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2004-2005-2006
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
TRADE PRACTICES AMENDMENT (NATIONAL ACCESS REGIME)
BILL 2006
REVISED EXPLANATORY MEMORANDUM
(Circulated by authority of the Treasurer,
THE HON PETER COSTELLO, MP)
THIS MEMORANDUM TAKES ACCOUNT OF
AMENDMENTS MADE BY THE HOUSE OF REPRESENTATIVES
TO THE BILL AS INTRODUCED
Table of Contents
OUTLINE ..............................................................................................................1
FINANCIAL IMPACT STATEMENT ........................................................................8
REGULATION IMPACT STATEMENT ....................................................................9
NOTES ON INDIVIDUAL CLAUSES ......................................................................16
SCHEDULE 1 -- AMENDMENTS..........................................................................17
TABLE OF PROVISIONS OF PART 1 OF SCHEDULE 1 OF THE BILL
PRODUCTIVITY
CROSS-REFERENCED AGAINST RELEVANT
COMMISSION RECOMMENDATIONS ...................................................................71
Trade Practices Amendment (National Access Regime) Bill 2005 iii
1
Outline
Trade Practices Amendment (National Access Regime)
Bill 2005
1.1 This Bill makes amendments to the Trade Practices Act 1974 (the TP Act)
that will implement the Government's response to the Productivity
Commission's Inquiry Report No. 17, Review of the National Access Regime
(the Review).
1.2 The National Access Regime (the regime) comprises Part IIIA of the TP
Act and Clause 6 of the Competition Principles Agreement (CPA). There are
three `pathways' to obtaining access to an infrastructure service under Part
IIIA. A party seeking access may:
2 apply to the National Competition Council (the Council) to have the
service declared. The Council then makes a recommendation to the
designated Minister. Declaration gives the access seeker the right to
negotiate with the service provider, with provision for arbitration by the
Australian Competition and Consumer Commission (the Commission) if
those negotiations are unsuccessful;
3 seek access through an `effective' access regime. Where an `effective'
access regime already exists, declaration is not available and an access
seeker must use the effective regime. In the case of a state or territory
access regime, the question of effectiveness can be pre-determined
through the process of `certification'. An access regime can be certified as
effective by the Commonwealth Minister following the Council's
recommendation that the regime satisfies the Clause 6(4) criteria
contained in the CPA; and
4 seek access under the provisions of an access undertaking. Part IIIA
allows service providers to submit a voluntary access undertaking to the
Trade Practices Amendment (National Access Regime) Bill 2005 1
Outline
Commission for approval. An undertaking sets out the terms and
conditions under which access to the service/s will be provided. An
undertaking may be submitted in relation to existing or proposed
infrastructure, and either can apply to an individual service or provide the
basis for an industry access code. Services covered by undertakings
cannot be declared.
4.1 The Review supported the retention of the regime, but made
33 recommendations seeking to improve the regime's operation, including
changes to clarify the regime's objectives and scope, encourage efficient
investment in new infrastructure, strengthen incentives for commercial
negotiation and improve the certainty and transparency of regulatory processes.
The majority of these recommendations were endorsed by the Government.
4.2 The major changes to Part IIIA of the TP Act to give effect to the
Government response are outlined below. Further detail is provided in chapter 5
below. As announced in its final response, the Government will be progressing
a small number of the Productivity Commission's recommendations not
through this Bill but through the development of industry-specific access
regimes. Where amendments to Clause 6 of the CPA are required, or may be
required, these will be the subject of intergovernmental discussions to be held
following passage of the Bill.
4.3 The Bill attaches a Schedule. The substantive changes to the Act are
contained in Part 1 of the Schedule. Part 2 of the Schedule sets out the
application and transitional provisions applicable to the substantive items in
Part 1.
Major Elements of the Legislation
A new objects clause
4.4 A new objects clause is inserted into Part IIIA to provide for greater
certainty for infrastructure owners, access seekers, investors and other
interested parties. The Bill also requires decision makers under Part IIIA to
have regard to the objects clause when making their respective decisions. This
will help to promote consistency and provide guidance in relation to each
decision maker's approach, thereby enhancing regulatory accountability.
Pricing principles
4.5 The Government has agreed that statutory pricing principles should be
established in relation to Part IIIA, to provide guidance for pricing decisions
and to contribute to consistent and transparent regulatory outcomes over time as
well as certainty for investors and access seekers. This Bill inserts pricing
2 Trade Practices Amendment (National Access Regime) Bill 2005
Outline
principles into the TP Act. The Australian Competition and Consumer
Commission (the Commission) will be required to take into account those
principles when making a final determination on an access dispute, when
assessing a proposed new access undertaking or access code, and when
considering whether to vary the terms of, or extend the expiry date of, an
existing access undertaking or access code. The Commission also may take
such principles into account when making an interim determination on an
access dispute. On review, the Australian Competition Tribunal (the Tribunal)
will also be required to take the pricing principles into account where the
Tribunal is required to reconsider a decision of the Commission. The Bill does
not require the decision maker to be satisfied that each and every principle has
been met when making its decision, but that the decision maker `have regard to'
the objects of Part IIIA.
4.6 To ensure consistency in all three access routes under Part IIIA, the
Council of Australian Governments has agreed, as part of the Competition and
Infrastructure Reform Agreement signed on 10 February 2006, to include the
same pricing principles in Clause 6 of the CPA for the purposes of assessing
certification applications.
Changes to the declaration threshold
4.7 The Government has agreed to amend the `promote competition'
declaration criteria contained in paragraph 44G(2)(a), to ensure that access
declarations are only granted where the expected increase in competition in an
upstream or downstream market is not trivial.
New arbitration requirements
4.8 A number of changes will be made to the existing arbitration requirements
in Part IIIA.
4.9 The Commission will be given the discretion to conduct multilateral
hearings in arbitrations, following notification to the parties to the dispute. Such
processes will allow the Commission to consider the service in its entirety and
could streamline administrative requirements and reduce costs. Provisions to
allow parties to safeguard commercially confidential information, and to
require the Commission to explain its reasons for conducting multilateral
hearings against the wishes of the parties, will enhance regulatory transparency
and provide guidance for future multilateral arbitration hearings.
4.10 Consistent with provisions contained in the telecommunications access
regime in Part XIC of the TP Act, the Commission will also be given the
discretion to grant interim arbitration determinations. This change will ensure
that appropriate outcomes, including the access seeker gaining access to the
Trade Practices Amendment (National Access Regime) Bill 2005 3
Outline
service, can be realised in the period leading up to the final determination, by
preventing an access provider from using the arbitration process as a strategy to
delay providing access, or to delay providing access on fair terms and
conditions.
4.11 The arbitration provisions will be amended to make it explicit that when
arbitrating a dispute, the Commission can require a service provider to permit
interconnection to its facility by an access seeker. In the absence of any
developed case law on this issue, the Government is taking the opportunity to
provide clear guidance in this area to access seekers and service providers.
New provisions enabling access providers to lodge post-declaration
undertakings
4.12 The Bill enables access providers to lodge access undertakings and access
codes with the Commission after a service has been declared, which will
provide a means for achieving certainty on access terms and conditions, thereby
facilitating negotiations between access providers and access seekers. By
increasing the incentive to negotiate for both parties, post-declaration
undertakings should reduce recourse to arbitration, thereby reducing the burden
on the regulator and the industry. The Commission will also be given the
discretion to decide whether or not to suspend either an undertaking or
arbitration process, if an undertaking is lodged after an arbitration has
commenced.
Explicit prohibition on access undertakings where an effective access
regime exists
4.13 The Bill amends the TP Act to explicitly prevent the Commission from
accepting an access undertaking or access code where a decision is in force that
a state or territory access regime is an effective access regime. This removes the
incentive for industry gaming through forum shopping, reduces potential
concerns about `double regulation', provides procedural certainty and supports
the use of effective access regimes.
Immunity for services provided by government sponsored infrastructure
facility
4.14 The Bill introduces a mechanism to enable the Commission to grant (and
thereafter revoke) immunity from declaration for services to be delivered by
government-sponsored infrastructure, where the construction and operation of
the facility is to be awarded through a competitive tendering process, and where
reasonable terms and conditions of access will be a key consideration in
selecting the proposed tenderer. The rationale for granting immunity is that the
competitive tendering process is likely to see any monopoly rents expected to
4 Trade Practices Amendment (National Access Regime) Bill 2005
Outline
be attached to the facilities concerned dissipated in reasonable terms and
conditions for service users, rather than accruing to the service provider.
New appeal rights for access undertakings and access codes
4.15 Consistent with the appeal rights applicable to other access routes
provided under Part IIIA, this Bill establishes rights to merit review in relation
to decisions made by the Commission regarding access undertakings and access
codes. A person whose interests are affected may seek a review on the merits of
the Commission's decisions on proposed new access undertakings and access
codes, and of decisions by the Commission to vary, extend or withdraw existing
access undertakings or access codes. This additional appeal right should
encourage the use of undertakings by providing for regulatory accountability.
New target time limits
4.16 The Bill applies a number of non-binding target time limits to various
decisions under Part IIIA. While the time limits are not binding on the decision
maker concerned, they oblige the decision maker to publish a notice of any
extension beyond the target time limit, thereby providing regulatory
transparency, as well as increasing incentives for timely decision-making.
4.17 The new target time limits are as follows:
5 four months for the Council to assess an application and to make a
recommendation to the designated Minister that a service be declared or
not be declared;
6 60 days for a ministerial decision to revoke a declaration,
7 six months for the Council to assess an application and to make a
recommendation to the Commonwealth Minister that a state or territory
regime for access to a service or proposed service is or is not an effective
access regime, or that the period for which a decision is in force be
extended;
8 60 days for the Commonwealth Minister to decide that a state or territory
regime for access to a service or proposed service is or is not an effective
access regime, or that the period for which a decision is in force be
extended;
Trade Practices Amendment (National Access Regime) Bill 2005 5
Outline
9 six months for the Commission to assess a new access undertaking or
access code, or an application to vary, extend or withdraw an access
undertaking or access code, or an application to approve a tender process
as a competitive tender process;
10six months for a final arbitration determination for a declared service by
the Commission; and
11four months for the processing of an appeal by the Tribunal.
Public input on decisions
11.1 The Bill introduces legislative provisions for public input on declaration
and certification applications and proposed access undertakings where it is
`reasonable and practical' for the Council or the Commission, as the case may
be, to undertake such consultation. This will provide for more informed
decision-making, particularly when assessing the public interest in each case.
Publication of reasons
11.2 The Bill places additional obligations on ministers, the Council and the
Commission to publish reasons for their decisions or recommendations. This
will enhance procedural transparency and regulatory accountability, and will
facilitate informed consideration of whether there are grounds to challenge a
decision by way of merit review before the Tribunal or judicial review by the
courts.
11.3 The Commission will also be required to publish reports on completed
arbitrations for services declared under Part IIIA. The Bill sets out a range of
minimum requirements to be included in the reports, but the specification of
minimum requirements will not preclude the Commission from reporting on a
matter relevant to an arbitration, subject to the exclusion of confidential
commercial information. Publication of arbitration reports will enhance
regulatory transparency and may provide guidance for future cases.
Expediting extensions of certifications and undertakings
11.4 The Bill introduces a new process to expedite extensions of certifications,
access undertakings and access codes. This process should benefit a wide range
of stakeholders. It will allow service providers the opportunity to streamline
any application for extending certifications, undertakings or codes, thereby
6 Trade Practices Amendment (National Access Regime) Bill 2005
Outline
avoiding potential regulatory uncertainty or delay. This will generate benefits to
access seekers and consumers, by expediting regulatory certainty for the terms
and conditions of access, and by increasing transparency through a public
consultation process.
New reporting requirements on the Council and the Commission
11.5 As the Government's key adviser on the regime, the Council will be
required to report annually on the operation and effects of the regime, including
on specific matters identified in the Bill.
11.6 The Commission will be required to include information in its annual
report regarding the time it took to make certain decisions, and to include
information about decisions made under the new provisions in existing public
registers.
Trade Practices Amendment (National Access Regime) Bill 2005 7
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Financial Impact Statement
1.1 The financial implications arising from the passage of this Bill will be
considered in a budget context. The Bill will have some impacts on the
activities of the National Competition Council, the Australian Competition and
Consumer Commission and the Australian Competition Tribunal.
8 Trade Practices Amendment (National Access Regime) Bill 2005
1
Regulation Impact Statement
Trade Practices Amendment (National Access Regime)
Bill 2005
Introduction
1.1 The Government accepted the majority of the Productivity Commission's
recommendations in its Inquiry Report No. 17, Review of the National Access
Regime. While a regulation impact statement (RIS) is required for the
legislative amendments on those recommendations, the Government considers
that the Productivity Commission's analysis in the review report is adequate, so
the review report may be considered to substitute for the RIS for those
recommendations that have been accepted unchanged by the Government.
Copies of the report can be found at
http://www.pc.gov.au/inquiry/access/finalreport/index.html.
1.2 The Government decided to consider the practicality of certain
recommendations of the Productivity Commission report in the context of
industry-specific regimes, for example, in the Productivity Commission's
Review of the Gas Access Regime. The Government also decided that certain
recommendations may be considered in the context of a future review of the
regime, to be held five years after the changes in this Bill are put in place.
Further, the Government signalled an intention to work with participating
jurisdictions to seek a resolution on a number of outstanding recommendations.
The regulatory impacts of these recommendations are not examined in this
document.
1.3 The Government made variations to some of the Productivity
Commission's recommendations. However, as the variations are minor or
machinery in nature, the analysis contained in the Productivity Commission's
Report adequately addresses those impacts.
Trade Practices Amendment (National Access Regime) Bill 2005 9
Regulation Impact Statement
1.4 Recommendation 8.1 of the Productivity Commission Report is the only
recommendation to which the Government has made significant modifications.
While the Government agreed that certain elements of the recommendation
might be considered in the context of the next review of Part IIIA in five years
time, the Government did propose a response to deal with the problem
identified by the Productivity Commission (and described below) in the
intervening period. A RIS is provided below.
Problem
1.5 Declaration of a service under Part IIIA establishes a right for access
seekers to negotiate terms and conditions of access with facility owners. If
negotiation is unsuccessful, Part IIIA establishes an enforceable right to dispute
resolution through arbitration by either a private arbitrator or the Australian
Competition and Consumer Commission (the Commission).
1.6 While Part IIIA does not preclude private negotiation between an access
seeker and a facility owner, declaration of a service shifts the negotiating
balance. The fact that negotiations for declared services are underpinned by the
threat of arbitration will inevitably condition those negotiations.
1.7 Negotiations between access seekers and access providers can also be
affected by imbalances in information available to the parties. A service
provider's greater appreciation of the cost and price structures of the services in
question, their technical operation and the degree of spare capacity weakens the
bargaining position of the access seeker.
1.8 The magnitude of this perceived problem is unclear, given that, to date
there have not been any arbitrated outcomes under Part IIIA and several
industry-specific regimes already specify types of information to be exchanged
between the parties. However, the services that have thus far been the subject of
an access declaration include: payroll deduction services provided by the
Department of Employment, Training and Youth Affairs, Western Australian
gas distribution services, Qantas and Ansett ramp and cargo terminal services
and particular airport services at Melbourne and Sydney international airports,
rail track services in Queensland, New South Wales, Western Australia and
South Australia, electricity services in Western Australia, and water and sewage
transmission and interconnection services in New South Wales.
Objective
1.9 The objective is to facilitate negotiations where possible between access
providers and access seekers after declaration of a service without creating
regulatory uncertainty.
10 Trade Practices Amendment (National Access Regime) Bill 2005
Regulation Impact Statement
Options
1.10 Recommendation 8.1 of the Productivity Commission Report
recommended that:
The arbitration provisions of Part IIIA should be amended to provide for
`two-sided' information disclosure requirements involving both the
access provider and the access seeker. The access seeker should be
required to provide sufficient information, including technical and
commercial requirements, to enable the access provider to respond to
the request for access. The provider of the declared service should be
required to provide sufficient information to an access seeker to
facilitate effective negotiation on the terms and conditions of access.
This should include:
2 information on the availability of the service, including any reasons why
the service is not available on the conditions sought by the access seeker;
3 an offer of the terms and conditions of access to the service;
4 sufficient information (such as the costs of operating the facility and
providing the service) to enable the access seeker to make a reasonable
judgement of the basis on which the terms and conditions of access were
determined; and
This information should be provided within 28 days of the access seeker
submitting its request for access to the service provider.
4.1 An alternative option available for consideration is that the Commission
publish non-binding guidelines indicating to commercial parties what type of
information is likely best to facilitate negotiations after declaration of a service.
This issue may be considered in the context of the next review of Part IIIA, in
five years time.
Impact analysis
Identification of impact groups
4.2 As the proposal relates to the arbitration provisions, and arbitration under
Part IIIA follows declaration of a service, the impact groups include parties
subject to a declaration, or those who may become subject to a declaration.
4.3 Since Part IIIA's inception, there have been 33 applications to have
services declared. Grouped by sector, there have been 14 applications for rail
Trade Practices Amendment (National Access Regime) Bill 2005 11
Regulation Impact Statement
services, 12 for airport services, four for water and sewage services, one for gas
services, one for electricity transmission and distribution, and one for payroll
services. However, a number of the applications for rail, airport, and water and
sewage services involved an applicant seeking declaration of multiple services
provided by a single infrastructure owner/operator.
4.4 In spite of the number of applications submitted, there have been few
access arrangements arising directly from the Part IIIA declaration provisions.
