Bills Digest no. 152 2007–08
Telecommunications Legislation Amendment (National Broadband
Network) Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Telecommunications
Legislation Amendment (National Broadband Network) Bill 2008
Date introduced: 19 March 2008
House: The
Senate
Portfolio: Broadband, Communications and the Digital Economy
Commencement: On the day after the date of Royal Assent.
Links: The relevant links
to the Bill, Explanatory Memorandum and second reading speech can be accessed
via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills
have been passed they can be found at ComLaw, which is at http://www.comlaw.gov.au/.
This Bill inserts proposed Part 27A into Telecommunications
Act 1997 (the Telecommunications Act). Part 27A is a legislative
framework which enables the Minister to make an instrument that sets out
information that telecommunications carriers must give to the Commonwealth
about their telecommunications networks. The Bill provides for that information
to be given to certain public officials and to intending bidders for the
building of a ‘National Broadband Network’ (NBN). The Bill also creates
a framework for the protection of that information.[1]
Background –
Basis of Policy Commitment
The election platform of the Australian Labor Party in 2007 included
an undertaking to contribute $4.7 billion towards the ‘building’ of a
‘national broadband network’ that would reach 98% of home and business
premises and provide speeds of no less than 12 megabits per second.[2] Work would commence on the network before
the end of 2008.
Of that $4.7 billion, $2 billion is to come from the Communications Fund
which will necessitate the amendment of the legislation under which the
Fund was established.[3] The Bill amending
the Communications Fund legislation is presently before Parliament.
The language used to describe the NBN proposal is apt to lead to the
impression that a broadband network is a unitary thing — perhaps even
one that is owned by one firm — and that this proposal involves the creation
of an entirely new broadband network. In fact, most of the network elements
that are used to provide fixed line broadband services are already in
place, some parts for many years. Broadband services do and will continue
to use a good deal of the same physical infrastructure as has been used
for many years for conventional fixed line telephone calls.
The NBN proposal will actually involve will be the replacement of some
parts of the network — mainly sections of copper wire between premises
and Telstra exchanges — and the addition of some new parts; in particular,
the high capacity cable which runs between exchanges and into the core
network. These new parts will have to integrate with the parts that are
already in place most, but not all, of which are owned by Telstra. In
order for a party to make a credible proposal to upgrade the network,
it must have reliable information about what is already in place. The
principal purpose of this Bill is to facilitate the dissemination of that
information to prospective bidders.
It has long been known by the Commonwealth that anyone — particularly
anyone other than Telstra — wanting to upgrade the network would need
information about existing infrastructure. Under a not entirely different
process that commenced in the term of the previous Government, a group
of nine companies (‘the G9’) submitted a proposal on 1 August 2007
to the then Government’s Expert
Taskforce which clearly made the case for the disclosure of relevant
network information. It said:
‘In order for the assessment process to be fair and for
proposals put forward to have a reasonable degree of accuracy, it will
be necessary for all potential proponents to have access to the information
required for them to design and cost their network...’[4]
At page 5 of its 2007
submission to the previous Government’s Expert Taskforce, the G9 set
out some of the kinds of information that would be required by a proponent.
In response to questions from the Senate Environment, Communications and
the Arts Committee which conducted an inquiry
into this Bill, the Department of Broadband, Communications and the Digital
Economy provided further information about the kinds of information that
it envisaged would be required by proponents. These are listed at paragraph
1.18 of the Committee’s
report. For further details, see the main provisions below.
The Commonwealth is reported
in the Australian on 29 February 2008 to have written to several telecommunications
carriers with a request for voluntary disclosure of network information.
Carriers were reported to have been told that, unless they agreed within
four days to disclose the information, the Commonwealth would legislate
to force disclosure.
Some carriers—notably Telstra and Pipe Networks—were concerned about being
asked to disclose confidential network information.
