Australia: National Access Regime: New Bill Ineffective to Speed Up Part II A Declaration Process

Competition & Market Regulation Update
Last Updated: 12 April 2010
Article by Simon Uthmeyer, Fleur Gibbons and Geoff Taperell

In February this year we provided an outline of the proposed amendments to the National Access Regime in Part II A of the Trade Practices Act 1974 (Cth) (Act). Those changes are contained in the Trade Practices Amendment (Infrastructure Access) Bill 2009. Since our last update, the Senate Economics Legislation Committee has recommended the Bill be passed.

The reforms are advanced by the Government as being designed to speed up the Part IIIA declaration process and decrease costs for participants in that process. The Explanatory Memorandum and Second Reading Speech note that delays in decision making under the regime have been a significant concern to infrastructure owners, access seekers and regulators and that there have been complaints that processes under the regime are too lengthy and costly. While it may be the aim of the reforms to address those criticisms, the reforms may fall short of doing so.

The two mechanisms in the Bill that are touted as addressing those complaints are:

  • 'Binding' time limits for the making of decisions under Part IIIA and deeming of decisions by the Minister and the Australian Competition and Consumer Commission (ACCC) where those time limits are not met.
  • Limiting the material before the Australian Competition Tribunal (Tribunal) in proceedings concerning a review of the Minister's or ACCC's decision to information submitted to the decision maker (with some exceptions). The ineffectiveness of the proposed provisions to speed up the declaration process or reduce costs is discussed below.

Time Limits

Time Limits not binding

There is no doubt that binding time limits for the National Competition Council (Council), the ACCC and the Tribunal would be effective in addressing delays in decision making under Part IIIA. The main problem with the Bill is that, except for ACCC arbitration decisions, the proposed time limits are not at all binding. While the deadline for ACCC arbitration decisions is binding, the deemed consequence of the ACCC's failure to make a decision means that the ACCC process is a waste of time where the ACCC fails to make a decision by the deadline.

Under the Bill, the Council, the ACCC and the Tribunal are required to make a decision within 180 days of receiving an application for declaration (Council), application for an arbitration determination (ACCC), or application for review of a decision (Tribunal). Accordingly, the Council and the Tribunal are given a longer period of time to make a decision than the current 4 month target time limit. In addition, under the Bill provisions the clock can be stopped for particular events such as making a request for information or on agreement of the relevant parties to the decision. As a result, the 180 days from the date of the application can blow out.

Further, the ability for the Council and the Tribunal to extend the time for making their decision means that the time limits are not truly 'binding'. Under the Bill the Council and the Tribunal can extend (and re-extend) the time for making their decisions by notice to the Minister of the new deadline explaining why it has not been able to make a decision, giving the parties a copy of the notice and publishing notice of the new deadline in a national newspaper. The ease with which the deadlines can be extended and re-extended means that it is erroneous to describe the time limits as binding.

In addition, the Bill includes a provision that the failure by the Tribunal to comply with a time limit does not affect the validity of its decision. This means that there is very little 'stick' in the time limit since there is no adverse outcome if the Tribunal fails to comply with the time limit.

Deeming mechanisms

While the ACCC has no ability to extend the time for making its decision (aside from clock stoppers), the effect of the deeming mechanism for the ACCC's decision should it fail to make its decision within the designated period means that the ACCC process is wasted in that circumstance.

Under the current legislation, the ACCC is required to use its best endeavours to make a final determination within 6 months of receiving notification of the access dispute, however, it is able to extend (and re-extend) that period. The Bill removes the ACCC's ability to extend that deadline. The Bill requires the ACCC to make a decision within 180 days of receiving the application (plus clock stoppers) and provides that where the ACCC fails to make a decision within that deadline, the ACCC is deemed to have made a final determination that does not impose any obligations on the parties or alter any obligations that exist between the parties. Accordingly, while the time for the ACCC's decision making under the Bill is shortened because the ACCC is unable to extend that time, if the ACCC fails to make its decision in that period the parties are left with the status quo in which case the ACCC process will have been a waste of time.

