australian telecoms licensing - An overview