However, on 4 March 2008, Telstra was reported
to have agreed to voluntarily supply network information ‘on the condition
that the Government ensures national security and commercial interests
are not compromised.’ Pipe Networks also explained, in the daily communications
newsletter Communications Day,
that it was concerned about, amongst other things, the commercially sensitive
nature of the information being sought; the uncertainty about the manner
in which the information would be used and to whom it would be given;
the lack of security arising from the format in which the information
was to be provided; the lack of involvement of the disclosing parties
in the drafting of non-disclosure agreements and the difficulties that
would arise upon disclosure in Pipe’s negotiations with regulators and
law enforcement agencies in the United States where it is hoping to land
a new undersea cable.
On 11 March 2008, the Minister announced
the membership of an Expert Panel. The role of the panel is to determine
the manner in which the request for proposals/tender will be conducted
and to assess any proposals that are submitted. The Expert Panel was
differently constituted from the former Government’s Expert Taskforce
which included a current and former officer of the ACCC while the Expert
Panel includes none. The absence of members of the ACCC has been criticised
by the Opposition because of the regulatory challenges that will be
raised by the NBN process.
In the same announcement on 11 March 2008, the Minister said that, in
addition to the Government issuing a request for proposals/tender, it
would also invite submissions from the public about regulatory issues.
On 17 March 2008, the Minister invited
submissions from the public to be made between 17 March to 30 March
2008 to assist in the development of the Request for Proposals. A considerable
number of submissions
were received in response, only a few of which addressed the question
asked.
On 18 March 2008, the Minister was reported in Communications
Day as having announced that the Government would introduce legislation
to force disclosure of network information. As reported, this was because
carriers had not agreed, in the four days provided for by the Minister,
to agree to provide the information.
Although this Bill had not been passed by both Houses at the time, on
11 April 2008 the Minister announced
the issue of the request
for proposals/tender (RFP/T) for the national broadband network.
The RFP/T closes on 25 July 2008 (after 75 days).
Also on 11 April 2008, the Commonwealth called
for submissions on regulatory issues concerning the NBN. Submissions
on regulatory issues are due on 25 June 2008, one month before proposals
for the NBN are due.
On 29 April 2008, in the absence of the voluntary disclosure of network
information (and prior to this Bill being passed to force compulsory disclosure),
representatives
of the ‘Group of 9’ which is expected to lodge a proposal, began to
agitate for an extension of time for the lodgement of proposals.
On 9 May 2008, Telstra voluntarily released network information with
undisclosed conditions. However, on 13 May 2008, this information was
described as ‘absolutely
inadequate’ by the bid manager for the G9 consortium. It is therefore
probable that this Bill will need to be passed in order for the Commonwealth
to force the disclosure of relevant network information.
On 20 March, 2008, the Bill was referred to the Senate
Standing Committee on Environment, Communications and the Arts for
inquiry and report by 7 May 2008. The Committee actually reported on
9 May 2008. It has made recommendations for amendments to the Bill which
were debated in the Senate
on 14 May 2008.
This Bill sets up a legislative scheme for the collection and protection
of network information. It enables the Minister to make disallowable
instruments dealing with the detail of the scheme. Much will depend therefore
on the content and timing of those instruments which cannot be made until
the Bill is passed. Little can be said, then, about this legislative
scheme other than that the objective of the Bill is sound: it is clear
that potential bidders for the NBN will need information about the existing
network and clear, also, that it is not in the interests of those in possession
of it to make it available without coercion.
It is beyond the scope of this digest to consider the NBN policy or the
details of request for proposals process. However, the operation of this
Bill, if it is passed, is clearly tied to the NBN tender process and there
may be some consequences if the Bill does not pass or, if it passes but
the instruments made under it are not promptly made. In the event that
the useful network information is not made available to prospective bidders
in a timely manner, it is certain that the timetable for RFP process will
need to be adjusted. This will naturally affect the timetable for the
commencement of the building process as well. While this may be awkward
for the Government in the light of its election promise, it may well prove
to be positive outcome as it will allow time for consideration of the
complex regulatory, technical, commercial, social and economic issues
that attend this proposal.