The Explanatory Memorandum and the Second Reading Speech note that it is not practical to deem a decision by the Tribunal since its role is to review decisions. This is an unusual statement since there are mechanisms in Part XIC of the Act for the deeming of Tribunal decisions where it fails to make its decision with the prescribed period (see for example section 152AW(5) in the context of a review of an ACCC decision on an exemption from standard access obligations, and section 152CF(5) in the context of the review of an ACCC decision on an access undertaking).

We observe that under the current legislation there is already a deeming mechanism for the Minister's decision should it fail to publish its decision within the specified period, however, the Bill changes the outcome of the operation of that provision. Under the current legislation if the Minister fails to make a declaration decision within 60 days of receiving the Council's recommendation the Minister is taken to have decided not to declare the service. Under the Bill, if the Minister fails to publish a declaration decision within that period, the Minister is taken to have made a decision in accordance with the Council's recommendation. This gives greater weight to the Council's final recommendation. If the Minister proposes to go against the Council's final recommendation, it will be required to publish a decision.

Limiting material before the Tribunal

It is accepted that limiting the material before the Tribunal in proceedings concerning a review of the Minister's declaration decision should shorten the time taken on review. However, the structure of the Act which provides for a 240 day plus process before the NCC/Minister and then for review by the Tribunal which can be appealed on error of law to the Full Federal Court still means that the declaration process is lengthy as most applications that are successful before the NCC/Minister tend to end up in the Tribunal. The process could be shorted by there being no ability for review by the Tribunal, or by the process starting at the Tribunal and there being no NCC/Minister process.

Under the current legislation, there is no restriction on the material which the Tribunal can review in proceedings before it. This has the result that the applicant and the provider re-run their case for/against declaration before the Tribunal. Like where proceedings take place in a Court, parties file affidavit evidence and cross examine the other parties' witnesses during the hearing. The preparation of affidavit evidence (including lay and expert) can take lengthy periods of time which can result in a blow out of the timetable leading up to the hearing in the Tribunal. In addition, cross-examination can be extensive in some cases resulting in long hearings.

Under the proposed legislation, the material before the Tribunal is limited to:

  • where the Minister makes a decision, the material that the Minister took into account in connection with making the decision; or
  • where the Minister fails to make a decision and the Council's final recommendation is deemed to stand, the information that the Council took into account in connection with making the recommendation; and
  • in all cases:
  • information given to the Tribunal as a result of a notice to a person who provided information to the original decision maker requesting the person give the Tribunal information to clarify the original information;
  • anything done as a result of a request to the Council to give assistance for the purposes of the review; and
  • any information or report given to the Tribunal as a result of a request to the Council for the purposes of the review.

This limit on the material before the Tribunal should decrease the length of time required for parties to prepare for the hearing as they will not be able to file new affidavit evidence unless that is the subject of a request from the Tribunal and there will be no need for discovery. It should therefore decrease the time taken between the filing of the application for the review and the hearing and the costs of preparing for hearing. Further, since there is unlikely to be extensive cross examination of witnesses, the time taken for hearing the proceedings should decrease.

However, in our experience, limiting the material the Tribunal is able to receive won't necessarily limit the time taken in the review process, or the costs of that process. In merits review proceedings under the telecommunications regime in Part XIC of the Act the Tribunal is limited to material before the ACCC. While the time taken for the Tribunal to hear and determine a proceeding might be quicker, there is still the prospect of appeal from the Tribunal's decision to the Full Federal Court and subsequent remittal of the matter to the Tribunal for redetermination. This remains a prospect under the changes to Part IIIA. Accordingly, the time taken for the declaration process is likely to remain long.

In our experience imposing an evidentiary limit on the material before the Tribunal can artificially constrain the Tribunal's review. In some cases essential facts won't be available to the Tribunal where they were not in the material before the original decision maker. This can make a party's case more difficult and may hamper the Tribunal in reaching the correct decision. However, the Tribunal's ability under the proposed provisions to ascertain new information from the Council or persons who submitted information to the original decision maker may help to address this issue. This is something that is not available to the Tribunal in its reviews under Part XIC of the Act.

© DLA Phillips Fox

DLA Phillips Fox is one of the largest legal firms in Australasia and a member of DLA Piper Group, an alliance of independent legal practices. It is a separate and distinct legal entity. For more information visit

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances.

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