If an entity in your corporate group has a carrier licence, and a different entity in the group owns or operates telecommunications facilities (like mobile towers), you should be aware of the expansion of the telecommunications facilities access regime under the Telecommunications Act.
Under the expanded regime, other carriers may be able to get regulated access to telecommunications facilities from non-carriers in your group.
Whether non-carrier group members will be impacted depends on the ownership structure in the group. The ACCC is currently consulting industry stakeholders on the appropriate corporate ownership threshold. Submissions close on 6 May 2022.
Carriers can seek regulated access from non-carriers
The Telecommunications Act currently requires carriers to provide regulated access to telecommunications facilities they own or operate, on request from other carriers. Relevant telecommunications facilities include ducts, towers, antennae, equipment, apparatus, pits and poles, provided they meet certain criteria.
This regulated access regime was recently expanded by changes to the Telecommunications Act. Once the changes are operative, carriers will be able to request access to telecommunications facilities owned or operated by non-carriers where there is a carrier in the non-carrier’s corporate group.
Whether a non-carrier and carrier are in the same corporate group for the purposes of the regulated access regime depends on the ownership structure within the group. To determine if companies are related for these purposes, a modified version of the standard Corporations Act test for whether entities are “related bodies corporate” applies. Applying this test, the requisite ownership threshold is either 15% (instead of 50%) of the issued share capital, or such other ownership threshold determined by the Minister having consulted with the ACCC. (There is also a modified test concerning the number of votes that can be cast at a general meeting.) Last week, the ACCC announced its consultation on the appropriate threshold.
Consultation on the control threshold
The ACCC is currently seeking stakeholder input on the appropriate control percentage, as it prepares its report of recommendations for the Minister. Although the Minister is not required to follow the ACCC recommendation, the ACCC’s consultation is a valuable opportunity to provide input on the appropriate ownership threshold for the operation of the new regulated access regime.
The ACCC is seeking views on 9 questions:
- What factors should be considered in identifying an appropriate corporate control percentage in relation to a carrier company group?
- What percentage ownership by a carrier shareholder in a telecommunications tower or facilities operator is sufficient for entities to be considered related?
- What factors should be considered in determining whether carrier entities are sufficiently related?
- What level of ownership by a carrier shareholder would be required such that a carrier may be able to influence the day-to-day decisions and operations of a tower or facilities operator?
- Are there reasons to believe that a carrier company group would favour its own carrier shareholder? Please provide details.
- Are there policies in place such that carrier shareholders potentially abstain from voting on matters that involve the carrier shareholder? If so, how would these be governed in practice?
- Are there any current or potential issues carriers have in relation to access to facilities and infrastructure owned and operated by new operators?
- Are there any other considerations relevant to the determination of an appropriate corporate control percentage that the ACCC should be aware of?
- Are there any events in the foreseeable future regarding the telecommunications tower market in Australia that the ACCC should be aware of?
For action
You may be impacted by this change if you are a non-carrier that owns or operates telecommunications facilities and you have a carrier in your group. We’d be happy to chat about whether you could be caught by the expanded regime.
If you are impacted, you should consider providing written submissions to the ACCC by 6 May 2022. For more information, see the ACCC Consultation Paper.
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The ACCC’s carrier group ownership threshold consultation coincides with its inquiry into access to towers and associated passive and active infrastructure – you can read about that inquiry here.