There have been only two declarations, of cargo handling services at Sydney
and Melbourne airports, and to date the Commission has not been required to
exercise its arbitration powers.
4.5 As a consequence, it is difficult to predict with certainty the quantum of
parties in each of the two main impact groups likely to be affected by this
proposal. However, certain key features of the parties in each group can be
identified, and examples of each can be cited.
Service providers
4.6 Under the declaration process, access is provided only to services produced
by the infrastructure facility, and not to the facility itself. Section 44B provides
clarification that the term `service' includes the use of an infrastructure facility
such as a road or railway line, handling or transporting things such as goods or
people, and a communications service or similar service, but that it excludes the
supply of goods, the use of intellectual property or of a production process,
except to the extent that it is an integral but subsidiary part of the service.
Further, declaration is only possible if the infrastructure facility by which the
services are to be provided is of national significance, having regard to the size
of the facility, the importance of the facility to constitutional trade or
commerce, or the importance of the facility to the national economy. In
addition, it must also be uneconomical for anyone to develop another facility to
provide the service. As a consequence, the service providers in this context
either own or operate a facility of national significance (duplication of which
must be uneconomical) that is used, or is to be used, to provide a service subject
to declaration. Such facilities traditionally tended to be held in public
ownership, due in part to the significant capital required to develop a facility.
Since the mid-1990s, however, many of these previously government-owned
vertically integrated entities (for example, electricity, rail, gas and port sectors)
have been privatised or corporatised and have been subjected to vertical
separation. Infrastructure service providers now will be either a vertically
integrated provider (a provider of an infrastructure service that also provides
services in an upstream or downstream market for example, an electricity
authority responsible for generation, transmission and distribution) or a non-
integrated provider (a provider of an infrastructure service which is not
involved in providing services in upstream or downstream markets).
12 Trade Practices Amendment (National Access Regime) Bill 2005
Regulation Impact Statement
Access seekers
4.7 As the services provided by these natural monopoly facilities have been
subjected to varying forms of contestability, third party access seekers could
include participants from a wide range of sectors motivated to compete on
reasonable terms and conditions with service providers.
4.8 As noted above, since Part IIIA's inception, there have been
33 applications to have services declared. Generally only one party has sought
access in relation to each application.
Assessment
4.9 The benefits of providing statutory information disclosure requirements
were assessed in the Productivity Commission report. The following
assessment focuses on the relative merits of the two approaches for
implementing these disclosure requirements.
4.10 Statutory information disclosure obligations have been a common feature
of various industry-specific access regimes, including several state rail access
regimes submitted for certification, the Gas Code, the telecommunications
access regime contained in Part XIC of the TP Act, and the generic access
regime applicable in Queensland. Based upon a comparison of these
arrangements, the Productivity Commission recommended introducing
information disclosure requirements within Part IIIA.
4.11 However, such introduction would raise several difficulties in practice in
the context of the regime's generic framework for access.
4.12 Given that one of the policy objectives in responding to the Productivity
Commission report is to strengthen incentives for commercial negotiation, there
are challenges in establishing arrangements that provide certainty for the parties
concerned but do not create additional opportunities for further dispute and
delay. It would be difficult in a generic regime to specify with adequate
certainty, the nature of the information that is required for each case to be
disclosed, either by general description or by specifying a minimum level of
information. If the information is not specifically certain, it provides limited
benefit to the parties concerned, and may contribute to increased costs and
delays. This uncertainty and the need to provide a process adequately to protect
commercially confidential information could create the potential for further
disputes, appeals and delays.
4.13 The benefit of industry-specific access regimes is that it will be easier to
specify with greater certainty the nature of the information that is required for
each case to be disclosed, and hence avoid uncertainty and the possibility of
further disputes, appeals and delays. The Productivity Commission itself
Trade Practices Amendment (National Access Regime) Bill 2005 13
Regulation Impact Statement
considered that detailed information requirements, such as specific pre-
determined information packages, were more suited to industry-specific
regimes. This option supports the Productivity Commission's recommendation
for some form of mandatory information disclosure, while counterbalancing the
competing aims of certainty for the parties concerned, and protection of
commercially confidential information.
Consultation
4.14 The scope of the inquiry required the Productivity Commission to report
on current arrangements established by Clause 6 of the CPA and Part IIIA for
regulation of access to significant infrastructure facilities, and ways of
improving them, taking into account a number of identified aims or
considerations, as well as any recent relevant studies undertaken.
4.15 The Productivity Commission advertised the commencement of the
inquiry in the national press and invited public submissions. To help those
preparing submissions, it released an issues paper in 2000, and established a
website (at www.pc.gov.au/inquiry/access) on which it placed relevant
legislation, inquiry material and submissions from interested parties.
4.16 The Productivity Commission conducted informal discussions with more
than 60 groups and individuals representing a wide range of interests, and held
two roundtables to elicit views on the efficacy of the regime and possible
modifications to it. A range of regulators, lawyers, economists, facility owners,
access seekers and end user/consumer groups attended.
4.17 In March 2001, the Productivity Commission released a Position Paper
outlining its preliminary views, findings and proposals. This report proposed
introducing information disclosure requirements into Part IIIA. The
Productivity Commission followed this with public hearings in Melbourne,
Sydney, Brisbane and Perth during May and June 2001. Some 28 participants
attended the hearings.
4.18 Prior to the release of the Position Paper, the Productivity Commission
received 54 submissions. A further 72 submissions were lodged in response to
the Position Paper, from a wide cross-section of interests, including state
governments, private owners or operators of infrastructure facilities, access
seekers, those involved in administering access regulation, the legal profession,
and academics. Submissions indicated that there was widespread support for
this option in principle (including by business, the Council and some state
governments) but disagreement about specification of information to be
disclosed. For example, Energy Australia and Freight Australia argued for
broader principles concerning information disclosure requirements for
Part IIIA.
14 Trade Practices Amendment (National Access Regime) Bill 2005
Regulation Impact Statement
4.19 The Productivity Commission's inquiry report was released on 28
September 2001. The Government consulted with all jurisdictions in preparing
its response to the final report. Overall, jurisdictions largely supported the
interim response, and there were no significant changes in the final response.
Conclusion
4.20 The preferred option is for statutory information disclosure requirements
to be included in industry-specific access regimes, rather than within Part IIIA,
for the reasons outlined above. In relation to declarations made under Part IIIA,
the Commission may publish non-binding guidelines indicating to commercial
parties what type of information is likely best to facilitate negotiations after
declaration.
Implementation and Review
4.21 As it is proposed that statutory information disclosure requirements be
included in industry-specific access regimes, no legislative implementation will
occur under this recommendation. However, the Productivity Commission's
original proposal will be reviewed as part of the next review of Part IIIA in five
years time.
Trade Practices Amendment (National Access Regime) Bill 2005 15
1
Notes on Individual Clauses
Clause 1 -- Short title
1.1 This clause provides for this Act to be cited as the `Trade Practices
Amendment (National Access Regime) Act 2005'.
Clause 2 -- Commencement
1.2 The Bill provides for the following commencement times.
2 Table item #1 Sections 1 to 3 and anything in the Bill
not covered by the commencement information in Clause
2 will commence on the day on which this Act receives
Royal Assent.
3 Table item #2 Schedule 1 inserts the respective
amendments to Part IIIA. This Schedule will commence
on a single day to be fixed by Proclamation, or six
months after this Act receives Royal Assent, whichever
is earlier.
Clause 3 -- Schedule(s)
3.1 Where an Act is specified in a Schedule in this Act, the specified Act is
amended or repealed as required by the particular Schedule, and any other item
in a Schedule of this Act has effect according to its terms.
16 Trade Practices Amendment (National Access Regime) Bill 2005
1
Schedule 1 -- Amendments
Trade Practices Act 1974
1.1 Schedule 1 contains the substantive amendments to Part IIIA of the TP Act
recommended by the Productivity Commission and accepted by the
Government.
1.2 The application and transitional provisions, which state the time at which
items come into effect and the conduct to which the items are to apply, are
provided in Part 2 of Schedule 1. In this explanatory memorandum, the
application and transitional provisions are described adjacent to the substantive
amendments contained in Part 1 of Schedule 1 to which those application and
transitional provisions apply.
Item 1 -- Subsection 4N(4) (definition of service)
1.3 Item 1 is a technical amendment that repeals a reference to Subdivision C
of Division 2 from the definition of service in subsection 4N(4) of the TP Act,
and replaces it with a reference to the new Division 2A of Part IIIA. Division
2A of Part IIIA is formed by re-numbering the existing provisions in
Subdivision C of Division 2 of Part IIIA relating to effective access regimes.
Division 2A imposes new timing, publication and reporting requirements on
ministers, the Council and the Commission when determining whether a state
or territory access regime is an effective access regime.
Item 2 -- Section 29O
1.4 Item 2 makes a technical amendment to section 29O by inserting `(1)'
before the word `within'. This makes provision for the new subsection (2) to be
inserted in section 29O by Item 3.
Trade Practices Amendment (National Access Regime) Bill 2005 17
Schedule 1 -- Amendments
Item 3 -- At the end of section 29O
1.5 Item 3 inserts a new subsection 29O(2), to require the Council to report
annually on the operation and effects of the regime. In particular, the Council
will be required to report on the time taken by the Council to make a
recommendation on particular matters, any judicial interpretation of the
`production facility' exemption from the definition of `service' contained in
paragraph (f) of section 44B, any judicial interpretation of the declaration
criteria contained in subsection 44H(4), any factors that have impeded the
regime's capacity to deliver efficient access outcomes, evidence of benefits
arising from arbitration determinations under the regime, evidence of associated
costs, including any evidence of disincentives created for investment in
infrastructure by which declared services are provided, and implications for the
operation of the regime in the future.
Item 4 -- Before Section 44B
New section 44AA Objects of Part
1.6 Item 4 inserts a new section 44AA into Part IIIA, which sets out the objects
of Part IIIA. Two objectives are expressed in section 44AA.
1.7 The first objective, set out in paragraph 44AA(a), explicitly recognises the
importance of fostering efficient investment in new infrastructure.
Consideration of the impact of an access decision in a wider economic and
public benefit context was one of the key reasons for including a statutory
access regime within the National Competition Policy framework. It is not
necessary for the legislation specifically to refer to `long-term investment'
within this objective, as infrastructure investments are inherently long-term in
nature.
1.8 The second objective, set out in paragraph 44AA(b), is to promote a
consistent approach to access regulation in each industry. However, it is also
important to recognise that industry-specific access regimes accepted under
Part IIIA may be divergent due to different market characteristics (as the Gas
Code and National Electricity Code demonstrate). The structure of Part IIIA
provides an inducement for certification of state and territory access regimes,
and to that extent it provides an overarching framework for access regimes.
However, it is not intended that the objects clause place binding requirements
on industry-specific access regimes. The wording of new paragraph 44AA(b) is
intended to clarify that Part IIIA provides a framework to guide, rather than
prescribe, the requirements of state and territory industry regimes, and that the
design and operation of state and territory access regimes is a matter for each
relevant jurisdiction.
18 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
Item 5 -- Section 44B
1.9 Item 5 inserts into section 44B a definition of access code application. This
term provides a method of referring collectively to the various applications that
may be made to the Commission in relation to access codes -- that is, for a new
access code, for the withdrawal or variation of an existing access code, or for
the extension of the period that an existing access code is in operation.
Item 6 -- Section 44B
1.10 Item 6 inserts into section 44B a definition of access code decision. This
term provides a method of referring collectively to the various decisions that
may be made by the Commission following receipt of an access code
application that is, a decision to accept or reject a proposed access code, to
consent or refuse to consent to the withdrawal or variation of an existing access
code, or to extend or refuse to extend the period for which an access code is in
operation.
Item 7 -- Section 44B
1.11 Item 7 inserts into section 44B a definition of access undertaking
application. This term provides a method of referring collectively to the various
applications that may be made to the Commission in relation to access
undertakings -- that is, for a new access undertaking, for the withdrawal or
variation of an existing access undertaking, or for the extension of the period
that an existing access undertaking is in operation.
Item 8 -- Section 44B
1.12 Item 8 inserts into section 44B a definition of access undertaking
decision. This term provides a method of referring collectively to the various
decisions that may be made by the Commission following receipt of an access
undertaking application -- that is, a decision to accept or reject a proposed
access undertaking, to consent or refuse to consent to the withdrawal or
variation of an existing access undertaking, or to extend or refuse to extend the
period for which an access undertaking is in operation.
Item 9 -- Section 44B
1.13 Item 9 inserts into section 44B a definition of final determination, to
establish a means of distinguishing between a final arbitration determination
and an interim arbitration determination.
Trade Practices Amendment (National Access Regime) Bill 2005 19
Schedule 1 -- Amendments
Item 10 -- Section 44B
1.14 Item 10 inserts into section 44B a definition of interim determination, to
clarify that a reference in the Act to an arbitration determination by the
Commission will only be considered an interim determination if the provisions
of the Act expressly refer to it as an interim determination.
Item 11 -- Subsection 44F(1)
1.15 Item 11 makes a technical amendment to subsection 44F(1), to delete the
words `under section 44G', as the Council's recommendation is made under
section 44F rather than section 44G.
Item 12 -- Paragraph 44F(2)(b)
1.16 Item 12 amends paragraph 44F(2)(b) to require the Council to have regard
to the objects of Part IIIA before making a recommendation to the designated
Minister. The objects clause in section 44AA is a statement of principle.
Decision makers will continue to apply existing specific statutory criteria (such
as consideration of the public interest and promotion of competition) in regard
to the declaration and undertakings access routes, and the principles outlined in
Clause 6 of the CPA (such as promotion of competition) in regard to
certifications.
1.17 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides, at table
item number 1, that this amendment applies to applications made to the Council
after the commencement of Item 12.
Item 13 -- At the end of subsection 44F(2)
1.18 Item 13 inserts three notes at the end of subsection 44F(2). Note 1
indicates that section 44GA applies a target time limit (of four months) to the
Council's recommendation. Note 2 indicates that section 44GB provides the
Council with the discretion to invite public submissions. Note 3 indicates that
section 44GC imposes publication requirements on the Council's
recommendation.
Item 14 -- Subsection 44G(1)
1.19 Item 14 amends subsection 44G(1) by replacing `section 44ZZA' with
`Division 6'. New Division 6 incorporates sections 44ZZA to 44ZZC (as
amended by this Bill), and also introduces new provisions providing for the
withdrawal, variation or extension of access undertakings and access codes, as
well as merit review by the Tribunal of access undertaking or access code
20 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
decisions. The effect is that the Council cannot recommend declaration of a
service that is the subject of an access undertaking.
Item 15 -- After subsection 44G(1)
1.20 Item 15 inserts a new subsection 44G(1A), to prevent the Council from
recommending declaration of any service provided by a facility so long as a
decision of the Commission is in force under subsection 44PA(3) approving a
tender process, for the construction and operation of the facility, as a
competitive tender process. The service must also have been specified in the
application made to the Commission for approval of the tender process, as
provided by new subsection 44PA(2)(a). New section 44PC makes it clear that
a decision by the Commission under subsection 44PA(3) to approve a tender
process as a competitive tender process continues in force until such a time as
the Commission revokes its decision under the discretionary revocation
provision in subsection 44PC(1), or the Commission is required to revoke its
decision because the requirements of subsection 44PC(2) (`Mandatory
revocation') are met.
Item 16 -- Paragraph 44G(2)(a)
1.21 Item 16 amends paragraph 44G(2)(a), to provide that the Council cannot
recommend that a service be declared unless it is satisfied, inter alia, that
access (or increased access) to the service would promote a material increase in
competition in at least one market (whether or not in Australia), other than the
market for the service. In responding to the Productivity Commission's report,
the Government indicated that while the current declaration criteria (such as
`the national significance' test) preclude declaration where the relevant
infrastructure and subsequent public benefits are not significant, this does not
sufficiently address the situation where, irrespective of the significance of the
infrastructure, declaration would only result in marginal increases in
competition. The change will ensure access declarations are only sought where
increases in competition are not trivial.
1.22 Subitem 117(1), contained in Part 2 of Schedule 1 of the Bill, provides
that the amendment made by Item 16 will apply to applications made to the
Council after the commencement of Item 16.
Item 17 -- After Paragraph 44G(3)(a)
1.23 Item 17 amends subsection 44G(3), by inserting a new
paragraph 44G(3)(aa). This provision requires the Council to have regard to the
objects of Part IIIA when deciding whether an access regime established by a
state or territory that is a party to the CPA is an effective access regime, while
Trade Practices Amendment (National Access Regime) Bill 2005 21
Schedule 1 -- Amendments
deliberating on an application to declare a service. The objects clause in
section 44AA is a statement of principle. Decision makers will continue to
apply existing specific statutory criteria (such as consideration of the public
interest and promotion of competition) in regard to the declaration and
undertakings access routes, and the principles outlined in Clause 6 of the CPA
(such as promotion of competition) in regard to certifications.
1.24 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides at table
item number 1, that this amendment applies to applications made to the Council
after the commencement of Item 17.
Item 18 -- At the end of Subdivision A of Division 2 of Part IIIA
1.25 Item 18 inserts new sections 44GA, 44GB and 44GC at the end of
Subdivision A of Division 2 of Part IIIA.
New section 44GA Target time limit on Council recommendation
1.26 Section 44GA introduces a target time limit for the Council's assessment
of declaration applications. It requires the Council to use its best endeavours to
make a recommendation within a period of four months from the date of receipt
of the application. If the Council cannot make a recommendation within that
initial four-month period, it must extend the time limit by publishing a
notification to that effect in a national newspaper. Again, if the Council cannot
make a recommendation within the extended time limit, the publication
obligation applies to a further extension. While there is no limit on the number
of times the Council may extend the time limit, the requirement that the
decision maker publish notification of any extension beyond the target time
limit provides for regulatory transparency and flexibility for decision makers,
thereby increasing incentives for timely decision-making.