According to the Explanatory Memorandum, the Bill is not expected to
have any financial impact on Commonwealth expenditure or revenue.[5]
The Regulation Impact Statement sets out four options which may provide
viable means for obtaining information from telecommunications carriers
about their telecommunications networks and recommends adopting Option
D. [6]
However, according to the Regulation Impact Statement, a potential cost
attached to Option D is that carriers may require compensation for the
compulsory acquisition of intellectual property.[7]
The Bill was introduced in the Senate on 19 March 2008. Debate took
place in the Senate on 14 May 2008. During the debate a number of issues
relating to the Bill arose. In particular:
- the status of any information which may have been provided voluntarily
to the Government in response to its request of 29 February 2008 and
whether, in fact, there should be a two tiered system which differentiated
between voluntary disclosure and involuntary disclosure
- whether the legislation was sufficiently clear about the purposes
for which disclosed information could be used[8] and
- whether disclosed information was sufficiently protected in terms
of its storage and disposal.
After vigorous debate in the Senate about these and other matters, thirteen
Government and sixteen opposition amendments were agreed to. The Bill,
as amended, was introduced into the House of Representatives on 15 May
2008 where a total of eighteen Government amendments were agreed to.
The Senate agreed to the amendments passed by the House of Representatives
on 15 May 2008.
This digest incorporates the various amendments to the Bill.
Items 1 and 2 of the Bill insert new definitions into existing
section 7 of the Telecommunications Act. These include:
- ‘ACCC official’ is to have the same meaning as ‘Commission official’
in section 155AAA of the Trade Practices Act 1974
- ‘ACMA official’ has the same meaning as in the Australian Communications
and Media Authority Act 2005
These terms are referred to in the definition of ‘entrusted company official’
in proposed section 531B.
Items 3 to 9 of the Bill also insert definitions
into existing section 7 of the Telecommunications Act. The details of
each definition are contained variously in proposed sections 531B,
531C and 531D.
Item 10 inserts a further definition into existing
section 7 of the Telecommunications Act. The detail of the definition
is contained in proposed section 531N.
Item 11 of the Bill inserts proposed Part 27A
which contains proposed sections
531A-Q.
Proposed subsection 531C(1) empowers the Minister,[9]
by written instrument, to determine the following:
- specified information is ‘designated information’ for the
purposes of applying the Telecommunications Act to a specified carrier[10]
- the ‘approved manner’ and ‘approved form’ in which a
specified carrier is to give designated information
- the ‘approved period’ within which a specified carrier is to
give designated information.[11]
The written instrument is, according to proposed subsection
531C(7) a disallowable instrument under section 46B of the Acts
Interpretation Act 1901 (AIA). The relevant provisions of section
46B of the AIA are:
- The written instrument must be notified in the Gazette: subsection
46B(5).[12]
- A copy of the written instrument is to be laid before each House of
the Parliament not later than 6 sitting days of that House after the
instrument is made and, for that purpose, must be delivered to the House
by the person or body authorised to make the instrument: subsection
46B(9) and
- If a copy of an instrument is not laid before each House of the Parliament
as required, it ceases to have effect: subsection 46B(10).
For the avoidance of doubt, proposed subsection 531C(8) confirms
that this written instrument is not a legislative instrument under the
terms of the Legislative Instruments Act 2003.
However, before the instrument is Gazetted proposed subsection
531C(4) requires that the Minister must:
- give written notice to the specified carrier setting out the contents
of the instrument in draft form and inviting the carrier to make submissions
within three business days after the notice is given and
- consider any submissions that were received within the timeframe.[13]
This means that the Minister has no legislative obligation to consider
a submission which was not submitted within the three business day period.
