QUESTnet 2000

1. QUESTnet 2000 Just become a Carrier - It’s not a Problem! (or is it?)

2. Presenters Peter de Haas - Gibson Quai Pty Ltd George McLaughlin - AARNet Pty Ltd

3. Agenda • Global Trends • The Australian Scene • Regulatory Players • The State of Play • Getting a Carrier Licence • You need one if... • Some Definitions • Implications for AARNet • Current Status • The Next Steps • Questions

4. Global Trends • Deregulation is booming • 150 Countries since 1990 • Old monopolies breaking down • ‘New Economy’ driving innovation • Regulators struggling to keep up with the technology

5. The Australian Scene • Full Deregulation from July 1997 • One of the most open markets in the world • Licensed Carriers: 44 to June 2000 • Carriage Service Providers: 100 + • Internet Service Providers: 700+

6. Market Characteristics • Very dynamic • Constant flow of new, competitively priced products and services • Rapidly changing technology options (LMDS, ADSL etc) • New market entrants • Complex (competing?) policy initiatives

7. Regulatory Players • ACA - Issues Carrier Licenses • Sets Technical Standards • ACCC- ‘Competition Watchdog’ • Polices Uncompetitive Behaviour • ACIF - Co-ordinates Industry Self Regulation • DOCITA - Sets Legislative Framework

8. The State of Play • Competition benefits have been patchy • mainly on ‘thick routes’ • most effective with competitive infrastructure • focus on ‘commodity’ products eg long distance, mobiles • Bandwidth Issues • Prices high by international standards • Encourages private infrastructure investment

9. State of Play (contd) • Emergence of Wholesale Infrastructure Providers (e.g. Reef Networks in Qld) • Niche carriers emerging (e.g. SCTel, TransAct) • New technologies being deployed to bypass existing infrastructure (e.g.LMDS)

10. Getting a Carrier Licence • Relatively easy to get started • Must comply with the Act • Must have an approved Industry Development Plan • Pay a $10,000 fee (p.a.) + a percentage of revenue

11. You Need a Licence if... • A carrier licence is mandatory for: • anyone who owns telecommunications infrastructure and who provides access to a network unit to those outside their immediate circle (ie to the “public”) • carriers who operate without a licence are subject to steep fines - up to $10M plus $1M/day

12. Carriage Service Provider (CSP) • A carriage service provider is defined as: • anyone who supplies a listed carriage service to those outside their immediate circle using a network unit owned by one or more carriers or a network unit in relation to which a nominated carrier declaration is in force

13. Network Unit • a network unit is defined as any transmission means that satisfies tests relating to • the ‘old’ 500m rule • communications between ‘distinct places’ • double-endedness - that is connects to other ‘network units’ at both ends

14. Network Unit (Contd) • Four types of Network Unit • Single line links connecting Distinct places • Multiple line links connecting Distinct places • Designated radiocommunications facilities • Facilities specified by the Minister. • The definition will catch private network operators who provide services to the ‘public’.

15. Immediate Circle • Definition in the Act (S.23) extends over five pages! • In general: • includes employees and others who have a close connection to the network unit owner • If not in the ‘immediate circle’ they are the ‘public’ and a Licence is required.

16. Example 1 • A State Govt Department’s ‘Immediate Circle’ includes: • officers, employees of the Department • officers & employees of other departments, authorities and institutions BUT NOT Institutions that carry on business as a core function (eg Rail, Electricity)

17. Example 2 • A Public Hospital would be part of a State Government ‘Immediate Circle’ BUT NOT • Other co-located entities such as: • private hospitals • pathology laboratories • newsagents • universities

18. Example 3 • CITEC (Not a Licensed Carrier) Can Provide Services To: • State Govt Departments via Fibre Loop (as part of the immediate circle) • Private Customers (as a Carriage Service Provider using Licensed Carrier Infrastructure)

19. Example 4: Universities • Collocation of TAFEs, schools • Services to Bookshops etc on campus • Community projects • Commercial businesses on campus • CRCs • Other collaborative research (eg University and hospital staff)

20. Carrier Onus & Obligations • Carriers have specific onus and obligations including • contribution to Universal Service Obligation • compliance to Access Policies and TPA • open to requests for carriage from other Providers • subject to TIO, ACCC, price regulation, QoS, etc

21. Ministerial Exemptions for AARNet • on 23 January 1998 two purposed-based determinations were gazetted • exemption from carrier obligations of the Act • exemption from carriage service provider obligations of the Act

22. Carrier Exemptions The carrier exemptions apply to network units owned by AVCC members provided: • that the sole or principle use is for the research, education, or administrative functions of AVCC Members; and • any remaining use is for the research and administrative functions of CSIRO, ANSTO, DSTO and AIMS

23. Immediate Circle Issues • In the university case the immediate circle is defined as: • the governing body; • officers; • employees; and • students (as a result of AVCC submission to Senate Inquiry), of that university only • very tight interpretation of ‘public’ • any or all end users outside immediate circle of the owner

24. AVCC Exemptions A carriage service provided by an AVCC Member is exempt provided: • the sole or principle use of the service is for or in connection with the research, education, or administrative functions of AVCC Members; and • any remaining use is for the research and administrative functions of CSIRO, ANSTO, DSTO and AIMS

25. Review of Exemptions A comprehensive review of the impact of the exemptions was submitted prior to the end-1999 review An extension of the exemptions (unchanged) was granted until 30 June 2000 A further (and probably final) extension may be granted to end 2000 to allow AARNet time to take out a carrier licence and to make members aware of their CSP obligations

26. Relevant References The AARNet Access Policy, Ministerial Determinations, Explanatory Statement and other relevant material is available from: http://www.aarnet.edu.au/corporate/publications/

27. AARNet Carrier Licence – Process • AARNet Pty Ltd will develop a draft Industry Development Plan (required for carrier application) • Will include options for addressing constraints associated with current exemptions; vehicle for APAC, industry incubation; • Draft will be reviewed and, if appropriate, endorsed • An application for a carrier licence will be submitted together with the endorsed IDP

28. AARNet Carrier Licence – Process (cont) • A template agreement will be developed between AARNet Pty Ltd and an AARNet Member covering the roles, rights and responsibilities of the parties • AARNet Members will be invited to nominate AARNet as their declared carrier

29. Carriage Service Provider Obligations • If the exemptions from CSP obligations lapse, all AARNet members will need to abide by the CSP obligations for the carriage services they supply to those other than their staff and students. • AARNet will develop material to assist members in this regard

30. Thank You!QUESTIONS?