1.27 Item 116, contained in Part 2 of Schedule 1 of the Bill, provides, at table
item number 1, that this amendment applies to applications made to the Council
after the commencement of Item 18.
New section 44GB Council may invite public submissions on the
application
1.28 Section 44GB provides the Council with the discretion to seek public
input on an application for declaration of a service, provided that the Council
considers that it is appropriate and practicable to do so. Where the Council
exercises its discretion, subsection (3) requires it to have regard to any
submission it receives in deciding what it will recommend to the designated
Minister. Public input into the regime's decision-making process is desirable
for more informed decision-making, particularly when assessing the public
22 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
interest in each case. This requirement is consistent with the Council's existing
practices, as the discretion ensures that the Council is not bound when practical
limitations suggest that consultation would not be effective.
Subsections 44GB(5) and (6) ensure that the Council can make an appropriate
assessment of any claims to restrict publication of a submission on the grounds
that it contains confidential commercial information. Should the Council refuse
a request for a submission, or part thereof, not to be made public, the person
making it may withdraw the whole or the part of the submission, with the
consequence that the Council must not have regard to it in making its
recommendation.
1.29 Subitem 118(1), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to applications made to the Council after
the commencement of Item 18.
New section 44GC Council must publish its recommendation
1.30 Section 44GC requires the Council to publish its recommendation, and its
reasons for recommending that the designated Minister declare or not declare a
service. This requirement should enhance procedural transparency and
regulatory accountability. It also facilitates informed consideration of whether
there are grounds to challenge a decision by way of merit review before the
Tribunal, or judicial review by the courts. Subsection 44GC(4) gives the
Council the discretion to consult with relevant commercial parties prior to
publication, to determine whether the documents proposed for publication
contain any information which should be excluded from publication on the
grounds that the information is confidential commercial information.
Subsection 44GC(5) requires the Council to have regard to submissions in
deciding what to publish.
1.31 Subitem 119(1), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to recommendations made by the
Council after the commencement of Item 18.
Item 19 -- At the end of subsection 44H(1)
1.32 Item 19 inserts a note at the end of subsection 44H(1) (which requires the
designated Minister either to declare the service or decide not to declare the
service), to indicate that section 44HA imposes publication requirements on the
designated Minister's decision.
Trade Practices Amendment (National Access Regime) Bill 2005 23
Schedule 1 -- Amendments
Item 20 -- After subsection 44H(1)
1.33 Item 20 requires the designated Minister to have regard to the objects
clause when making his or her decision whether or not to declare a service.
Consequently, the Tribunal, if called upon under section 44K to review the
designated Minister's decision, must also have regard to the objects clause by
way of the operation of existing subsection 44K(4), which states that the review
by the Tribunal is a reconsideration of the matter.
1.34 The objects clause in section 44AA is a statement of principle. Decision
makers will continue to apply existing specific statutory criteria (such as
consideration of public interest and promotion of competition) in regard to the
declaration and undertakings access routes, and the principles outlined in
Clause 6 of the CPA (such as promotion of competition) in regard to
certifications.
1.35 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides, at table
item number 2, that this amendment applies to recommendations made to the
designated Minister after the commencement of Item 20, where the applications
for recommendations were also made to the Council after the commencement
of Item 20.
Item 21 -- Subsection 44H(3)
1.36 Item 21 amends subsection 44H(3) by replacing `section 44ZZA' with
`Division 6'. New Division 6 incorporates sections 44ZZA to 44ZZC (as
amended by this Act), and also introduces new provisions providing for the
withdrawal, variation or extension of access undertakings and access codes, as
well as merit review by the Tribunal of access undertaking decisions or access
code decisions. The effect is that the designated Minister cannot declare a
service that is the subject of an access undertaking.
Item 22 -- After subsection 44H(3)
1.37 Item 22 inserts a new subsection 44H(3A), to prevent the designated
Minister from declaring any service provided by a facility so long as a decision
of the Commission is in force under subsection 44PA(3) approving a tender
process, for the construction and operation of the facility, as a competitive
tender process. The service must also have been specified in the application
made to the Commission for approval of the tender process, as provided by new
subsection 44PA(2)(a). New section 44PC makes it clear that a decision by the
Commission under subsection 44PA(3) to approve a tender process as a
competitive tender process continues in force until such a time as the
Commission revokes its decision under the discretionary revocation provision
in subsection 44PC(1), or the Commission is required to revoke its decision
24 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
because the requirements of subsection 44PC(2) (`Mandatory revocation') are
met.
Item 23 -- Paragraph 44H(4)(a)
1.38 Item 23 amends paragraph 44H(4)(a), to provide that the designated
Minister cannot declare a service unless he or she is satisfied, inter alia, that
access (or increased access) to the service would promote a material increase in
competition in at least one market (whether or not in Australia), other than the
market for the service. In responding to the Productivity Commission's report,
the Government indicated that while the current declaration criteria (such as
`the national significance' test) preclude declaration where the relevant
infrastructure and subsequent public benefits are not significant, this does not
sufficiently address the situation where, irrespective of the significance of the
infrastructure, declaration would only result in marginal increases in
competition. The change will ensure access declarations are only sought where
increases in competition are not trivial.
1.39 Subitem 117(2), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to declaration recommendations made to
the designated Minister after the commencement of Item 23, where the
applications for the recommendations were also made after the commencement
of Item 23.
Item 24 -- After paragraph 44H(5)(a)
1.40 Item 24 inserts a new paragraph 44H(5)(aa) to require the Minister to
have regard to the objects clause when deciding whether an access regime
established by a state or territory that is a party to the CPA is an effective
access regime. The objects clause in section 44AA is a statement of principle.
Decision makers will continue to apply existing specific statutory criteria (such
as consideration of the public interest, or promotion of competition) in regard to
the declaration and undertakings access routes, and the principles outlined in
Clause 6 of the CPA (such as promotion of competition) in regard to
certifications.
1.41 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides, at table
item number 2, that this amendment applies to recommendations made to the
designated Minister after the commencement of Item 24, where the applications
for recommendations were also made to the Council after the commencement
of Item 24.
Trade Practices Amendment (National Access Regime) Bill 2005 25
Schedule 1 -- Amendments
Item 25 -- Subsection 44H(7)
1.42 Item 25 repeals subsection 44H(7), which contained requirements for the
designated Minister to publish his or her decision on receiving a declaration
recommendation from the Council, as Item 27 is inserting a new section 44HA
to require the designated Minister to publish his or her decision and the reasons
for the decision.
1.43 Subitem 119(2), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to decisions made after the
commencement of Item 25.
Item 26 -- Subsection 44H(9)
1.44 Item 26 makes a technical amendment to subsection 44H(9), to support
the amendments made by Item 25 to repeal subsection 44H(7), and by Item 27
to insert a new section 44HA requiring the designated Minister to publish his or
her decision and the reasons for the decision.
1.45 Item 120, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to declaration recommendations made to the
designated Minister after the commencement of Item 26.
Item 27 -- After section 44H
New section 44HA Designated Minister must publish his or her decision
1.46 Section 44HA requires the designated Minister to publish his or her
decision on a declaration recommendation and his or her reasons for the
decision. This requirement should enhance procedural transparency and
regulatory accountability. In addition, introducing this requirement will
facilitate informed consideration of whether there are grounds to challenge a
decision by way of merit review before the Tribunal, or judicial review by the
courts. Subsection 44HA(3) gives the designated Minister the discretion to
consult with relevant commercial parties prior to publication, to determine
whether the documents proposed for publication contain any information which
should be excluded from publication on the grounds that the information is
confidential commercial information. Subsection 44HA(4) requires the
designated Minister to have regard to submissions in deciding what to publish.
1.47 Subitem 119(2), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to decisions made after the
commencement of Item 27.
26 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
Item 28 -- At the end of subsection 44J(1)
1.48 Item 28 inserts a requirement at the end of subsection 44J(1), that the
Council must have regard to the objects clause when considering whether to
recommend to the designated Minister that a declaration be revoked. The
objects clause in section 44AA is a statement of principle. Decision makers will
continue to apply existing specific statutory criteria (such as consideration of
the public interest, or promotion of competition) in regard to the declaration and
undertakings access routes, and the principles outlined in Clause 6 of the CPA
(such as promotion of competition) in regard to certifications.
1.49 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides, at table
item number 3, that this amendment applies to revocation recommendations
made to the designated Minister after the commencement of Item 28.
Item 29 -- At the end of subsection 44J(3)
1.50 Item 29 inserts a note at the end of subsection 44J(3) to indicate that
section 44JA applies a target time limit (of 60 days) to the designated
Minister's decision under subsection 44J(3) either to revoke a declaration or
decide not to revoke a declaration.
Item 30 -- After subsection 44J(3)
1.51 Item 30 inserts a new subsection 44J(3A) to require the designated
Minister to have regard to the objects of Part IIIA in making his or her decision
under subsection 44J(3) either to revoke or not to revoke a declaration.
Consequently, the Tribunal, if called upon under section 44L to review the
Minister's decision, must also have regard to the objects clause by way of the
operation of existing subsection 44L(3), which states that the review by the
Tribunal is a reconsideration of the matter.
1.52 The objects clause in section 44AA is a statement of principle. Decision
makers will continue to apply existing specific statutory criteria (such as
consideration of the public interest and promotion of competition) in regard to
the declaration and undertakings access routes, and the principles outlined in
Clause 6 of the CPA (such as promotion of competition) in regard to
certifications.
1.53 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides at table
item number 3, that this amendment applies to revocation recommendations
made to the designated Minister after the commencement of Item 30.
Trade Practices Amendment (National Access Regime) Bill 2005 27
Schedule 1 -- Amendments
Item 31 -- After section 44J
New section 44JA Target time limit on designated Minister's revocation
decision
1.54 Item 31 inserts a new section 44JA to introduce a target time limit for the
designated Minister's decision on a recommendation under section 44J. It
requires the designated Minister to use his or her best endeavours to make a
recommendation within a period of 60 days from the date of receipt of the
recommendation. If the designated Minister cannot make a decision within that
initial 60-day period, he or she must extend the time limit by publishing a
notification to that effect in a national newspaper. Again, if the designated
Minister cannot make a decision within the extended time limit, the publication
obligation applies to a further extension. While there is no limit on the number
of times the designated Minister may extend the time limit, the requirement that
the decision maker publish notification of any extension beyond the target time
limit provides for regulatory transparency and flexibility for decision makers,
thereby increasing incentives for timely decision-making.
1.55 Item 116, contained in Part 2 of Schedule 1 of the Bill, provides at table
item number 2, that this amendment applies to revocation recommendations
made to the designated Minister after the commencement of Item 31.
Item 32 -- At the end of subsection 44K(4)
1.56 Item 32 inserts a note at the end of subsection 44K(4) to indicate that
section 44ZZOA applies a target time limit (of four months) to the Tribunal's
decision under subsection 44K(4) for review of a decision by the designated
Minister to declare or not to declare a service.
Item 33 -- At the end of subsection 44L(3)
1.57 Item 33 inserts a note at the end of subsection 44L(3) to indicate that
section 44ZZOA applies a target time limit (of four months) to the Tribunal's
decision under subsection 44L(3) for review of a decision by the designated
Minister not to revoke a declaration of service.
Item 34 -- Subdivision C of Division 2 of Part IIIA (heading), Item 35 --
Before section 44M
1.58 Item 34 repeals the heading Subdivision C `Miscellaneous', and Item 35
inserts a new heading establishing Division 2A of Part IIIA `Effective access
regimes'. Division 2A of Part IIIA is a re-numbering of the existing provisions
in Subdivision C of Division 2 of Part IIIA relating to effective access regimes.
28 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
Division 2A imposes new timing, publication and reporting requirements on
ministers, the Council and the Commission when determining whether a state
or territory access regime is an effective access regime. Item 35 also inserts the
subheading `Subdivision A -- Recommendation by Council', to indicate that
the measures to be applied when the Council makes recommendations
commence from section 44M.
Item 36 -- At the end of subsection 44M(3)
1.59 Item 36 inserts three notes at the end of subsection 44M(3). Note 1
indicates that section 44NC applies a target time limit (of six months) to the
Council's recommendation that the Commonwealth Minister decide to extend
the period for which a decision is in force, that an access regime is or is not an
effective access regime. Note 2 indicates that section 44NE provides the
Council with the discretion to invite public input on an application that an
access regime be declared an effective access regime. Note 3 indicates that
section 44NF imposes publication requirements on the Council's
recommendation on an application that an access regime be declared an
effective access regime.
Item 37 -- After paragraph 44M(4)(a)
1.60 Item 37 inserts a new paragraph 44M(4)(aa) to require the Council to have
regard to the objects clause of Part IIIA when making a recommendation to the
Commonwealth Minister under subsection 44M(3) that he or she decide that an
access regime is an effective access regime, or is not an effective access regime.
The objects clause in section 44AA is a statement of principle. Decision makers
will continue to apply existing specific statutory criteria (such as consideration
of the public interest and promotion of competition) in regard to the declaration
and undertakings access routes, and the principles outlined in Clause 6 of the
CPA (such as promotion of competition) in regard to certifications.
1.61 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides, at table
item number 4, that this amendment applies to applications made to the Council
after the commencement of Item 37.
Item 38 -- Before section 44N
1.62 Item 38 inserts the subheading `Subdivision B -- Decision by
Commonwealth Minister', to indicate that the measures to be applied when the
Commonwealth Minister is making his or her decision on a recommendation
from the Council that an access regime is an effective access regime or is not an
effective access regime commence from section 44N.
Trade Practices Amendment (National Access Regime) Bill 2005 29
Schedule 1 -- Amendments
Item 39 -- Subsection 44N(1)
1.63 Item 39 inserts the words `under section 44M' after `recommendation', to
clarify that the obligations applicable to the decision by the Commonwealth
Minister under subsection 44N(1) follow receipt by the Commonwealth
Minister of a recommendation made by the Council under section 44M.
Item 40 -- At the end of subsection 44N(1)
1.64 Item 40 inserts two notes at the end of subsection 44N(1). Note 1
indicates that section 44ND applies a target time limit (of 60 days) to the
Commonwealth Minister's decision that an access regime is or is not an
effective access regime. Note 2 indicates that section 44NG imposes
publication requirements on the Commonwealth Minister's decision.
Item 41 -- After paragraph 44N(2)(a)
1.65 Item 41 inserts paragraph 44N(2)(a)(a) and requires the Commonwealth
Minister to have regard to the objects clause of Part IIIA when making his or
her decision on the effectiveness of an access regime. Consequently, the
Tribunal, if called upon under section 44O to review the Commonwealth
Minister's decision, must also have regard to the objects clause by way of the
operation of existing subsection 44O(3), which states that the review by the
Tribunal is a reconsideration of the matter.
1.66 The objects clause in section 44AA is a statement of principle. Decision
makers will continue to apply existing specific statutory criteria (such as
consideration of the public interest and promotion of competition) in regard to
the declaration and undertakings access routes, and the principles outlined in
Clause 6 of the CPA (such as promotion of competition) in regard to
certifications.
1.67 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides at table
item number 5, that this amendment applies to applications made to the
Commonwealth Minister after the commencement of Item 41, where the
applications for the recommendations were also made after the commencement
of Item 41.
Item 42 -- At the end of subsection 44N(3)
1.68 Item 42 inserts a note at the end of subsection 44N(3) to indicate that
section 44NB enables the period for which the decision is in force to be
extended.
30 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
Item 43 -- Subsection 44N(4)
1.69 Item 43 repeals subsection 44N(4), which placed obligations on the
Commonwealth Minister to publish his or her decision that an access regime is
or is not an effective access regime. This item is being repealed because a new
section 44NG, introduced under Item 44, requires the Commonwealth Minister
to publish his or her decision and the reasons for the decision.
1.70 Subitem 119(2), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to decisions made after the
commencement of Item 43.
Item 44 -- After subsection 44N
1.71 Item 44 inserts new Subdivisions C (new sections 44NA and 44NB) and
D (new sections 44NC to 44NG) after section 44N. These new provisions are
intended to streamline processes for the application for, and granting of,
extensions of decisions that a state or territory regime for access to a service is
an effective access regime.
New Subdivision C -- Extensions of Commonwealth Minister's decision
New Section 44NA Recommendation by Council
1.72 Section 44NA introduces a process to allow a responsible Minister for a
state or territory to request the Council to recommend to the Commonwealth
Minister that he or she decide to extend the period for which a decision is in
force under section 44N. Subsection 44NA(4) provides that the Council must
make its assessment in accordance with subsection 44M(4) (which under
Item 37 will include regard to the objects clause of Part IIIA), and
subsection 44NA(5) requires that the recommendation be made in writing to the
Commonwealth Minister. New section 44NC applies a target time limit (of
six months) to the Council's recommendation. Section 44NA is followed by
three notes. Note 1 indicates that section 44NC applies a target time limit (of
six months) to the Council's recommendation. Note 2 indicates that section
44NE provides the Council with the discretion to invite public submissions.
Note 3 indicates that section 44NF imposes publication requirements on the
Council's recommendation.
1.73 Subitem 121(1), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to decisions made by the
Commonwealth Minister before or after the commencement of Item 44 that an
access regime is an effective access regime.
