The ACCC has issued guidelines informing telecommunications operators of the ACCC's approach to exercising its infringement notice powers for failure to comply with the 'carrier separation rules' under the Telecommunications Act.
The guidelines follow recent legislative amendments that give the ACCC the power to issue infringement notices to network operators and intermediaries supplying retail services, including apartment building owners, property managers and retirement village operators, that contravene the carrier separation rules.
The legislative amendments also include increased maximum penalties of $10 million per contravention for non-compliance with the carrier separation rules if the ACCC takes legal action in the Court in serious cases.
The carrier separation rules require superfast network operators to operate on a wholesale-only basis, unless they seek an exemption from the ACCC. This means that a company that controls a superfast broadband network cannot supply retail services over it unless an exemption applies. In all instances, they must also comply with the non-discrimination obligations and the ACCC's superfast broadband access service determination, which sets maximum wholesale prices for retailers to access their networks.
The ACCC takes compliance with the carrier separation rules very seriously given their objective of promoting retail competition and choice for consumers on alternative fixed-line broadband networks.
The new infringement notice powers allow the ACCC to respond quickly to instances of non-compliance within the telecommunications industry, such as a network operator favouring its own retail operations.
However, where warranted, the ACCC will not hesitate to pursue matters in the Federal Court and seek appropriate penalties where there is evidence of contravening conduct.
The ACCC considers it important that consumers are able to benefit from effective retail broadband competition regardless of their fixed-line network provider and these new powers will assist in improving compliance within the sector.
Further details about the guidelines are available on the ACCC website at: ACCC Telecommunications (Infringement Notices) Guidelines 2024
Background
On 25 August 2020, the carrier separation rules in the Telecommunications Act 1997 were amended to enable vertically integrated superfast network operators serving residential customers to offer wholesale and retail services on a functionally separated basis (rather than a structurally separated basis), subject to important legislative requirements.
Unless they have fewer than 12,000 residential customers and elect to be bound by the Class Exemption that the ACCC made on 25 August 2020, superfast network operators that wish to offer both retail and wholesale services must either:
- elect to be subject to a deemed functional separation undertaking that has been made by the ACCC, if eligible, or
- submit a customised standard functional separation undertaking, given by a single corporation, or joint functional separation undertaking, given by two or more corporations, for approval by the ACCC.
In all cases, operators are required to offer wholesale access on non-discriminatory terms and operators who have elected to be bound by the ACCC's class exemption or deemed functional separation undertaking, or who have submitted a customised functional separation undertaking are subject to the non-discrimination rules in Part 8 of the Telecommunications Act, and must comply with their obligations.
On 16 October 2020, the ACCC made the Telecommunications (Deemed Functional Separation Undertaking) Determination 2020 (the deemed functional separation undertaking). The deemed functional separation undertaking is only available for networks supplying superfast services to no more than 50,000 residential customers.
On 29 September 2021, the ACCC published telecommunications non-discrimination guidelines that provides guidance in relation to the non-discrimination obligations in Part 8 of the Telecommunications Act.
On 14 October 2022, the ACCC published industry guidance on the carrier separation rules that provides an overview of the carrier separation obligations. A number of these obligations are civil penalty provisions, and the ACCC may issue infringement notices or take enforcement action for any alleged contraventions of these obligations.
On 5 January 2024, the ACCC amended the Telecommunications (Deemed Functional Separation Undertaking) Determination 2020 to incorporate commitments to enhanced transparency measures and stronger arm's-length separation between an eligible network operator's wholesale and retail business units.
On 12 March 2024, the ACCC released its final decision on the Superfast Broadband Access Service (SBAS) access determination. The SBAS access determination came into force on 1 September 2024.
On 3 June 2024, the Telecommunications Legislation Amendment (Enhancing Consumer Safeguards and Other Measures) Act 2024 (the Act) came into force. Among other things, the Act increases penalties for contraventions of the carrier separation rules in Part 8 of the Telecommunications Act to a maximum penalty of $10 million for each contravention of a civil penalty provision and enables the ACCC to make guidelines for the issuing of infringement notices for certain alleged contraventions of the Telecommunications Act.
On 17 July 2024, the ACCC published draft telecommunications infringement notices guidelines. Consultation on the draft guidelines concluded in August 2024.
The guidelines set out a range of factors which an authorised infringement notice officer may consider in determining whether an infringement notice should be given, and they also set out a range of administrative matters.
An authorised infringement notice officer may give an infringement notice if they have reasonable grounds to believe that a person has contravened a civil penalty provision under or relating to the carrier separation rules. These civil penalty provisions include compliance with the wholesale-only requirements, compliance with the ACCC's class exemption, compliance with functional separation undertakings and the non-discrimination obligations.
Based on current penalty unit values, the penalty payable under an infringement notice for an alleged contravention is $18,780 per contravention for a body corporate, and $3,756 for an individual.