Proposed section 531C is important because it triggers
the requirement for a carrier to provide designated information to an
authorised information officer within a specified time. ‘Designated
information’ may include:
- core optical fibre transmission network information, for example locations
such as towns between which optical fibre operates
- microwave radio core transmission networks
- location points of interconnection
- detail about the network servicing customers
- from the exchange to the premises including locations of telephone
exchanges
- line lengths from exchanges to pillars
- line lengths from pillars to homes
- information concerning equipment in the Customer Access Network
and
- information regarding physical space in underground conduits.[14]
Proposed section 531D defines the term ‘designated
request for proposal notice’ as a notice published on the Internet
by the Commonwealth inviting companies to make submissions to the Commonwealth
setting out their proposals for the creation or development of a ‘telecommunications
network’ that is capable of carrying ‘communications’ on a broadband basis,
and any other requirements, within a specific time frame. This is a key
definition as it is used throughout proposed Part 27A in relation
to the prohibition on disclosing ‘protected carrier information’.[15]
In the context of proposed section 531D other definitions
in section 7 of the Telecommunications Act are relevant as follows:
- communications includes any communication whether:
- between persons and persons, things and things or persons and
things
- in the form of speech, music or other sounds, data, text, visual
images (animated or otherwise) signals or in any other form and
- in any combination of forms.
- telecommunications network means a system, or series
of systems, that carries, or is capable of carrying, communications
by means of guided and/or unguided electromagnetic energy.
One of the amendments to the Bill was to inserted proposed subsection
531D(3). It provides that it is immaterial whether the ‘designated
request for proposal notice’ is published before or after the commencement
of Part 27A. This means that any information which is voluntarily provided
in response to the Commonwealth’s call for submissions on 11 April 2008
will be covered by the definition.[16]
Proposed section 531F applies where an instrument under proposed
subsection 531C(1) has come into force so that a specified carrier
has ‘designated information’. In that case, the carrier must give
the information to an ‘authorised information officer’ within the approved
period that is set out in the instrument: proposed subsection 531F(2).
Under proposed section 531M the Minister may appoint an SES
employee to be an ‘authorised information officer’ for the purposes of
the Telecommunications Act. The term ‘authorised information officer’
was extended as a result of the Senate amendments to proposed section
531B to include:
- the Secretary of the Department[17]
- a Deputy Secretary of the Department
- an individual who is an SES employee in the Department and whose duties
relation to the National Broadband Network Task Force, or
- a person who has been appointed as an ‘authorised information officer’
under proposed section 531M.
Once proposed subsection 531F is triggered, the ‘designated
information’ becomes ‘protected carrier information’ which is defined
in proposed subsection 531B. The ‘protected carrier information’
would then have to be provided in the manner and form and within the time
which are specified in the Minister’s written determination.
One of the amendments to the Bill was the expansion of the
definition of ‘protected carrier information’ by the insertion of proposed
paragraph (aa). This paragraph was inserted in response to concerns
raised during the debate on the Bill about the status of any information
which may have been provided voluntarily to the Government in response
to its request of 29 February 2008. The definition now provides that
any information provided by a carrier to an ‘authorised information officer’
during the period beginning on 27 February 2008 and ending 12 months after
the commencement of proposed Part 27A can be the subject of an undertaking
from the authorised information officer on behalf of the Commonwealth
that the information will be treated as ‘protected carrier information’.
As a result that information will be afforded the same protection from
unauthorised disclosure and use as the information which is provided under
the terms of this Bill.
The consequences of a failure to give the information to
the ‘authorised information officer’ are significant. Firstly, section
61 and Part 1 of Schedule 1 of the Telecommunications Act together, provide
that a carrier licence is dependent upon compliance with the whole of
the Telecommunications Act, the Telecommunications (Consumer Protection
and Service Standards) Act 1999 and regulations under that Act, and
Chapter 5 of the Telecommunications (Interception and Access) Act 1979.