Trade Practices Amendment (National Access Regime) Bill 2005 31
Schedule 1 -- Amendments
New Section 44NB Decision by the Commonwealth Minister
1.74 Section 44NB provides that the Commonwealth Minister must make a
decision upon receiving a recommendation from the Council under
section 44NA on whether to extend the period for the decision that is in force
under section 44N. It also specifies the obligations that flow from a decision to
extend the period or not to extend the period. Section 44NB is followed by
Note 1, which indicates that section 44ND applies a target time limit (of
60 days) to the Commonwealth Minister's decision that an access regime is or
is not an effective access regime.
New Subdivision D -- Procedural provisions
New Section 44NC Target time limits -- Council
1.75 Section 44NC introduces a target time limit for the Council's assessment
of an application that an access regime is an effective access regime, or to
extend the period for which such a decision is in force. It requires the Council
to use its best endeavours to make a recommendation within a period of six
months from the date of receipt of the application. If the Council cannot make a
recommendation within that initial six-month period, it must extend the time
limit by publishing a notification to that effect in a national newspaper. Again,
if the Council cannot make a recommendation within the extended time limit,
the publication obligation applies to a further extension. While there is no limit
on the number of times the Council may extend the time limit, the requirement
that the decision maker publish notification of any extension beyond the target
time limit provides for regulatory transparency and flexibility for decision
makers, thereby increasing incentives for timely decision-making.
1.76 Item 116, contained in Part 2 of Schedule 1 of the Bill, provides at table
item number 3, that this amendment applies to applications made to the Council
after the commencement of Item 44.
New Section 44ND Target time limits -- Commonwealth Minister
1.77 Section 44ND introduces a target time limit for the Commonwealth
Minister to make his or her decision that an access regime is an effective access
regime, or to extend the period for which such a decision is in force. It requires
the Commonwealth Minister to use his or her best endeavours to make a
decision within a period of 60 days from the date of receipt of the
recommendation from the Council. If the Commonwealth Minister cannot make
a decision within that initial 60-day period, he or she must extend the time limit
by publishing a notification to that effect in a national newspaper. Again, if the
Commonwealth Minister cannot make a recommendation within the extended
time limit, the publication obligation applies to a further extension. While there
32 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
is no limit on the number of times the Commonwealth Minister may extend the
time limit, the requirement that the decision maker publish notification of any
extension beyond the target time limit provides for regulatory transparency and
flexibility for decision makers, thereby increasing incentives for timely
decision-making.
1.78 Item 116, contained in Part 2 of Schedule 1 of the Bill, provides, at table
item number 4, that this amendment applies to recommendations made to the
Commonwealth Minister after the commencement of Item 44.
New Section 44NE Council may invite public submissions
1.79 Section 44NE provides the Council with the discretion to seek public
input on an application for a decision that an access regime is an effective
access regime or to extend the period that such a decision is in force, provided
that the Council considers that it is appropriate and practicable to do so. Where
the Council exercises its discretion, subsection (3) requires it to have regard to
any submission it receives in deciding what it will recommend to the
Commonwealth Minister. Public input into the regime's decision-making
process is desirable for more informed decision-making, particularly when
assessing the public interest in each case. This requirement is consistent with
the Council's existing practices, as the discretion ensures that the Council is not
bound when practical limitations suggest that consultation would not be
effective. Subsections 44NE(5) and (6) ensure that the Council can make an
appropriate assessment of any claims to restrict publication of a submission on
the grounds that it contains confidential commercial information. Should the
Council refuse a request for a submission, or part thereof, not to be made
public, the person making it may withdraw the whole or the part of the
submission, with the consequence that the Council must not have regard to it in
making its recommendation.
1.80 Subitem 118(1), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to applications made to the Council after
the commencement of Item 44.
New Section 44NF Publication -- Council
1.81 Section 44NF requires the Council to publish its recommendation under
section 44M or 44NA, and its reasons for the recommendation. This
requirement should enhance procedural transparency and regulatory
accountability. It also facilitates informed consideration of whether there are
grounds to challenge a decision by way of merit review before the Tribunal, or
judicial review by the courts. Subsection 44NF(4) gives the Council the
discretion to consult with relevant commercial parties prior to publication, to
determine whether the documents proposed for publication contain any
Trade Practices Amendment (National Access Regime) Bill 2005 33
Schedule 1 -- Amendments
information which should be excluded from publication on the grounds that the
information is confidential commercial information. Subsection 44NF(5)
requires the Council to have regard to submissions in deciding what to publish.
1.82 Subitem 119(1), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to recommendations made by the
Council after the commencement of Item 44.
New Section 44NG Publication -- Commonwealth Minister
1.83 Section 44NG requires the Commonwealth Minister to publish his or her
decision on a recommendation under section 44M or 44NA, and his or her
reasons for the decision. This requirement should enhance procedural
transparency and regulatory accountability. It also facilitates informed
consideration of whether there are grounds to challenge a decision by way of
merit review before the Tribunal, or judicial review by the courts.
Subsection 44NG(3) gives the Commonwealth Minister the discretion to
consult with relevant commercial parties prior to publication, to determine
whether the documents proposed for publication contain any information which
should be excluded from publication on the grounds that it is confidential
commercial information. Subsection 44NG(4) requires the Commonwealth
Minister to have regard to submissions in deciding what to publish.
1.84 Subitem 119(2), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to decisions made after the
commencement of Item 44.
Item 45 -- Before section 44O
1.85 Item 45 inserts the subheading `Subdivision E -- Review of decisions'.
This new subdivision contains arrangements enabling review of the
Commonwealth Minister's decision to decide that an access regime is an
effective access regime, or to extend the period for which such a decision is in
force.
Item 46 -- Subsection 44O(1)
1.86 Item 46 repeals subsection 44O(1) and substitutes a new subsection. New
subsection 44O(1) enables the responsible Minister of the state or territory who
applied to the Council for a recommendation that an access regime is an
effective access regime, or to extend the period for which a decision is in force
that an access regime is an effective access regime, to apply to the Tribunal for
review of the Commonwealth Minister's decision.
34 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
1.87 Item 122, contained in Part 2 of Schedule 1 of the Bill, provides that an
application made to the Tribunal under subsection 44O(1) of the TP Act before
the commencement of Item 122 has effect, after that commencement, as if it
had been made under that subsection after the commencement of Item 122.
Item 47 -- At the end of subsection 44O(3)
1.88 Item 47 inserts a note at the end of subsection 44O(3) to indicate that
section 44ZZOA applies a target time limit (of four months) to the Tribunal's
decision on the review when an application is made under subsection 44O(1).
1.89 Subsection 44O(3) states that the Tribunal's review is a reconsideration of
that matters. As such, in reviewing the Commonwealth Minister's decision, the
Tribunal is required to take into account the matters that the Commonwealth
Minister must take into account when making the decision under section 44N.
This includes the requirement of the Minister to take into account the new
objects clause.
Item 48 -- Before section 44P
1.90 Item 48 inserts the subheading `Subdivision F -- State or Territory
ceasing to be a party to Competition Principles Agreement' before section 44P.
Item 49 -- After section 44P
1.91 Item 49 inserts a new Division 2B into Part IIIA. Division 2B
(`Competitive tender processes for government owned facilities') sets out the
processes that apply to the Commission in making its decision to approve or
refuse to approve a tender process, for the construction and operation of a
facility that is to be owned by the Commonwealth, state or territory, as a
competitive tender process. If the Commission makes such a decision, the
Council, under subsection 44G(1A), cannot recommend declaration of any
service provided by means of the facility and specified in the application
(Item 15 refers), and the designated Minister, under subsection 44H(3A),
cannot declare any such service (Item 22 refers).
New Section 44PA Approval of competitive tender process
1.92 Section 44PA enables the Commonwealth Minister, or the responsible
Minister of a state or territory, to make a written application to the Commission
asking it to approve a tender process, for the construction and operation of a
new facility that is to be owned by either the Commonwealth Government or a
state or territory government, as a competitive tender process.
Subsection 44PA(2) requires that the application must specify the service or
Trade Practices Amendment (National Access Regime) Bill 2005 35
Schedule 1 -- Amendments
services to be provided by means of the facility and be in accordance with
requirements to be prescribed by regulations.
1.93 Subsection 44PA(3) requires the Commission, by notice in writing, either
to approve or refuse to approve the tender process as a competitive tender
process. Subsection (7) is included to assist readers as the notice is not a
legislative instrument within the meaning of section 5 of the Legislative
Instruments Act 2003.
1.94 Notes 1 to 4 are inserted after subsection 44PA(3). Note 1 indicates that
the effect of a decision by the Commission under subsection 44PA(3) is that the
designated Minister cannot declare a service under section 44H if a decision to
approve a tender process as a competitive tender process is in force under this
subsection. Note 2 indicates that section 44PD applies a target time limit (of six
months) to the Commission's decision. Note 3 indicates that section 44PE
provides the Commission with the discretion to invite public submissions on the
application. Note 4 indicates that section 44PF requires that the Commission
publish its decision under subsection 44PA(3) (to approve or refuse to approve
a tender process as a competitive tender process) or under subsection 44PC(1)
(to revoke a decision to approve a tender process as a competitive tender
process), as well as its reasons for the decision.
1.95 Subsection 44PA(4) states the conditions that must be met before the
Commission can approve a tender process as a competitive tender process. The
Commission must be satisfied that reasonable terms and conditions of access to
any service that may be provided by means of the facility will be the result of
the process. The Commission must also be satisfied that the tender process
meets the requirements to be prescribed in regulation.
1.96 Subsection 44PA(5) allows the Commission to specify the period for
which an approval granted under 44PA(3) is to remain in force (unless it is
earlier revoked) under new section 44PC.
1.97 Subsection 44PA(6) allows the Commission to extend a period
determined in subsection 44PA(5) by a specified period. The Commission may
extend the period multiple times.
New Section 44PB Report on conduct of tender process
1.98 Subsection 44PB(1) requires the Commission to ask an applicant for
approval of a tender process as a competitive tender process to give the
Commission a written report of the conduct of the tender process. This
requirement applies after a tenderer has been selected, and will require the
Commission to establish a procedure to keep abreast of the selection of the
tenderer. Subsection 44PB(3) also enables the Commission to seek further
36 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
information upon receipt of the report. These provisions will ensure that the
Commission has the capacity to seek information to determine whether it is
satisfied that the assessment of the tenders was not in accordance with the
tender process advised in the initial application for approval, and consequently
decide under subsection 44PC(1) to revoke its decision to approve a tender
process as a competitive tender process.
1.99 Subsection 44PB(2) enables regulations to be made setting minimum
requirements for such reports.
1.100 Subsection 44PB(4) is included to assist readers as the report is not a
legislative instrument within the meaning of section 5 of the Legislative
Instruments Act 2003.
New Section 44PC Revocation of approval decision
1.101 The Bill provides the Commission with three different grounds for the
revocation of a decision by it to approve a tender process as a competitive
tender process.
1.102 First, under subsection 44PC(1), the Commission is given discretion to
revoke its decision to approve a tender process as a competitive tender process,
if it is satisfied that the assessment of tenders was not in accordance with that
process. Note 1 indicates that section 44PE provides the Commission with the
discretion to invite public submissions on any proposed revocation decision.
Note 2 indicates that section 44PF imposes a requirement on the Commission to
publish its decision.
1.103 Second, subsection 44PC(2) provides that the Commission may revoke
its decision if it is satisfied that the provider of a service being provided by
means of the facility subject to the tender process, and which was specified in
the application for the original approval, is not complying with the terms and
conditions of access to the service that resulted from the tender process. The
Commission is required by subsection 44PC(3) to notify the applicant under
subsection 44PA(1) and the provider that it is proposing to revoke its approval
and invite a written submission from the parties on the Commission's proposal,
to be received by the Commission within the period of 40 business days
(business day being defined in subsection 44PC(6) as a day that is not a
Saturday, a Sunday or a public holiday in the Australian Capital Territory).
Subsection 44PC(4) requires the Commission to consider any written
submission received within the 40 business day period.
1.104 Third, in order to ensure that the Commission receives the information
required to be able to determine whether or not it should exercise its
discretionary revocation power, subsection 44PC(5) provides for the mandatory
Trade Practices Amendment (National Access Regime) Bill 2005 37
Schedule 1 -- Amendments
revocation of the Commission's decision to approve a tender process as a
competitive tender process, where the Commission has requested by notice
either a written report on the conduct of the tender process under
subsection 44PB(1) or further information on the conduct of the tender process
under subsection 44PB(3), and the applicant has not provided the report or
information within 40 business days commencing on the day the Commission
gave the notice. Merit review does not apply to this mandatory revocation
process, as it is a consequence of a failure to respond to the Commission, and
the Commission is not required to make a decision on the issue.
New Section 44PD Target time limits for Commission decisions
1.105 Section 44PD introduces a target time limit for the Commission to make
its decision to approve or refuse to approve a tender process as a competitive
tender process. It requires the Commission to use his or her best endeavours to
make a decision within a period of six months from the date of receipt of the
application. If the Commission cannot make a decision within that initial six-
month period, it must extend the time limit by publishing a notification to that
effect in a national newspaper. Again, if the Commission cannot make a
decision within the extended time limit, the publication obligation applies to a
further extension. While there is no limit on the number of times the
Commission may extend the time limit, the requirement that the decision maker
publish notification of any extension beyond the target time limit provides for
regulatory transparency and flexibility for decision makers, thereby increasing
incentives for timely decision-making.
New Section 44PE Commission may invite public submissions
1.106 Section 44PE provides the Commission with the discretion to seek
public input on an application for approval of a tender process as a competitive
tender process, or on a proposed decision by the Commission under
subsection 44PC(1) to revoke its decision, provided that the Commission
considers it appropriate and practicable to do so. Where the Commission
exercises its discretion, subsection 44PE(3) requires it to have regard to any
submission it receives in making its decision. Public input is desirable for more
informed decision-making, particularly when assessing the public interest in
each case. This requirement is consistent with the Commission's existing
practices, as the discretion ensures that the Commission is not bound when
practical limitations suggest that consultation would not be effective.
Subsections 44PE(5) and (6) ensure that the Commission can make an
appropriate assessment of any claims to restrict publication of a submission on
the grounds that it contains confidential commercial information. Should the
Commission refuse a request for a submission, or part thereof, not to be made
public, the person making it may withdraw the whole or the part of the
38 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
submission, with the consequence that the Commission must not have regard to
it in making its recommendation.
New Section 44PF Commission must publish its decision
1.107 Subsection 44PF(1) requires the Commission to publish its decision to
approve or refuse to approve a tender process as a competitive tender process,
or to revoke its decision to approve a tender process as a competitive tender
process, and its reasons for the decision. This requirement should enhance
procedural transparency and regulatory accountability. It also facilitates
informed consideration of whether there are grounds to challenge a decision by
way of merit review before the Tribunal, or judicial review by the courts.
Subsection 44PF(3) gives the Commission the discretion to consult with
relevant commercial parties prior to publication, to determine whether the
documents proposed for publication contain any information which should be
excluded from publication on the grounds that the information is confidential
commercial information. Subsection 44PF(4) requires the Commission to have
regard to submissions in deciding what to publish.
New Section 44PG Review of Commission's initial decision
1.108 Section 44PG establishes the procedure for a review by the Tribunal on
the merits of a decision by the Commission to approve or not to approve a
tender process as a competitive tender process.
1.109 Subsection 44PG(1) enables a person whose interests are affected by a
decision of the Commission under subsection 44PA(3) (to approve or to refuse
to approve a tender process as a competitive tender process) to apply in writing
to the Tribunal for review of the decision. The person must apply for review
within 21 days after the Commission publishes its decision
(subsection 44PG(2)).
1.110 Subsections 44PG(3) and (4) provide that the review by the Tribunal is a
reconsideration of the matter, and for the purposes of the review, the Tribunal
has the same powers as the Commission. A note follows subsection (3), to
indicate that section 44ZZOA applies a target time limit (of four months) to the
Tribunal's decision on the review.
1.111 Subsections 44PG(6) and (8) set out the respective types of decisions
available to the Tribunal, depending upon the nature of the decision made by
the Commission subject to review. Subsection 44PG(6) establishes that if the
Commission's decision was to refuse to approve a tender process as a
competitive tender process, then the options open to the Tribunal are either to
affirm the Commission's decision, or to set aside the Commission's decision
and approve the process as a competitive tender process. Subsection 44PG(7)
Trade Practices Amendment (National Access Regime) Bill 2005 39
Schedule 1 -- Amendments
provides that a decision of the Tribunal to approve a process as a competitive
tender process is taken to be a decision by the Commission for all purposes of
Part IIIA. This provision provides statutory confirmation that the Commission's
initial decision approving a tender process as a competitive tender process
remains in place, ensuring continuity of immunity from declaration.
Subsection 44PG(8) provides that if the Commission's decision was to approve
a tender process as a competitive tender process, then the options open to the
Tribunal are either to affirm the Commission's decision, or set it aside. The
note that follows draws out the implications of the Tribunal making a decision
to set aside a decision of the Commission under paragraph 44PG(6)(b).
New Section 44PH Review of decision to revoke an approval
1.112 Section 44PH establishes the procedure for review by the Tribunal on
the merits of a decision by the Commission to revoke a decision to approve a
tender process as a competitive tender process.
1.113 Subsection 44PH(1) enables the applicant for approval of a tender
process as a competitive tender process or any other person whose interests are
affected by the decision under subsection 44PC(1) (to revoke a decision to
approve a tender process as a competitive tender process) to apply in writing to
the Tribunal for review of the decision. The person must apply for review
within 21 days after the Commission publishes its decision
(subsection 44PH(2)).
