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Who does this affect?

Infrastructure owners and infrastructure users.

What do you need to do?

Consider putting a submission to Treasury on the proposed infrastructure access reforms. The devil will be in the detail.

Author
Thomas Jones  
Special Counsel
Vishal Ahuja  
Partner
T +61 2 9296 2116

Sydney
Dave Poddar  
Thomas Jones  

Melbourne
Amanda Bodger  
Andrew Monotti  

Government flags speedier resolution to infrastructure access disputes - 8 April 2009

The Minister for Competition Policy and Consumer Affairs, Mr Chris Bowen, has flagged a package of reforms to streamline the National Access Regime in Part IIIA of the Trade Practices Act (TPA). Following consultations with the States and Territories, legislation to amend the National Access Regime is expected to be introduced to Parliament in mid 2009.

Interested parties may wish to put a submission to Treasury on the proposed Part IIIA reforms.

Highlights

Mr Bowen emphasised that the changes proposed are not intended to strengthen or weaken the Regime. They are intended to address concerns expressed by some infrastructure owners and access seekers that the processes under the Regime are too lengthy and costly. To this end, the changes proposed include:

  • imposing binding time limits on regulatory decisions
  • limiting any merits review by the Tribunal to information submitted to the Australian Competition and Consumer Commission (ACCC) or National Competition Council (NCC), and
  • allowing infrastructure owners to seek “no coverage” rulings which would exempt infrastructure from declaration for a minimum of 20 years if the infrastructure would not meet the declaration criteria.

Some of the proposed reforms have already been implemented in the telecommunications access regime in Part XIC of the Act which, like Part IIIA, provides for declarations, undertakings and arbitrations by the ACCC. These include binding time limits limiting merits review to information submitted to the regulators, and provision for access holidays.

Reform proposals - a brief summary

A brief summary of the proposed reforms is as follows:

a) COAG commitments on Competition and infrastructure Reform Agreements

  • Time limits on regulatory decisions to become binding. They are currently targets only, and non-binding.
  • Merits review to be limited to information submitted to regulators.

b) Part IIIA decision-making criteria and processes

  • “No coverage” rulings, which would allow infrastructure owners to obtain a minimum 20 year exemption from declaration if the infrastructure would not meet the declaration criteria.
  • “Fixed principles” in access undertakings, which would apply to subsequent undertakings covering an infrastructure.
  • “Health and safety” to be removed as a separate declaration criterion, but continue to be considered as part of the public interest criterion.
  • State/Territory access regimes must be certified as effective under Part IIIA in order for services covered under those regimes to be exempt from declaration.
  • The Minister is deemed to agree with the NCC’s recommendation in the event of a non-decision.

c) NCC and ACCC administrative processes

  • Applications for declaration may be amended and accepted by the NCC.
  • Conditional approvals of access undertakings: the ACCC may accept an access undertaking if the infrastructure provider agrees to amendments to the terms and conditions of the access undertaking.
  • Decisions of the ACCC and NCC may be made by circulation of papers.

d) Australian Competition Tribunal processes

  • The Tribunal may award costs for reviewing declaration decisions in certain circumstances.
  • No automatic stay on the Tribunal’s decision if there is an appeal. Rather, the Tribunal is to determine whether a stay is appropriate.

Will the proposed changes work?

While the desire to streamline regulatory processes (thereby reducing cost and inefficiency) is laudable, our experience under Part XIC of the TPA shows that some of these gains can be illusory. They may also involve a compromise in the quality of key regulatory decisions, especially where the review body has insufficient information before it to make a fully informed decision.

As a consequence, infrastructure owners and users should give careful consideration to making submissions on the proposed changes.

This publication is only a general outline. It is not legal advice. You should seek professional advice before taking any action based on its contents.