This means that a failure to provide the information as required could
lead to the termination of a carrier licence. Secondly, contravention
of a carrier licence condition would also be a contravention of a civil
penalty provision and could result in the imposition of a pecuniary penalty
of up to $10 million, under section 570 of the Telecommunications Act.
Proposed subsection 531F(3) is a sunset provision which limits
the operation of proposed section 531F to a period of one year
beginning on the day that the section commences. This ensures that designated
information would be required to be provided only during the period in
which the competitive assessment process for the National Broadband Network
is expected to be conducted.
Another of the amendments to the Bill was the expansion
of proposed subsection 531G(1). Prior to the amendment it provided
that if a person has obtained ‘protected carrier information’ in their
capacity as an ‘entrusted public official’, the person must not disclose
the information to any other person. The amendment extended the prohibition
to include the use of the information. However, exceptions to those prohibitions
are contained in proposed subsection 531G(2) and, following amendment,
proposed subsection 531G(3A).
The term ‘entrusted public official’ is defined in proposed
section 531B to include any Commonwealth Minister or any Secretary
of a Commonwealth Department, as well as all other Commonwealth officers
or employees. The definition also includes, amongst other things, ACMA
officials, ACCC officials and the Director-General of the Australian Security
Intelligence Organisation (ASIO).
Proposed subsection 531G(2) sets out the exceptions
to the prohibition of disclosure. It provides that an ‘entrusted public
official’ may disclose ‘protected carrier information’ for the
following purposes:
- a matter preparatory to the publication of a ‘designated request for
proposal notice’[18]
- the approach to be taken when considering submissions that could
be made after the publication, or proposed publication, of a ‘designated
request for proposal notice’, in response to an invitation set out in
the notice
- the action to be taken by the Commonwealth[19] or Minister in relation to a proposal set out
in a submission made in response to an invitation set out in a ‘designated
request for proposal notice’
- any matter that is ancillary or incidental to the above.
The above disclosure may be made by the ‘entrusted public
official’ to
- the Cabinet: proposed paragraph 531G(2)(a)
- the Minister: proposed paragraph 531G(2)(b)
- another ‘entrusted public official’ who is to advise the Cabinet,
a Minister or Secretary of a Department: proposed paragraph 531G(2)(c)
- another ‘entrusted public official’ for the purposes of ASIO, the
ACCC or the ACMA giving advice to the Cabinet, a Minister or Secretary
of a Department: proposed paragraph 531G(2)(d)
- another ‘entrusted public official’ for a purpose set out in the
Regulations: proposed paragraph 531G(2)(e)[20]
- another ‘entrusted public official’ for purposes set out in proposed
section 531H: proposed paragraphs 531G(2)(f) to (h).
The ‘entrusted public official’ may also disclose ‘protected
carrier information’ if the carrier has consented to the disclosure, the
information is publicly known or the disclosure is in compliance with
a requirement under a law of the Commonwealth, State or a Territory: proposed
paragraphs 531G(2)(j) and (k).
Proposed subsection 531G(3A) was added to the Bill
by amendment. It sets out the exceptions to the prohibition on use of
‘protected carrier information’ by an ‘entrusted public official’. As
with proposed subsection 531G(2), ‘protected carrier information’ can
be used by an ‘entrusted public official’ for the following purposes:
- a matter preparatory to the publication of a ‘designated request for
proposal notice’
- the approach to be taken when considering submissions that could
be made after the publication, or proposed publication, of a ‘designated
request for proposal notice’, in response to an invitation set out in
the notice
- the action to be taken by the Commonwealth or Minister in relation
to a proposal set out in a submission made in response to an invitation
set out in a ‘designated request for proposal notice’
- any matter that is ancillary or incidental to the above.