1.114 Subsections 44PH(3) and (4) provide that the review by the Tribunal is a
reconsideration of the matter, and for the purposes of the review, the Tribunal
has the same powers as the Commission. A note follows subsection (3), to
indicate that section 44ZZOA applies a target time limit (of four months) to the
Tribunal's decision on the review.
1.115 Subsection (6) provides that the Tribunal must either affirm or set aside
the Commission's decision.
Item 50 -- Before section 44Q
1.116 Item 50 inserts, before section 44Q, a new Division title: `Division 2C
-- Register of decisions and declarations'.
Item 51 -- After paragraph 44Q(a)
1.117 Item 51 inserts a new paragraph (aa) into section 44Q, to require that the
Commission must maintain a public register that includes each decision of the
Commonwealth Minister to extend the period for which a decision under
40 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
section 44N (that an access regime is or is not an effective access regime for a
service or proposed service) is in force.
Item 52 -- At the end of section 44Q
1.118 Item 52 inserts two new paragraphs (c) and (d) at the end of section 44Q,
to require the Commission to maintain a public register that includes each
decision of the Commission under subsection 44PA(3) to approve a tender
process as a competitive tender process, and each decision of the Commission
under section 44PC to revoke a decision to approve a tender process as a
competitive tender process.
Item 53 -- At the end of subsection 44S(1) (before the note)
1.119 Item 53 amends subsection 44S(1), by adding additional words which
provide that if a third party cannot agree with a provider on one or more aspects
of access to a declared service, either the provider or the third party may notify
the Commission in writing that an access dispute exists, but only to the extent
that those aspect of access to the service are not the subject of an access
undertaking that is in operation. Pursuant to Item 107 (which repeals
section 44ZZB) an undertaking may be offered once a service has been
declared. Item 53 prevents the Commission from arbitrating on matters that are
covered under a post-declaration undertaking.
Item 54 -- Subparagraph 44T(1)(a)(i)
1.120 Item 54 inserts the word `final' into subparagraph 44T(1)(a)(i), to
indicate that the provider may withdraw its notification to the Commission of
an access dispute at any time before the Commission makes its final
determination. This item provides clarification of the differences between an
interim determination and a final determination.
Item 55 -- Subparagraph 44T(1)(a)(ii) and Item 56 --
Subparagraph 44T(1)(a)(ii)
1.121 Item 55 and Item 56 insert the word `final' into
subparagraph 44T(1)(a)(ii) at two places. Cumulatively, these items clarify the
period in which a notification may be withdrawn -- that the third party may
withdraw the provider's notification to the Commission of an access dispute at
any time after the Commission issues a draft final determination, but before the
Commission makes its final determination.
Trade Practices Amendment (National Access Regime) Bill 2005 41
Schedule 1 -- Amendments
Item 57 -- Subsection 44T(2)
1.122 Item 57 inserts the word `final' into subsection 44T(2), to clarify when a
third party may not withdraw a provider's notification.
Item 58 -- Subsection 44V(1)
1.123 Item 58 repeals subsection 44V(1) and inserts a new subsection, to
require the Commission to make a written final determination on third party
access to the service, and to provide the Commission with the discretion to
make an interim determination.
1.124 The discretion to make an interim arbitration determination will ensure
that an access provider does not use the arbitration process as a strategy to
delay providing access, which would render the new six-month target time limit
for arbitrations under Part IIIA unrealistic. This power should ensure that the
access seeker obtains access to the service whilst the arbitration process is
conducted. An interim determination, in providing an indication of the
Commission's view, may also facilitate commercial negotiations. Interim
determinations will not be subject to merit review by the Tribunal.
1.125 Subsection 44V(1) is followed by two notes. Note 1 indicates that
section 44XA applies a target time limit (of six months) to the Commission's
final determination. Note 2 indicates that section 44ZZCB provides a
mechanism for the Commission to defer arbitration on an access dispute where
it is also considering an access undertaking because Item 107 (which repeals
section 44ZZB) facilitates the provision of post-declaration undertakings, which
generates the possibility that the Commission may need to deal with parallel
processes.
1.126 Item 123, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to disputes notified to the Commission before or
after the commencement of Item 58.
1.127 Item 124, contained in Part 2 of Schedule 1 of the Bill, provides that a
determination made by the Commission under subsection 44V(1) of the TP Act
before the commencement of Item 124, and that is in operation under the TP
Act immediately before the commencement of Item 124, has effect after the
commencement of Item 124, as if it were a final determination made by the
Commission under subsection 44V(1) of the TP Act.
Item 59 -- Subsection 44V(2)
1.128 Item 59 amends subsection 44V(2) by replacing the words `The
determination' with `A determination'. This change reflects that section 44V
42 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
establishes two types of determination (interim and final), and confirms that
subsection 44V(2) applies to both types.
Item 60 -- After paragraph 44V(2)(d)
1.129 Subsection 44V(2) provides a number of examples of matters relating to
access that may be dealt with in a determination. Item 60 inserts a new
paragraph 44V(2)(da), which provides that a determination may require the
provider to permit interconnection to the facility by the third party. While the
list of examples at subsection 44V(2) is not intended to be exhaustive, the
insertion of paragraph 44V(2)(da) provides statutory confirmation that the
Commission can require a service provider to permit interconnection, thereby
providing greater certainty as to the scope of the Commission's discretion. The
allocation of the costs for interconnection between the parties would be subject
to existing provisions within Part IIIA, and Item 63 clarifies that the
Commission is prevented from making a determination that would have the
effect of requiring the provider to bear some or all of the costs of
interconnections to the facility or maintaining interconnections to the facility.
Item 66 requires the Commission, when making a final determination, to have
regard to the value to the provider of interconnections to the facility whose cost
is borne by someone else.
1.130 Item 125, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access disputes notified after the
commencement of Item 60, and in relation to access disputes notified before the
commencement of Item 60 in respect of which no determination has been made
under subsection 44V(1) of the TP Act before that commencement.
Item 61 -- Subsection 44V(3)
1.131 Item 61 amends subsection 44V(3), by replacing the words `The
determination' with `A determination'. This change reflects that section 44V
establishes two types of determinations (interim and final), and confirms that
subsection 44V(3) applies to both types.
Item 62 -- At the end of section 44V
1.132 Item 62 inserts a new subsection 44V(6). This provision is included to
assist readers as a determination under section 44V is not a legislative
instrument within the meaning of section 5 of the Legislative Instruments Act
2003.
Trade Practices Amendment (National Access Regime) Bill 2005 43
Schedule 1 -- Amendments
Item 63 -- At the end of subsection 44W(1)
1.133 Item 63 extends the list of matters contained in paragraphs 44W(1)(a) to
(e), by adding a new paragraph (f), to prevent the Commission from making a
determination that would have the effect of requiring the provider to bear some
or all of the costs of interconnections to the facility or maintaining
interconnections to the facility. Item 60 also provides statutory confirmation
that a determination may require the provider to permit interconnection to the
facility by the third party, and Item 66 requires the Commission to have regard
to the value to the provider of interconnections to the facility whose cost is
borne by someone else when making a final determination.
1.134 Item 125, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access disputes notified after the
commencement of Item 63, and in relation to access disputes notified before the
commencement of Item 63 in respect of which no determination has been made
under subsection 44V(1) of the TP Act before that commencement.
Item 64 -- Subsection 44X(1)
1.135 Item 64 inserts the word `final' into subsection 44X(1), to indicate that
the Commission must take the matters listed under paragraphs 44X(1)(a) to (g)
into account when making a final determination.
Item 65 -- Before paragraph 44X(1)(a), Item 66 -- After paragraph
44X(1)(e), Item 67 At the end of subsection 44X(1)
1.136 Items 65, 66 and 67 amend subsection 44X(1) to insert three new
paragraphs (44X(1)(aa), (ea) and (h)), to require the Commission, when making
a final determination, to have regard to the objects clause, to have regard to the
value to the provider of interconnections to the facility whose cost is borne by
someone else, and to have regard to the pricing principles specified in section
44ZZCA. As a consequence, the Tribunal, if called upon under section 44ZP to
review the Commission's decision, must also have regard to these matters by
way of the operation of existing subsection 44ZP(3), which states that the
review by the Tribunal is a re-arbitration of the matter.
1.137 In relation to new paragraph 44X(1)(aa), the objects clause in
section 44AA is a statement of principle. Decision makers will continue to
apply existing specific statutory criteria (such as consideration of public
interest, and promotion of competition) in regard to the declaration and
undertakings access routes, and the principles outlined in Clause 6 of the CPA
(such as promotion of competition) in regard to certifications.
44 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
1.138 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides at table
item number 6, that this amendment will apply to access disputes notified after
the commencement of Item 65.
1.139 In relation to new paragraph 44X(1)(ea), Item 60 also provides that the
determination may require the provider to permit interconnection to the facility
by the third party, and Item 63 provides statutory confirmation that a
determination may require the provider to permit interconnection to the facility
by the third party.
1.140 Item 125, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access disputes notified after the
commencement of Item 60, and in relation to access disputes notified before the
commencement of Item 66 in respect of which no determination has been made
under subsection 44V(1) of the TP Act before that commencement.
1.141 In relation to new paragraph 44X(1)(h), section 44ZZCA specifies
pricing principles relevant to the price of access to a service.
1.142 Item 126, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access disputes notified, and access
undertakings and access codes given, to the Commission after the
commencement of those items.
Item 68 -- At the end of section 44X
1.143 Item 68 amends section 44X to add two further subsections which apply
where the Commission decides to issue an interim determination.
Subsection 44X(3) provides that the Commission, in making an interim
determination, has the discretion to take into account any matter that it must
take into account in relation to a final determination, and any other matter it
considers relevant. Subsection 44X(4) further clarifies that, in making an
interim determination, the Commission does not have a duty to consider
whether to take into account a matter referred to in subsection 44X(1) -- that is,
those matters that the Commission will be required, by virtue of Items 64 to 67,
to take into account when making a final determination.
Item 69 -- After section 44X
1.144 Item 69 inserts new section 44XA into Part IIIA. Item 116, contained in
Part 2 of Schedule 1 of the Bill, provides, at table item number 5, that this
amendment applies to access disputes notified after the commencement of
Item 69.
Trade Practices Amendment (National Access Regime) Bill 2005 45
Schedule 1 -- Amendments
New section 44XA Target time limits for Commission's final
determination
1.145 Section 44XA introduces a target time limit for the Commission to make
a final determination. It requires the Commission to use its best endeavours to
make a recommendation within a period of four months from the date of receipt
of the application. If the Commission cannot make a recommendation within
that initial four-month period, it must extend the time limit by publishing a
notification to that effect in a national newspaper. Again, if the Commission
cannot make a recommendation within the extended time limit, the publication
obligation applies to a further extension. While there is no limit on the number
of times the Commission may extend the time limit, the requirement that the
decision maker publish notification of any extension beyond the target time
limit provides for regulatory transparency and flexibility for decision makers,
thereby increasing incentives for timely decision-making.
Item 70 -- Subsection 44Y(1)
1.146 Item 70 amends subsection 44Y(1), to clarify that the power in
section 44Y to terminate an arbitration without making a determination applies
in relation to final determinations.
Item 71 -- At the end of Subdivision D of Division 3 of Part IIIA
1.147 Item 71 inserts new section 44ZNA.
New section 44ZNA Joint arbitration hearings
1.148 Section 44ZNA provides the Commission with the discretion to conduct
joint arbitration hearings following notification to the parties to the dispute.
These arrangements will allow the Commission to consider the service in its
entirety and could streamline administrative requirements and reduce costs. For
example, where a service has not yet been declared, the risk that the
Commission could implement multilateral hearings in arbitrations (upon
declaration of the service) may prompt the use of the certification and
undertakings routes as an alternative access route. Alternatively, if a service has
already been declared, the threat of multilateral hearings in arbitration may
expedite commercially negotiated outcomes.
1.149 Subsection 44ZNA(1) establishes the discretion for the Chairperson of
the Commission to decide, by written notice, that the Commission must hold a
joint arbitration hearing in respect of the specified disputes nominated in the
notice. This discretion may only be exercised where the Chairperson considers
46 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
that such an arrangement would be likely to result in the nominated disputes
being resolved in a more efficient and timely manner (subsection 44ZNA(2)).
1.150 Subsection 44ZNA(3) requires the Commission to undertake
consultation with the parties to the dispute prior to undertaking the joint
arbitration hearing, and subsection (4) requires the Commission to have regard
to submissions received in deciding whether or not to hold the joint hearing.
1.151 Subsections 44ZNA(5) to (8) set out the procedural requirements
applicable to the Chairperson and the Commission in undertaking a joint
arbitration hearing. Subsection (5) enables the Chairperson to give written
directions to the member of the Commission residing at the hearing. Subsection
(6) provides that the procedural requirements applicable to arbitration hearings
as set out in sections 44Z to 44ZN apply in the same way to joint arbitration
hearings. Subsections (7) and (8) set out rules for the Commission to have
regard to certain material in the arbitration of any nominated dispute.
1.152 Subsection 44ZNA(9) is included to assist readers as a notice under
subsection 44ZNA(1) and a written direction under subsection 44ZNA(5) are
not legislative instruments within the meaning of section 5 of the Legislative
Instruments Act 2003.
1.153 Item 127, contained in Part 2 of Schedule 1 of the Bill, provides that
these amendments apply in relation to access disputes notified to the
Commission either before or after the commencement of Item 71.
Item 72 -- After Subdivision D of Division 3 of Part IIIA
1.154 Item 72 inserts a new subheading establishing Subdivision DA of
Division 3 of Part IIIA, `Arbitration reports', containing new section 44ZNB,
which requires the Commission to prepare a written arbitration report about a
final determination it makes.
New Subdivision DA -- Arbitration reports
New section 44ZNB Arbitration reports
1.155 Section 44ZNB requires the Commission to prepare and publish a
written report about any final arbitration determination it makes.
Subsection 44ZNB(3) establishes a list of matters which must be addressed in
the report, and subsection (4) provides the Commission with the discretion to
include any other matter that the Commission considers relevant.
1.156 Subsection 44ZNB(6) obliges the Commission to consult with relevant
commercial parties prior to publication of an arbitration report, to determine
Trade Practices Amendment (National Access Regime) Bill 2005 47
Schedule 1 -- Amendments
whether any information should be excluded on the grounds that it is
confidential commercial information. Subsection 44ZNB(7) requires the
Commission to have regard to submissions in deciding what to publish.
1.157 Subsection 44ZNB(8) is included to assist readers as an arbitration report
is not a legislative instrument within the meaning of section 5 of the Legislative
Instruments Act 2003.
1.158 Item 128, contained in Part 2 of Schedule 1 of the Bill, provides that
these amendments apply in relation to access disputes notified to the
Commission after the commencement of Item 72.
Item 73 -- Subsection 44ZO(1), Item 74 Subsection 44ZO(2)
1.159 Item 73 and Item 74 insert the word `final' into subsections 44ZO(1) and
(2), to clarify that section 44ZO applies to final determinations. A note is
inserted after subsection 44ZO(1), to indicate that the section heading has also
been amended to clarify that the provision applies to final determinations.
Item 75 -- At the end of section 44ZO
1.160 Item 75 amends section 44ZO by adding subsections (3) to (9), to enable
the Commission to backdate a final determination. The purpose of these
amendments is to reduce the risk of the arbitration process being used by the
service provider to delay providing access to the service.
1.161 Subsection 44ZO(3) provides that any or all of the provisions of a final
determination can be backdated to a date earlier than the day on which the final
determination takes effect. It also provides an example of how backdating
might operate.
1.162 Subsection 44ZO(4) places limits on the extent to which any or all of the
provisions can be backdated. If the parties commenced negotiations on access
to the service after the service was declared, provisions of the final
determination can be backdated up to the date of commencement of
negotiations. This should prevent a service provider from using commercial
negotiations, the arbitration process, or in some cases the appeal process, as
tactics to delay providing access. If the parties commenced negotiations on
access to the service before the service was declared, provisions of the final
determination may only be backdated to the day on which the declaration began
to operate. A declaration commences at a time specified in the declaration,
which cannot be less than 21 days after the declaration is published, or if an
application for review of a declaration is made within the period allowed, the
declaration commences when the Tribunal makes its decision (section 44I sets
out these arrangements).
48 Trade Practices Amendment (National Access Regime) Bill 2005
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1.163 In either circumstance, the backdating cannot be to a day on which the
third party did not have access to the service. Allowing the Commission to
backdate a determination to a date where the access seeker did not have access
would be fundamentally inconsistent with the regime, and, if legislated, may
have raised concerns that the Commission has the ability to impose a financial
penalty on service providers.
1.164 Either approach allows the Commission considerable discretion in
determining the appropriate date for backdating of a determination. This is
because, in some circumstances, there may not be a clear and objective marker
to indicate the date on which negotiations commenced, and it may be a matter
on which the parties disagree.
1.165 Subsection 44ZO(5) provides that where a provision of a final
determination is backdated so that it applies to a period in which an interim
determination is in operation, the provision of the final determination prevails
over the interim determination to the extent provided for in the final
determination. Access seekers are expected to be mindful of the possible
retrospective application of the provisions of a final determination, particularly
in relation to access charges, when deciding whether to obtain access on the
basis of the interim determination.
1.166 Subsection 44ZO(6) enables a final determination to require one party to
pay interest, at the rate specified in the determination, for the whole or part of a
period commencing on the date to which the provision was backdated, and
ending on the date on which the determination takes effect.
1.167 Subsection (7) requires the Commission to formulate guidelines (within
six months after the commencement of this provision) in relation to backdating
and the application of the payment of interest requirements to a backdated
determination. The guidelines are a legislative instrument, and the Commission
will be required to have regard to those guidelines when exercising the
backdating and application of the payment of interest powers.
