Policy and procedural framework
Eligible revenue estimates and assessments
May 2016
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Background 1
Participating persons 2
Submission of ERRs 3
Compliance with section 43 4
Estimation process 5
Non-participating persons 6
Revenue thresholds 6
Eligible statutory declaration (ESD) 6
Contact with a participating person 7
acma | v
Background
Each carrier must provide revenue information to the Australian Communications and Media Authority (the ACMA) each year. Reporting requirements vary depending on whether a carrier is a participating person or a non-participating person.
Participating persons must submit an eligible revenue return (ERR) in accordance with the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the Act).[1] ERRs give the ACMA information about participating persons’ eligible revenue in order to calculate the telecommunications industry levy (TIL)—which replaces the universal service obligation (USO) and national relay service (NRS) levies—and the annual carrier licence charge (ACLC).
The legislative framework for the TIL regime is set out in the Act. The Department of Communications and the Arts (DoCA) is responsible for entering into contracts and making grants to support the provision of public interest telecommunications services. Such services include standard telephone services, payphones, emergency call services and the NRS.
Division 6 of Part 2 of the Act provides for all participating persons in an eligible revenue period (financial year) to contribute to the TIL in proportion to their share of total industry eligible revenue. Each participating person’s eligible revenue is assessed by the ACMA on an annual basis (the ERR process) under section 47 of the Act (the persons’ levy contribution factor is worked out by reference to the total industry eligible revenue - see subsection 49(3) of the Act, based on section 47 assessments). Total industry eligible revenue is the sum of all assessments of participating persons’ eligible revenue for the period.
The purpose of the ACLC is to recover costs incurred by the ACMA, the Australian Competition and Consumer Commission (ACCC) and the Australian Government in exercising their telecommunications functions and powers, from the telecommunications industry. The ACLC consists of a fixed and a variable portion, and is determined by the participating person’s proportional share of total industry eligible revenue.
Participating persons
Section 43 of the Act requires participating persons who have held a carrier licence for all or part of the eligible revenue period to submit an ERR to the ACMA in the ACMA approved form, setting out its eligible revenue for the period, details of how that revenue was worked out and certain other information required by the ACMA. The ACMA also requires participating persons to verify the calculation of their eligible revenue.
Under subsection 43(5) of the Act, the ACMA may specify a period for the submission of ERR’s. On 11 June 2015 the ACMA made the Telecommunications (Eligible Revenue) Determination 2015 (the Determination). Under section 40 of the Determination, a participating person is required to submit their ERR to the ACMA within four months after the end of the eligible revenue period, that is, by 31 October each year.
Under subsection 47(1) of the Act, the ACMA must assess the eligible revenue of each participating person for each eligible revenue period (other than the first eligible revenue period). Subsection 47(2) of the Act provides that this assessment must be based on the participating person’s ERR and other information and documents obtained or possessed by the ACMA which are relevant to the making of the assessment.
Submission of ERRs
ERRs submitted under subsection 43(1) of the Act must be in a form approved in writing by the ACMA (subsection 43(2) of the Act).
Submissions of ERRs can be made in the TELLER system (ACMA’s eligible revenue reporting system). However, if a submission of an ERR cannot be completed in TELLER, a copy of the approved ERR form is available upon request to the ACMA.
An ERR made via TELLER must include the following documentation:
a copy of the final financial statements on which the ERR is based (audited if required under the Corporations Act 2001 or other legislation)
a diagram (or description) of the corporate group structure to which the participating person belongs and a declaration of any related parties that earn telecommunications revenue in the Australian telecommunications industry.
An ERR submitted otherwise than by using the TELLER system must include the following documentation:
all the pages of the ERR form (if a manual submission) completed for the eligible revenue period
a copy of the final financial statements on which the ERR is based (audited if required under the Corporations Act 2001 or other legislation)
a diagram (or description) of the corporate group structure to which the participating person belongs and declaration of any related parties that earn telecommunications revenue in the Australian telecommunications industry
a statutory declaration (‘Statutory Declaration—Management Certification’) made on the ACMA-approved form, signed by the Chief Executive Officer (CEO) Chief Financial Officer (CFO), Company Secretary or other authorised officer of the participating person, confirming the accuracy and completeness of the ERR documents referred to above.
The ACMA may make enquiries and request additional information from a participating person in order to determine whether the person’s ERR correctly states its eligible revenue for the period (section 46 of the Act).
It is an offence for a person required to lodge an ERR to fail to do so (section 69 of the Act).
Compliance with section 43
An ERR provided to the ACMA must comply with the requirements of section 43 of the Act.
