Consultation paper
juLY 2014
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acma | iii
Contents (Continued)
Executive summary 1
Part 1—What is the TLN? 3
1.1 Background 3
1.1.1 Legislative framework 3
1.2 Section 407 instrument—Telecommunications Labelling Notice 3
1.2.1 Application of the arrangements to supply and suppliers 4
1.3 ACMA technical standards 4
1.3.1 Relationship between ACMA standards and industry standards 4
1.4 What risks do the TLN arrangements address? 4
1.4.2 The TLN and consumer protection 6
Part 2—Rationale for review 7
2.1 Legislative Instruments Act and sunsetting legislation 7
2.2 Changes in the external environment 7
2.2.1 Technological changes and functionality of devices 7
2.2.2 Changes in the supply market 8
2.3 Scope and application 9
2.3.1 ACMA technical standards 9
2.4 Regulatory costs 9
2.4.2 Application of regulatory costs associated with the TLN 10
2.5 Options for reform 11
2.5.1 Option 1—Allow the arrangements to sunset and rely on
general laws 11
2.5.2 Option 2—Industry-controlled and -developed self-regulatory arrangements 12
2.5.3 Option 3—Re-make the arrangements with modifications 12
2.5.4 Option 4—Re-make the arrangements with no modifications 13
2.5.5 Longer term changes 13
Part 3—New TLN 14
3.1 Introduction 14
3.2 Scope and application 14
3.2.1 After-market applications and software upgrades 14
3.2.2 Exemptions 15
3.2.3 Categorisation of CE 15
3.2.4 Accessories 17
3.3 Labelling 18
3.3.1 Labelling with A-Tick 19
3.3.2 Supplier registration 19
3.3.3 Cabling and cabling product 19
3.4 Record-keeping 19
3.4.1 2001 TLN approach to record-keeping 20
3.4.2 Proposed 2014 TLN approach 20
3.4.3 Requirements for disability CE 23
3.5 ACMA technical standards 24
3.5.1 Removing superseded standards 24
3.5.2 Re-made ACMA standards 25
3.5.3 Notes to the schedule 25
3.6 Transitional arrangements 26
3.6.1 CE and CC labelled in accordance with the 2001 TLN 26
3.6.2 Changes to industry standards 26
3.7 Compliance issues 26
3.8 Ancillary issues not covered by this consultation paper 27
3.8.1 Certification body arrangements 27
3.8.2 Recognised testing authority list 27
Invitation to comment 28
Making a submission 28
Attachment A 30
Industry standards to be incorporated into the arrangement 30
Attachment B 31
ACMA standards to be removed 31
acma | vExecutive summary
The Telecommunications Labelling (Customer Equipment and Customer Cabling) Notice 2001 (TLN) is made under section 407 of the Telecommunications Act 1997. The TLN is the centrepiece of a set of regulatory arrangements for the supply of customer equipment and customer cabling connected, or intended for connection, to a telecommunications network.
The TLN operates in conjunction with technical standards made by the ACMA under section 376 of the Act. ACMA standards consist of requirements for specified customer equipment (CE) or customer cabling (CC). Generally, the TLN requires CE and CC to be labelled to indicate compliance with applicable ACMA standards.
The TLN arrangements were developed in the mid 1990s in a different technical and commercial environment. While they have generally served Australian conditions well, and are not ‘broken’, they have a number of issues and it is timely to consider whether they remain relevant in their current form.
A particular trigger for this review is that the TLN will be automatically repealed (sunset) by section 50 of the Legislative Instruments Act 2003 (LIA) on 1 April 2015. A number of associated ACMA standards will also sunset on 1 April or 1October 2015. Accordingly, the ACMA has considered the operation of the TLN and all the ACMA standards specified in the TLN.