‘Protected carrier information’ can be used in the above
manner by the following:
- the Cabinet: proposed paragraph 531G(3A)(a)
- the Minister: proposed paragraph 531G(3A)(b)
- for advising the Cabinet, a Minister or Secretary of a Department:
proposed paragraph 531G(3A)(c)
- so that ASIO, the ACCC or the ACMA can give advice to the Cabinet,
a Minister or a committee established under the executive power of the
Commonwealth: proposed paragraph 531G(3A)(d)
- for a purpose set out in the Regulations: proposed paragraph 531G(3A)(e)[21]
- for purposes set out in proposed section 531H: proposed paragraphs
531G(3A)(f) to (h).
Under proposed subsection 531G(4) an ‘entrusted public
official’ is not required to give a carrier an opportunity to be heard
in relation to a decision to disclose the ‘protected carrier information’.
An amendment was made to the Bill inserting proposed subsection 531G(4A)
which is in similar terms in relation to the use of ‘protected carrier
information’. Further reference to these provisions is made in relation
to proposed section 531J below.
Proposed section 531H allows an ‘authorised information
officer’ to disclose information to an ‘entrusted company officer’. This
term is defined in proposed section 531B. The definition is extremely
broad setting out as it does, some 22 separate circumstances in which
a person will be considered an ‘entrusted company officer’ to whom ‘protected
carrier information’ may be disclosed. In some circumstances there is
a direct relationship with a company such as:
- the directors or employees of the company: proposed paragraphs
531B(a) and (b)
- an individual engaged to provide services to the company: proposed
paragraph 531B(d)
- an employee or director of a body corporate engaged as a consultant
to the company: proposed paragraphs 531B(e)
- an individual who is a partner in or employee of a partnership engaged
as a consultant to the company: proposed paragraph 531B(g)
- an individual who is an officer or employee of a body politic[22] that provides services to a
company: proposed paragraph 531B(i).
However, in other circumstances the relationship is one
step removed from the company such as:
- an individual engaged to provide services to a body politic which
in turn provides services to the company: proposed paragraph 531B(k)
- an employee or director of a body corporate engaged to provide services
to a body politic that provides services to the company: proposed
paragraph 531B(m)
- an individual who is a partner in, or employee of, a partnership engaged
to provide services to a body politic that in turn provides services
to the company: proposed paragraph 531B(o)
- an employee or director of a body corporate engaged as a consultant
to a body corporate that provides services to the company: proposed
paragraph 531B(s)
- an individual who is a partner in, or employee of, a partnership engaged
as a consultant to a body corporate that provides services to the company:
proposed paragraph 531B(u).
According to the Explanatory Memorandum the broad definition
recognises that development proposals may involve consortia and the preparation
of joint submissions.[23] It should be noted though,
that proposed section 531N details ‘restricted recipients rules’.
Under proposed subsection 531N the Minister may make ‘restricted
recipients rules’ which restrict or limit the ‘entrusted company officers’
to whom information may be given under proposed subsection 531H(1)
or proposed paragraph 531K(2)(a). The ‘restricted recipients
rules’ are made by legislative instrument and act as a limit to the persons
who will fall within the definition of ‘entrusted company officer’ in
proposed section 531B.
Under proposed paragraphs 531H(1)(a)-(f) an authorised
information officer may disclose ‘protected carrier information’ only
if all the following conditions are satisfied:
- a designated request for proposal notice has been published and
- a company notifies the authorised information officer in writing that
the company is considering making a submission, intends to make a submission
or has made a submission which is may vary and
- any relevant Ministerial determination made by legislative instrument
according to proposed subsections 531H(3) and (4) are satisfied
and
- any other matters set out in the designated request for proposal notice
are satisfied.
Disclosure of protected carrier information may only be
made by an authorised information officer for the following purposes:
- consideration by the company of whether to make a submission in response
to the invitation in the designated request for proposal notice: proposed
paragraph 531H(1)(g)
- actual preparation of a submission by the company: proposed paragraph
531H(1)(h)
- where a submission has already been made by the company, so that the
company can consider whether to vary the submission, or to actually
vary the submission: proposed paragraphs 531H(1)(i) and (j).