The ACMA considers that a participating person will have submitted an ERR in
TELLER in accordance with the Act if the following information is provided:
a copy of the final financial statements on which the ERR is based (audited if required under the Corporations Act 2001 or other legislation)
a diagram (or description) of the corporate group structure to which the participating person belongs and declaration of any related parties that earn telecommunications revenue in the Australian telecommunications industry
If the submission is not made via TELLER, the ACMA considers that a participating person will have submitted an ERR in accordance with the Act, if the following information is provided:
an ERR form for the appropriate period in accordance with section 47 of the Act, addressing the period a carrier licence was held by the participating person during the eligible revenue period or the deemed eligible revenue period in accordance with the Determination
financial statements on which the ERR is based for the participating person and any declared related parties that are a source to determine eligible revenue to report in the ERR in accordance with the Determination
details of the company structure, including confirmation of declared related parties that earn telecommunications revenue
a statutory declaration (‘Statutory Declaration—Management Certification’) made by the CEO, CFO, Company Secretary or other authorised officer of the participating person on the accuracy and completeness of the ERR documents referred above.
If a participating person fails to give the ACMA an ERR, or submits information that is not substantially compliant with the requirements of the Act, the ACMA may estimate the eligible revenue of that participating person under section 48 of the Act, for the purposes of making an assessment of that participating person’s eligible revenue in accordance with section 47 of the Act (see further below).
If a participating person has lodged an incomplete ERR, the ACMA will generally contact the carrier seeking the information it requires to complete the ERR before proceeding with an estimate.
Estimation process
In cases where a participating person fails to give the ACMA an ERR for an eligible revenue period, section 48 of the Act empowers the ACMA to estimate the participating person’s eligible revenue for that period, and make a written assessment of the participating person’s eligible revenue under section 47 of the Act based on that estimate (unless the participating person submits an ERR before the assessment is made (see subsection 48(4) of the Act)).
Prior to making an eligible revenue assessment based on an estimate, the ACMA must give the affected participating person at least 14 days written notice of the amount of eligible revenue proposed to be assessed and its intention to make a written assessment based on that estimate (subsection 48(2) of the Act).
Until the ACMA makes an assessment of eligible revenue based on an estimate, the participating person is able to submit an ERR (subsection 48(4) of the Act). However, if the participating person submits an ERR after the ACMA has made an assessment based on an estimate, the ACMA is not required to change the assessment (subsection 48(5) of the Act).
Any relevant information submitted by a participating person may be considered when assessing a person’s eligible revenue under section 47 of the Act or, if required, when estimating the person’s eligible revenue under section 48 of the Act. Any submissions made by the participating person in response to a notice under subsection 48(2) of the Act will be taken into consideration when making an estimate under section 48 of the Act.
Non-participating persons
A carrier is a non-participating person if it meets the definition in subsection 4(3) of the Telecommunications (Participating Persons) Determination 2015 (the Determination). The definition sets out revenue thresholds and requires the person to give the ACMA an eligible statutory declaration verifying that its revenue for the period fell below the relevant revenue threshold. In some circumstances the ACMA may be otherwise reasonably satisfied that the person’s revenue for the period was below the threshold.
Revenue thresholds
A non-participating person is a carrier that has either:
initial sales revenue for the eligible revenue period of less than AUD $25 million
gross telecommunications sales revenue for the eligible revenue period of less than AUD $25 million
eligible revenue for the eligible revenue period of less than AUD $25 million.
For each of these revenue categories, if the carrier has the same ultimate Australian parent entity as one or more other carriers, this calculation is to be performed on a group basis.
Eligible statutory declaration (ESD)
If a carrier’s revenue falls below one of the revenue thresholds described above, in order to fall within the definition of nonparticipating person in subsection 4(3) of the Determination, it must also provide to the ACMA an ESD stating that the carrier’s initial sales revenue, gross telecommunications sales revenue or eligible revenue (whichever is applicable) for the eligible revenue period was less than AUD$25million.
In some circumstances, a carrier will be a non-participating person where the ACMA is reasonably satisfied that the carrier would have met the revenue threshold had an ESD been provided to that effect and an ESD was not, in fact, provided within the specified time frame.
Where appropriate, the revenue is to be calculated on a group basis (subsection 4(4) of the Determination).
The carrier must provide the ACMA with an ESD by 31 October following the end of the relevant eligible revenue period.
In addition to the ESD, the ACMA has the power to seek further information in support of a carrier’s statement that it is a non-participating person in accordance with section 521 of the Telecommunications Act 1997.
Contact with a participating person
The ACMA contacts participating persons to:
acknowledge and respond to requests for information
advise when approved forms are available and remind participating persons of their legislative obligations
notify participating persons when the obligation to provide an ERR is not met within the legislated time frame
request further information from participating persons to either:
complete an ERR
enquire into the completeness and accuracy of an ERR