An overview of the telecommunications licensing regime in Australia

1. Telecoms licensing in Australia
Dr Martyn Taylor
Partner
March 2014

2. Overview
1. Australian telecoms licensing – an overview
2. When is a carrier licence required in Australia?
3. Application of regulation to fixed networks
4. Application of regulation to wireless/mobile networks
5. Obtaining a carrier licence
6. Carrier licence conditions and powers
7. Carriage service providers
8. Regulation of customer equipment and cabling
9. Case study: wireless network in a shopping centre
10. Australian National Broadband Network
11. Greenfields housing estates
Telecoms licensing in Australia2
Dr Martyn Taylor
Partner
+61 45 777 4711
martyn.taylor@nortonrose.com

3. Australian telecoms licensing – an overview
Telecoms licensing in Australia3
• The Australian model for telecoms licensing is one of the least complex telecoms
licensing models by global standards.
• Australia applies regulation to three types of entities:
• Under the Australian regime, only a carrier is required to apply for and hold a
telecommunications licence, known as a “carrier licence”.
• Regulation automatically applies if the relevant entity meets the relevant statutory
definitions of a carriage service provider (CSP) or content service provider. A
licence is not required for a CSP or content service provider.
• If wireless or mobile services are involved, radiocommunications licences may also
be required as well as telecommunications licences.
Australian terminology Role of entity Level of regulation
“Carrier” Infrastructure ownership High
“Carriage service provider” Carriage of communications Moderate
“Content service provider” Delivery of content Low

4. When is a carrier licence required in Australia?
Telecoms licensing in Australia4
• The policy behind carrier licensing is to apply the heaviest regulation to the owners of
certain telecommunications infrastructure in order to promote competition and
address various public interest issues.
• A “carrier licence” is required by an entity if it owns a “network unit” that is used to
supply carriage services “to the public”.
• There are no limits to the number of carrier licences that may be issued. As at
February 2014, there were 202 active carrier licences in Australia.
• There are two circumstances where a requirement to hold a carrier licence can be
avoided:
• First, if one of the exemptions from carrier licensing applies. Some electricity
distribution companies have obtained exemptions for monitoring, for example.
• Second, if an existing holder of a carrier licence obtains a declaration from the
ACMA that it is the „nominated carrier‟ in relation to the relevant network unit.
• A “nominated carrier declaration” is a unique feature of the Australian regime and, in
effect, permits an infrastructure owner to contract with an existing licensed carrier for
that carrier to assume statutory obligations on its behalf.

5. Application of regulation to fixed networks
Telecoms licensing in Australia5
• The concept of a “network unit” is used to identify the particular types of telecoms
infrastructure that is subject to regulation.
• The Telecommunications Act 1997 (Cth) identifies four key types of basic telecoms
network infrastructure that require a carrier licence, each is a “network unit”:
• A single line link (e.g. optical fibre, copper cable) connecting distinct places (e.g.
different properties) in Australia, and having a length of greater than 500 metres.
• Multiple line links connecting distinct places in Australia and having an aggregate
length of greater than 5 km.
• Designated radiocommunications facilities (see next slide)
• Facilities specified in a Ministerial determination.
• The concept of “distinct places in Australia” in essence refers to different properties.
Contiguous properties owned by the same person are treated as the same property.
However, leases within a property are treated as different properties.
• Various nuances apply in relation to the manner in which these concepts are applied.

6. Application of regulation to wireless/mobile networks
Telecoms licensing in Australia6
• Wireless/mobile networks are subject to both telecommunications licensing and
radiocommunications licensing.
• The concept of a “designated radiocommunications facility” is used to apply
telecommunications licensing to mobile and wireless networks. The definition
applies to the following network equipment:
• a base station for the supply of public mobile telecommunications services
• a base station that is part of a terrestrial radcoms customer access network;
• a fixed radcoms link that is double-ended interconnected;
• a satellite-based facility; and
• a radcoms transmitter or receiver of a kind specified in a Ministerial
determination.
• Again, there are various nuances in relation to the application of these concepts.
• A radiocommunications licence may also be required in the form of an apparatus
licence, class licence or spectrum licence. (Not covered in this slide pack)

7. Obtaining a carrier licence
Telecoms licensing in Australia7
• Carriers must be individually licensed by the ACMA. Initially, ACMA may issue a trial
certificate for a network unit for the purpose of trailing the technical and commercial
viability of services. The certificate exempts the owner from the obligation to hold a
carrier licence for up to 6 months.
• Subsequently, the owner of the network unit must apply to ACMA by completing the
relevant application forms.
• Legislative requirements for granting a carrier licence include the payment of an
application fee, currently set at AUD 2,076.
• A decision is usually made by ACMA within 20 business days.
• Carriers who earn AUD $25 million or more in eligible revenue during a relevant 12
month period are required to pay a telecommunications industry levy (pro rated
across the industry) and an annual carrier licence charge (currently $1.18 per $1,000
of revenue).
• Unless exempted by ACMA, a carrier must also join the Telecommunications Industry
Ombudsman (TIO) scheme.