Proposed subsections 531G(4), 531G(4A) and proposed
subsection 531H(2), provide that an ‘authorised information officer’
is not required to give a carrier an opportunity to be heard in relation
to a decision to disclose or use ‘protected carrier information’.
The term ‘procedural fairness’, or ‘natural justice’, encapsulates a
duty to observe fair procedures when making decisions which directly and
individually affect a person's rights, interests or legitimate expectations.
There is a strong presumption that procedural fairness must be observed
in the exercise of public power.[24] However, in this case the proposed subsections make it clear
that the presumption is removed.
Generally, review for breach of procedural fairness is provided for in
paragraph 5(1)(a) of the Administrative Decisions (Judicial Review)
Act 1977 (ADJR Act). In addition, subsection 15(1) of the ADJR Act
provides that where an application for review is made to the Federal Court
under section 5, the Court or a Judge may order that the operation of
decision is suspended, or that any proceedings under the decision are
stayed. Subsection 15A(1) of the ADJR has the same effect in respect
of applications for review that are made to the Federal Magistrates Court.
This means, in essence, that the decision which is the subject of the
appeal is not put into effect until the appeal proceedings are completed.
However, proposed subsection 531J(1) of the Bill
provides that the ‘stay’ provisions in subsections 15(1) and 15A(1) of
the ADJR Act will not apply to decisions to disclose ‘protected carrier
information’.
Another way that an aggrieved person may access the Federal
Court is via the Judiciary Act 1903 (Judiciary Act). Section 39B(1)
of the Judiciary Act provides that the Federal Court can issue writs or
injunctions ordering an officer of the Commonwealth to stop taking certain
action for a specified period of time. However proposed subsection
531J(2) provides that, where a person makes application to the Federal
Court about a decision made under proposed subsections 531G(2) or 531H(1),
that is, a decision to disclose ‘protected carrier information’, (or following
amendment, a decision under proposed subsection 531G(3A) to use
‘protected carrier information’) the Court must not make any orders which
would affect the operation or implementation of those decisions pending
the finalisation of the application. In effect, if a carrier were to
make an application to the Federal Court for a judicial ruling about a
decision to disclose protected carrier information there is no mechanism
to prevent the disclosure while the Court deliberates.
Proposed subsection 531K(1) of the Bill was also
subject to amendment to include a reference to the use of protected carrier
information. It provides that where a person has obtained ‘protected
carrier information’ in their role as an ‘entrusted company officer’ they
must not disclose the information to another person or use it.
However, proposed subsection 531K(2) sets out exceptions
to the prohibition against disclosure in the following circumstances:
- the disclosure is to another entrusted company officer of the company
to consider whether the company should make a submission in response
to an invitation set out in a designated request for proposal notice,
to prepare a submission, or vary a submission: proposed paragraph
531K(2)(a)
- the information is disclosed in a submission made in response to an
invitation set out in a designated request for proposal notice, or is
a variation to a submission: proposed paragraph 531K(2)(b)
- the carrier who gave the information to an authorised information
officer has consented to the disclosure: proposed paragraph 531K(2)(c)
- the information has been made publicly known by the carrier or a person
authorised by the carrier to make the information publicly known: proposed
paragraph 531K(2)(d)
- the disclosure is in compliance with a requirement under a law of
the Commonwealth, a State or a Territory: proposed paragraph 531K(2)(e).
Telstra’s
submission to the Senate Standing Committee on Environment, Communication
and the Arts strongly objected to the contents of proposed paragraph
531K(2)(b) and proposed that the paragraph be narrowed to require
any bid submission to preserve the confidentiality of the protected carrier
information.[25] Recommendation
2 of the Committee report is that the government consider amending the
Bill to require companies submitting tenders to designate a carrier’s
protected network information as confidential.[26] No amendments of this nature were made to
the Bill.