1.168 Item 129, contained in Part 2 of Schedule 1 of the Bill, provides that
Item 75 applies in relation to access disputes notified to the Commission after
the commencement of Item 75. However, a day specified under
subsection 44ZO(3) of the TP Act (which enables the Commission to backdate
provisions of a final determination) cannot be backdated to a date occurring
before that commencement.
Trade Practices Amendment (National Access Regime) Bill 2005 49
Schedule 1 -- Amendments
Item 76 -- At the end of Subdivision E of Division 3 of Part IIIA
1.169 Item 76 inserts new section 44ZOA, which sets out the effect and
duration of interim determinations. The Commission cannot backdate the
provisions of an interim determination.
New section 44ZOA Effect and duration of interim determinations
1.170 Section 44ZOA clarifies the effect and duration of an interim
determination. A note is inserted after new paragraph 44ZOA(2)(b) which
indicates that, under subsection 44ZO(5), a backdated final determination may
prevail over an interim determination.
Item 77 -- Subdivision F of Division 3 of Part IIIA (heading)
1.171 Item 77 repeals the current subheading to Subdivision F (Review of
determinations), and inserts the new subheading `Review of final
determinations', to clarify that the provisions in sections 44ZP to 44ZT apply to
final determinations.
Item 78 -- Subsection 44ZP(1), Item 79 -- Subsection 44ZP(2)
1.172 Item 78 and Item 79 insert the word `final' into subsection 44ZP(1) and
subsection 44ZP(2), to clarify that merit review by the Tribunal is only
available in relation to the Commission's decision to issue a final
determination, not an interim determination.
Item 80 -- At the end of subsection 44ZP(3)
1.173 Item 80 inserts a note at the end of subsection 44ZP(3), to indicate that
section 44ZZOA applies a target time limit (of four months) to the Tribunal's
decision on the review.
Item 81 -- Section 44ZQ
1.174 Item 81 inserts the word `final' into section 44ZQ, to clarify that
section 44ZQ only applies in relation to a final determination.
Item 82 -- Subdivision G of Division 3 of Part IIIA (heading)
1.175 Item 82 repeals the current subheading to Subdivision G (Variation of
determinations), and inserts the new heading `Variation and revocation of
determinations'.
50 Trade Practices Amendment (National Access Regime) Bill 2005
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Item 83 -- Subsection 44ZU(1), Item 84 -- Subsection 44ZU(1), Item
85 -- Paragraph 44ZU(2)(a), Item 86 -- Paragraph 44ZU(2)(b)
1.176 Item 83 and Item 84 insert the word `final' into subsection 44ZU(1), and
Item 85 and Item 86 insert the word `final' into paragraphs 44ZU(2)(a) and (b),
to clarify that the power of the Commission to vary a determination under this
provision applies in relation to final determinations.
Item 87 -- At the end of Division 3 of Part IIIA
1.177 Item 87 inserts a new section 44ZUA into new Subdivision G of
Division 3, which enables the Commission to vary or revoke an interim
determination.
New section 44ZUA Variation and revocation of interim determinations
1.178 Subsection 44ZUA(1) clarifies that the power of the Commission to vary
or revoke an interim determination is a discretionary power. However, the
Commission is obliged to revoke an interim determination under subsection (2)
if all of the parties to the determination request revocation.
Item 88 -- Before paragraph 44ZW(2)(a)
1.179 Item 88 inserts an additional paragraph into subsection 44ZW(2), to
require the Commission to have regard to the objects clause of Part IIIA when
deciding whether to register a contract under Division 4. Consequently, the
Tribunal, if called upon under section 44ZX to review the Commission's
decision, must also have regard to the objects clause by way of the operation of
existing subsection 44ZX(3), which states that the review by the Tribunal is a
reconsideration of the matter.
1.180 The objects clause in section 44AA is a statement of principle. Decision
makers will continue to apply existing specific statutory criteria (such as
consideration of the public interest, and promotion of competition) in regard to
the declaration and undertakings access routes, and the principles outlined in
Clause 6 of the CPA (such as promotion of competition) in regard to
certifications.
1.181 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides, at table
item number 7, that this amendment applies to applications made to the
Commission after the commencement of Item 88.
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Schedule 1 -- Amendments
Item 89 -- After subsection 44ZW(2)
1.182 Item 89 inserts a new subsection (2A) into section 44ZW, to prevent the
Commission from registering a contract if it deals with a matter or matters
relating to access to the service that are dealt with in an access undertaking in
operation. While new section 44ZZCB enables the Commission to defer
arbitrating an access dispute while it considers an access undertaking, or vice
versa, with the purpose of ensuring that coverage of the same terms and
conditions of access is not dealt with under two procedures, such a deferral
power is only effective to deal with processes that are occurring
simultaneously. Subsection 44ZW(2A) supplements section 44ZZCB, by
preventing dual coverage of terms and conditions by two processes that may
not occur simultaneously.
Item 90 -- At the end of subsection 44ZX(3)
1.183 Item 90 inserts a note at the end of subsection 44ZX(3), to indicate that
section 44ZZOA applies a target time limit (of four months) to the Tribunal's
decision on the review.
Item 91 -- Division 6 of Part IIIA (heading)
1.184 Item 91 repeals the current heading to Division 6 of Part IIIA (Access
undertakings for non-declared services) and inserts the new heading `Access
undertakings and access codes for services', which is required as access
undertakings may now be offered after a service has been declared. Item 91
also establishes a new Subdivision A -- Giving of access undertakings and
access codes.
Item 92 -- Before paragraph 44ZZA(3)(a)
1.185 Item 92 inserts two new paragraphs (aa) and (ab) into
subsection 44ZZA(3). Subsection 44ZZA(3) provides that the Commission may
accept an undertaking, if it thinks it is appropriate to do so having regard to the
matters listed in the subsection.
1.186 Paragraph 44ZZA(3)(aa) requires the Commission to have regard to the
objects of Part IIIA. The objects clause in section 44AA is a statement of
principle. Decision makers will continue to apply existing specific statutory
criteria (such as consideration of the public interest, and promotion of
competition) in regard to the declaration and undertakings access routes, and
the principles outlined in Clause 6 of the CPA (such as promotion of
competition) in regard to certifications.
52 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
1.187 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides at table
item number 8, that this amendment applies to access undertakings given to the
Commission after the commencement of Item 92.
1.188 Paragraph 44ZZA(3)(ab) requires the Commission to have regard also to
the pricing principles specified in section 44ZZCA.
1.189 Item 126, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access disputes notified, and access
undertakings and access codes given to the Commission after the
commencement of those items.
1.190 The Tribunal, if called upon under new section 44ZZBF to review the
Commission's decision, must also have regard to the objects clause and pricing
principles by way of the operation of new subsection 44ZZBF(3), which states
that the review by the Tribunal is a reconsideration of the matter.
Item 93 -- Paragraph 44ZZA(3)(d)
1.191 Item 93 repeals paragraph 44ZZA(3)(d), which provided that the
Commission may accept an undertaking, if it thought it appropriate to do so
having regard to whether access to the service was already the subject of an
access regime. This has been repealed because the Government agreed that it
should be made explicit that the Commission cannot accept an undertaking if
the service concerned is subject to an access regime that has been certified as an
effective access regime in accordance with section 44N (see new
subsections 44ZZA(3AA) (Item 95) and 44ZZAA(3A) (Item 102)). The
intention is to reduce any incentive for industry gaming through forum
shopping, which could potentially undermine effective access regimes and
create procedural uncertainty.
1.192 Item 130, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access undertakings and access codes given to
the Commission after the commencement of Item 93.
Item 94 -- At the end of subsection 44ZZA(3)
1.193 Item 94 inserts a note at the end of subsection 44ZZA(3), to indicate that
section 44ZZCB allows the Commission to defer consideration of an access
undertaking if it is also arbitrating an access dispute.
Item 95 -- After subsection 44ZZA(3)
1.194 Item 95 inserts a new subsection 44ZZA(3AA), to make it explicit that
the Commission must not accept an access undertaking if a decision of the
Trade Practices Amendment (National Access Regime) Bill 2005 53
Schedule 1 -- Amendments
Commonwealth Minister is in force under section 44N that a state or territory
access regime is an effective access regime. This restriction removes the
incentive for industry gaming through forum shopping, reduces potential
concerns about double regulation, provides procedural certainty and supports
the use of effective access regimes, which is important, as certified access
regimes provide greater regulatory certainty for industry and investors than
case-by-case undertakings.
1.195 Item 130, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access undertakings and access codes given to
the Commission after the commencement of Item 95.
Item 96 -- Subsections 44ZZA(4) and (4A)
1.196 Item 96 repeals subsections 44ZZA(4) and (4A), which set out
requirements for the Commission to publish an undertaking, invite submissions
and consider those submissions prior to accepting an undertaking. These
subsections have been repealed because new Subdivision D of Division 6
includes procedural provisions setting out consultation requirements in relation
to access undertakings and access codes (see section 44ZZBD).
1.197 Subitem 118(2), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to access undertakings and access code
applications made to the Commission after the commencement of Item 96.
Item 97 -- Subsection 44ZZA(5)
1.198 Item 97 repeals subsection 44ZZA(5), which set out when an access
undertaking came into operation, and when it ceased to operate. This subsection
has been repealed because new Subdivision B of Division 6 includes provisions
relating to the commencement and operation of access undertakings and access
codes (subject to an application for merit review). These changes are required
because merit review is now available for decisions in relation to access
undertakings and access codes, and this will affect the commencement and
operation of access undertakings and access codes.
1.199 Item 131, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to decisions made by the Commission after the
commencement of Item 97.
Item 98 -- At the end of subsection 44ZZA(7)
1.200 Item 98 adds a sentence to subsection 44ZZA(7), to provide that the
Commission may consent to a variation of an access undertaking if it thinks it
54 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
appropriate to do so having regard to the matters in subsection 44ZZA(3). As
amended, subsection (3) will include the following matters:
2 the objects of Part IIIA,
3 the pricing principles specified in section 44ZZCA,
4 the legitimate business interests of the provider,
5 the public interest, including the public interest in having competition in
markets (whether or not in Australia),
6 the interests of persons who might want access to the service,
7 whether the undertaking is in accordance with an access code that applies
to the service, and
8 any other matters that the Commission thinks are relevant.
8.1 Item 133, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to variations sought after the commencement of
Item 98.
Item 99 -- At the end of subsection 44ZZA
8.2 Item 99 inserts three notes at the end of subsection 44ZZA. Note 1
indicates that section 44ZZBC applies a target time limit (of six months) to the
Commission's decision. Note 2 indicates that section 44ZZBD provides the
Commission with the discretion to invite public submissions in relation to its
decision. Note 3 indicates that section 44ZZBE imposes publication
requirements on the Commission's decision.
Item 100 -- Before paragraph 44ZZAA(3)(a)
8.3 Item 100 inserts two new paragraphs into subsection 44ZZAA(3).
Subsection 44ZZAA(3) provides that the Commission may accept an access
code, if it thinks it is appropriate to do so having regard to the matters listed in
the subsection.
8.4 Paragraph 44ZZAA(3)(aa) requires the Commission also to have regard to
the objects of Part IIIA. The objects clause in section 44AA is a statement of
principle. Decision makers will continue to apply existing specific statutory
criteria (such as consideration of the public interest, and promotion of
competition) in regard to the declaration and undertakings access routes, and
Trade Practices Amendment (National Access Regime) Bill 2005 55
Schedule 1 -- Amendments
the principles outlined in Clause 6 of the CPA (such as promotion of
competition) in regard to certifications.
8.5 Item 115, contained in Part 2 of Schedule 1 of the Bill, provides, at table
item number 9, that this amendment applies to access codes given to the
Commission after the commencement of Item 100.
8.6 Paragraph 44ZZAA(3)(ab) requires the Commission also to have regard to
the pricing principles specified in section 44ZZCA.
8.7 The Tribunal, if called upon under proposed new section 44ZZBF to
review a decision of the Commission made under 44ZZAA, must also have
regard to the objects clause and the pricing principles, by way of the operation
of proposed new subsection 44ZZBF(3), which states that the review by the
Tribunal is a reconsideration of the matter.
8.8 Item 126, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access disputes notified, and access
undertakings and access codes given, to the Commission after the
commencement of Item 100.
Item 101 -- Paragraph 44ZZAA(3)(d)
8.9 Item 101 repeals paragraph 44ZZAA(3)(d), which provided that the
Commission might accept an access code, if it thought it appropriate to do so
having regard to whether access to the service was already the subject of an
access regime. This has been repealed because the Government agreed that it
should be made explicit that the Commission cannot accept an undertaking or
code if the service concerned is subject to an access regime that has been
certified as an effective access regime in accordance with section 44N (see new
subsections 44ZZA(3AA) (Item 95) and 44ZZAA(3A) (Item 102)). The
intention is to reduce any incentive for industry gaming through forum
shopping, which could potentially undermine effective access regimes and
create procedural uncertainty.
8.10 Item 130, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access undertakings and access codes given to
the Commission after the commencement of Item 101.
Item 102 -- After subsection 44ZZAA(3)
8.11 Item 102 inserts a new subsection 44ZZAA(3A), to make it explicit that
the Commission must not accept an access code if a decision of the
Commonwealth Minister is in force under section 44N that a state or territory
access regime is an effective access regime. This restriction removes the
56 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
incentive for industry gaming through forum shopping, reduces potential
concerns about double regulation, provides procedural certainty and supports
the use of effective access regimes, which is important, as certified access
regimes provide greater regulatory certainty for industry and investors than
case-by-case undertakings.
8.12 Item 130, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access undertakings and access codes given to
the Commission after the commencement of Item 102.
Item 103 -- Subsection 44ZZAA(4)
8.13 Item 103 repeals subsection 44ZZA(4), which set out requirements for the
Commission to publish a code, invite submissions and consider those
submissions prior to accepting the code, because new Subdivision D of
Division 6 includes procedural provisions setting out consultation requirements
in relation to access undertakings and access codes (see section 44ZZBD).
8.14 Subitem 118(2), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to access undertaking applications and
access code applications made to the Commission after the commencement of
Item 103.
Item 104 -- Subsection 44ZZAA(5)
8.15 Item 104 repeals subsection 44ZZAA(5), which set out when an access
code comes into operation, and when it ceases to operate, because new
Subdivision B of Division 6 includes provisions relating to the commencement
and operation of access undertakings and access codes (subject to an
application for merit review). These changes are required because merit review
is now available for decisions in relation to access undertakings and access
codes.
8.16 Item 131, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to decisions made by the Commission after the
commencement of Item 104.
Item 105 -- At the end of subsection 44ZZAA(6)
8.17 Item 105 adds a sentence to subsection 44ZZAA(6), to provide that the
Commission may consent to a variation of an access code if it thinks it
appropriate to do so having regard to the matters in subsection (3). As amended,
subsection (3) will include the following matters:
9 the objects of Part IIIA,
Trade Practices Amendment (National Access Regime) Bill 2005 57
Schedule 1 -- Amendments
10the pricing principles specified in section 44ZZCA,
11the legitimate business interests of providers who might give
undertakings in accordance with the code,
12the public interest, including the public interest in having competition in
markets (whether or not in Australia),
13the interests of persons who might want access to the service covered by
the code,
14any matters specified in regulations made for the purposes of this
subsection,
15any other matters that the Commission thinks are relevant.
15.1 Item 133, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to variations sought after the commencement of
Item 105.
Item 106 -- At the end of section 44ZZAA
15.2 Item 106 inserts three notes at the end of section 44ZZAA. Note 1
indicates that section 44ZZBC applies a target time limit (of six months) to the
Commission's decision. Note 2 indicates that section 44ZZBD provides the
Commission with the discretion to invite public submissions in relation to its
decision. Note 3 indicates that section 44ZZBE imposes publication
requirements on the Commission's decision.
Item 107 -- Section 44ZZB
15.3 Item 107 repeals section 44ZZB, which provided that the Commission
could not accept an undertaking given under section 44ZZA if the service
concerned was a declared service. This provision is no longer necessary, as the
Government has agreed that there should be provision in Part IIIA for an access
provider to lodge an undertaking after a service has been declared.
15.4 Item 130, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to access undertakings and access codes given to
the Commission after the commencement of Item 107.
Item 108 -- Before section 44ZZC
15.5 Item 108 inserts five new subdivisions in Division 6 of Part IIIA:
58 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
16Subdivision B -- Effect of access undertakings and access codes
17Subdivision C -- Extensions of access undertakings and access codes
18Subdivision D -- Procedural provisions
19Subdivision E -- Review of decisions
20Subdivision F -- Register of access undertakings and access codes.
Subdivision B -- Effect of access undertakings and access codes
New section 44ZZBA When access undertakings and access codes come
into operation
20.1 Subsections 44ZZBA(1) and (2) set out the time at which an access
undertaking or access code comes into operation once accepted by the
Commission, following the Government's decision to enable review on the
merits by the Tribunal of decisions by the Commission on undertakings.
20.2 Paragraph 44ZZBA(1)(a) provides that an access undertaking or access
code commences at the end of 21 days after the Commission publishes its
decision, if no person applies to the Tribunal for review of the decision. Where
a person applies for review of the decision within the relevant period available
for a review application, and the Tribunal affirms the Commission's decision,
the undertaking or code comes into operation at the time of the Tribunal's
decision. Subsection (2) provides that if the Commission originally decided to
reject either an undertaking or code, and subsequently the Tribunal decides to
set aside the Commission's decision and make a decision to accept the
undertaking or code, then the access undertaking or code comes into operation
at the time of the Tribunal's decision. In contrast to arbitration determinations
by the Commission, access undertaking and access code decisions cannot be
backdated.