This paper examines the evolution of the TLN arrangements and the marketplace, and assesses the ongoing issues and risks that the arrangements are seeking to manage. It considers a range of options for addressing those issues and risks. The conclusion in this paper is that a TLN-based scheme still provides an efficient and effective mechanism for addressing some key risks associated with CE and CC, but that a substantial modernisation of the arrangements is warranted. The proposed approach should have a number of benefits including better targeted regulation, greater transparency and a reduced regulatory burden on industry.
This consultation paper invites interested parties to comment on the ACMA’s analysis and proposed approach. More specifically, it invites comments on proposed changes to the 2001 TLN. In summary, these changes are intended to:
reduce record-keeping obligations on suppliers while placing greater emphasis on a more targeted declaration of conformity by a supplier
remove redundant clauses, requirements and ACMA standards that are no longer effective or necessary
simplify the content and structure of the instrument to increase readability and decrease the likelihood of inadvertent industry non-compliance
increase flexibility for suppliers to rely on overseas compliance documentation for establishing compliance against Australian requirements
amend record-keeping requirements to more accurately reflect a contemporary risk assessment.
The ACMA is also proposing to revise its approach to making standards. An ACMA standard typically incorporates by reference an industry standard with which specified CE or CC must comply.
Under this revised approach ACMA standards will:
contain transitional (grandfathering) arrangements that allow for the continued supply of CE and CC that comply with earlier versions of industry standards
accommodate amendments and replacements of industry standards without requiring further ACMA action
contain provisions that replace the notes appended to Schedule 1 of the TLN that seek to limit or change the application of ACMA standards.
Structure of this paper
Part 1 provides the background and history of the TLN, and describes the risks that the TLN seeks to address.
Part 2 describes the current structural and operational issues with the TLN.
Part 3 outlines the proposed Telecommunications (Labelling Notice for Customer Equipment and Customer Cabling) Instrument 2014 (the 2014 TLN) and the revised approach for ACMA standards.
The proposed draft of the Telecommunications (Labelling Notice for Customer Equipment and Customer Cabling) Instrument 2014 is available on the ACMA website at www.acma.gov.au/Home/theACMA/Consultations.
Part 1—What is the TLN?
1.1 Background
The TLN and associated regulations form the basis for regulating the supply and connection of customer equipment (CE) and customer cabling (CC). Prior to 1997, this was managed through a permit system administered by the Australian Telecommunications Authority (AUSTEL) (a predecessor organisation of the ACMA). Permitted items of equipment were required to be labelled as a precondition for connection to a telecommunications network. Equipment suppliers had equipment tested (by accredited testing agencies) and then submitted test reports and other necessary documentation to AUSTEL. The AUSTEL permit system replaced the CE connection arrangements managed by Telecom and its predecessors.
In 1997, the new Telecommunications Act 1997 introduced a new legislative framework for the supply and connection of CE and CC. The fundamental change was to move from a permit-based approval scheme to arrangements that placed significant emphasis on supplier self-declaration.
1.1.1 Legislative framework
The principal elements of the CE and CC legislative framework are set out in Part21 of the Act and include:
an instrument or notice (the TLN) made by the ACMA under section 407 of the Act, and given a potentially wide operational effect by section 408
technical standards (ACMA standards) made under section 376 of the Act
provisions (including offence provisions) in the Act that generally prohibit the supply and connection of CE or CC that do not comply with an instrument made under section 407 of the Act.
The notice and ACMA standards form the basis for the discussion in this consultation paper and for ease of reference are described as ‘the TLN arrangements’. These arrangements are supported by the ACMA’s general enforcement powers under the Act, which are not discussed.
1.2 Section 407 instrument—Telecommunications Labelling Notice
The instrument made under section 407 is referred to as the Telecommunications Labelling Notice. The first such instrument was the Telecommunications Labelling (Customer Equipment and Cabling) Notice 1997 (the 1997 TLN). This was replaced by the current Telecommunications Labelling (Customer Equipment and Cabling) Notice 2001 (the 2001 TLN).
