Commonwealth of Australia Explanatory Memoranda

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DATACASTING TRANSMITTER LICENCE FEES BILL 2006

                         2004-2005-2006


THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA


                HOUSE OF REPRESENTATIVES




 DATACASTING TRANSMITTER LICENCE FEES BILL 2006


              EXPLANATORY MEMORANDUM




    (Circulated by authority of Senator the Hon. Helen Coonan,
 Minister for Communications, Information Technology and the Arts)
        DATACASTING TRANSMITTER LICENCE FEES BILL 2006


                                     OUTLINE

The Government has decided to reform several aspects of the digital television and
commercial television broadcasting regime. Much of that reform is implemented by
amendments to the Broadcasting Services Act 1992 (BSA) and the
Radiocommunications Act 1992 (the Radcomms Act) made by the proposed
Broadcasting Legislation Amendment (Digital Television) Bill 2006 (the Digital TV
Bill).

One component of that reform relates to decisions to allocate spectrum for use to
provide new digital services. The Digital TV Bill will provide for the allocation of
two types of datacasting transmitter licences, a channel A datacasting transmitter
licence and a channel B datacasting transmitter licence.

The Datacasting Transmitter Licence Fees Bill 2006 provides for the imposition of
annual licence fees, by way of taxes, on channel A datacasting transmitter licence
holders, based on revenue received by the DTL operator. The proposed Broadcasting
Services Amendment (Collection of Datacasting Transmitter Licence Fees) Bill 2006
will contain measures necessary to implement the provisions in the Datacasting
Transmitter Licence Fees Bill 2006.


                      FINANCIAL IMPACT STATEMENT

The provision to impose annual licence fees on the gross earnings attributable to the
transmission of matter under Channel A datacasting transmitter licences is likely to
result in receipt of revenue to the Commonwealth on an annual basis in the future.
However, at this stage it is not possible to predict with any accuracy the quantum of
revenue likely to be received.
                                           2

                               NOTES ON CLAUSES

Clause 1 - Short title

Clause 1 provides for the citation of the Datacasting Transmitter Licence Fees Act
2006 (the Act).

Clause 2 - Commencement

Clause 2 provides that the Act commences on 1 January 2007. This commencement
date coincides with the commencement of the proposed Datacasting Transmitter
Licence Fees Bill 2006 (the Datacasting Fees Bill), and with the commencement of
Schedule 2 of the proposed Broadcasting Legislation Amendment (Digital Television)
Bill 2006 (the Digital TV Bill).

Clause 3 - Definitions

The definition clause provides that in the Act the term "gross earnings", in respect of
a licence in relation to a period, means so much of the gross earnings of the licensee
during that period as are attributable to the transmission of matter by
radiocommunications transmitters operating under the licence.

This definition is intended to ensure that the licensee's gross earnings from
transmitting material for content providers or from the material the licensee transmits
on a transmitter used to provide a service on channel A is included in the
determination of gross earnings derived from the operation of that transmitter.

The definition also provides that, to avoid doubt, clause 46 of Schedule 6 to the BSA,
which relates to the effect of a nominated datacaster declaration, does not apply to this
definition. This means that where there is a nominated datacasting declaration in
effect, for the purposes of deciding gross earnings under this Act, the channel A
datacasting transmitter licensee is still taken to have transmitted any content
transmitted by the holder of a datacasting licence under the BSA using the transmitter
in question.

Clause 4 - Non-cash consideration

This clause provides that the money value of any non-cash consideration paid or
given in connection with any transaction be taken to have been paid or given in
connection with a transaction. This follows the approach taken in the Television
Licence Fees Act 1964.

This provision is intended to ensure that the money value of any non-cash payment
provided in relation to any gross earnings attributable to the operation of a channel A
datacasting transmitter be taken into account in the determination of gross earnings
used to calculate the annual licence fee
                                           3

Clause 5 - Act to bind Crown

By virtue of this clause, the Act binds the Crown in relation to the States and
Territories, but does not bind the Commonwealth.

This provision is intended to ensure that if State or Territory Governments hold
channel A datacasting transmitter licences, licence fees can be applied. The Bill
cannot bind the Commonwealth because for constitutional reasons the
Commonwealth cannot tax itself.

Clause 6 - External Territories

This clause provides that the Act extends to every external territory.

Clause 7 - Imposition of fees

This clause imposes fees payable to the Commonwealth by a channel A datacasting
transmitter licensee, by way of a tax in respect of the channel A datacasting
transmitter licence.

This gives effect to the Government's intention that the channel A datacasting
transmitter licence be subject to an annual licence fee based on the revenue received
by the datacasting transmitter licence operator in addition to the up-front allocation
price provided for in the Radcomms Act.

This clause also provides the Governor-General with a power to make Regulations
providing for rebates of fees payable by licensees.

Clause 8 - Amount of fees

Subclause 8(1) provides a timetable for annual licence fee payments. This timetable is
similar to the timetable which applies to the annual licence fees payable by
commercial television broadcasting licensees. The Bill does not, however, provide for
alternative accounting periods.

Subclause 8(2) provides that the annual licence fee payable by a channel A
datacasting transmitter licensee will be equal to the relevant percentage of the gross
earnings in respect of the licence and that the relevant percentage will be determined
according to the formulae set out in paragraphs 8(2)(a)-(h) of the Act. These
formulae are the same as those used to calculate annual licence fees for commercial
television broadcasting licensees.

Clause 9 - Earnings of subsidiary companies etc.

This clause provides the Australian Communications and Media Authority (ACMA)
with a power to direct that an amount earned by a person other than the licensee in a
given period be treated as part of the gross earnings in respect of the licence if ACMA
is of the opinion that there is a relationship between the person and the licensee,
whether because of any shareholding, agreement, arrangement or any other reason,
and the amount would form part of the gross earnings of the licensee if the person and
the licensee were the same person.
                                           4

This provision is intended to ensure that the earnings of subsidiary companies and
other related entities of the licensee can be included in the calculation of the annual
licence fee payable by a channel A datacasting transmitter licensee.

Clause 10 - Regulations
Clause 10 provides the Governor-General with a power to make regulations in
relation to matters required or permitted by this Act, or necessary or convenient to be
prescribed for carrying out or giving effect to this Act.