20.3 Subsection 44ZZBA(3) indicates the period for which the undertaking or
code remains in operation, and inserts a note indicating that section 44ZZBB
establishes arrangements for the extension of the period in which an
undertaking or code is in operation.
20.4 Subsection 44ZZBA(4) sets out when a withdrawal or variation of an
undertaking or code comes into operation, and is similar in nature to the
commencement provisions in subsection (1).
20.5 Subsection 44ZZBA(5) provides that if the Commission originally
decided to refuse either to consent to the withdrawal or variation of an
Trade Practices Amendment (National Access Regime) Bill 2005 59
Schedule 1 -- Amendments
undertaking or code, or to extend the period for which an undertaking or code
was in operation, and subsequently the Tribunal decides to set aside the
Commission's decision and make a decision to consent to the withdrawal or
variation of an access undertaking or access code, then the Tribunal's decision
comes into operation at the time of its decision.
20.6 Item 131, contained in Part 2 of Schedule 1 of the Bill, provides that these
amendments apply in relation to decisions made by the Commission after the
commencement of Item 108.
20.7 Item 132, contained in Part 2 of Schedule 1 of the Bill, provides that an
access undertaking or access code, that is in operation under section 44ZZA or
section 44ZZAA of the TP Act immediately before the commencement of
Item 132, continues in operation after the commencement of Item 132 under
section 44ZZBA of the TP Act.
Subdivision C -- Extensions of access undertakings and access codes
New section 44ZZBB Extensions of access undertakings and access
codes
20.8 Section 44ZZBB establishes procedures to expedite extensions of existing
access undertakings and codes. It should benefit a wide range of stakeholders. It
will allow service providers the opportunity to streamline applications for
extending undertakings or codes, avoiding potential regulatory uncertainty and
delay. It will also benefit access seekers by expediting regulatory certainty for
the terms and conditions of access. Further, both access seekers and consumers
should benefit from participation in the application process via the proposed
public consultation process.
20.9 Subsections 44ZZBB(1) to (3) apply to access undertakings, while
subsections (4) to (7) apply to access codes.
20.10 In relation to access undertakings, subsection (1) enables the service
provider to apply to the Commission for an extension. Subsection (2) places the
onus on the service provider to specify the proposed extension period.
Subsection (3) provides the Commission with the discretion to extend the
period for which the undertaking is in operation if it thinks it appropriate to do
so, having regard to the matters that the Commission is required to consider
when examining an application for a proposed new access undertaking.
20.11 In relation to access codes, subsection (4) enables the industry body to
apply to the Commission for an extension. Subsection (5) places the onus on
the industry body to specify the proposed extension period. Subsection (6)
provides the Commission with the discretion to extend the period for which the
60 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
code is in operation if it thinks it appropriate to do so, having regard to the
matters that the Commission is required to consider when examining an
application for a proposed new access code. Subsection (7) establishes
arrangements for a different industry body or association to apply for an
extension where the original industry body has ceased to exist.
20.12 Should the service provider wish to seek a variation to an access
undertaking or code at the same time as an extension, the service provider is
required to make a separate application to the Commission under amended
subsection 44ZZA(7), with respect to an access undertaking, or amended
subsection 44ZZAA(6), with respect to an access code.
20.13 Subsection (8) clarifies that multiple extensions may be made to an
access undertaking or access code. Subsection (8) is followed by three notes.
Note 1 indicates that section 44ZZBC applies a target time limit (of six months)
to the Commission's decision. Note 2 indicates that section 44ZZBD provides
the Commission with the discretion to invite public submissions in relation to
its decision. Note 3 indicates that section 44ZZBE imposes publication
requirements on the Commission's decision.
20.14 Subitem 121(2), contained in Part 2 of Schedule 1 of the Bill, provides
that Item 108, in so far as it inserts section 44ZZBB of the TP Act, applies in
relation to decisions made by the Commission before or after the
commencement of Item 108 to accept an access undertaking or an access code.
Subdivision D -- Procedural provisions
New section 44ZZBC Target time limits for Commission decisions
20.15 Section 44ZZBC introduces a target time limit for the Commission to
make a decision on an access undertaking application or an access code
application -- that is, a decision to accept a new undertaking or code, or for the
withdrawal or variation of an undertaking or code, or for the extension of the
period in which an undertaking or code is in operation. It requires the
Commission to use its best endeavours to make a decision within a period of six
months from the date of receipt of the application. If the Commission cannot
make a decision within that initial six-month period, it must extend the time
limit by publishing a notification to that effect in a national newspaper. Again,
if the Commission cannot make a recommendation within the extended time
limit, the publication obligation applies to a further extension. While there is no
limit on the number of times the Commission may extend the time limit, the
requirement that the decision maker publish notification of any extension
beyond the target time limit provides for regulatory transparency and flexibility
for decision makers, thereby increasing incentives for timely decision-making.
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Schedule 1 -- Amendments
20.16 Item 116, contained in Part 2 of Schedule 1 of the Bill, provides, at table
item number 6, that this amendment applies to access undertaking applications
and access code applications made to the Commission after the commencement
of Item 108.
New section 44ZZBD Commission may invite public submissions
20.17 Section 44ZZBD provides the Commission with the discretion to seek
public input on an access undertaking application or an access code application,
provided that the Commission considers it appropriate and practicable to do so.
Where the Commission exercises its discretion, subsection (3) requires it to
have regard to any submission it receives in making its decision. Public input
into the regime's decision-making process is desirable for more informed
decision-making, particularly when assessing the public interest in each case.
This requirement is consistent with the Commission's existing practices, as the
discretion ensures that the Commission is not bound when practical limitations
suggest that consultation would not be effective. Subsections 44ZZBD(5)
and (6) ensure that the Commission can make an appropriate assessment of any
claims to restrict publication of a submission on the grounds that it contains
confidential commercial information. Should the Commission refuse a request
for a submission, or part thereof, not to be made public, the person making it
may withdraw the whole or the part of the submission, with the consequence
that the Commission must not have regard to it in making its recommendation.
20.18 Subitem 118(2), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to access undertakings and access code
applications made to the Commission after the commencement of Item 108.
New section 44ZZBE Commission must publish its decision
20.19 Subsection 44ZZBE(1) requires the Commission to publish its decision
in relation to an access undertaking application or an access code application,
and its reasons for its decision. This requirement should enhance procedural
transparency and regulatory accountability. It also facilitates informed
consideration of whether there are grounds to challenge a decision by way of
merit review before the Tribunal, or judicial review by the courts.
Subsection 44ZZBE(4) gives the Commission the discretion to consult with
relevant commercial parties prior to publication of a decision, to determine
whether any information should be excluded on the grounds that it is
confidential commercial information. Subsection 44ZZBE(5) requires the
Commission to have regard to submissions in deciding what to publish.
20.20 Subitem 119(2), contained in Part 2 of Schedule 1 of the Bill, provides
that this amendment applies in relation to decisions made after the
commencement of Item 108.
62 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
Subdivision E -- Review of decisions
New section 44ZZBF Review of decisions
20.21 Section 44ZZBF establishes the procedure for review by the Tribunal on
the merits of an access undertaking decision or access code decision by the
Commission -- that is, a decision to accept or reject an access undertaking or
code, a decision to consent or refuse to consent to the withdrawal or variation of
an access undertaking or code, or a decision to extend or refuse to extend the
period for which an access undertaking or access code is in operation.
20.22 Subsection 44ZZBF(1) enables a person whose interests are affected by
an access undertaking decision or access code decision of the Commission to
apply in writing to the Tribunal for review of the decision. The person must
apply for review within 21 days after the Commission publishes its decision
(subsection (2)).
20.23 Subsections (3) and (4) provide that review by the Tribunal is a
reconsideration of the matter, and for the purposes of the review, the Tribunal
has the same powers as the Commission.
20.24 A note follows subsection (3), to indicate that section 44ZZOA applies a
target time limit (of four months) to the Tribunal's decision on the review.
20.25 Subsections (6) and (7) set out the respective types of decisions available
to the Tribunal, depending upon the nature of the decision initially made by the
Commission subject to review. Subsection (6) establishes that if the
Commission's decision was to accept an undertaking or code, or consent to the
withdrawal or variation of an undertaking or code, or extend the period for
which an undertaking or code is in operation, then the Tribunal must either
affirm or set aside the Commission's decision. Subsection (8) provides that if
the Commission's decision was to reject an undertaking or code, or refuse to
consent to the withdrawal or variation of an undertaking or code, or refuse to
extend the period for which an undertaking or code was in operation, then the
options open to the Tribunal are either to affirm the Commission's decision, or
set it aside and either accept the undertaking or code, consent to the withdrawal
or variation, or extend the period of operation, as the case may be.
20.26 Item 134, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to decisions of the Commission made after the
commencement of Item 108.
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Schedule 1 -- Amendments
Subdivision F -- Register of access undertakings and access codes
Item 109 -- At the end of section 44ZZC
20.27 Item 109 inserts a new subsection (3) at the end of section 44ZZC, that
the Commission's public register of access undertakings and access codes must
also include details of all extensions of the period for which an access
undertaking or access code is in operation.
Item 110 -- After Division 6 of Part IIIA
20.28 Item 110 inserts two new Divisions at the end of Division 6:
21Division 6A -- Pricing principles for access disputes and access
undertakings or codes
22Division 6B -- Overlap among determinations, registered contracts and
access undertakings.
Division 6A -- Pricing principles for access disputes and access
undertakings or codes
New section 44ZZCA Pricing principles for access disputes and access
undertakings or codes
22.1 Division 6A includes section 44ZZCA, which specifies pricing principles
relevant to the price of access to a service. Items 67, 92 and 100 (and the note
inserted after new section 44ZZCA) clarify that the Commission must have
regard to these pricing principles in making a final determination under
Division 3 and in deciding whether or not to accept an access undertaking or
access code under Division 6.
22.2 These pricing principles will assist in addressing concerns expressed by
the Productivity Commission in its review of the National Access Regime over
the potential for access regulation to deter investment in essential infrastructure.
The Productivity Commission recommended insertion of an objects clause into
Part IIIA, which would emphasise the objective of promoting the efficient use
of, and investment in, essential infrastructure. This objects clause will provide
guidance to decision makers across all access routes under the regime. Pricing
principles will ensure that the objects clause has more than just symbolic value,
by providing effective market signals for the efficient use of existing resources
and for future investment in infrastructure.
64 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
22.3 By applying pricing principles across all access routes under the regime,
these principles will provide guidance on how the objectives of the regime
should be given effect, which will contribute to consistent and transparent
regulatory outcomes over time. The pricing principles will also help provide
certainty to regulated firms and access seekers, which will improve the
operation of the negotiate-arbitrate framework, and provide guidance for
pricing approaches in industry specific access regimes.
22.4 As noted above, the pricing principles specified in section 44ZZCA will
be applied by the Commission in making certain decisions identified in the Bill.
This is clarified by the note following new section 44ZZCA. The Government's
intention is that the Commission be required to have regard to the pricing
principles, but the Commission need not require each and every principle to be
satisfied. The weight to be given to each principle is to be a matter for the
Commission.
Pricing Principle (a)
22.5 The starting point for achieving efficient use of infrastructure is for the
price of access to an additional unit of service to be equal to the cost (that is, the
additional resources used to produce that unit). This implies that prices should
be set at the short-run marginal cost of producing a unit. However, most
infrastructure services involve high fixed costs. Even successful infrastructure
projects will not usually generate revenues in the early years sufficient to cover
those costs. Consequently, early losses must be covered by above normal
profits in later years as demand for the services increases. Setting a uniform
price equal to short run marginal costs would result in the facility owner facing
a revenue shortfall, which may have adverse implications for new investment.
To address this concern, this principle provides that regulated access prices
should be set so as to generate expected revenue across a facility's regulated
service or services that is at least sufficient to meet the efficient costs of
providing access to these services, and include a return on investment
commensurate with the regulatory and commercial risks involved. This sets a
revenue floor without necessarily constraining individual prices.
22.6 The motive for regulating access prices is that, in the absence of
regulation, the exercise by infrastructure providers of monopoly power could
result in prices that are inefficiently high. However, a pricing regime that
sought to force prices continually down to costs would erode incentives for
firms to drive costs down or to innovate. This principle aims to balance the
setting of access prices to include a return reflecting the commercial and
regulatory risks associated with the investment (and thus not deter investment),
while addressing monopoly pricing concerns.
22.7 The reference to regulatory risk in Pricing Principle (a)(ii) is intended to
refer to the perception that the exercise of regulatory discretion will be
Trade Practices Amendment (National Access Regime) Bill 2005 65
Schedule 1 -- Amendments
undertaken in a heavy-handed, arbitrary or uneven fashion. While such
perceptions may deter investment in any dysfunctional market subject to
regulation, regulatory risk takes on greater importance for infrastructure
investors, due to the length of time and expense required for service providers
to respond to changes in a market, perceptions that regulatory decisions tend to
be biased in favour of service users rather than service providers/investors, the
scale of investment in infrastructure and the sunk nature of assets. Pricing
Principle (a)(ii) requires regulators specifically to factor in regulatory and
commercial risks in setting access prices. This may assist to address perceptions
that regulatory bias favours service users.
Pricing Principle (b)
22.8 This principle addresses two specific price structures: multi-part pricing
and price discrimination.
22.9 Multi-part price structures enable a facility owner to charge a fixed
amount to access seekers to access the network, plus a use charge which is
based on the short run marginal cost or incremental cost. If a fixed charge did
not deter parties from accessing the network, this approach allows the facility
owner to recover its full costs while avoiding efficiency costs arising from
reduced use of the network.
22.10 As multi-part price structures do not overcome all efficiency problems
(for example, lump sum access charges will deter some customers from using
the services, which represents a loss in efficiency as those users may be willing
to pay a price higher than the additional cost of supplying them with the
service), an alternative price structure, known as price discrimination, enables
the facility owner to recover costs, while minimising losses in efficiency
resulting from reduced use of the service. Under this approach, the service
provider could charge individual customers different amounts depending on
how highly they value the service.
22.11 Price discrimination could be implemented under a single price structure
or under a multi-part price structure.
23Under a single price structure, individual customers pay a different unit
charge for the service.
24Under a multi-part price structure, while all customers would pay the
same charge for each unit of the service used, those customers who
valued the service highly would pay a relatively high fixed access fee,
making a relatively large contribution to common and fixed costs, while
marginal users who valued the service less highly would be charged a low
access fee so as not to deter them from taking up the service.
66 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
24.1 In order to prevent facility owners from using price discrimination in
anti-competitive ways and thereby breaching Part IV of the TP Act, Pricing
Principle (b)(i) makes it clear that such pricing structures are only allowed
where they aid efficiency.
Pricing Principle (c)
24.2 This principle refers to the desirability for access pricing regimes
providing incentives for infrastructure providers to make productivity gains,
without prescribing the specific mechanisms (as considerable debate has
surrounded the appropriate mechanisms to promote productivity gains).
Comparison between Pricing Principles (a), (b) and (c) and Productivity
Commission recommendations
24.3 The Productivity Commission recommended that Pricing Principle (a)(i)
be worded such that regulated access prices should be set so to generate
expected revenue across a facility's regulated services that is at least sufficient
to meet the efficient long-run costs of providing access to these services.
24.4 Pricing Principle (a) does not refer to `long-run' efficient costs, largely
because infrastructure investments are inherently complex long term scenarios,
and the Government considers that its omission would not necessarily result in
the pricing principles being interpreted as relating to the short term. Its
inclusion may also increase uncertainty and provide greater scope for parties to
seek judicial review of the interpretation of provisions in Commission
decisions. It would also restrict the regulatory approach to a cost based form of
regulation, as this could limit the decision maker's scope to introduce or retain
alternatives such as price caps or benchmarking.
24.5 The Productivity Commission also recommended a further pricing
principle be adopted, that regulated access prices should generate revenue from
each service that at least covers the directly attributable or incremental costs of
providing the service.
24.6 This pricing principle has not been incorporated. As with the Productivity
Commission's recommendation on Pricing Principle (a)(i), this approach would
require a more intrusive and complex regulatory approach than at present and
would unduly risk restricting the regulatory approach, by limiting the decision
maker's scope to introduce or retain alternatives such as price caps or
benchmarking.
Proposed incorporation of pricing principles in the Competition Principles
Agreement
24.7 In relation to decisions by the Commonwealth Minister that a regime
established by a state or territory for access to a service is an effective access
regime, the Government has indicated that it will work with participating
Trade Practices Amendment (National Access Regime) Bill 2005 67
Schedule 1 -- Amendments
jurisdictions to include in the CPA a principle to have regard to the pricing
principles specified in section 44ZZCA.
Division 6B -- Overlap among determinations, registered contracts and
access undertakings
24.8 Division 6B resolves some overlap issues arising from the new policy to
enable access undertakings to be accepted by the Commission once a service
has been declared. Division 6B includes new section 44ZZCB (Deferring
access disputes or access undertakings), section 44ZZCC (Overlap between
determinations and access undertakings) and section 44ZZCD (Overlap
between registered contracts and access undertakings).
New section 44ZZCB Deferring access disputes or access undertakings
24.9 Section 44ZZCB provides that if a service provider lodges an undertaking
after arbitration has commenced, or notifies an access dispute after an
undertaking is lodged, the Commission has the discretion to determine, on a
case-by-case basis, whether the undertaking or arbitration process should be
suspended.