A further amendment was the insertion of proposed subsection
531K(2A) in similar terms to proposed subsection 531K(2), setting
out the exceptions to the prohibition against use.
Proposed subsection 531K(3) provides civil penalty
provisions for a breach of proposed subsection 531K(1). The civil
penalty provisions are set out in section 570 of the Telecommunications
Act.
Proposed subsection 531L(1) provides for the Federal
Court to make an order directing a company to compensate a carrier where:
- ‘protected carrier information’ was given to an ‘authorised information
officer’ and
- an ‘entrusted company officer’ of a company has contravened proposed
subsections 531K(1) or (3) in relation to the information (that
is, by disclosing it or using it in ways other than those which are
permitted) and
- the Court is satisfied that the carrier has suffered loss or damage
as a result of the contravention and
- the Court is satisfied that the company expressly, tacitly or impliedly
authorised or permitted the contravention.
The submission by Telstra to the Senate Standing Committee
on Environment, Communication and the Arts sought removal of the requirement
that a company authorised the offence as a precondition for compensation.[27]
Recommendation 3 of the Committee report was that
… the government consider amending paragraph 521L(1)(d)
… and replace it with wording that conveys that the contravention was
committed in the context of an entrusted company officer’s employment
or authority.[28]
In response to this concern, the Bill was amended to insert
proposed subsections 531L(3) to (5). Proposed subsection 531L
provides for the Federal Court to make an order directing a company to
compensate a carrier where an ‘entrusted company officer’ of the company
has contravened the prohibition on disclosure of use of ‘prohibited carrier
information’, thus causing loss or damage, and the Court is satisfied
that the ‘entrusted company officer’ was acting within their actual or
apparent authority as an employee of the company when the contravention
occurred.
However the submission by Telstra went further. It states:
Under the current clause 531L, orders for compensation
may only be made against the company of an entrusted company
officer who has contravened section 531K(1). Companies involved … could
be impecunious. Hence it is conceivable that a ‘judgment-proof’ company
may be a vehicle for conduct which causes significant commercial detriment
to competing carriers ….[29]
No amendments were made to the Bill which address this issue.
Issues about the storage, handling or destruction of ‘protected
carrier information’ are dealt with in proposed section 531P.
Under proposed subsection 531P(1) the Minister may make such rules
by legislative instrument. The Explanatory Memorandum states that the
rules could require a company and/or an entrusted company officer of that
company to store or handle protected carrier information in a certain
way, or to destroy such information after a certain period of time. The
rules could detail the practical measures that recipients of protected
carrier information would be required to put into place to safeguard the
information.[30] However,
at the time that this Bills Digest was prepared, the legislative instrument
was not available for analysis. It is not, therefore, possible to say
with certainty that there are rules which deal with the storage, handling
or destruction of ‘protected carrier information’ in a way that is adequate,
effective and fair. Nevertheless, they will be legislative instruments
as defined by the Legislative Instruments Act 2003 and so will
be on the Federal Instruments Register.
Proposed subsections 531P(3) and (4) are civil penalty provisions
in accordance with section 570 of the Telecommunications Act.
Concluding comments
As a general proposition, the intent of this Bill is positive. As to
whether it is effective, much will turn on the content and timing of the
instruments that are made under it. If the information sought and received
is of a nature that satisfies the needs of those intending to submit proposals
for the NBN, then it can be expected that the quality of bids will be
enhanced making for a more competitive tender process. The converse is
true if the subordinate instruments do not satisfactorily specify the
information that is appropriately sought by intending bidders or if the
information is sought or received too late in the ‘Request for Proposals’
process. Given the doubts that have been raised about the process—in
particular the suggestion that the Commonwealth may not be adhering to
the process that it has established—it may be prudent for the Commonwealth
to consider the calls by intending bidders for an extension of time to
the process rather than face the possibility of having the process challenged.
Jonathan Chowns and Paula Pyburne
30 June 2008
Bills Digest Service
Parliamentary Library
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