8. Carrier licence conditions and powers
Telecoms licensing in Australia8
• A carrier licence is granted with a range of conditions, essentially involving the
imposition of various forms of regulation on the carrier.
• The level of regulation is detailed and hence is not summarised in these slides. One
example is a requirement to comply with the telecommunications access regime and
related obligations concerning access to telecommunications facilities.
• Most of the conditions are statutory conditions that apply to all carrier licensees,
although the Minister does have the power to impose specific conditions in relation to
a particular licence (as occurs in relation to Telstra).
• The holder of a carrier licence can also use statutory carrier access powers to obtain
access to land and buildings for the purposes of installing telecoms access
infrastructure. These power can be used to circumvent the usual State and local
environmental planning requirements in certain circumstances.
• Specific obligations also apply under various network codes and standards, including
obligations relating to the deployment of mobile network base stations.

9. Carriage service providers
Telecoms licensing in Australia9
• A CSP is person that supplies a “carriage service” to the public using the network
unit of a licensed carrier.
• CSPs can include organisations that resell time on a carrier network for phone
calls, provide access to the internet (Internet Service Providers) or provide
telephone services over the internet (VoIP service providers).
• CSPs are not required to obtain a licence from ACMA to supply a carriage service
to the public, rather they must comply with various legislation and service
provider rules.
• The service provider rules comprise a basket of regulation that is intended to
protect consumers and the public interest in the supply of telephony services.
The regulation is higher where “standard telephone services” are supplied.
• Regulation applies, for example, to numbering (including charges and number
portability), preselection, interception, protection of communications, calling line
identification, interception, emergency call services, disaster management, law
enforcement, disability services, billing and operator/directory assistance.

10. Regulation of customer equipment and cabling
Telecoms licensing in Australia10
• ACMA regulates equipment used on the customer side of the telecoms network
boundary (customer equipment and customer cabling).
• It is mandatory for certain customer equipment and cabling to comply with
specified industry-developed technical standards and be labelled with a
compliance label (i.e., the A-Tick compliance mark).
• If equipment is compliant with the relevant technical standards, it can be
connected to a network without the consent of the network or facility manager.
• If the equipment is not compliant with the relevant technical standards, the written
consent of network or facility manager is required for the connection to occur.
• Connection of non-compliant equipment to a telecoms network without the written
consent of the network or facility manager gives rise to an offence.
• Mobile network customer equipment must also comply with radiocommunications
standards, including compliance labelling (i.e., the C-Tick compliance mark).

11. Case study: wireless network in a shopping centre
Telecoms licensing in Australia11
Scenario: The owner of a shopping centre wishes to provide free Wi-Fi services to all
persons within a shopping centre.
• There are two types of licensing: radiocommunications and telecommunications.
• Most wireless local area networks (WLANs) operate radiocommunications equipment
under class licences. If the WLAN is within the requirements of the class licence, it is
not necessary to apply for any further radiocommunications licence.
• Radiocommunications equipment used for a WLAN is generally a „designated
radcoms facility‟, although there are a range of potential exceptions that may apply.
• A carrier licence would not be required if the WLAN were for the sole purpose of
supplying carriage services on a non-commercial basis (e.g., at no charge).
• Wireless networks in airport lounges, hotels, shopping centres and Internet cafes
probably would not normally require a carrier licence because the wireless service is
provided in a single place.
Conclusion: A wireless network in a shopping mall is unlikely to require a carrier licence
or a radiocommunications licence.

12. Australian National Broadband Network
Telecoms licensing in Australia12
• Following the recent change in Government, the arrangements for the Australian
National Broadband Network are currently under review. Under the previous policy,
NBN Co would provide 93% of premises with broadband and phone using fibre to
the home. The remaining 7% would be provided using fixed wireless and satellite.
• In NBN fibre areas, NBN Co would provide a free standard installation of a premises
connection device (PCD) on the outside wall of each dwelling while the network is
being rolled out, and a Network Termination Device (NTD) inside each dwelling once
a service is ordered through a retail service provider.
• In areas serviced by fixed wireless, NBN Co would conduct a radio signal survey to
ensure that each premises is able to receive a good quality fixed wireless service.
NBN Co would then mount an outdoor Antenna on the roof of the premises and
install an NTD to an interior wall, with a cable running between them.
• In areas serviced by satellite, NBN Co would mail each eligible premises with a
registration ID and an information pack. The selected service provider would
organise the installation of network equipment at each premises. A satellite dish on
the outside of a dwelling would be connected to the NTD inside the premises.

13. Greenfields housing estates
Telecoms licensing in Australia13
• Under the National Broadband Network arrangements, NBN Co is the provider of
last resort for fibre new housing estates of over 100 premises. The fibre would
be deployed in the new estate at no charge to the developer.
• The developer is responsible for providing the duct infrastructure (pits and pipes)
to meet NBN requirements, including conduits and pipes for the deployment of
fibre. The developer is required to enter into a Master Developer Agreement and
transfer ownership of the duct infrastructure to NBN Co.
• The developer is free to select an alternative fibre provider, but is then potentially
liable for the costs of deploying the fibre (depending on the arrangement with the
alternative fibre provider).
• The provision of fibre by NBN Co has experienced significant delays, so we
understand developers have sometimes used alternative fibre providers
notwithstanding the additional cost involved.
• For new housing estates of under 100 premises, Telstra remains as the provider
of last resort and could deploy either fibre or copper in those estates.

14. 14 Telecoms licensing in Australia
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