24.10 Subsection (1) provides an important tool enabling the Commission to
decide either to defer arbitrating an access dispute, or to consider whether to
accept an access undertaking. Subsections (2) and (3) specify the obligations on
the Commission if it decides to defer arbitrating the access dispute and then
accept the undertaking, or if it decides to defer considering whether to accept
the undertaking and then makes a final determination in relation to the
arbitration of an access dispute. In the former situation, the Commission must
terminate the arbitration when the undertaking comes into operation, but only to
the extent of the matters that are dealt with in the undertaking. In the latter
situation, the Commission must resume consideration of the access undertaking
once it has made its final determination on the arbitration.
24.11 Subsection (4) requires the Commission to publish a statement of
reasons for its decision to suspend the arbitration process, or not assess an
undertaking, and to provide a copy of this document to each party to the
arbitration.
24.12 Subsection (5) is inserted to require the Commission, in exercising its
suspension power, to have regard to two matters: the fact that an access
undertaking has general application while an arbitration determination is
binding only in respect of the parties to the arbitration, and any guidelines made
by the Commission under subsection (6) for the purposes of subsection (5). The
Commission is required to take all reasonable steps to ensure that the first set of
guidelines is made within six months after the commencement of the
68 Trade Practices Amendment (National Access Regime) Bill 2005
Schedule 1 -- Amendments
requirement. The Commission is not prevented from having regard to any other
matter it considers relevant.
24.13 Subsection (8) is included to assist readers as the suspension notice is not
a legislative instrument within the meaning of section 5 of the Legislative
Instruments Act 2003.
24.14 Item 135, contained in Part 2 of Schedule 1 of the Bill, provides that
these amendments apply in relation to access disputes notified, and access
undertakings given, to the Commission after the commencement of Item 110.
New section 44ZZCC Overlap between determinations and access
undertakings
24.15 Section 44ZZCC provides that if, at a particular time, a final
determination is in operation, and an access undertaking is in operation in
relation to the same service, the third party's access to the service at that time is
to be determined under the undertaking to the extent that it deals with terms and
conditions of access to the service that are not dealt with in the determination.
New section 44ZZCD Overlap between registered contracts and access
undertakings
24.16 Section 44ZZCD provides that if, at a particular time, a contract is
registered under Division 4 in relation to a declared service, and an access
undertaking is in operation in relation to the same service, the third party's
access to the service at that time is to be determined under the undertaking to
the extent that it deals with terms and conditions of access to the service that are
not dealt with in the contract.
Item 111 -- Subsection 44ZZJ(1)
24.17 Item 111 amends subsection 44ZZJ(1), by replacing `section 44ZZA'
with `Division 6', to provide that if the Commission thinks that the provider of
an access undertaking in operation under Division 6 has breached any of its
terms, the Commission may apply to the Federal Court for an order under
subsection 44ZZJ(2). Previously the subsection had referred to an access
undertaking in operation under section 44ZZA. New Division 6 incorporates
sections 44ZZA to 44ZZC (as amended by this Bill), and also introduces new
provisions providing for the withdrawal, variation or extension of access
undertakings and access codes, as well as merit review by the Tribunal of
access undertaking decisions or access code decisions.
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Schedule 1 -- Amendments
Item 112 -- After section 44ZZO
New section 44ZZOA Target time limits for Tribunal decisions
24.18 Item 112 introduces section 44ZZOA, which provides a target time limit
for the Tribunal to make a decision on a review under Part IIIA. It requires the
Tribunal to use its best endeavours to make a decision within a period of four
months from the date of receipt of the application for review. If the Tribunal
cannot make a decision within that initial four-month period, it must extend the
time limit by publishing a notification to that effect in a national newspaper.
Again, if the Tribunal cannot make a recommendation within the extended time
limit, the publication obligation applies to a further extension. While there is no
limit on the number of times the Tribunal may extend the time limit, the
requirement that the decision maker publish notification of any extension
beyond the target time limit provides for regulatory transparency and flexibility
for decision makers, thereby increasing incentives for timely decision-making.
24.19 Item 116, contained in Part 2 of Schedule 1 of the Bill, provides at table
item number 7, that this amendment applies to applications for review made to
the Tribunal after the commencement of Item 112.
Item 113 -- Before paragraph 171(3)(a)
24.20 Item 113 inserts a new paragraph (aa) into subsection 171(3), requiring
that the Commission's annual report also include details of the time taken by
the Commission to make final determinations under section 44V in relation to
access disputes, decisions on access undertaking applications or access code
applications (within the meaning of section 44B), and decisions on applications
under subsection 44PA(1) about whether a tender process is a competitive
tender process.
24.21 Item 136, contained in Part 2 of Schedule 1 of the Bill, provides that this
amendment applies in relation to financial years ending after the
commencement of Item 113.
70 Trade Practices Amendment (National Access Regime) Bill 2005
Table of provisions of Part 1 of Schedule 1 of the
Bill cross-referenced against relevant Productivity
Commission recommendations
The substantive changes to the Act are contained in Part 1 of Schedule 1 to the
Bill. Part 2 of Schedule 1 sets out the application and transitional provisions
applicable to the substantive items in Part 1. Table 1 (below) cross-references
the items of Part 1 of Schedule 1 of the Bill against relevant Productivity
Commission recommendations.
Table 1: Items of Part 1 of Schedule 1 of the Bill cross-referenced against
relevant Productivity Commission recommendations
Item of Bill Section of Act Nature of amendment Recommendation/s
amended or
inserted
1 4N(4) Ensures Bill is internally 15.3A
consistent and that numbering
reflects amendments made by the
Bill
2, 3 29O Extends Council's annual 15.3A, 15.7, 16.1
reporting obligations
4 44AA Inserts new objects provision 6.1
5, 6, 7, 8, 9, 10 44B Inserts new definitions 15.1, 15.3A, 15.3B, 15.4, 15.5,
15.7
11 44F(1) Corrects an incorrect legislative No recommendation
reference
12, 13 44F(2)(b) Requires decision maker to have 6.2; 15.3A, 15.4, 15.5
regard to the new objects
provision; inserts legislative notes
14 44G(1) Ensures Bill is internally 15.1
consistent and that numbering
reflects amendments made by the
Bill
15 44G(1A) Amends declaration powers to 11.2
provide immunity from declaration
for competitive tender process
16 44G(2)(a) Amends declaration criteria 7.1
17 44G(3)(a) Requires decision maker to have 6.2
regard to the new objects
provision
Trade Practices Amendment (National Access Regime) Bill 2005 71
Table of provisions of Part 1 of Schedule 1 of the Bill
cross-referenced against relevant Productivity Commission recommendations
Item of Bill Section of Act Nature of amendment Recommendation/s
amended or
inserted
18 44GA Inserts target time limits 15.3A
18 44GB Establishes consultation 15.4
procedure
18 44GC Requires publication of 15.5
recommendation/decision and
reasons
19 44H(1) Inserts legislative note 15.5
20 44H(1A) Requires decision maker to have 6.2
regard to the new objects
provision
21 44H(3) Ensures Bill is internally 15.1
consistent and that numbering
reflects amendments made by the
Bill
22 44H(3A) Amends declaration powers to 11.2
provide immunity from declaration
for competitive tender process
23 44H(4)(a) Amends declaration criteria 7.1
24 44H(5)(aa) Requires decision maker to have 6.2
regard to the new objects
provision
25 44H(7) Requires publication of 15.5
recommendation/decision and
reasons
26 44H(9) Requires publication of 15.5
recommendation/decision and
reasons
27 44HA Requires publication of 15.5
recommendation/decision and
reasons
28 44J(1) Requires decision maker to have 6.2
regard to the new objects
provision
29 44J(3) Inserts legislative note 15.3A
72 Trade Practices Amendment (National Access Regime) Bill 2005
Table of provisions of Part 1 of Schedule 1 of the Bill
cross-referenced against relevant Productivity Commission recommendations
Item of Bill Section of Act Nature of amendment Recommendation/s
amended or
inserted
30 44J(3A) Requires decision maker to have 6.2
regard to the new objects
provision
31 44JA Inserts target time limits 15.3A
32 44K(4) Inserts legislative note 15.3A
33 44L(3) Inserts legislative note 15.3A
34 Subdivision C Repeals the heading 15.3A, 15.4, 15.5
of Division 2
35 Division 2A, Creates new Division and 15.3A, 15.4, 15.5
Subdivision A Subdivision
36 44M(3) Inserts legislative notes 15.3A, 15.4, 15.5
37 44M(4)(a) Requires decision maker to have 6.2
regard to the new objects
provision
38 Subdivision B of Creates new Subdivision 15.3A, 15.5
Division 2A
39 44N(1) Clarifies an action 15.3A, 15.5
40 44N(1) Inserts legislative notes 15.3A, 15.5
41 44N(2)(aa) Requires decision maker to have 6.2
regard to the new objects
provision
42 44N(3) Inserts legislative note 15.7
43 44N(4) Repeals a provision 15.5
44 Subdivisions C Creates new Subdivisions 15.3A, 15.4, 15.5, 15.7
and D of
Division 2A
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Table of provisions of Part 1 of Schedule 1 of the Bill
cross-referenced against relevant Productivity Commission recommendations
Item of Bill Section of Act Nature of amendment Recommendation/s
amended or
inserted
44 44NA Provides for extensions of 15.7
decisions; inserts legislative notes
44 44NB Provides for extensions of 15.7
decisions; inserts legislative notes
44 44NC Inserts target time limits 15.3, 15.7
44 44ND Inserts target time limits 15.3, 15.7
44 44NE Establishes consultation 15.4
procedure
44 44NF Requires publication of 15.5
recommendation/decision and
reasons
44 44NG Requires publication of 15.5
recommendation/decision and
reasons
45 Subdivision E of Creates new Subdivision 15.3A, 15.4, 15.5
Division 2A
46 44O(1) Provides for merit review 15.7
47 44O(3) Inserts legislative note 15.3A
48 Subdivision F of Creates new Subdivision 15.3A, 15.4, 15.5
Division 2A
49 Division 2B Creates new Division 11.2
49 44PA Provides for approval of a tender 11.2
process as a competitive tender
process; inserts legislative notes
49 44PB Provides for accountability 11.2
mechanisms in relation to
approval of a tender process as a
competitive tender process
49 44PC Provides for revocation of 11.2
decision; inserts legislative notes
74 Trade Practices Amendment (National Access Regime) Bill 2005
Table of provisions of Part 1 of Schedule 1 of the Bill
cross-referenced against relevant Productivity Commission recommendations
Item of Bill Section of Act Nature of amendment Recommendation/s
amended or
inserted
49 44PD Inserts target time limits 11.2, 15.3
49 44PE Establishes consultation 11.2, 15.4
procedure
49 44PF Requires publication of 11.2, 15.5
recommendation/decision and
reasons
49 44PG Provides for merit review; inserts 11.2
legislative note
49 44PH Provides for merit review 11.2
50 Division 2C Creates new Division 15.3A, 15.4, 15.5
51 44Q(aa) Extends requirements regarding 15.7
Commission's public registers
52 44Q(c) and (d) Extends requirements regarding 11.2
Commission's public registers
53 44S(1) Makes provision for new 10.1
arbitration requirements
54 44T(1)(a)(i) Makes provision for new 15.3B
arbitration requirements
55, 56 44T(1)(a)(ii) Makes provision for new 15.3B
arbitration requirements
57 44T(2) Makes provision for new 15.3B
arbitration requirements
58 44V(1) Makes provision for new 10.1, 15.3B
arbitration requirements; inserts
legislative notes
59 44V(2) Makes provision for new 15.3B
arbitration requirements
60 44V(2)(da) Makes provision for new 8.4
arbitration requirements
61 44V(3) Makes provision for new 15.3B
arbitration requirements
62 44V(6) Makes provision for new 15.3B
arbitration requirements
Trade Practices Amendment (National Access Regime) Bill 2005 75
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cross-referenced against relevant Productivity Commission recommendations
Item of Bill Section of Act Nature of amendment Recommendation/s
amended or
inserted
63 44W(1)(f) Makes provision for new 8.4
arbitration requirements
64 44X(1) Makes provision for new 15.3B
arbitration requirements; also
inserts legislative note
65 44X(1)(aa) Requires decision maker to have 6.2
regard to the new objects
provision
66 44X(1)(ea) Makes provision for new 8.4
arbitration requirements
67 44X(1)(h) Requires decision maker to have 6.3
regard to new pricing principles
68 44X(3) Makes provision for new 15.3B
arbitration requirements
69 44XA Inserts target time limits 15.3A
70 44Y(1) Makes provision for new 15.3B
arbitration requirements
71 44ZNA Makes provision for new 8.5
arbitration requirements
72 Subdivision DA Creates new Subdivision 8.2, 8.3, 13.1, 15.6
of Division 3
72 44ZNB Establishes arbitration report 15.6
requirements
73, 74 44ZO(1), (2) Makes provision for new 15.3B
arbitration requirements; also
inserts legislative note
75 44ZO(3) (9) Makes provision for new 15.3C
arbitration requirements
76 44ZOA Makes provision for new 15.3B
arbitration requirements; inserts
legislative note
77 Subdivision F of Creates new Subdivision 15.3B
Division 3
78, 79 44ZP(1) and (2) Makes provision for new 15.3B
arbitration requirements
76 Trade Practices Amendment (National Access Regime) Bill 2005
Table of provisions of Part 1 of Schedule 1 of the Bill
cross-referenced against relevant Productivity Commission recommendations
Item of Bill Section of Act Nature of amendment Recommendation/s
amended or
inserted
80 44ZP(3) Inserts legislative note 15.3A
81 44ZQ Makes provision for new 15.3A
arbitration requirements
82 Subdivision G Creates new Subdivision 15.3B
of Division 3
83, 84, 85, 86 44ZU(1) and Makes provision for new 15.3B
(2)(a) and (b) arbitration requirements
87 44ZUA Makes provision for new 15.3B
arbitration requirements
88 44ZW(2)(aa) Requires decision maker to have 6.2
regard to the new objects
provision
89 44ZW(2A) Provides powers to prevent 10.1
duplication of activity
90 44ZX(3) Inserts legislative note 15.3A
91 Division 6; Creates new Division and 10.1
Subdivision A Subdivision
92 44ZZA(3)(aa) Requires decision maker to have 6.2, 6.3
and (ab) regard to the new objects
provision; requires decision
maker to have regard to new
pricing principles
93 44ZZA(3)(d) Ensures Commission cannot 10.4
accept undertaking if service
subject to effective access regime
94 44ZZA(3) Inserts legislative note 10.1
95 44ZZA(3AA) Ensures Commission cannot 10.4
accept undertaking if service
subject to effective access regime
Trade Practices Amendment (National Access Regime) Bill 2005 77
Table of provisions of Part 1 of Schedule 1 of the Bill
cross-referenced against relevant Productivity Commission recommendations
Item of Bill Section of Act Nature of amendment Recommendation/s
amended or
inserted
96 44ZZA(4) and Establishes consultation 15.4
(4A) procedure
97 44ZZA(5) Provides for merit review 15.1
98 44ZZA(7) Provides for extensions of 15.7
decisions
99 44ZZA Inserts legislative notes 15.3A, 15.4, 15.5
100 44ZZAA(3)(aa) Requires decision maker to have 6.2, 6.3
and (ab) regard to the new objects
provision; requires decision
maker to have regard to new
pricing principles
101 44ZZAA(3)(d) Ensures Commission cannot 10.4
accept undertaking if service
subject to effective access regime
102 44ZZAA(3A) Commission cannot accept code 10.4
if service subject to effective
access regime
103 44ZZAA(4) Establishes consultation 15.4
procedure
104 44ZZAA(5) Provides for merit review 15.1
105 44ZZAA(6) Provides for extensions of 15.7
decisions
106 44ZZAA Inserts legislative notes 15.3A, 15.4, 15.5
107 44ZZB Enables access provider to lodge 10.1
an undertaking after a service has
been declared
108 Subdivisions B, Creates new Subdivisions 15.1, 15.3A, 15.4, 15.5, 15.7
C, D, E and F of
Division 6
108 44ZZBA Provides for merit review; inserts 15.1, 15.7
legislative note
108 44ZZBB Provides for extensions of 15.7
decisions; inserts legislative notes
108 44ZZBC Inserts target time limits 15.3, 15.7
78 Trade Practices Amendment (National Access Regime) Bill 2005
Table of provisions of Part 1 of Schedule 1 of the Bill
cross-referenced against relevant Productivity Commission recommendations
Item of Bill Section of Act Nature of amendment Recommendation/s
amended or
inserted
108 44ZZBD Establishes consultation 15.4, 15.7
procedure
108 44ZZBE Requires publication of 15.5, 15.6, 15.7
recommendation/decision and
reasons
108 44ZZBF Provides for merits review; inserts 15.1, 15.7
legislative note
109 44ZZC(3) Extends requirements regarding 15.5, 15.7
Commission's public registers
110 Divisions 6A Creates new Divisions 6.3, 10.1
and 6B of
Division 6
110 44ZZCA Specifies new pricing principles; 6.3
inserts legislative note
110 44ZZCB Enables access provider to lodge 10.1
an undertaking after a service has
been declared; inserts legislative
note
110 44ZZCC Provides powers to prevent 10.1
duplication of activity
110 44ZZCD Provides powers to prevent 10.1
duplication of activity
111 44ZZJ(1) Provides for merit review 15.1
112 44ZZOA Inserts target time limits 15.3A
113 171(3)(aa) Extends Commission's annual 15.3A, 15.7
reporting obligations
Trade Practices Amendment (National Access Regime) Bill 2005 79
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