MNF Group Limited (MNF) response to ACMA Proposal to Remake Numbering Charges December 2016
1. Summary
MNF believes that the current costing model unfairly places most of the cost recovery on users of inbound numbers(13/1300/1800 numbers). The new models proposed by the ACMA do nothing to alleviate this situation and will in fact perpetuate a flawed model that has a heavy dependence on inaccurate forecasting of new inbound number allocations.
MNF has proposed two alternative models that could be used to more equitably distribute the cost of the system among users of all types of numbers and would request that these models be given serious consideration.
However, if such a new model is unable to be introduced at this time and the current model is retained, MNF would support the use of Option A –cost recovery smoothed across the remaining life of the contract ($31.00).
2. Issues with the Current Charging Structure
From the time of the initial public consultation in 2015, MNF identified that the basic problem with the charging model was that it was overly dependent on the number of allocations for one number type, ie inbound numbers. For example, figures provided in Table 1 of the ACMA Paper indicate over 90% of the charges recovery is associated with inbound numbers. This makes the recovery very sensitive to inbound number usage which past history shows has fluctuated significantly from year to year. In addition, it is uncertain what the usage pattern will be going forward and frequent adjustments of charges may well be necessary. Any increase in charge may ultimately lead to a decrease in activations and this would be a further concern when new activations are already lower than expected. In summary, continuing to rely on the current model is likely to create uncertainty for both government and industry regarding cost recovery revenue.
3. Fairer Charging Structure
MNF believes that the ACMA should re-examine the funding model with a view to identifying an approach that more equitably allocates the cost of the ZOAK Numbering System to all users of numbers and to reduce the uncertainty created by the current model.
MNF would like to see the charging structure completely overhauled so that it distributes the cost of the Numbering System across all holders of numbers rather than recovering the cost only from allocation charges. MNF believes that the current model unfairly advantages large existing players and penalises newer growing companies.
MNF has identified two models which could more fairly distribute the cost of the Numbering System without substantial changes. Both approaches anticipate no changes to the current $19.50 allocation charges but propose a different mechanisms to collect additional revenue to cover the current revenue shortfall identified by the ACMA.
Model 1
Implement an Annual Registration Charge for the ZOAK system to recover the revenue differential from all holders of numbers. This approach recognises the role the ZOAK Numbering System plays in facilitating the regulation of the telecommunication industry firstly as its role as the Register of Numbers, in facilitating transfers of all number types between industry participants and in providing reporting to government, carriage service providers and the public.
This charge could be calculated using a flat rate formula with reference to the total volume of all kinds of telephone numbers held by a CSP and included in the ZOAK system. This simple flat rate formula means that the charge could easily be calculated manually meaning that no changes would be required to the ZOAK Numbering System. A full overhaul of the charging approach could expand this model to collect the majority of revenue via the Annual Registration Charge leading to a reduction in allocation charges.
MNF could provide more detail on the development and operation of such a system if this would assist the ACMA.
Model 2
The ACMA could recover the revenue differential via ACLC. This approach also recognises the key role of the ZOAK Numbering System plays in facilitating the regulation and management of numbers and allows the charges to be more broadly spread among major users of numbers. We understand this approach could be implemented without any legislative amendments and would require no changes to the ZOAK Numbering System.
4. Review of ACMA’s Proposed Charging Options
As indicated above, MNF is not in favour of continuing with the current model but if this is the outcome of this consultation, then MNF expresses a strong preference for Option A – cost recovery smoothed across the remaining life of the contract ($31). The reasons for this are as follows:
-previous history shows that new allocations of inbound numbers are “lumpy”, ie very changeable on a year to year basis so averaging will be beneficial
-there may be a degree of pre-purchase/hoarding/re-use of numbers if CSP’s know that the price will be increasing in year 3, leading to even greater problems for Options B and C which emphasize greatly additional costs in year 3 only
5. Other Issues
As a general comment, MNF is disappointed that the outsourcing of the numbering allocation functions to ZOAK does not seem to have achieved a reduction in MNF’s numbering allocation charges and in fact is likely to lead to an increase in these charges.
MNF is an integrated telecommunications software and network provider, specialising in IP voice communications. MNF Group companies include retail brands MyNetFone, Connexus, CallStream, PennyTel and The Buzz; and wholesale brands TNZI, Symbio and iBoss
MNF Group Limited, Level 3, 580 George St, Sydney NSW 2000COMMERCIAL IN CONFIDENCE
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