The 2001 TLN has three fundamental elements:
CE and CC must comply with applicable ACMA standards
the CE or CC must bear the appropriate compliance label prior to supply to the market
the supplier of the CE or CC must meet certain record-keeping obligations on the compliance of the CE or CC with the applicable ACMA standards.
1.2.1 Application of the arrangements to supply and suppliers
The regulatory arrangements apply principally at the point of supply of the CE or CC. This occurs in two main ways:
a prohibition against the supply of CE or CC that is not labelled in accordance with the 2001 TLN
requirements for suppliers (Australian importers or manufacturers, or their authorised agents) on compliance of CE or CC with technical standards, labelling and record-keeping.
1.3 ACMA technical standards
Under section 376 of the Act, the ACMA may make a technical standard (an ACMA standard) that applies to specified CE or CC. An ACMA standard only has practical effect if it is referenced in the TLN.[1]
Section 376 defines the matters that can be addressed in technical standards. Until 2011, these matters, broadly speaking, were:
protecting personal health and safety
protecting the integrity of telecommunications networks
ensuring the supply of a standard telephone service
ensuring access to an emergency call service.
In 2011, Part 21 of the Act was amended to extend the ACMA’s capability to make standards for CE or CC intended for use in connection with a superfast carriage service.
1.3.1 Relationship between ACMA standards and industry standards
Each ACMA standard incorporates by reference one or more industry standard(s) that contain the technical parameters for the performance of the particular CE or CC. Historically, the ACMA has made one standard for each referenced industry standard.[2]
Because the title of the industry standard and the ACMA standard that incorporates it are very similar, the ACMA standards have, to some extent, been ‘invisible’ in the arrangements. Suppliers have instead read the reference to the ACMA standard in the TLN as being a reference to the underlying industry standard.
An ACMA standard typically references a specific version of an industry standard. Accordingly, each time the industry standard has been amended or replaced, the ACMA has made a new standard and consequentially amended Schedule 1 to the TLN. The effect of this has been to create an extensive list of ACMA standards in Part 1 of Schedule 1 to the TLN that includes all standards in effect over the life of the TLN. Future arrangements for ACMA technical standards are discussed in section 3.5.
1.4 What risks do the TLN arrangements address?
The risks addressed by the TLN arrangements reflect the heads of power conferred by section 376 of the Act. That is:
health and safety (notably electrical safety) of persons using carriage services or operating or working on telecommunications networks or facilities
access to emergency call services
interoperability of CE and CC with the standard telephone service
network integrity (protection of network operations from connected equipment or cabling).
The TLN arrangements essentially provide an ex-ante strategy for addressing the above risks by imposing obligations on suppliers of all CE and CC at the point of supply of equipment to the market. The requirement for a supplier to hold records and label equipment was intended to provide confidence (especially to the regulator, but also to network operators) that suppliers had taken appropriate steps to ensure equipment complied with applicable technical requirements.
From a supplier perspective, the TLN provides a consistent regulatory framework (and associated technical and administrative requirements) for supply of CE and CC to the Australian market. In doing so, the TLN arrangements were also intended to facilitate competition in the supply of CE and CC from a level playing field.
The risks addressed by the TLN reflect the historical technical, operating and market context in which the TLN was developed originally. In particular:
the requirement for interoperability of CE and CC with the standard telephone service was consistent with the social importance of voice telephony
the inherent electrical safety risks associated with copper access networks
the coupling of service provision and equipment functionality, and the defined capability of customer equipment
the susceptibility of networks to harmful effects caused by non-compliant CE orCC
the technical differences between Australian networks and overseas networks
the relative immaturity of the market for supply of CE and CC (for example, where CE was still being supplied directly by network operators rather than through third-party suppliers).
The substantive risks associated with the supply and connection of CE and CC have changed significantly since the TLN was first made. The changes in the external environment, and associated change in the risk profile, are discussed further in Part 2.