Alert

Who does this affect?

Infrastructure owners and infrastructure users.

What do you need to do?

Given the likelihood that the Bill will become law without major amendments, infrastructure owners will need to consider how these proposed changes could impact on their access obligations. Likewise, infrastructure users will need to consider how the Bill could affect their ability to access infrastructure.

Authors
Thomas Jones  
Special Counsel

Danet Khuth  
Solicitor

Stefanie Benson  
Solicitor

---

Vishal Ahuja  
Partner
T +61 2 9296 2116

---

Sydney
Dave Poddar  
Thomas Jones  

Melbourne
Amanda Bodger  
Andrew Monotti  

---

As foreshadowed in April 2009 (and our previous alert), a package of reforms designed to improve the efficiency of regulatory decision making under the National Access Regime in Part IIIA of the Trade Practices Act 1974 (TPA) has been released.

The Trade Practices Amendment (Infrastructure Access) Bill 2009 (Bill) was introduced on 29 October 2009 and will provide for:

• Binding time limits and limited merits review

• ‘No coverage’ decisions

• Fixed principles in access undertakings

• ACCC amendments to access undertakings, and

• Other amendments.

Binding time limits and limited merits review

Under the Bill, the National Competition Council (NCC), Australian Competition and Consumer Commission (ACCC) and the Australian Competition Tribunal (ACT) will be required to make decisions or recommendations under Part IIIA within a specified period, generally 180 days (as extended by clock-stopping events such as requests for further information).

The designated Minister will have 60 days to make a decision after receiving a recommendation from the NCC. This period cannot be extended.

Moreover, if requested information is not provided within a specified timeframe, the decision-maker may disregard that information.

Deemed decisions

Currently, if the Minister does not publish a decision within 60 days, he or she is deemed to have decided not to declare the service. Under the Bill, if the Minister does not publish a decision within 60 days, he or she is deemed to have agreed with the NCC’s recommendation.

Where the ACCC does not make a decision within the relevant expected period, as extended by clock stoppers, it is deemed to have, in the case of:

• access undertakings and industry codes - rejected the access undertaking or industry code

• arbitration of access disputes - preserved the status quo between the parties, and

• a competitive tender process - approved the competitive tender process.

Limited merits review

The National Access Regime currently provides for merits review of decisions by the ACT. The Bill limits the scope of that review by providing that it will be based upon the material before the original decision-maker. The ACT will be able to seek additional information, but only to clarify the original information, or from the ACCC or NCC in their role of assisting the ACT.

The Bill does not go so far as the (current) telecoms access regime in Part XIC which expressly provides that the Act in review may only have regard to that material. However the ultimate effect may be similar.

No coverage decisions

A person with a material interest in a service to be provided by means of a new infrastructure facility (proposed facility) may apply to the NCC for a recommendation that the service be ineligible for declaration. This is intended to enhance regulatory certainty for infrastructure investors.

The application must be made before the construction of the facility commences but can be withdrawn without the NCC’s consent.

A service can only be ineligible for declaration if the NCC and the Minister are satisfied that it would not satisfy at least one of the criteria for declaration under s44H.

The period for which a service is declared ineligible must be at least 20 years and may only be revoked if:

• the facility, when built, is so different that it would now meet the test for declaration, or

• the service provider so requests.

The Minister's decision is subject to merits review by the ACT.

Fixed principles in access undertaking

The Bill expressly provides for the acceptance of access undertakings containing “fixed principles” that will apply to subsequent undertakings for that service. The intention is to create greater regulatory certainty for investment and business planning by allowing important variables such as service standards to be fixed for a longer period of time.

The Access Provider may seek to vary or withdraw the “fixed principles” but only with the ACCC’s consent.

ACCC may propose amendments to a proposed access undertaking

The ACCC will also be able to issue an Amendment Notice to a service provider who has submitted an undertaking for consideration by the ACCC. The Amendment Notice will set out the nature of any amendments the ACCC requires before it accepts the undertaking.

Currently the ACCC can only formally accept or reject an undertaking. Accordingly, the ACCC will normally issue a draft determination to accept or reject an undertaking. A party receiving a draft determination to reject its undertaking must then withdraw the undertaking and re-submit a varied undertaking.

While the extent of the benefits arising from the proposed amendments will largely depend on what changes the ACCC makes to its processes, it is likely that the ACCC’s ability to issue an Amendment Notice will create greater certainty and transparency for services providers during the undertaking assessment process.

Other amendments

Other amendments included in the Bill are to:

• Allow the NCC to make decisions via circulation of papers, rather than requiring decisions to be made only at a NCC meeting.

• Allow the NCC to approve variations to applications that a service be declared without requiring applications to be resubmitted as entirely new applications.

• Remove the requirement that, in considering declaration applications, the NCC and the Minister must explicitly consider:

• Provide the ACT with a discretion to: